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A new antitrust frontier – the issue closing partisan divides in the name of policing big tech

A new antitrust frontier – the issue closing partisan divides in the name of policing big tech

The new head of a congressional antitrust panel has vowed to take on big technology companies that “threaten our democracy”, the latest sign of a growing cross-party Washington consensus that Silicon Valley has grown too powerful.

Democratic congressman David Cicilline is set to spearhead efforts to check the influence of Amazon, Facebook, Google and other “big tech” firms, a rare bipartisan cause that unites figures such as Donald Trump, senators Lindsey Graham and Elizabeth Warren and congresswoman Alexandria Ocasio-Cortez, albeit for wildly divergent reasons.

We need to have a serious conversation about the dominance of these platforms,” Cicilline, who will serve as chairman of the House judiciary committee’s antitrust, commercial and administrative law subcommittee, said in a statement made available to the Guardian. “There’s no question that these new gatekeepers have the incentive and ability to harm the competitive process, undermine innovation, and threaten our democracy.”

After a swath of privacy and data manipulation debacles over the past few years, the utopian vision of Silicon Valley companies in California has been shattered and their “move fast and break things” mantra has lost much of its charm. The star players are facing demands for greater accountability and transparency. America is playing catch-up with the European Union whose competition commissioner, Margrethe Vestager, has ordered Apple and Amazon to pay back taxes, fined Facebook over its acquisition of WhatsApp and imposed billions of dollars’ worth of antitrust penalties on Google.

In the US, executives from Facebook, Google and Twitter have now all testified before Congress during the past year. Tim Cook, the chief executive of Apple, has called on Congress to pass comprehensive privacy legislation to protect consumers. In the meantime, the Federal Trade Commission (FTC) is reportedly close to finishing a privacy investigation into Facebook, which could lead to a major fine.

In a measure of how the mood on Capitol Hill is shifting, Trump’s nominee for attorney general, William Barr, faced several questions about big tech during his Senate confirmation hearing, a stark contrast to former attorney general Jeff Sessions’ hearings two years ago when the issue did not arise.

Barr told the judiciary committee: “I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers. ”

Tellingly, the questions to Barr were posed by senators from the Republican heartlands: Marsha Blackburn of Tennessee, Chuck Grassley of Iowa, Josh Hawley of Missouri and Mike Lee of Utah. And last year, when Facebook chief executive Mark Zuckerberg appeared before the Senate, some of the sharpest cross-examination came from Lindsey Graham, a Republican from South Carolina.

On the Democratic side, senators Richard Blumenthal, Cory Booker and Warren have expressed a desire to clip the companies’ wings, especially after the Cambridge Analytica scandal during the 2016 presidential election.

Senator Bernie Sanders took on Amazon over its minimum wage and won. House newcomer Ocasio-Cortez spoke out against New York city’s $3bn welcome package to Amazon, earning unlikely praise from an unlikely quarter.

“I hate to admit it, but Alexandria Ocasio-Cortez has a very good point,” Fox News host Tucker Carlson said. “It’s hard to argue with the internal logic. The richest man in the world just got $2bn in taxpayer subsidies. How does that work?”

An illustration depicting Carlson and Warren in bed together was published last month by the New Republic along with the headline, “The One Issue the Left and Right Can Agree On”, and an article written by Matt Stoller, policy director of the Open Markets Institute.

In an interview, Stoller suggested that big tech is bringing together conservatives’ anti-monopoly streak with progressives’ suspicion of big business and wealth inequality. “You’re seeing a real ideological change and I don’t think it’s isolated. It’s a rightwing and centrist and leftwing thing. People are realising we’ve been ignoring power in our society and the power held by tech platforms that control the flow of information.”

Facebook, which rules social networking, and Google, by far the biggest search engine, enjoy a near duopoly of online advertising, while Amazon is the dominant online retailer and stands accused of putting the high street out of business. Stoller said: “I think people on the left and right understand these three companies are powerful and political. A few years ago, they were seen as cuddly, cool and progressive. Now it’s ‘Wait, you have a lot of market power, you control the flow of information and you’re doing it to serve yourselves’.”

Trump himself has weighed in (“We are looking at [antitrust] very seriously,” he told Axios on HBO last year), though many believe his critique of Amazon is fuelled by animus towards founder Jeff Bezos, owner of the Washington Post.

Indeed, the unwieldy coalition of political motivations – such as conservatives’ complaint that online platforms show a leftwing bias – could lead to a lack of clarity that the tech giants might exploit.

Scott Cleland, former deputy coordinator for communications and information policy in the George HW Bush administration, said: “While they are getting a lot of opposition, it’s not focused enough. They’re in a castle and no one’s organised the catapults or which ramparts to target or found the weaknesses.”

Congress bared its teeth last year when it passed bipartisan legislation to strengthen the policing of sex trafficking on websites such as Backpage.com. Despite opposition from many internet companies, it passed 97-2 in the Senate and was signed into law by Trump.

But big tech, which spends millions of dollars on lobbying, would be a far tougher proposition. The companies do not fit the traditional definition of monopolies that push up prices and inflict consumer suffering and it is not clear that existing antitrust laws could be applied. When the FTC previously investigated Google over how it displayed its search results, it concluded there was no antitrust violation and did not break it up. To force Google to part with YouTube and DoubleClick, or Facebook to get rid of Instagram and WhatsApp, would be a radical step that requires a cast iron legal argument.

Kristian Stout, associate director of the International Center for Law & Economics, said: “I’m very sceptical as to whether you would call them ‘too big’ in the classical sense because it’s an ill-defined criterion.

There’s always been a contingent of the Democratic party that’s sceptical of big business in one form or another. Republicans are getting more interested because they say conservative speech is being suppressed, but using antitrust laws is absolutely the wrong way to deal with that.”

The most famous antitrust case against a tech giant in recent times broke Microsoft’s monopoly of the internet browser market. It was 1998, the year of Bill Clinton’s impeachment, hardly a time of bipartisan harmony. In 2019, as a partial government drags on and partisan divisions run deeper than ever, big tech seems be the one issue that Washington can agree on. But these are unchartered waters.

Historian Niall Ferguson, a senior fellow at the Hoover Institution at Stanford University in Palo Alto, California, said: “The difficulty here is that there are some quite different motivations behind going after big tech. Keeping everybody on the same page is difficult enough and there are these different options: do you do antitrust, do you do you tougher regulation or do you go down the Section 230 road?”

Under Section 230 of the Communications Decency Act, tech firms currently enjoy broad immunity from liability stemming from what users post on their services.

Some commentators have likened data to oil, and big tech to Standard Oil, the colossus owned by John D Rockefeller that was eventually broken up by the supreme court in 1911. But Ferguson, who explores the power of big tech in his book The Square and the Tower, objected: “We are all in the position of being able to drill for oil and produce it every time we go online and start typing or take a film and post it on Instagram, so the analogy with Standard Oil is poor because oil is a finite resource in certain places and you can extract rents from being in those places.

“In any case, unlike oil, which is just something which has industrial uses, data have all kinds of uses and the most important thing we’ve learnt is that our personal data is both valuable and can be exploited in ways that are harmful. So it’s not right to say this is just the Standard Oil problem: these companies have the scale of these predecessors but, unlike them, they also have this role as, in effect, content publishers and news providers. So they’re William Randolph Hearst meets John D Rockefeller meets Bill Gates.”

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