This essay is adapted from the recent book Big Business: A Love Letter to an American Anti-Hero, published by St. Martin’s Press.
Talk of breaking up Facebook, and perhaps some of the other tech giants such as Google and Amazon, continues to grow. Democratic presidential candidate Elizabeth Warren, Mark Zuckerberg’s own college roommate, some of the most respected writers who cover technology, and influential legal scholars are all beating the drums. And pressure isn’t just coming from the left. Last week it was reported that the Department of Justice and the Federal Trade Commission recently divvied up among themselves jurisdictional oversight over four tech juggernauts—Amazon, Apple, Google, and Facebook—in preparation for expected antitrust probes.
Facebook is under the most intense scrutiny for a host of well-known reasons: Russian use of the social network to interfere in our elections, repeated violations of Facebook users’ privacy, and recurring controversies over where the company should draw the line around what constitutes permissible speech on its platform. What all of these issues have in common, curiously, is that they have nothing to do with violating antitrust law by being an unlawful monopoly.
Calling for a breakup of Facebook is not only unwarranted, it would be a misapplication of antitrust laws that would make current problems worse. (I should add here as a disclaimer that Facebook, Google, and other tech companies have been donors to my university, my university has significant plans to work with Amazon in the future, and I have attended—unpaid—staged events put on by Facebook and Google.)
It is commonly alleged that Facebook has a monopoly on social networking, yet unlike traditional villainous monopolists, Facebook has not raised prices—the service is free—or restricted output. And people do not use Facebook because the company has emptied their lives of alternatives. We can still connect with one another by text, email, telephone calls (yes, they still work), Pinterest, Twitter, LinkedIn, writing a blog and creating an online community (my own favorite), Twitch, Fortnite and other online games and platforms, Snapchat, messaging services (including for instance Apple’s iMessage, and also Facebook’s own WhatsApp, maximized for privacy), and last but not least, knocking on your neighbor’s door.
On the other hand, this is an age of suspicion of power, and the big tech companies are indeed large, highly profitable, and world-spanning. They have overturned how we communicate, and there is a resulting sense, not always backed by hard analysis, that the status quo simply cannot be left alone. But American antitrust law doesn’t penalize bigness or social influence per se. There may well be features of the major tech companies you don’t like, such as their privacy implications or how they have shifted the balance of power in politics, but that is not a sound legal basis for dismantling them. If you wish to address consumer privacy issues on online platforms or foreign interference in elections, push for legislation that does so, but don’t prescribe a remedy for one illness to one that is completely unrelated.
Advocates of splitting up the big tech companies have a utopian vision of what will replace them. Whether you like it or not, we now live in a world where every possible idea (and video) will be put out there in some fashion or another. Don’t confuse your discomfort with reality with your assessment of big tech companies as individual agents. We’re probably better off having major, well-capitalized companies as guardians and gatekeepers of online channels, however imperfect their records, as the relevant alternatives would probably be less able to fend off abuse of their platforms and thus we would all fare worse.
Imagine, for instance, that instead of the current Facebook we had seven smaller companies all performing comparable social networking services, perhaps with some form of interconnectability or data portability. The negative sides of social media, which are indeed real, probably would be worse and harder to control.
It is unlikely that such a setting would result in greater consumer privacy and protection. Instead, we would have more weakly capitalized entities, with less talent on staff and weaker A.I. technologies to take down objectionable material. Probably some of those companies would be more tolerant of irresponsible user behavior as a competitive lure. Fake accounts would proliferate, and social networking sites such as 4chan—often a cesspool of racism and rhetoric that goes beyond the merely offensive—would comprise a larger and more central part of the market.
As for privacy, these smaller Facebook replacements would be more susceptible to hacks, foreign surveillance and infiltration, and external manipulation—the real dangers to our privacy and well-being.
A more modest plan to split up Facebook might just hive off WhatsApp and Instagram, the company’s two most successful acquisitions, leaving “Facebook the page/service” more or less intact. But that won’t work, either. For one thing, it wouldn’t address most of the actual current criticisms of Facebook, which typically revolve around the Facebook page. If we had maintained an independent Instagram, current social media dilemmas wouldn’t be any less acute. Facebook has actually upgraded those services and kept them uncluttered, with the revenue-earning burden placed mainly on the Facebook page itself.
An independent WhatsApp, once placed under the pressure to bring in more revenue and make profits as a solo enterprise, would acquire more of the features Facebook critics find objectionable. Put another way: Facebook resists the temptation to make WhatsApp more like its own ad-driven core product because the company realizes that if it did, it would drive many users away and onto other “pure” texting services. And that curb on Zuckerberg and Co.’s power to monetize WhatsApp is another indication that Facebook’s supposed monopoly power isn’t all that monopolistic.
Another claim you hear is that the big tech companies must be taken down a notch because otherwise they will control our government. But the evidence does not support that assumption. Over the longer haul, farming, big pharma, and banking lobbies, or for that matter Boeing, have had a much better record getting their way with the federal government. The tech companies are spending more and more on lobbying as time passes, but for them and their revenue models the D.C. scene remains a sideshow.
The tech companies also have been losing plenty of political battles. In general, they did not favor the election of Donald Trump, nor have they pushed for an immigration crackdown—quite the contrary—or the current spate of trade wars.
To see the limits of Amazon’s influence, even at the level of local government, consider the company’s withdrawal from its planned Long Island City location in Queens, New York. If the company really is pulling all of the strings, why did it find the hostile political environment so troubling? Why didn’t it just stick around and bulldoze the opposition into submission?
Finally, the next time you are tempted to levy a charge of monopoly against Google or Facebook, keep in mind that both companies are significant anti-monopoly engines in their own right. They allow small and midsize businesses to engage in targeted advertising, and therefore to offer niche products that compete against the goods and services of larger companies. Before Facebook and Google, smaller companies had much more limited advertising prospects as they often found it too expensive to advertise on television or radio.
So instead of being price-gouging advertising providers, Google and Facebook allow far smaller companies to spread their message in smart, economical ways, allowing them to compete with larger firms. This is a common trend in the world of accessible, networked tech platforms, of behemoths empowering smaller companies. Think of how much easier Amazon’s Marketplace makes it for small businesses to sell to distant customers, and how much Amazon’s cloud computing services make it easier for individual entrepreneurs to start these small businesses without having to hire in-house tech support.
Whenever there are major companies that have grown so large and influential in a short period, as in the case of big tech, they will always arise suspicion, and indeed those companies will always make some objectionable missteps. Let’s not confuse those criticisms with a case for a split-up that would harm American consumers and go beyond the boundaries of the law.
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