Is competition good for cybersecurity?

by Sebastian Benthall

A question that keeps coming up in various forms, but for example in response to recent events around the ‘trade war’ between the U.S. and China and its impact on technology companies, is whether or not market competition is good or bad for cyber-security.

Here is a simple argument for why competition could be good for cyber-security: The security of technical products is a positive quality of them, something that consumers would like. Market competition is what gets producers to make higher quality products at lower cost. Therefore, competition is good for security.

Here is an argument for why competition could be bad for cyber-security: Security is a hard thing for any consumer to understand; since most won’t, we have an information asymmetry here and therefore a ‘market for lemons’ kind of market failure. Therefore, competition is bad for security. It would be better to have a well-regulated monopoly.

This argument echoes, though it doesn’t exactly parallel, some of the arguments in Pasquale’s work on Hamiltonian’s and Jeffersonian’s in technology platform regulation.