It’s Time to Break Up Big Tech
By: Paul Ingrassia
Amazon obtained a place in the popular psyche that has far surpassed its principal market function as an online retailer and entertainment provider. The conventional wisdom was that Amazon operated much like the major industrial powerhouses at the turn of the last century—standard oil, railroads, and steel—and thus warranted the same basic sort of legal treatment that its ancestor monopolies received. Perhaps the laws would have to be updated somewhat, but the idea was that Amazon had justly achieved its privileged position in society through free and fair competition in the marketplace. Jeff Bezos was predestined to be next in the line of a venerable lineage of American entrepreneurs whose spiritedness and ingenuity entitled them the rarefied perches they occupy in public life. In short, Bezos’s outsized influence in society today, a consequence of his unprecedented wealth (now upwards of two hundred billion dollars), has enabled him to lobby lawmakers for exceptionally lenient policies—skirting oversight of his company’s adverse working conditions and slyly evading a number of pesky environmental issues—for a handsome return payment deposited in the coffers of both Democratic and Republican lawmakers.
From one point of view, to deny Bezos of his wealth and fame would be tantamount to roleplaying as a griping naysayer, quintessentially at odds with all that American entrepreneurship stands for: individual freedom, competitive markets, organizational creativity. For decades, our system has favored innovative startups, particularly internet companies, and has rewarded such companies with irresistible tax incentives, such as those afforded by the 1998 Internet Tax Freedom Act, that established a system in which the privileged few companies who arrived on the nascent internet scene of the 1990s would benefit (literally!) ten thousand-fold, simply for just being in the right place at the right time. This point begins to underscore the larger dilemma: Big Tech’s monopolies exist not so much because they offer a truly novel product, but rather because the traditional incentives for a worthy competitor to overtake the current market linchpins simply do not exist.
The scarcity of formidable competitors in part suggests that Big Tech companies do not operate within the confines of a conventional market, if it can even be considered a market at all. It may ultimately be a more accurate characterization to compare technology companies with government institutions, given the size and scope of their power over people’s lives today. Certainly Google has a far more sophisticated infrastructure to collect personal data than the NSA. In an age where the lines between public and private are becoming increasingly blurred, in some metaphysical sense the advent of Big Tech almost seems to rehabilitate long-thought debunked Marxist prophecies about the end of capitalism and the rise of the global communist state.
In terms of the competitive dynamics at the market level, Amazon and Google, as just two examples, have stuck more or less with the same interface since their inception in the mid-1990s. Neither company has discovered some nonpareil formula that permanently guarantees their competitive advantage in the market, no matter the brilliance of any would-be challenger. Put another way, the laws governing innovation are not irrationally suspended in cyberspace. In fact, competitors of the Big Tech companies do exist, and in great abundance. DuckDuckGo and Bing offer search engines that are just as good, if not superior in many respects, as Google. The former, for example, accords users the opportunity to search with some confidence their privacy will be protected, while Bing provides a product nearly as intuitive as Google, without Google’s myriad controversial strings attached—be it uncertainty among users about mass data harvesting and outsourcing information to who knows where, and increasingly, worries about political censorship, an issue that has aroused ire from both political parties. Still, the competitors fail to go anywhere, which suggests a problem more deep-seated than the simple wisdom governing free markets.
Nearly all young Americans born in the last two decades of the twentieth century and onward have very limited means to acquire social and economic capital offline. Such opportunities are vanishingly rare, they become rarer by the year, and are realistically limited to those already sitting on sizable fortunes, and even then, there remains an open question of whether such hypothetical people could actually make it “off the grid.” As a result, modern people are dependent on Big Tech in ways that less than a generation before would have been unthinkable. More profoundly (and disconcertingly), as the economy continues to evolve—which is to say, becomes more data-oriented and tech-driven—daily life could expectedly, over the course of the next two or so decades, become even more integrated with technology. Such foreseeable innovations that would directly impact everyday life include the gradual phasing out of paper currency, the starving out of traditional brick-and-mortar businesses by online retailers, and the further relegation of meaningful social interactions—notably, the formation of romantic and marital partnerships—to the digital sphere. These radical micro social changes, monumental in effect, will undoubtedly be offset by the even greater revolutionary macroeconomic transformations affecting both low- and high-skilled vocations. These forces could significantly upend traditional lifestyles for untold millions of Americans, whose costs, only now starting to be grasped, could unleash seismic economic and political shockwaves across society.
But that is only scratching the surface. Already, Americans spend more time in front of screens than any people in history. This technological overindulgence is bound to result in negative, long-lasting social (and science indicates even physiological) ramifications which could foreseeably impact generations of people, depending on whether reversing such changes is at all possible. On the macro scale, further empowering companies like Amazon with the means to control multifarious industries, from bookselling to clothing to even food distribution (see Amazon’s recent acquisition of Whole Foods) introduces extraordinary challenges for society. For example, it is realistic to conjecture a scenario whereby Amazon monopolizes enough of the food industry such that all nonmajor food suppliers—i.e., smaller or individually owned grocery stores and restaurants—are forced to close for lack of ability to compete with Big Tech as a result of systemic inequities baked into the economic marketplace originating from the 1990s tax incentives referenced above. Big Tech’s bullying market practices not only impose devastating social costs on local communities thereby forcing beloved mom-and-pop retailers to foreclose, but also effect severe economic repercussions on consumers in the form of more expensive, inferior-quality products, probably manufactured in China.
A Completely New Market Paradigm
Are these trends a natural byproduct of market forces sorting themselves out organically, or is something more sinister afoot? Even if Amazon had a legitimate claim to its lofty market position, should a putatively “free society” desire to have tech companies in charge of vital resources, like food? One could easily imagine a scenario in which the company decides to turn on or off an essential resource like a switch for some unfortunate segment of the population. An even more insidious angle would be that these companies could plausibly link a person’s financial credit for purchases—including food, healthcare, or other vital necessities—based on his or her fealty to the corporate magisterium. In this case, tech companies could adopt some elements of the model currently being employed by the Chinese Communist Party, which links social credit—in part an indicator of party loyalty—to crucial political and economic opportunities. This would in turn preclude uncooperative persons from securing loans to purchase homes or cars, or risk being publicly blacklisted and thereby prevented from traveling altogether. At the most cynical end of the spectrum, such a system could be foreseeably manipulated to deprive political or corporate dissidents of vital food supplies, and in the most dystopian case, emergency surgeries and life-saving medical care.
Perhaps this nightmarish vision is wildly farfetched. But still, the possibility of millions of people depending on a single corporate supplier for life-preserving necessities recently became a stark reality in the age of the coronavirus, in which many privately-owned restaurants and food suppliers permanently shut their doors or downsized dramatically as a result of government-mandated lockdowns. In the age of the symbiotic “public-private partnership,” where massive corporations work hand-in-hand with the federal government in pursuit of a common goal, it is not unthinkable that in an era of extreme partisanship, political antipathies may someday exploit financial capital for revenge, where one party could punish its opponent utilizing the gears of corporate power on a whim.
Even if the situation is not that dire and never gets to that point, Americans should still be wary about living in a society where most of their daily life is effectively governed by a handful of Silicon plutocrats. We are undeniably at this point already. If this system proves (and it should) heinous, antitrust laws must be deployed to address these overarching concerns, freeing up space in the marketplace for competitors to take root in order to aggressively rout out past government-created inequities. However, while the logic behind America’s antitrust laws is to facilitate market innovation, or—“creative disruption”—to borrow a favorite phrase of Silicon wonks, legislators should also think about novel ways to update these laws, perhaps with the newfound understanding that the conventional marketplace can no longer sort out competitors naturally in a way that maximizes the public welfare.
At bottom, the cybersphere managed by Silicon technocrats is not a conventional free market. Instead, this mostly unregulated and still fairly unknown terrain commands unprecedented power due to its alacrity of collecting information. By data mining billions of people, where not only buying habits but even genetic information is shamelessly amassed by faceless technocrats operating behind the scenes trading personal information like stocks in order to make a quick profit, humans become transactional casualties in the machinery of information exchange. Marketing campaigns are being passed on to the public as a chic way for Big Tech to make our lives ever more convenient by selecting healthy dishes tailored to our genetic profiles, for instance. But should we accept Big Tech’s purported altruism at face value? Even if these companies were being completely honest about their good intentions (an extremely dubious claim), a fundamental constitutional issue lingers regarding whether individual liberty could be meaningfully sustained, not just superficially, in a society whose citizens are controlled from womb to tomb by Amazon, Google, Apple, and Facebook. Their ability to harvest personal information on a scale unprecedented in human history makes mincemeat of the power John D. Rockefeller exerted by Standard Oil’s monopoly at the turn of the last century.
Deeper Metaphysical Inquiries About Power
Politics aside, the most important question ultimately hinges on whether a tech-driven society is conducive to securing “life, liberty, and the pursuit of happiness.” Countless polls chronicling historically high rates in suicide, drug overdoses, and general feelings of malaise and depression bleakly suggest the contrary. More profoundly, what role technology companies should play in society transcends even political, economic, or legal inquiries. Indeed, a truly holistic understanding would require a metaphysical probe into where political power should be vested in a free society: democratic governmental institutions or powerful corporations. Moreover, is it actually still possible to preserve a putatively “free market system” that is rapidly technologizing, and also a “free society” in which individual liberties are guaranteed, at one and the same time?
Such existential questions dignify a gravitas that will inevitably be reflected in much of the public and legal discourse in the near future. As man and machine become increasingly intertwined, the most important anthropological questions concerning human existence—the “teleology” (to borrow a term from Thomistic philosophy)—of technological progress obtain newfound urgency, and accordingly inspire penetrating inquiries into how laws should be reformulated if the preservation of privacy and freedom, the bedrock principles of a free society, still remains a desirable goal on its own terms.
About the Author: Paul Ingrassia is a 2L at Cornell Law School. He grew up on Long Island, New York and has a degree in Mathematics and Economics from Fordham University. Paul is an Associate on both the Cornell Journal of Law and Public Policy and the LII Supreme Court Bulletin.
Suggested Citation: Paul Ingrassia, It’s Time to Break Up Big Tech, Cornell J.L. & Pub. Pol’y: The Issue Spotter (Oct. 16, 2020), http://jlpp.org/blogzine/its-time-to-break-up-big-tech/.