Can We Scale Down Big Tech?

Can We Scale Down Big Tech?

Scandal at Facebook and the Amazon headquarters search charade have prompted renewed calls to break up big tech companies. But we need to go beyond trustbusting to rein in Silicon Valley.

Amazon CEO Jeff Bezos (Emmanuel Dunand/AFP/Getty Images)

The Curse of Bigness: Antitrust in the New Gilded Age
by Tim Wu
Columbia Global Reports, 2018, 154 pp.

Today, a handful of tech firms wield troubling influence over our political and economic institutions. Platforms like Facebook and Twitter have consolidated a major share of the public forum, selling speech, attention, and political influence to the highest bidders. Billionaires like Peter Thiel and Joe Ricketts show contempt for the free press, undermining labor conditions and vaporizing media companies that dare to challenge private power. And Jeff Bezos, the richest man in recent history and owner of the Washington Post, spent this year leading local governments down a path of self-abasement, competing to see who could offer the most to Amazon as home to its second headquarters, only to settle on the two of the most obvious choices—New York City and the Washington, D.C. area. “I’ll change my name to Amazon Cuomo if that’s what it takes,” said New York Governor Andrew Cuomo, revealing a pathetic eagerness to bend his office to the whims of capital. As it turned out, he went even further, offering the company billions in tax incentives along with publicly funded infrastructure.

Preparing a response to the alarming growth of tech monopolists is an urgent task for the left, and a new book by Columbia Law professor Tim Wu, The Curse of Bigness, points to a possible solution. Wu is among the country’s most influential technology critics and a frequent opponent of concentrated power. His perspective draws from a wide range of experiences. He spent the dot-com bubble between the Department of Justice and Silicon Valley, later joining academia, advising the Obama-era Federal Trade Commission, and running for lieutenant governor in New York alongside Zephyr Teachout. He’s best known for coining the term “network neutrality.” His previous books, The Master Switch and The Attention Merchants, examine the lifecycle of information systems and the drive to monetize human attention.

His latest is a call to action—a plea to revive a lost tradition of antitrust in the face of accelerating global inequality. It fishes for solutions by paralleling contemporary crises with those of the early twentieth century, namely, the emergence of dramatic class stratification and an increasingly concentrated economy. “During just one decade, from 1895 to 1904,” Wu writes, “at least 2,274 manufacturing firms merged, leaving behind 157 corporations, most of which dominated their industries.”

The rapid consolidation of firms like U.S. Steel and Bell Telephone bears resemblance to the merger wave we are currently experiencing. In the ten years since the financial crisis, a massive round of mergers in a variety of industries worth $10 trillion has coupled soaring profits with heightening inequality, with 38 percent of the nation’s wealth now in the hands of the richest 1 percent. Wu sees clear echoes of Gilded Age monopolists like John D. Rockefeller and J.P. Morgan in the words and actions of modern-day empire-builders like Bezos and Mark Zuckerberg.

Wu frames inequality as a partial consequence of concentration, which results from a combination of organic market effects and coercive, anti-competitive behaviors. The evils of unchallenged scale, though, are not purely or even primarily economic. They also bear grave threats to democracy, as concentrated trusts challenge popular sovereignty and consolidated industries attain regulatory capture by lobbying in unison.

When true monopolies congeal, the emergent system looks more like feudalism than the market utopia of small-business capitalism. By degrading democracy, Wu argues, economic concentration gradually steers the public toward more radical solutions. He partially credits the rise of de facto corporate monarchs with sparking the fascist and revolutionary leftist projects of the twentieth century, and asserts that the United States both did and should once again carve a middle path to temper capitalism with democratic institutions—chief among them, a forceful agenda to break up the biggest companies and block mergers that would produce anti-competitive monopolies.

Louis Brandeis is the hero of Wu’s story. A progressive Supreme Court justice who served through the interwar period, Brandeis is best remembered for his writing on privacy and the First Amendment. But Wu argues that his most important (and widely forgotten) legacy was a commitment to “the economic conditions under which life is lived, and the effects of the economy on one’s character and on the nation’s soul.” Brandeis wanted an economy structured in service of free expression rather than unrepentant and all-consuming growth, viewing abstractions of scale as roots of a violent inhumanity and opposing financial returns as measures of success. As a result, he committed to a lengthy crusade against the evils of bigness and in favor of decentralization.

If The Curse of Bigness finds intellectual footing in Louis Brandeis’s thought, then Theodore Roosevelt anchors its platform for action. A president who actively courted the image of a great trustbuster, Roosevelt’s cases against the railroad monopolists and other industry titans are better known than Brandeis’s (Elizabeth Warren cites him as her favorite president for this reason), but they are deeply significant to the book’s main project: rooting opposition to oversized corporate power in U.S. history. Wu sees this as foundational, noting that the American Revolution was partly sparked as a response to royal monopolies, and that the Boston Tea Party was an anti-monopoly protest.

But antitrust measures were greatly weakened during the 1970s, a shift that Wu largely credits to the growing influence of the Chicago school of economics, as well as a particularly narrow interpretation of the Sherman Act advanced by judge and legal scholar Robert Bork in The Antitrust Paradox in 1978. Antitrust was diminished from a safeguard of individual and collective self-determination to a relatively tepid consumer price protection. After a few final gasps, most notably the drawn-out case to break up AT&T mandated in 1982, trustbusting was a dying art by the time the internet buoyed a new corporate ecosystem. The halcyon years of the online economy, in which many believed that lean and continuous disruption would become the norm, gave way to a few dominant platforms that continue to grow more entrenched. In a particularly telling example, Wu explains that the antitrust agencies allowed Facebook’s acquisition of Instagram, perhaps the last credible threat to Zuckerberg’s social media market dominance, on the grounds that they allegedly did not compete—for the simple reasons that Facebook lacked a built-in camera, and that Instagram didn’t run advertisements.

Wu’s prescription is clear. He believes that the best way to curb the sinister power of the tech powerhouses is by breaking them up, using a recovered Brandeisian philosophy to encourage private competition on a smaller scale.

The book’s core strength is an elegant brevity. It ties a century of obscure history together without losing sight of its central argument—making a convincing case for federal action to decentralize our economic system, and to manage the social unrest that attends relentless private concentration.

But the story also suffers for its simplicity. Wu tours the ossification of a number of modern industries, including airlines, pharmaceuticals, and even beer, noting the 2016 merger of Miller and Anheuser-Busch. But his main targets—the signature oligarchs of today—are the leviathans of Silicon Valley. The tech trusts cast long shadows across the book, and their similarities to the great trusts of the early twentieth century are implied through histories of cloning and anti-competitive acquisition. This analogizing encourages an uncritical reapplication of the idea of managed, small-scale competition without discussing what sets Silicon Valley firms apart from their early-twentieth-century forerunners.

The Curse of Bigness lacks an in-depth account of the unique features of platform capitalism. Firms like Amazon, Apple, and Facebook don’t just corner markets—they absorb and reproduce them. The Amazon-owned livestreaming service Twitch may compete with Google’s YouTube at some level, but each also leverages extreme power over a self-contained market all its own. Blocking platforms from dominating the market is related to, but not the same as, preventing them from organizing interior competition between content creators to the advantage of shareholders. If a private firm captures the entire medium of exchange for a given service, its providers and consumers (categories that are increasingly blurred) are beholden to their terms. The choice is usually stark: play by our rules or get out.

Wu’s neo-Brandeisian solution, to shrink and proliferate digital platforms—essentially creating markets for markets—is incomplete because the value of any platform is almost entirely in the connections it facilitates. The best thing about Facebook is that everyone is on Facebook, which is why direct competitors like Ello and Google+ bit the dust.

To the extent that platforms step on each other’s toes, it is largely over different forms of engagement rather than in a head-to-head battle for market share. Competition between Twitter and Snapchat is more like Amtrak vs. the U.S. highway system than Target vs. Walmart. Digital platforms are an essential type of network infrastructure, and like others, their benefits intensify with concentration. In their case, smallness may be a curse more lethal than its inverse.

To this point, it’s also important to realize that the internet isn’t just a web; it’s a fractal superstructure of platforms and networks layered on top of and embedded within one another. Cable connects servers and data centers to backbone to backhaul to last mile, delivering packets of data to handheld or desktop hardware that load apps on browsers on operating systems. Each point of translation introduces new markets, layers of abstraction, and avenues for enclosure and domination. Growing at exponential speeds, the system defies totalizing comprehension and continues to grow more efficient with consolidation.

Platforms exist to network real-life human elements, but every manner of peer-to-peer connection is facilitated by a deep and complexly layered multitude of private network systems. Curbing anti-competitive behavior on the internet has historically meant preventing these layers from folding into one another. For example, Wu cites United States v. Microsoft, a Clinton-era Department of Justice case alleging that Microsoft had abused monopoly power by bundling Internet Explorer with its operating system, as the last great antitrust effort. And a primary aim of “net neutrality” is to prevent anti-competitive collusion between internet service and content providers.

But the field of competition among platform giants is inherently unlike that of their industrial supply chain forerunners; the scope and scale of virtual environments enclosed by platform capitalists are ultimately only knowable through artificial abstraction. Human consciousness can only perceive these interconnected indexes as a dizzying succession of disconnected images, and it is almost impossible to imagine an antitrust regime keeping pace for long. Their bigness is not only incomprehensible but, given enough time, most likely unavoidable.

Under capitalism the end-user experience of the internet is one of both connection and isolation, in which profit-hungry algorithms dig through the layers to extract data, demand attention, and feed desires in the name of growth. These systems hold us together, but they also fly blind, save largely for an uncaring drive for accumulation. This, not the late Victorian factory floor, is the terrain of the new tech monopolists. As such, historical precedent only goes so far.

Wu is no stranger to the peculiarities of an economy wired into the internet and would likely agree that antitrust is an incomplete, if important, part of the solution to curbing the antisocial impact of its corporate wunderkinds. Elsewhere he has suggested a consumer boycott movement to redefine the terms of advertisement and attention, as well as generally engaging with technology in a more intentional manner.

Still, it is important to remember that the internet’s digital and physical elements are ultimately just networks connecting us to one another. That infrastructure should serve collective interests, and not merely those of a select few at our expense. Why should we settle for greater consumer leverage over diminished services when we can continue to push for direct, collective control of these resources? Seizing and governing the layered platforms that bind us will require a myriad of diverse and radical strategies, such as funding publicly owned internet service providers, organizing platform cooperatives, socializing media platforms through a recognition of passive digital labor, and other ideas that have yet to be voiced. But one thing is clear: if the internet is to become a source for positive social transformation, the market can’t go it alone.

The Curse of Bigness is a useful guide to the evils of privatized scale, but pragmatism restrains its prescriptions to reining in concentration rather than challenging private ownership of digital network infrastructure outright. If we hope to cohabit a universe of accelerating abstraction, democratic collectivization must also be a central task.

To label antitrust as an incomplete proposal is not to accuse The Curse of Bigness of timidity. A revitalization of aggressive trustbusting is as radical a proposal as could be taken seriously in the short term, and Wu charts a clear path to temporarily forestall the social ills of an oligarchic private tech industry. Long-term solutions, however, will almost certainly require a broader reconfiguration of ownership. To do that, we will need to look to the future for answers, and not merely to a Brandeisian past.

Evan Malmgren is a freelance researcher who lives all over. He’s written about technology and power for outlets including Logic, The Baffler, Jacobin, and The Nation.