Mastering Big Tech is the key to competition and capitalism
In the golden age of the late 19th and early 20th centuries, powerful elites such as John Rockefeller, JP Morgan and Andrew Carnegie controlled oil, railroads and steel, key commercial industries on which businesses, large and small, relied upon to engage in trade.
With commercial power controlled by these few “robber barons”, capitalism began to become more of an oligarchy, where wealth became concentrated in the hands of the elite at the expense of consumer prices, innovation and competition for growing businesses across the country.
Enter Republican President Teddy Roosevelt, who began using the Sherman Act (passed in 1890) to break up Rockefeller’s Standard Oil and Morgan’s rail conglomerate Northern Securities.
Today, the era of Big Tech’s robber barons poses a far greater threat to our country than their golden age predecessors. Big Tech robber barons like Amazon, Apple, Facebook and Google are the guardians of commerce and information, giving them the kind of commercial and political power that John Rockefeller could only wield in his dreams. With nearly $250 billion in profits in 2021 alone, these four companies are able to wield unilateral power to dictate how we search, share and buy, and are able to crush competitors, amass exorbitant data, customers and profits.
Consider how Amazon uses data about independent sellers on its platform to develop cheaper competing products and then prioritize them on its platform. Meanwhile, Google enjoys an unlimited virtual monopoly on search, advertising and mobile, making it nearly impossible for small businesses to compete. Apple also enjoys overwhelming power in its market, using that power to decide which apps can and cannot be accessed through its platform and generate mega-profits, while stifling competition from small businesses.
Meanwhile, these four Big Tech robber barons not only enjoy comfortable business relations with the People’s Republic of China, but also cater to the whims of the Chinese government and rely on its cheap labor and production. It is estimated that 75% of products sold on Amazon are made in China and more than a third of Amazon sellers are based there. Apple hit a record 23% market share in China last year and plans to use memory chips made by Wuhan-based Yangtze Memory Technologies Co. in its iPhones, despite more established developers in the US and in other Asian countries.
Despite China’s Facebook ban, the country’s state-sponsored media recently bought Facebook ads to push pro-Russian propaganda and Google recently produced a censored search engine project – Dragonfly – on demand. of the pro-censorship Chinese Communist Party.
It’s time for lawmakers to fully recognize in word and deed that America’s economic strength is the result of elected leaders like Roosevelt prioritizing the innovation and market competition that make capitalism work. Likewise, America’s health as a functioning republic depends on a robust marketplace of ideas, where speech and information are not strangled by political motivations.
That’s why lawmakers must act now to rein in Big Tech’s robber barons before America is ruled, not by informed citizens, but rather by an unholy alliance between Big Tech and the federal government, the former doing advancing his interest in raw and unfettered trade. power and the latter through political manipulation and censorship.
A key piece of legislation that can help accomplish this is the US Online Choice and Innovation Act.
The bill would create consumer choice and improve access by preventing Big Tech gatekeepers from choosing their own products over those of competitors, by requiring a company to purchase goods and services from a Big Tech gatekeeper. for preferred placement on the platform, misusing a company’s data to compete with that. company, skew search results in favor of the Big Tech gatekeeper and against the smaller competitor, and prioritize strict privacy and security protections for American consumers and businesses.
In addition, AICOA would give antitrust authorities the power to deter violations and hold violators accountable for illegal behavior through civil penalties, general injunctions, emergency interim relief, and possible forfeiture of executive compensation.
There will be those who hesitate to give government such sweeping powers to interfere with the private sector, but that misses the point. The private sector and our system of capitalism is not about allowing unfettered growth of private enterprise, but rather about maintaining a system where competition, innovation and consumer choice can thrive, leading to a stronger system where Oligarchic powers aren’t able to stifle economic growth and get the kind of raw power to influence politics just in their name, as is the case with the Big Tech robber barons.
It is imperative that our elected officials, regardless of their party, recognize that they are at a moment in history that calls for the same type of action that Roosevelt applied over 100 years ago, and that he it’s time for them to do the same.
• Ian Prior is the former senior director of public affairs for the Trump administration’s Department of Justice.