Monthly Archives: August 2021

Twenty-five years ago, Facebook, Google, and Amazon didnt exist. Now they are among the most valuable and well-known companies in the world. Its a great story but also one that highlights why the government must break up monopolies and promote competitive markets.

In the 1990s, Microsoft the tech giant of its time was trying to parlay its dominance in computer operating systems into dominance in the new area of web browsing. The federal government sued Microsoft for violating anti-monopoly laws and eventually reached a settlement. The governments antitrust case against Microsoft helped clear a path for Internet companies like Google and Facebook to emerge.

The story demonstrates why promoting competition is so important: it allows new, groundbreaking companies to grow and thrive which pushes everyone in the marketplace to offer better products and services. Arent we all glad that now we have the option of using Google instead of being stuck with Bing?

Todays big tech companies have too much power too much power over our economy, our society, and our democracy. Theyve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.

I want a government that makes sure everybody even the biggest and most powerful companies in America plays by the rules. And I want to make sure that the next generation of great American tech companies can flourish. To do that, we need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favor and throwing around their economic power to snuff out or buy up every potential competitor.

Thats why my administration will make big, structural changes to the tech sector to promote more competition including breaking up Amazon, Facebook, and Google.

How the new tech monopolies hurt small businesses and innovation

Americas big tech companies provide valuable products but also wield enormous power over our digital lives. Nearly half of all e-commerce goes through Amazon. More than 70% of all Internet referral traffic goes through sites owned or operated by Google or Facebook.

As these companies have grown larger and more powerful, they have used their resources and control over the way we use the Internet to squash small businesses and innovation, and substitute their own financial interests for the broader interests of the American people. To restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last, its time to break up our biggest tech companies.

Americas big tech companies have achieved their level of dominance in part based on two strategies:

Weak antitrust enforcement has led to a dramatic reduction in competition and innovation in the tech sector. Venture capitalists are now hesitant to fund new startups to compete with these big tech companies because its so easy for the big companies to either snap up growing competitors or drive them out of business. The number of tech startups has slumped, there are fewer high-growth young firms typical of the tech industry, and first financing rounds for tech startups have declined 22% since 2012.

With fewer competitors entering the market, the big tech companies do not have to compete as aggressively in key areas like protecting our privacy. And some of these companies have grown so powerful that they can bully cities and states into showering them with massive taxpayer handouts in exchange for doing business, and can act in the words of Mark Zuckerberg more like a government than a traditional company.

We must ensure that todays tech giants do not crowd out potential competitors, smother the next generation of great tech companies, and wield so much power that they can undermine our democracy.

Restoring competition in the tech sector

America has a long tradition of breaking up companies when they have become too big and dominant even if they are generally providing good service at a reasonable price.

A century ago, in the Gilded Age, waves of mergers led to the creation of some of the biggest companies in American history from Standard Oil and JPMorgan to the railroads and AT&T. In response to the rise of these trusts, Republican and Democratic reformers pushed for antitrust laws to break up these conglomerations of power to ensure competition.

But where the value of the company came from its network, reformers recognized that ownership of a network and participating on the network caused a conflict of interest. Instead of nationalizing these industries as other countries did Americans in the Progressive Era decided to ensure that these networks would not abuse their power by charging higher prices, offering worse quality, reducing innovation, and favoring some over others. We required a structural separation between the network and other businesses, and also demanded that the network offer fair and non-discriminatory service.

In this tradition, my administration would restore competition to the tech sector by taking two major steps:

First, by passing legislation that requires large tech platforms to be designated as Platform Utilities and broken apart from any participant on that platform.

Companies with an annual global revenue of $25 billion or more and that offer to the public an online marketplace, an exchange, or a platform for connecting third parties would be designated as platform utilities.

These companies would be prohibited from owning both the platform utility and any participants on that platform. Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.

For smaller companies (those with annual global revenue of between $90 million and $25 billion), their platform utilities would be required to meet the same standard of fair, reasonable, and nondiscriminatory dealing with users, but would not be required to structurally separate from any participant on the platform.

To enforce these new requirements, federal regulators, State Attorneys General, or injured private parties would have the right to sue a platform utility to enjoin any conduct that violates these requirements, to disgorge any ill-gotten gains, and to be paid for losses and damages. A company found to violate these requirements would also have to pay a fine of 5 percent of annual revenue.

Amazon Marketplace, Googles ad exchange, and Google Search would be platform utilities under this law. Therefore, Amazon Marketplace and Basics, and Googles ad exchange and businesses on the exchange would be split apart. Google Search would have to be spun off as well.

Second, my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.

Current antitrust laws empower federal regulators to break up mergers that reduce competition. I will appoint regulators who are committed to using existing tools to unwind anti-competitive mergers, including:

Unwinding these mergers will promote healthy competition in the market which will put pressure on big tech companies to be more responsive to user concerns, including about privacy.

Protecting the future of the internet

So what would the Internet look like after all these reforms?

Heres what wont change: Youll still be able to go on Google and search like you do today. Youll still be able to go on Amazon and find 30 different coffee machines that you can get delivered to your house in two days. Youll still be able to go on Facebook and see how your old friend from school is doing.

Heres what will change: Small businesses would have a fair shot to sell their products on Amazon without the fear of Amazon pushing them out of business. Google couldnt smother competitors by demoting their products on Google Search. Facebook would face real pressure from Instagram and WhatsApp to improve the user experience and protect our privacy. Tech entrepreneurs would have a fighting chance to compete against the tech giants.

Of course, my proposals today wont solve every problem we have with our big tech companies.

We must give people more control over how their personal information is collected, shared, and sold and do it in a way that doesnt lock in massive competitive advantages for the companies that already have a ton of our data.

We must help Americas content creators from local newspapers and national magazines to comedians and musicians keep more of the value their content generates, rather than seeing it scooped up by companies like Google and Facebook.

And we must ensure that Russia or any other foreign power cant use Facebook or any other form of social media to influence our elections.

Those are each tough problems, but the benefit of taking these steps to promote competition is that it allows us to make some progress on each of these important issues too. More competition means more options for consumers and content creators, and more pressure on companies like Facebook to address the glaring problems with their businesses.

Healthy competition can solve a lot of problems. The steps Im proposing today will allow existing big tech companies to keep offering customer-friendly services, while promoting competition, stimulating innovation in the tech sector, and ensuring that America continues to lead the world in producing cutting-edge tech companies. Its how we protect the future of the Internet.

We can get this done. We can make big, structural change. But its going to take a grassroots movement, and it starts right now. Sign our petition if you agree, and lets get ready to fight hard together.

Here is the original post:

Heres how we can break up Big Tech | by Team Warren | Medium

One of the remarkable trends of the past year has been the accelerated pace at which corporate power has caught up to state power. Billionaires are blasting off into space, literally but also figuratively, as truckloads of easy money have added trillions to business valuations.

Whether as a consequence of fiscal flourishing or becoming increasingly beholden to activist politics, the most influential of Americas megacorporations the Big Tech oligopoly has turned toward challenging state power.

Facebook is now making official its de facto status as the judge, jury, and executioner of the internet death penalty for elected leaders.

Big Tech now not only has the audacity to erase heads of state from the internet but also has proven willing to act with a vigor and decisiveness that has been missing from ossified public institutions. Silicon Valley coordinated to take down both President Trump and rival platform Parler within days of the January 6 riot; the Trump administrations attempt to crack down on Chinese app TikTok, on the other hand, meandered for months and was overturned by President Biden earlier this week.

With the deplatforming of Trump serving as a successful test run for impunity, Facebook made a small but decisive change to its policies last week in a blog post announcing that Trump could potentially be unsuspended in 2023. The change went underreported, with most outlets focusing on Trumps possible comeback.

The post, written by Facebooks Vice President of Global Affairs Nick Clegg, declares that the company is scaling back its newsworthiness exemption for politicians, first introduced in 2016 and then strengthened in 2019. The exemption, which permits content deemed newsworthy to remain on Facebook even if it breaks the sites rules, was previously applied by default to all heads of state, elected officials, and other important public figures.

As of last Friday, default protection no longer exists. Facebook will now suspend public figures during times of civil unrest and ongoing violence for up to two years (the same penalty given to Trump).

Nick Clegg writes,

At the end of this period, we will look to experts to assess whether the risk to public safety has receded. We will evaluate external factors, including instances of violence, restrictions on peaceful assembly and other markers of civil unrest. If we determine that there is still a serious risk to public safety, we will extend the restriction for a set period of time and continue to re-evaluate until that risk has receded.

In other words, Facebook is now making official its de facto status as the judge, jury, and executioner of the internet death penalty for elected leaders. Clegg continues,

Of course, this penalty only applies to our services Mr. Trump is and will remain free to express himself publicly via other means.

This washing of hands is comical given recent events. Trumps ordeal, as well as the experience of so many other less prominent conservatives in the past, suggests that these other means are few in number and declining all the time, in no small part because of Big Techs own aggressive persecution of its competitors.

Trumps attempt to seek other means of communicating with his supporters in the form of his blog helped to highlight the myth of Big Tech as an optional service. Despite his immense public profile, Trumps blog posts drew in only a minute fraction of the audience that his tweets and Facebook posts had received.

Clearly, social media is the primary means by which ordinary people communicate with others locally. When it comes to communication on a national or international scale, which of course is required of any important figure, that primacy grows. Closing down all of a politicians social media accounts is equivalent to gagging him.

Consider what foreign governments are thinking right now. With the exception of a few countries such as China (with its Great Firewall blanket ban on tens of thousands of websites) or Russia (which has VK, its own homegrown social media giant), the Silicon Valley titans are the worlds information conduits.

Facebook, Google, and Twitter raced into dozens of countries just as widespread adoption of the internet picked up, establishing local monopolies. There are millions of people worldwide for whom Facebook is the entire internet.

Governments will inevitably view American tech as a threat to their sovereignty. They will see it as unacceptable that platforms that account for most of the information flow in their countries are headquartered overseas, run by unelected and unaccountable foreign corporate executives, and take a growing interest in influencing domestic politics.

Nigeria is the latest country to give voice to this discontent against Silicon Valley. After Twitter deleted one of Nigerian President Muhammadu Buharis tweets in which he issued a veiled threat toward insurgents currently operating in the countrys southeast, Nigeria responded by blocking Twitter for all of its citizens.

The Nigerian Ministry of Information has since declared the ban indefinite unless Twitter meets a series of demands, including registering as a company in the country and submitting to its licensing procedure.

While Twitters initial decision to delete Buharis tweet can be debated on its merits, Nigeria is within its rights to be concerned about the platforms influence. It sees the current separatist movement as a threat to its own existence and therefore reasonably interprets Twitters intervention as an undermining of national sovereignty that goes beyond the usual critical coverage in foreign newspapers.

The Big Tech platforms showed that they were terrible arbiters of political truth the moment that they banned Trump for inciting violence in a riot in which the only violent death was an unarmed woman at the hands of police. Even if they were perfect judges, however, it would not be their place to prevent duly elected officials from communicating with their constituents.

There are many more Nigerias on our current trajectory, whether spurred by censorship incidents or through countries preempting any issues with Big Tech. The future may bring a much more fractured social media landscape, with countries either creating their own homegrown social media infrastructure or inviting in rival monopolies (probably Russian or Chinese) that undercut American platforms by offering more local control.

Original post:

Big Tech Now Threatens National Sovereignty | The American ...