Does the House Antitrust Report Mean That Tech Is Evil?

Oh, to say, “I’ve never felt better!” and mean it. Maybe in November.

The Plain View

Like any good nonfiction writer, the Majority Staff (i.e., Democrats) of the House Subcommittee on Antitrust, Commercial, and Administrative Law has produced a long-read document distinguished by deep research and an unyielding thesis: Big Tech is too big, too bad, and fights dirty.

Sixteen months ago, the subcommittee set out to expose bad behavior in Silicon Valley’s top companies. Empowered with subpoenas, it had little trouble finding it. The docket of whistle-blowing witnesses and damning exhibits uncovered a litany of bullying, self-interested, anti-competitive behavior that justified the exercise, which some thought redundant because of ongoing investigations by the FTC, the DOJ, and state attorneys general. The tech overlords have built monopolies and weaponized them. They run platforms that favor their own products, and they use the data they gather to gain advantage over marketplace competitors or target them for buyout. They have the power to set prices, and they do so without sanction.

But if you pull back for a larger view, the report reveals something else—a sense that the committee has selectively invoked a lot of the ills of our economic and political system to make tech itself a villain. Let’s examine the attack vector of this report. The targets are Amazon, Apple, Facebook, and Google. (What, no Microsoft? Did they fail to note its trillion-dollar valuation, its glaring rapsheet, and its string of pricey acquisitions?) Every member of this fearsome quartet was deemed not only a monopoly but a corrupt one. But each dominates in a different arena, and each one’s abuses are different, with a few overlaps, like using their platform to favor their own products. What they have in common is that they are tech companies.

The obvious question—one that the report doesn’t really grapple with—is whether the technological advances themselves made the arc of these companies from idealistic startups to trillion-dollar predators inevitable. Each one of those companies has embraced digital progress to deliver real value to billions of people, creating products that we consume enthusiastically. The report concedes that, but goes on to say, “To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons.”

Is there something about tech that turned these former dreamers into denizens of the dark side? According to a source familiar with the committee’s motives, the staff felt that tech companies are indeed unique in their network effects and the lock-in that their platforms provide. Maybe it wasn’t the corrupting nature of tech that made these companies break bad, but the fact that their dizzying growth drew them into the power trip that characterizes the unrestrained, Hobbesian way we do business in America.

I have closely watched each of these companies from their earliest days, and I spent time with their founders in those nascent periods. With the possible exception of Jeff Bezos, who left a hedge fund to start Amazon, each one initially approached with horror the concept of taking a place in the maw of high finance, where profits are the dominating metric. Then they got fast-tracked into a trajectory that put them right into that maw. The letters they wrote to prospective stockholders upon their IPOs insisted they were not selling out to Wall Street, promising that they would work on society’s behalf even while being measured by stock prices. But the founders of these companies are hugely competitive. Presented with a game where victory is equated to growth metrics and rivals were left bloody on the board, they played with a vengeance. Their emails, exposed by the House investigators, lay this out in dismal detail.

Still, the questionable behavior the committee exposes in the thousands of pages of evidence here is less about the uniqueness of tech platforms than it is about how our system allows companies from any industry to conduct themselves. The huge, anticompetitive acquisitions listed in the report—like Facebook’s purchases of Instagram and WhatsApp—are much in the spirit of mergers we’ve seen in industries like banking, media, and airlines. If regulators look the other way when supermarket chains favor their house brands on display, why be surprised when Google pushes its services on search pages, and Amazon sends us its Basics line when we bark a request to Alexa? When a game company is disadvantaged by paying 30 percent of its revenue to Apple—while Apple’s competing product pays nothing—it sounds like the routine conflict of cable networks who favor content they own over those of companies who don’t have exclusive access to consumers. The report even takes the tech companies to task for using some of their fortunes to hire lobbyists to curry influence. Like, um, every other big industry in America? And, hey, Congress, whose fault is that?

In other words, Big Tech is doing business the American way. Exposing the sins of Amazon, Apple, Facebook, and Google is like pulling a curtain from a mirror.

That’s why I agree with many of the committee’s general conclusions: We need stronger antitrust law, stricter enforcement, and a set of rules that protects smaller businesses from the power of dominant players in all industries. Unfortunately, the prospects for legislation aren’t rosy: The House subcommittee couldn’t get the minority to join this painstakingly thorough report. It might be off-base to blame technology for our woes, but you can’t go wrong blaming politics.

Time Travel

One possible course the House report suggested is rolling back some of Facebook’s purchases, essentially pulling Instagram and/or WhatsApp out of the company. It reminded me of the Department of Justice’s recommendation, after winning the Microsoft antitrust case, to split that company into two pieces, one for Windows and one for its applications business. In May 2000, I wrote about the plan, concocted by DOJ prosecutor Joel Klein, in Newsweek:

Who knew that Joel Klein was a closet venture capitalist? Most of us thought that during the past few years Janet Reno's antitrust czar and his prosecution team were turned on by lawyerlike stuff like consent decrees, special masters, and making Bill Gates' lawyers look like crash dummies in court. But last Friday, unveiling his proposed remedy for Microsoft's illegal conduct (as ruled by Judge Thomas Penfield Jackson), Klein showed a previously untapped passion for writing business plans.

Instead of starting with a couple of Stanford geeks with a Web site, Joel Klein seeds his incubator with a famous $400 billion enterprise and splits it in two, giving one the world's dominant operating system, the other the world's most successful applications. What used to be Microsoft will be ... Microsoft and Mini-Microsoft. Or, as Klein's team puts it: "Ops Co" and "Apps Co." (Somebody had better nail down the domain names.) Will it be painful to split apart the world's most successful software company? Piece of cake, says Spreadsheet Joel, who promises that the operation can be performed at "a modest cost" and minimal disruption to consumers and even employees. Don't think of it as a breakup—it's a "reorganization," says Klein …

The one sure thing is that Klein's plan would kill Microsoft as we know it. The two new companies might indeed, as Klein believes, serve consumers by increasing competition from innovators who didn't want to face the currently constituted behemoth. But they may turn out to be Evil Twins, two abusive monopolies instead of one. Or they may become the Blues Brothers, two government-regulated orphans without missions, floundering to compete in the fast-paced tech world. Who knows?

Ask Me One Thing

Randy asks, “If the internet was changed to NOT allow people to use it anonymously, would this solve a lot of its problems?”

Randy, by “problems,” I assume you are referring to bad behavior, threats, ransomware, spoofing, free exchange of stolen goods, child pornography, espionage, and the wanton spread of misinformation. In other words, the internet. Seriously, it does sound tempting to eliminate all that misbehavior by limiting access to only those whose identity is certified, kind of a Real ID that must be checked before you fire up your browser or swipe your phone. But putting aside the technical barriers, do we really want that? It would solve some problems, sure, but sometimes even knowing who’s doing bad things doesn’t mean that you can catch those people or restrain them. Worse, won’t you feel uncomfortable being traced in everything you do? I have hopes that there will be less tracking. And removing the possibility of anonymity would be a boon to authoritarian regimes and those who want to keep whistle-blowers quiet. Ending anonymity would solve some problems, fail to solve other problems, and create some alarming new ones. But don’t quote me on that—I prefer to remain anonymous.

You can submit questions to mail@wired.com. Write ASK LEVY in the subject line.

End Times Chronicle

Don’t cry for me, West Wing.

Last but Not Least

Here are some highlights from the House’s antitrust report.

Lauren Smiley’s amazing account of what happened when a rural town in Washington mistakenly thought it was being invaded by antifa.

Got a Mac? Think it’s safe? Think again.

Things aren’t all doom and gloom: Here’s a tale of obsessive planners, who stave off the apocalypse with stickers and binders.

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