John J. Bastiat / November 8, 2017

Monopolizing the Internet

The increasing size and influence of Google and Facebook have elicited cries for trust-busting.

It’s long past time for government to break up Google and Facebook. Or so writes Yelp’s vice president of public policy, Luther Lowe, in The Wall Street Journal. Lowe spiritedly argues his case that Congress — or the executive branch, or somebody — needs to break up the Google and Facebook “monopolies.” How quaint: A veep of the site cornering a very sizable portion of the brick-and-mortar, ratings-and-reviews market says the government should shut down his competition. Of course it should. No doubt Ford and Chevy likely wouldn’t object to the same kind of treatment for Toyota and Honda, nor would a host of other contenders mind too much if the federal government weighed in against their competition, too. Even so, notwithstanding Lowe’s overtly self-serving op-ed, he raises a topic worth analyzing: Should Google and Facebook be broken up under antitrust laws — like Ma Bell, in the early ‘80s? If not, why not?

Certainly, that case is being made. For instance, according to Lowe, 99 cents of every dollar spent on online advertising goes to Google and Facebook, collectively. This, along with the duping of the two sites into service as puppets in Russia’s meddling in the 2016 presidential election, is reason enough in Lowe’s mind to warrant federal action. Setting aside the “monopoly” argument to which we will shortly return, do any other “root causes” explain the sudden momentum change against these two giants? Indeed.

Only two months ago, for example, we chronicled Google’s censoring efforts; we covered Facebook’s algorithm manipulation only a few months before that. It’s no secret neither company loves either conservatives or Republicans, but events like these — in which both efforts were designed to suppress conservative news and views — show the extent to which both companies have overplayed their left-orthodoxy hand. The broader public is starting to sit up and take notice — and not just our public.

For instance, the European Union (EU) just pistol-whipped Google with a record-breaking $2.7 billion fine for breaking its antitrust laws, stating Google had “abused its dominant position by systematically favoring” its own shopping service in its search results. The penalty is almost three times the previous record, meted out to Intel in 2009. The EU’s precedent could open the door for even more litigation over Google’s basic search engine, and a much deeper legal dive into its search algorithms. Moreover, since Facebook is already under the gun for algorithm-tinkering, Google’s exposure before the EU will likely only amplify scrutiny of Facebook, as well.

Nor is public opinion the two companies’ only setback. Ever since the Democrats’ blunt-trauma contact with the reality of the election of Donald Trump, party faithful have been relentlessly searching for a scapegoat sufficiently worthy to put their runaway train back on its ideological tracks. That scapegoat has variously taken the form of “Trump’s ‘collusion’ with the Russians,” “Russian meddling with the 2016 presidential election,” or some variation in between the two. Central to this truth-twisting groupthink has been notion the Google and Facebook ads were manipulated by the Russians to change the American voter’s mind. How else could Trump have won, they wonder. Never mind the fact Facebook, Twitter and Google have each stated the amount of Russian-backed content on their sites was negligible. Indeed, Facebook even quantified its assertion, noting the amount of news produced by the Russians under the auspices of the shill “Internet Research Agency” was less than a hundredth of 1%.

Sadly, such facts do not dissuade such crack forensic experts as Sen. Dianne Feinstein (D-Kookland). During a recent meeting of the Senate Select Intelligence Committee, she told these social media conglomerates, “I must say, I don’t think you get it. Because you bear responsibility. You created the platforms … and now they’re being misused. And you have to be the ones who do something about it — or we will.” Of course: Congress needs to step in and censor, break up, or otherwise ruin yet another segment of our erstwhile “free” market society, because Democrats have been hurt by it … somehow. Just what the nation needs: More laws and more regulation from the same buffoons who haven’t even the slightest notion of how a free market economy works.

That said, given the size and influence of these social-media monoliths, no one should be surprised at the general feeling — both from the Left and the Right — that they should be “brought in line.”

But how? Given its abysmal track record on “fixing” problems —and by “problems” we mean any problem — is government really the answer? It is true Silicon Valley has proven time and time again it is wholly incapable of breaking out of its far-left-leaning box or restraining itself from censoring content it finds “offensive” (read: conservative viewpoints). But are these sufficient reasons to make good on Feinstein’s “do-something-about-it-or-we-will” threat? God help us if they are: The worst remedy to this problem is to summon the unholy demons of federal intervention. The proof: Simply observe this was the Democrats’ immediate, go-to play: The polar opposite of that play is clearly the right move. That solution is the free market.

We note at the outset of our free market rejoinder that true “monopolies” cannot exist apart from government intervention. One need only briefly survey the past two centuries’ worth of history on this topic to understand that once a company reaches a certain size, it is no longer capable of carving through economic landscapes with the speed and custom-tuned response demanded by newer, smaller customers. That is, “one-size-fits-all” answers to customer demands never prevail in the long term, absent government-imposed constraints limiting the available options.

What then, is the conservative answer to the problems of Google and Facebook? As a philosophical first step, we would caution not to throw the baby out with the bath water. Both Google and Facebook serve worthy purposes, even from a conservative point of view. Second, remember the conservative concept of a “limiting principle”: Once Google, Facebook and Twitter are decimated, what’s to stop the onslaught against other e-giants? How about Amazon? Or, for that matter, Mr. Lowe, what about Yelp? Aren’t they, too, “monopolies” of a type? What is a “monopoly,” anyway, and how is one “broken up”? These questions allude to a more fundamental problem: Getting government involved in anything out of its lane — such as picking winners and losers in the so-called free market — makes a bad situation much worse.

In contrast, free market solutions — alternative platforms and applications, public exposure of leftist ideologies and biases infused in search algorithms, public awareness initiatives on the value of free speech in social media, litigation campaigns which force Google, Facebook, Amazon and other online juggernauts to publicly admit their positions and beliefs, boycotts and social media blitzes designed to alert the public of censorship or bias activities by online platforms, etc. — are surely much more effective and much less damaging to the national economy than draconian government intervention. Remember, the government chose the winners and losers in the 2008 financial meltdown — not the free market. Today, the U.S. is still recovering from those hastily made and utterly foolish choices. Let’s not repeat such recklessness less than a decade hence.

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