Monopoly Men | Boston Review
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Amazon. Google. Facebook. Twitter. These are the most powerful and influential tech platforms of the modern economy, and the headlines over the last few weeks underscore the degree to which these firms have accumulated an outsized influence on our economic, political, and social life. To many, including acting FTC Chair Maureen Ohlhausen, the status quo is great: the benefits to consumers—from cheap prices to easy access to information to rapid delivery of goods and services—outweigh greater regulation, lest policymakers undermine Silicon Valley innovation.
But the recent controversies suggest a very different perspective—that private power is increasingly concentrated among a handful of tech platforms, representing a major challenge to the survival of our democracy and the potential for a more dynamic and inclusive economic order. A growing clamor from both the left and right has created a sense of “blood in the water,” and suggests that Silicon Valley’s long honeymoon may finally be over.
The danger of the “platform power” accumulated by Amazon, Google, Facebook, and Twitter arises from their ability to control the foundational infrastructure of our economic, informational, and political life. Even if they didn’t spend a dime on lobbying or influencing elected officials, this power would still pose a grave threat to democracy and economic opportunity. The fact that these companies provide enormously popular and useful goods and services is indisputable—but also beside the point. The central issue here is not simply the value for the consumer. Instead it is vast, unaccountable private power over the foundations of contemporary society and politics. In a word, the central issue is democracy.
It was this deeper problem of power—not merely the impacts on prices or the consumer experience—that motivated reformers such as Brandeis to develop whole new institutions and legal regimes: antitrust laws to break up monopolies, public utility regulation to assure fair prices and nondiscrimination on “common carriers” such as railroads, the creation of the FTC itself, and much of President Franklin Roosevelt’s early New Deal push to establish governmental regulatory agencies charged with overseeing finance, market competition, and labor.
But the late twentieth century saw a widespread shift away from the New Deal ethos. Starting in the 1970s, intellectual critiques of economic regulation highlighted the likelihood of corruption, capture, and inefficiency, while scholars in economics espoused the virtues of self-regulation, growth-optimization, and efficient markets. In these intellectual constructs big business and the conservative right found support for their attacks on the New Deal edifice, and in the 1980s and 1990s, we saw the bipartisan adoption of a deregulatory ethic—including in market competition policy.
These cultural currents—the skepticism of government as corrupt at worst and inefficient at best, the belief in private enterprise and the virtues of “free markets,” and a commitment to delivering for consumers above the broader social and political repercussions—suffuses our current political economic discourse. The Brandeis-ian critique of private power has been wholly absent in recent decades and nowhere is this absence more pronounced than in the worldview of Silicon Valley.
In our current moment, it is as if technological innovation has been divorced from the corporations that profit from it. Through these rose-colored glasses, technology is seen as a good in itself, promising efficiency, delivering new wonders to consumers, running laps around otherwise stale and plodding government institutions. Amazon, Google, Facebook, and Twitter have been able to resist corporate criticism (until recently, that is) by emphasizing their cultural and ideational commitment to the consumer and to innovation. They have casted themselves as the vanguards of social progress, the future’s cavalry who should not be constrained by government regulation because they offer a better mode of social order than the government itself.
But as the anxieties of the last few months indicate, this image does not capture reality. Indeed, these technology platforms are not just “innovators,” nor are they ordinary corporations anymore. They are better seen and understood as privately controlled infrastructure, the underlying backbone for much of our economic, social, and political life. Such control and influence brings with it the ability to skew, rig, or otherwise manage these systems—all outside the kinds of checks and balances we would expect to accompany such power.
This kind of infrastructural power also explains the myriad concerns about how platforms might taint, skew, or undermine our political system itself—concerns that extend well beyond the ability of these firms to lobby inside the Beltway. Even before the 2016 election, a number of studies and scholars raised the concern that Facebook and Google could swing elections if they wanted to by manipulating their search and feed algorithms. Through subtle and unnoticeable tweaks, these companies could place search results for some political candidates or viewpoints above others, impacting the flow of information enough to influence voters.
Given our reality, it would be helpful to think of Amazon, Google, Facebook, and Twitter as the new “utilities” of the modern era. Today the idea of “public utility” conjures images of rate regulation and electric utility bureaucracies. But for Progressive Era reformers, public utility was a broad concept that, at its heart, was about creating regulations to ensure adequate checks and balances on private actors who had come to control the basic necessities of life, from telecommunications to transit to water. This historical tradition helps us identify what kinds of private power are especially troubling. The problem, ultimately, is not just raw “bigness,” or market capitalization. Rather, the central concern is about private control over infrastructure.
At a minimum Equifax’s data breach suggests a need for regulatory oversight imposing public obligations of data security, safety, and consumer protection on these firms. Some commentators have suggested an antitrust-style breaking up of credit reporting agencies while others have called for replacing the oligopoly altogether with public databases.