Today, the United States Department of Justice is litigating against the largest tech companies, claiming they constitute illegal monopolies. This also is not just a Democratic-party aggressive liberal effort at control: in 2019 the Trump DOJ launched investigations of Google, Meta, Apple and Amazon. This new intensity follows a couple of decades of antitrust apathy. Today, there are antitrust suits pending against Amazon, Apple, Meta (owns Facebook) and Google. Why this new wave?
First, understand that this is a revival of classic antitrust activity and not a reinterpretation of the underling laws (1890 and 1914 Federal legislation). In the “old days” companies were sued and indeed broken up based on sheer size which had the effect of creating, well, large and hence dominant enterprises in particular markets– recall that Standard Oil and AT&T and American Tobacco were chopped up in the good old days. It is not very hard to look at sheer size, creating substantial market control, and conclude that there is societal risk. And it is not very hard to see how size begat more size and to then track the steps to get there, and fairly conclude that such growth involved absorbing competitors, blocking competitors, tying up customers and generally acting like, well, monopolies.
In 2020, the House Committee on the Judiciary investigated the state of the digital economy and warned that this vital aspect of commercial life and social and political discourse was becoming highly concentrated. And since classic practice was to identify monopoly by size and to find steps taken to build that monopoly that excluded competitors which were of course smaller enterprises–voila, litigation. (I do not even address the active European antitrust efforts to similar effect.)
This Fall’s issue of Harvard Law (the school’s alumni publication) quotes Timothy Wu, special assistant to the president for technology and competition policy, as he set down the philosophical basis of current thinking: antitrust law is seen as “almost a companion to the Constitution. In the sense that the Constitution is a check on public power, the antirust laws are a backstop or limit on corporate and private power.” The article goes on to cite, among other proofs of massive private power to big tech, that “Google controls 80% of the internet search business in the U.S. In a survey of 2,000 consumers last year, 75% of respondents indicated they check prices and product review on Amazon before making a purchase.” While in the short term this may in fact be benign, one can imagine that in the long run that power can be used to wholly control pricing of whatever is sold and content of whatever is believed.
Mr. Wu should be taken with a grain of salt. No doubt there is social risk here, but when he argues (in his book “The Curse of Bigness: Antitrust in the New Gilded Age”) that the rise of political strongmen can be traced to increased corporate power and wealth disparities, one can only suspect that there are a lot of other factors contributing to whatever the political landscape looks like.
With this a backdrop, and with the shape of our future allegedly hanging on the promise/risk of AI, we will in a following post consider how the government is perceiving the growth of AI in this time of alleged tech monopolies.