Don't Break Up Big Tech
The worst ideas in Washington are often bipartisan. Big Tech is about to learn this lesson, if it hasn’t already.
Elizabeth Warren is out with a headline-grabbing proposal to break up Big Tech companies, the sort of overly ambitious government plan that once would have engendered knee-jerk Republican opposition. Not anymore. Who says we all can’t get along?
When the senator tweeted her (understandable) objection that Facebook had taken down her ads attacking Facebook and other tech companies, Ted Cruz agreed that the companies have too much power.
Tech is caught in a right-left pincer. Conservatives don’t like these companies because they are owned and operated by sanctimonious Silicon Valley liberals subject to the worst sort of groupthink. Progressives don’t like them because they are colossal profit-making enterprises.
That’s why there is some chance Washington might get together and, along the lines Warren proposes, effectively outlaw the business models of some of the most successful and iconic American companies.
Warren’s idea to cleave off the platforms of the tech companies and have them run as “platform utilities” separate from the rest of their business is unworkable and is justified by a series of errors and misjudgments.
It’s not true, as Warren asserts, that the antitrust suit against Microsoft in the 1990s opened up the space for Google and Facebook to thrive. Microsoft never got the internet and left the space open for Google and Facebook all by itself, as often happens with a large incumbent wedded to its business model.
She charges that the tech companies use mergers to limit competition and cites Facebook’s acquisition of WhatsApp. It’s hard to discern the harm here. When the social network bought it, WhatsApp was available for a fee. Now it’s free, and more people use it than ever. What’s the problem?
She calls out Google for allegedly killing off its competitors by burying them in its searches. It’s not obvious that Google actually does this, although its search business inherently involves constantly making choices to try to best serve what people want to see. No government regulator is going to improve Google’s searches, or is qualified to even try.
Warren’s proposal is obviously formulated without taking any account of the interests of consumers, who are the ones who made the tech companies so large.
Why does Google provide for free a tool without which it’s impossible to imagine contemporary life? Because it can monetize it with advertising. Without the advertising, which Warren insists should be a separate business, Google has no incentive to devote engineers to improving its search engine.
By the same token, no one will welcome iPhones that no longer come with or sell Apple apps. And would people really appreciate having to go to two different Amazons, one just a platform, one selling Amazon products?
This is all silly, as are the mergers that Warren pledges to reverse, including Amazon’s acquisition of Whole Foods. Amazon doesn’t have anything close to a monopoly in food retail. Rather than taking over the sector, it’s spurring investment and innovation. The nation’s largest supermarket chain, Kroger, was slated to increase its spending on investment 200 percent in 2018.
The tech giants aren’t stand-pat companies. Amazon alone spent more than $22 billion on investment in 2017. The development of autonomous vehicles, artificial intelligence and voice recognition wouldn’t be nearly as advanced if it weren’t for the research of the tech companies. The behemoth of yesteryear, General Electric, isn’t making these investments.
None of this is to deny genuine concerns about tech companies. They need rules for content that honor the spirit of the First Amendment, and perhaps there should be tighter regulations around privacy. But any real offenses should be addressed with fixes directed at specific conduct, rather than with a massive politically imposed reorganization.
That’s a very bad idea, and if you had any doubt, watch it get a respectful hearing from both sides in Washington.
© 2019 by King Features Syndicate