American Economic Liberties Project: Why the U.S. needs to break up Big Tech

The anti-monopoly American Economic Liberties Project, a nonprofit which recently co-hosted an online forum about the need to break up Big Tech, released a 9-page mini whitepaper a few months back making the case for why the U.S. should apply traditional antitrust law to shard the power of Facebook and Google. The document is structured primarily in FAQ format, with 9 questions and responses that cover various issues, including the broad societal harms of Big Tech, the pro-monopoly shift in U.S. antitrust policy that took place in the 1970’s, and the needed corrective actions.

The decision to use a title that markets the document towards “progressives” seems a bit odd, since the harms are broadly understood, but regardless of the title choice, the points are solid. Some extended extracts below.

- Bruce

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https://www.economicliberties.us/our-work/economic-liberties-explains-facebook-and-googles-toxic-business-model-and-how-to-hold-the-platforms-accountable/

Ending Our Click-Bait Culture: Why Progressives Must Break the Power of Facebook and Google

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The 2016 election crystallized for many policymakers that the big tech companies – and particularly Facebook and Google – are dangerous to democracy. During that election, they played an outsized role in disseminating misinformation and propaganda, promoting conspiracy theorists, and facilitating foreign interference. Their monopolization of digital advertising markets is also at the center of the collapse of good sources of credible information, in particular local press…

The conversation must move beyond requiring that platforms engage in better or more fact-checking, or symbolic actions to placate stakeholders frustrated with limited actions by these businesses. We must restructure how they make money.

Facebook and Google’s many interrelated harms trace back to their business model, and in particular, two primary causes: (1) their unregulated dominance over key communications networks, and (2) their use of those networks to engage in surveillance and user manipulation to monopolize digital advertising revenue. Addressing these harms will require policymakers to correct mistakes of the past and take two basic but essential steps.

First, they must break up Facebook and Google, so they are no longer too big to regulate. Second, policymakers must regulate the resulting market practices to protect broad universal public access to the 21st century public square...

When considering how to address monopolistic corporations like Google and Facebook, we are often presented with a false choice. Should we break them up, or regulate them? To achieve a structural reorientation of the business model of Google and Facebook, the answer is: Both.

Why should I care about this? What’s the real harm? [...]

- Facebook and Google supercharge the spread of misinformation

- They invade user and business privacy via surveillance, manipulation, and data breaches.

- They reduce innovation by acquiring or undermining start-ups that might compete with their products, creating what venture capitalists call a “kill zone” around sectors they control.

- They impose a tax on small businesses by preferencing ad placements...

- And they’ve destroyed local independent journalism by dominating ad markets, siphoning up about 60 percent of all digital ad revenue. That has particular effect on both local elections, since there are fewer local journalists providing coverage, and political corruption...

Why don’t lawmakers or regulators do something about it?

Historically, lawmakers have protected vital communications networks such as telephones or television airwaves from being commandeered by monopolists who exact a toll from everyone who wants to use their systems. But there was a break in the late 1970s, when the so-called Chicago School successfully reframed antitrust to mean only prices paid by consumers.

Both Republican and Democratic administrations adopted this framework. They sought to allow corporate concentration within and across markets, often under the assumption that market dominance signaled nothing more than efficiency...

What are the solutions?

Reducing Google and Facebook’s dominance means changing the rules and laws that enable their business model, and to bring anti-monopoly enforcement actions to reduce their scale and scope. One way to start is through structural separations: for instance, splitting out Google’s general search from mapping, Android, and YouTube.

… Finally, some business lines could be separated between production and distribution. For example, general search can be divided into the search engine web page Google.com, the underlying web crawl (the unseen function that indexes internet sites for searching), and the ad feed. This division would enable other firms to license the underlying web crawl, creating a new and open competitive market of search engines. [...]