Spurious Antitrust Suits Will Harm American Innovation

Innovations like artificial intelligence (AI) technologies and tools are transforming the U.S. economy, spurring job growth and the creation of new wealth. In 2020 alone, the internet’s economy contributed $2.45 trillion to the United States’ more than $21 trillion GDP. Further, AI technology is predicted to contribute $1 trillion into the U.S. economy over a decade.

On the international stage, AI is crucial to the United States maintaining its leadership in tech and innovation. Recognizing the importance of fostering this new technology, a pro-innovation, light-touch regulatory regime has allowed technologists to innovate, and AI to continue developing. The approach has allowed the United States to become a global leader in AI. 

However, the current Department of Justice (DOJ) wants to undermine this momentum. For example, in August, the agency filed a lawsuit against RealPage, alleging that its algorithmic pricing software allows landlords to collude on rental prices and monopolize the real estate market. The case is bogus, however. Although an attempt to appear pro-consumer, the DOJ’s overzealous antitrust enforcement creates a regulatory climate in which innovators know they can be targeted by ideologically driven enforcers for no good antitrust or economic reason. The DOJ fails to consider the full spectrum of benefits of AI tools in the real estate market, which have been shown to provide optimal pricing to consumers.

Unfortunately, others are watching and following the DOJ’s lead. Recently, the San Francisco Board of Supervisors banned the use of algorithmic devices to recommend rental prices. This kind of anti-innovation reactionary lawmaking is particularly strange coming from a city so close to Silicon Valley. On the other side of the country, Philadelphia is another jurisdiction contemplating such a ban.

The DOJ’s case against RealPage also offers lessons for the current administration’s antitrust approach to AI generally. The introduction of new AI-based technologies creates healthy competition that drives innovation and growth. It creates exciting new solutions to old problems that leave everyone better off. But instead of encouraging such dynamism, the charge against AI tools sets a dangerous precedent that will deter innovators from exploring the possibilities of the technology. Overzealous antitrust will do nothing to extend or maintain the United States’ lead in the AI race. 

The DOJ’s case against AI-enabled rental software is just one front in a larger struggle to over the future of American innovation. If regulators insist on trying to micromanage technologists and entrepreneurs, innovation will slow and consumers and businesses will miss out an untold number of new and exciting tools that could create efficiencies, lower prices, and otherwise make the American people more prosperous. 

America because the world’s technological leader because lawmakers have implemented a light-touch approach to regulation. The history is clear. The same approach must be applied going forward to AI.