The subcommittee revived a key function of Congress: the power to investigate, report and set the stage for legislation. The report itself may become a keystone in a long-overdue dawning of progressive tech reforms.
Since the mid-1970s, Congress has celebrated the rise of new technology and tech businesses. Both political parties, for different reasons, dismissed antitrust concerns as a relic of a bygone age. For Democrats, globalization and technology seemed to guarantee competition. When antitrust was excised from the party platform in 1992, it had been there since the Gilded Age. For Republicans, markets cured themselves; antitrust was simply another form of regulatory abuse.
Into the vacuum between these positions came the rapacious Big Four. The subcommittee report details how they came to operate at unprecedented scale and reach. The companies’ combined valuation is more than $5 trillion. Add in Microsoft ($1.5 trillion) and Tesla ($275 billion), and the collective value is nearly equal to that of the NASDAQ 100.
The Big Four have enormous influence given their hold on communications infrastructure (Facebook, Google), e-commerce (Amazon), and start-ups and entrepreneurs (Apple). They directly compete with businesses that use their markets. The report tracked how they have gouged suppliers and imitated, acquired or eliminated competitors. It showed how their profits allow them to enter into new lines of business, where they repeat their predatory strategies.
As the subcommittee detailed, the Big Four have acquired hundreds of companies, often to eliminate potential competitors, in what are known as “killer acquisitions.” Meanwhile, antitrust regulators are underfunded — or possibly compromised by lobbying — and seldom are their powers exercised under antitrust laws to block mergers. Of nearly 100 Facebook acquisitions, the Federal Trade Commission extensively investigated only its 2012 purchase of Instagram (over which the FTC took no action).
When monopolies have unlimited power to buy up or kill off competitors, they turn perverse. History shows how, in a variety of sectors, monopolies led to prices going up, quality and innovation declining, and wages and working conditions worsening. Inevitably, concentrated economic power becomes a political issue. The Big Tech monopolies illustrate the cycle. They control more and more parts of society. They employ legions of lobbyists to consolidate their control. Big-money politics expands their influence. They have grown further during the pandemic, as more economic and social activity has moved online.
The subcommittee report includes recommendations for action, including divestment of different lines of business — such as forcing Facebook to split off Instagram and WhatsApp — and preventing platforms such as Amazon from giving preference to its own services or products. (Amazon founder and chief executive Jeff Bezos owns The Post.) It calls for increasing the budgets and authority of the Federal Trade Commission and the Justice Department Antitrust Division.
Although the subcommittee investigation proceeded with bipartisan support, that fell apart when it came to remedies. Rep. Jim Jordan (R-Ohio), the right-wing disrupter, assumed minority leadership of the subcommittee midway through the investigation and focused his attention on the canard that the platforms discriminate against conservatives. Rep. Ken Buck (R-Colo.) announced that he agreed with most conclusions of the investigation but dissented from recommendations of forced divestments or strengthening antitrust laws. These dissents will not blunt the force of the investigation or the report. Antitrust has reemerged on the progressive agenda, thanks to the support of Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) and a growing progressive caucus in the House. Outside intellectual and policy support is deepening with the help of organizations such as the Open Markets Institute.
In the short term, the report could stiffen the spine of the Federal Trade Commission as it finishes an antitrust investigation into Facebook. Same for the Justice Department as it heads into court against Google. Taking on the economic and political power of Big Tech isn’t for the faint of heart. This report not only charts a course, but the waves it generates could also help to turn the tide.