From Steve Bannon, former advisor to Donald Trump and catalyst of the new American radical right, to Senator Elizabeth Warren, positioned on the far left of the Democratic candidates to unseat the Republican in 2020. From the president himself, who complained about his “ridiculous political bias,” to Democrat Nancy Pelosi, Speaker of the House, who warned this week that “unjustified economic power concentrated in the hands of a few is dangerous for democracy,” the question arises: Should Big Tech Be Broken Up?
In a political landscape more polarized than ever, the urgency of reining in the power of the tech giants is garnering unusual unanimity. Last Monday, the House of Representatives announced the opening of an investigation into potential monopolistic behavior by the tech giants. The debate over the limits of the power of Google, Facebook, Amazon, and Apple thus moves from the academic and journalistic spheres to the very heart of American democracy.
Telephones and VCRs
Policymakers could initiate the first review of competition laws in decades and, above all, subject an industry—one that did not exist when these rules were formulated and has faced harsh criticism since last year for its excessive power, misuse of privacy, and role in spreading disinformation—to public scrutiny. Seldom does such a consensus occur, but when it does, extraordinary things happen,” warns Barry Lynn, founder of the Open Markets Institute and longtime anti-concentration of power activist.
We’re talking about 18 months of public hearings. Republicans and Democrats working together in true harmony. These hearings educate legislators, the public, the executive branch, and the media. The key is using the authority of the United States Congress to investigate and shed light on these corporations that are a danger to our democracy. They are the greatest threat to our democracy since World War II. We must act now and forcefully.
Old Models and New Reality
And Congress has all the tools to do so, Lynn maintains. The announcement coincided with another offensive, this time by the White House. Hours before Congress’s announcement, sources revealed that the Federal Trade Commission (FTC) and the Department of Justice, the two agencies with jurisdiction over competition matters, had divided the four companies between them for investigation. According to the announcement, the Department of Justice will be in charge of scrutiny of Apple and Google, while the FTC will oversee the analysis of Amazon and Facebook.
The announcement caused the stock market prices of all four companies to plummet, dropping as much as 7% in Facebook’s case. Charlotte Slaiman, an antitrust attorney and advisor to the nonprofit organization Public Knowledge, agrees that both investigations are “crucially important. The main differences between them are that Congress’s investigation is more public, while the Department of Justice and the FTC remain more silent until they publish their findings. Furthermore, she explains that legal authorities must investigate potential antitrust violations, whereas Congress operates without such limitations.
Evolution Beats Intelligent Design
Back in 2008, Wall Street’s wild behavior helped shape the presidential race as the financial crisis exploded—and now, the growing buzz about tech giants is gearing up to play a big role in the 2020 campaign. Senator Warren has already said she would force the big tech companies to break up and reverse deals like Facebook’s purchase of Instagram and WhatsApp. Many people believe that her proposal will compel the other Democratic candidates to take a stand and likely push them to adopt extreme positions against companies that the public has come to view, in just one year, as nearly official villains.
It was only a year ago that the Cambridge Analytica scandal hit Facebook’s reputation and began to raise questions about the practices of these giants. But since then, little has been done to limit their power. However, with the new measures, that seems to be changing. In the competition arena, various parties primarily accused Google of favoring its own products in user searches and abusing its influence in the advertising market. Facebook is under investigation for becoming a monopoly on social media, with the acquisition of Instagram and WhatsApp.
Conclusion
Authorities accuse Amazon, which controls half of online commerce, of pressuring sellers who use its platform. They also accuse Apple of abusing its monopoly position in the app market. The growth of monopoly power in our economy is one of the political challenges we face. Google’s stock market valuation of $2 trillion is driven by search advertising, which generates more than half of its revenue. Search is also the company’s sector under the most pressure as artificial intelligence begins to answer queries. Google searches on Apple’s Safari browser fell for the first time in April. This is a major reason why Google’s stock has fallen more than 9% this year.
Other areas of Google are not getting the recognition they deserve. If Waymo were to go public, Mr. Luria argued, investors could value it close to Tesla’s $1 trillion valuation, especially since Tesla’s self-driving taxi ambitions are little more than a concept for now. The same is true of YouTube compared to rival Netflix, a Wall Street favorite. Mr. Luria estimated that all parts of Google could be worth more than $3.7 trillion separately, or nearly double the company’s current valuation. Investors want a radical spinoff, not isolated spinoffs, he wrote. The benefits wouldn’t just be economic, he claimed.
