Censorship Is a Consumer Harm

Tech firms further abuse market power by censoring content, thereby reducing the quality of the product. To claim people aren’t made worse off by constrained opportunities is to embrace paternalistic assumptions antithetical to both American freedom and economic modeling, which takes consumer preferences as given rather than as prescribed by a social planner.

Social-media platforms like

Facebook

and Twitter censored stories about the origins of the Covid-19 virus that discussed the possibility it leaked from a laboratory in China. For months, users were unable to share or read these stories on those platforms. Unquestionably, the quality of the platform was diminished while users were unable to read articles discussing scientific theories about the most important social and medical development of recent years.

Economists understand that improvements in quality reduce effective prices: This is the notion of “hedonic adjustment” in inflation calculations. The consumer price index, for instance, treats television prices as having declined for decades, because sets today are so much better than those in 1982, the benchmark year.

Conversely, tech platforms effectively raise prices through censorship, acting as a classic monopolist and reducing consumer welfare. This is analogous to the quality-adjusted price of a cable plan going up as the provider removes channels.

Nor are actions to limit consumer choice confined to censorship. Operating systems are often inseparable from hardware. Apps must be installed from approved sources, and developers’ options and revenues are severely constrained by the profit motives of the app store operator. If a consumer goes around the manufacturer’s myriad restrictions, it often voids the warranty.

Big Tech’s avatars among lobbyists and academics claim there’s no sense in which consumers are harmed by the concentrated economic power amassed by these companies, as they attempt to narrow the scope of what consumers can expect from their purchases. Yet a deeper dive into what consumers actually do with tech products reveals real harm, and provides classical economic justification for government to intervene in Big Tech as they would with any other monopoly.

Mr. Faulkender is a professor of finance at the University of Maryland. Mr. Miran is co-founder of Amberwave Partners. They served, respectively, as assistant Treasury secretary for economic policy (2019-21) and as senior adviser for economic policy at Treasury (2020-21).