Big tech, under scrutiny

On Wednesday, the CEOs of Amazon, Apple, Facebook and Alphabet appeared before the US Congress, which has been studying hundreds of hours of interviews and more than 1.4 million documents as part of efforts to try to understand the business practices of these companies and their impact on innovation, competition and society. At least on this occasion we did not see a repeat of April 2018, when several members of Congress showed their ignorance of the basics of these companies’ business.

To begin with, these are four very different companies, but that between them add up to a market capitalization of almost $5 trillion, annual revenues of almost $800 billion, and a cash flow of almost $500 billion. They are among the most innovative companies in the world (Apple is the first, Alphabet the second, Amazon the third, and Facebook the tenth), and leaving out Microsoft, which will no doubt be very grateful for not being invited, they represent that group that has been called big tech, and that the pandemic has even benefited greatly: two of the four quizzed by Congress, who, in addition to being CEOs, are founders of their companies, Jeff Bezos and Mark Zuckerberg, have seen their fortunes grow by up to 60% since mid-March, from $113 billion to $181 billion and from $55,000 to $86,000 respectively.

Making a lot of money is always synonymous with wrongdoing, although the business practices that have contributed to generating those fortunes and the contribution they should make to society as a whole are the subject of debate. But what Congress is interested in is the dominance obtained by these companies in their industries: advertising, retail, electronics or services.

This deserves public discussion. The fact that Apple has a monopoly on its App Store and imposes terms that some people consider abusive on developers who intend to use this channel to reach users deserves discussion, as might Google, Facebook and Amazon’s share between them 70% of digital advertising in the United States, or that Amazon makes sure its vendors do not compete with it or that Facebook is a threat to democracy.

But above all, the debate is about the extent to which the dominance of these companies may now be blocking innovation: if every time one of them detects that some new entrant has come up with a product that might threaten their hegemony, they can simply use their infinite resources to acquire it or copy it, then our future is at stake and we must apply antitrust laws.

Perhaps the best way to protect ourselves against the omnipotence of big tech is not to think about forcing it to break up into smaller companies. In fact, it may well be that this view of antitrust laws is quite outdated, and that today it would actually be useless or even have negative effects. But from there, as some think tanks funded by those same big tech companies claim, there is nothing to be done. Nevertheless, something will have to change in the way the market and innovation are protected from the power of companies that dominate their sectors.

That said, we’re going to need to hear better arguments than Mark Zuckerberg’s bogus patriotism: “if you regulate me, you will be benefiting China”. In reality, we are talking about how to rebuild the anti-monopoly guarantees that the United States itself and neoliberal thinking nullified a few decades ago, and create an environment in which anyone with a good idea can launch it and operate it without being harassed by players who are beyond competition.

How to approach a complex regulatory process? We are talking about rebuilding the regulatory landscape destroyed by Robert Bork under Ronald Reagan that neutralized antitrust legislation and created an anything goes environment that has brought us to where we are now. To do this will possibly require measures to break these companies up, possibly overturn some acquisitions and create new supervision mechanisms, new taxes and close loopholes, or force them to open up their data gathering, or even some strategic algorithms. We are talking about rewriting the rules of the game for the data economy, for an economy that has rewritten its own rules and that has led us into an increasingly unsustainable situation.

Given what’s going on in the world, and if you’re not American, you might be forgiven for thinking that Wednesday’s events were a largely internal affair with little real impact. But you’d be wrong, because what’s at stake here is our future.

(En espa?ol, aquí)