Government Should Work With, Not Break Up, Big Tech
Techlash at the state level has reached a fever pitch. On Monday, 40 state attorneys general announced that they’re backing an antitrust probe into Facebook, led by New York’s AG. Texas’s AG is heading up a similar investigation against Google. It’s pretty obvious that both politicians are aiming to score political points, given the unlikelihood of state-level claims succeeding against these companies.
This isn’t an unprecedented strategy by any means. In recent years, attacking Big Tech firms has become a tried and true way for AGs to boost their careers. Yet this circus of antitrust cases against technology firms doesn’t actually address the real issues in the digital economy—all it does is heighten antagonism between the state and American tech. As a result, the entire nation loses.
Large tech companies have certainly earned the frustration of consumers, which makes them an easy scapegoat for ambitious politicians. Firms like Google and Facebook have poorly handled alleged instances of foreign election meddling, been used as a channel for violent and hateful content, and often failed to adequately protect user information. These are serious matters, but none of them can be addressed by using antitrust.
In fact, no one has figured out the best way to deal with these problems, so penalties on these firms will do little to improve their content moderation or privacy policies. After all, the problems of Big Tech aren’t specific to these companies, but to the entire media ecosystem. State AGs capitalizing on the popular desire to do something are using a hammer where there’s no nail.
American antitrust law was designed to address the problems of monopoly power, measured through harms to consumer welfare. But aside from those aforementioned sins, companies like Google and Facebook that charge advertisers to generate revenue have contributed substantially to the declining price of ads and increased access to advertising relative to the print era. That’s really the opposite of monopolistic behavior.
And in the domains in which these large tech companies operate, they face fierce competition—be it email, social networking, search, artificial intelligence, cloud services, news, or shopping. So deeming them “monopolies” just because of their size and brand power isn’t pointing the finger in the right direction.
Using antitrust where it’s unfit can have hefty consequences, too, damaging its capacity to act where it’s needed. And when politicians stop using the consumer welfare standard as a metric for antitrust cases, they delegitimize enforcement in areas where it matters.
Hardware firms, for instance, may actually be exhibiting the monopolistic behavior that antitrust is meant to address. But thus far, no calls to address issues in that sector have been heard. The allure of attacking profitable and visible firms in return for political gain is simply too strong.
It’s clear that Silicon Valley has few friends in government. But working together would do more to advance the interests of all parties involved, because the problems of the digital economy weren’t created by the tech firms. As the issues surrounding content moderation and privacy are better understood, these companies have just as much an incentive to solve them as the government does. That’s why technologists and policymakers need to collaborate on facilitating improvements that serve the public interest, pushing forward much-needed changes such as federal privacy regulations.
Technologists like Jaron Lanier have advocated for this kind of digital economy overhaul, leveraging the insights only Big Tech has and improving the capacity of the government to understand and effectively regulate the technology sector. Instead of breaking up firms, data policy needs to change, enabling consumers to have more control over what they produce. The recent Data Dignity initiative by Microsoft shows how Big Tech can guide better policy.
Using antitrust without updating the policy landscape for digital competition means that agencies will target successful firms without creating more opportunity or changing the incentives that made them big in the first place. This is the lesson the European Commission learned after its successive antitrust cases against Google did little to improve consumers’ experiences, but much to help Amazon.
If we’re going to do something about Big Tech, lawmakers need to take a more long-term view. That means putting the needs of their constituents to the forefront and putting the political theater of antitrust investigations to the side.
Ryan Khurana is executive director of the Institute for Advancing Prosperity, and a tech policy fellow for Young Voices.