A handful of behemoth companies like Facebook, Google and Amazon today exert massive influence over American culture, economics and politics. This isn’t an intrinsically bad thing — big, culture-defining companies dot America’s history — but some of these tech giants have grown so powerful that it’s almost unthinkable any new competition could arise to keep them honest.
A House committee plans to investigate the tech sector with an eye toward possible antitrust legislation. Such an inquiry is overdue.
Today’s internet arguably is impacting everyday lives more dramatically than any technological advance since the automobile, linking people around the world and putting the sum of human knowledge at everyone’s fingertips in ways that would have been inconceivable a few decades ago. This has been mostly for the good.
But as a few entities have built enormous power in this largely unregulated new realm, the dark side has emerged.
Local brick-and-mortar businesses and online retail startups alike are being smothered by Amazon, which has a stranglehold on almost 40% of retail e-commerce sales. Google has been accused of directing searchers to its own services and away from those of competitors.
Facebook aggressively monetizes the personal information of its customers and allowed its platform to be manipulated by Kremlin operatives seeking to influence the 2016 election. If true market options existed, Facebook users angry over such intrusions could simply jump to a competitor. But for all practical purposes, Facebook doesn’t have one.
Younger users are now flocking to Instagram as an alternative. And who owns Instagram? Facebook.
Concern about these developments crosses party lines in Congress. Bipartisan hearings announced last week will examine why, as House Judiciary subcommittee chair Rep. David Cicilline, D-R.I., put it, “the internet is broken.”
Cicilline and others leading the effort are wisely casting it not as an investigation of specific companies but of the tech sector as a whole — though that will inevitably mean diving deep into the activities of Facebook, Google and others. The core question is: Have a few entities amassed and kept their power through anti-competitive behavior, ultimately killing the very kind of growth and innovation the internet is supposed to foster?
Facebook in particular has a history of stifling competition by buying up any company that might threaten it. Chris Hughes, who co-founded Facebook with chief executive Mark Zuckerberg, wrote an essay last month calling for the company’s breakup. In it, he cites a startling fact and the clearest indication of why that might be necessary: No major new social networking company has arisen since 2011.
The tech sector’s top five companies are collectively worth more than Britain’s entire gross domestic product. With stakes like that, vibrant new competitors should be sprouting up everywhere. Whether the shadows of those few towering companies are preventing it is a question begging to be answered.