The antitrust bills are on life support – and that’s a good thing
Everyone’s mad at Big Tech. Both the far-right and far-left seem furious with America’s biggest technology companies. There’s a strange horseshoe alliance between pseudo-fascists like Josh Hawley and the highly progressive Pramila Jayapal, where both extreme ends of the political spectrum seem to agree: Big Tech Is Bad. Some of them have come together to sponsor a series of anti-tech antitrust bills in Congress that would take far-reaching actions against these tech companies.
The conservatives calling for Big Tech to be further regulated and punished are doing so for entirely childish reasons. Several social media platforms have banned extremist political content, and in particular do not allow claims that the 2020 election was stolen or COVID-related conspiracies. Conservative anger is almost entirely about this ‘unfairness’ to conservatives in content moderation, and how it’s oppression when your Twitter account is suspended for promoting a violent insurrection or claiming horse deworming paste cures COVID. The conservative case against the tech sector isn’t worth addressing at any length, aside from telling these Republicans to grow up.
But what about the left-wing argument? The most radical arguments against large tech corporations from the left rely on the idea that bigness is inherently dangerous, without providing any specific reasons why that bigness is so bad. They’re worth rebutting in more depth, because the bills championed by many progressives would be highly destructive and cause quite a lot of harm. These bills are terrible in the technical details, they’re terrible in their larger vision of the world, and they’d leave both the US tech sector and the country as a whole worse off.
The technical details don’t make sense
The most important thing happening in the antitrust world is the series of six bills introduced in Congress. Not all these bills are bad – one is fairly straightforward in providing more funding for antitrust enforcement, and seems like a good idea. There are many industries that need more antitrust enforcement, but get little attention because attacking Big Tech is the hot thing. Another bill is a fairly minor change relating to which courts lawsuits take place in. The remaining bills, however, are massive in scale and targeted directly at America’s biggest tech companies.
They’re deliberately written such that they only apply to four companies – Apple, Amazon, Google and Facebook. Microsoft has been able to dubiously sidestep scrutiny while calling for tough legislation on its competitors – a hypocritical act given their history with antitrust enforcement. Walmart, which as of 2020 still had larger retail market share than Amazon and which has a lengthy history of acquisitions, also evades attention. The first suspicious detail from these bills is how precisely they target just a few companies that politicians are angry with.
The bills take aim at platforms, with the expressed goal of ‘ending platform monopolies’. The authors argue there’s an inherent conflict of interest when a company owns a platform and also makes products on that platform. The bill written by Rep. Jayapal threatens to outright break up any company that operates a platform and also competes on the platform. The text of the bill says:
“It shall be unlawful for a covered platform operator to own or control a line of business, other than the covered platform, when the covered platform’s ownership or control of that line of business gives rise to an irreconcilable conflict of interest.”
The first problem with this text is that it’s incredibly vague, and gives regulators power to effectively ban nearly anything they’d like. ‘Line of business’, ‘platform’, and ‘irreconcilable conflict of interest’ could be interpreted so broadly as to split companies like Apple into dozens of different corporations.
The second problem is that the idea that one shouldn’t compete on one’s own platform or store is an absurd idea that no one ever applies outside of technology. Retailers in many industries like Kohl’s, Target, Kroger, Walmart, Best Buy, Lowe’s and PetSmart all sell private labels that they own alongside more traditional brands. In fact, tech companies often do this far less than traditional companies. Amazon’s share of revenue from private label sales is only around 1%, much lower than all the companies listed above.
The third major problem is that this is entirely unworkable when you think about how technology operates. Modern tech is platforms on top of platforms on top of platforms. It’s platforms all the way down. The best way to illustrate this absurdity is with an example. Apple makes iPhones, but iPhones are defined by both the hardware and the operating system. The hardware is a platform that could potentially support many operating systems, so regulators could force Apple Hardware and Apple Software to be two different companies. Apple also designs its own chips, and this could violate platform rules – after all, Apple controls the market for what hardware components are used in iPhones. If they are designing their own chips, they’re competing with external chipmakers on an unfair playing ground, so we need to separate Apple Chips from Apple Hardware. Apple has also considered making its own LIDAR sensors and batteries, which would need to be separate companies.
Because an operating system is also a platform, Apple wouldn’t be allowed to operate an App Store on iOS. Apple Software would break into Apple iOS and App Store. But the App Store is also a platform, and Apple also makes a huge number of apps so every single app would need to be broken out as well. You’d need separate companies for the App Store, Apple Maps, iTunes, iMessage, Safari, FaceTime, iPhoto, iMovie, GarageBand, Siri, etc. Apple would be broken into dozens of companies, destroying what makes the iPhone valuable – its tightly integrated ecosystem that famously ‘just works’. The same story applies elsewhere – Google would have to stop producing Chromebooks, Pixel Phones, Google Maps, Gmail, Android, GCalendar, Google Docs, Drive, Images and News, Street View, Chrome, Youtube, etc. Does anyone really think the world would somehow be a better place if Google was forced to abandon or break off Gmail? Or if they had never developed it at all?
Some of the other bills are not quite as draconian. Rep. David Cicilline has introduced a bill that would forbid:
companies to engage in any behavior that “advantages [their] (the ‘covered platform’s operators) own products, services, or lines of business over those of a competing business or potential competing business that utilizes the covered platform”
While it sounds nice to prohibit companies from ‘advantaging their own products’, in practice this would be just as unworkable as Jayapal’s bill and produce the same kind of absurd results. Apple would be forbidden from pre-loading basic apps on its iPhones or Macs, since this would be an unfair advantage over other apps. Google couldn’t integrate Chrome with Gmail, Google Docs, or any Google product unless it built the same level of integration for all other major mail and document services. Modern tech is integrated to its core, and this bill outlaws useful integration in several crucial ways.
And even with these precautions, major tech firms would still immediately face lawsuits. You can’t build any kind of complex product that deals with hundreds of thousands of companies and hundreds of millions of users without accidentally advantaging someone, somewhere along the line. For search engines or online stores, something must appear at the top. It’s completely unfeasible to think that this problem can be litigated to the level of detail progressives imagine is possible.
The anti-tech worldview is faulty
These bills are completely broken on a technical level, but they’re also broken in their larger vision. They view Big Tech as a threat simply for being large, without making a case for the specific harms they’ve supposedly committed. This is the neo-Brandeisian school of thought, which aims to use antitrust as a tool to shape society in ways beyond just protecting consumers. But these bills’ impact on society would be destructive and leave us as a less innovative, less secure and less wealthy society.
America’s tech sector has been one of the fastest growing, best paying, most successful, and most innovative parts of the US economy for the last several decades. To put it bluntly – tech companies are so big and so valuable because they’re incredibly good and important. They provide millions of well-paying jobs, they’re our most important sources of rapid innovation and technical progress, and they produce enormous amounts of consumer value. Breaking them up for vague ideological reasons is preposterous. If you’re going to break up something valuable, you need an incredibly precise reason why it’s necessary and why the supposed benefits outweigh the obvious harms. There’s none of that here.
American technology policy should not be focused on arbitrarily punishing the most successful companies in America’s most successful industry. This path would replicate the many failures of European tech policy: overly regulated, under-invested, and with few success stories compared to the US or East Asian tech sectors.
America’s tech sector is also one of the few sectors where America’s flagship companies directly compete with China’s state enterprises. The CCP is a genocidal, authoritarian nightmare and American policy on all levels should be focused on counteracting the CCP and promoting liberal values abroad. These bills would hobble America’s most successful technology companies, and in doing so will cede enormous power to the CCP. If you want to force US tech companies to retreat from world markets and hand most of the global tech sector to CCP-aligned firms, these bills are a great way to accomplish that.
These anti-tech bills seem to be on life support in the House, at least for now – and that’s a good thing. American tech policy should be focused on continuing to build on what’s great about our tech sector. We need more federal R&D spending in basic science and in technical progress. We need increased immigration to let the most talented tech workers come here to found companies. And we need regulations that are more tightly focused on specific issues – privacy, funding for enforcement, etc. But trying to punish and break up tech companies merely for being big is a broken vision, and Congress should reject these bills as they stand.
