The article suggests that this practice is detrimental to the tech industry as it slows the pace of innovation and discourages other startups from challenging the incumbents. It also highlights the need for regulators to recognize these new tactics and take action to promote competition. The Federal Trade Commission and the Justice Department have begun investigating tech mergers and acquisitions for evidence of antitrust behavior, but the article argues that this may be too late, and that intervention is needed earlier to prevent the co-opting of startups.
Key takeaways:
- Big Tech companies are using their resources and influence to co-opt potential rivals from within, a process referred to as 'co-opting disruption', according to a new paper by scholars Mark Lemley and Matt Wansley.
- These tech giants are strategically investing in startups, taking seats on their boards, and subtly steering them away from innovation and into projects that reinforce the status quo.
- This co-opting strategy is stifling competition and slowing the pace of meaningful innovation in the tech industry.
- The paper suggests that regulators need to recognize these new and subtle ways that tech giants are shutting down competition and innovation, and enforce rules against 'interlocking directorates'.