Opinion | Why Amazon, Facebook, Google, and Apple are Bad for America

Why Amazon, Facebook, Google, And Apple Are Bad For America

Monopolies were once thought to be harmful to the economy and democracy. They continue to do so.

On Wednesday, four prominent tech CEOs — Tim Cook of Apple, Jeff Bezos of Amazon, Sundar Pichai of Google, and Mark Zuckerberg of Facebook — will testify before Congress in a hearing chaired Antitrust Subcommittee Chair David Cicilline. The hearing is one of the outcomes of Cicilline’s subcommittee’s year-long inquiry into whether these four corporations control more of the US economy than our elected officials.

This hearing may appear to some as a series of technical questions about market power, while others may see it as a mere legislative spectacle. However, the stakes are incredibly high. This hearing is part of the first major congressional inquiry into corporate influence in recent memory. In several ways, the result of this hearing and whether Congress develops the courage to split up and control these behemoths over the next few years will decide whether America remains a self-governing democracy.

That might seem to be an exaggeration, but it isn’t. Since they deliver free or low-cost services to customers, these behemoths’ harms have been shielded from the public until now. However, low prices conceal a significant threat to our society, beginning with an oppressive surveillance architecture with centralized ad revenue and jeopardized free speech. Two-thirds of American counties do not have a daily newspaper, owing to money diverted from Google and Facebook’s free press. Furthermore, with almost no oversight, these institutions spread disinformation, damage mental wellbeing, and perpetuate racial discrimination. Even a significant ad boycott by a slew of companies opposed to Facebook’s hate speech policies drew a monopolistic response from Zuckerberg: “My guess is that all tI guessers will be back on the platform soon enough,” he said. That is the essence of strength.

Meanwhile, Amazon has amassed forces that equal, if not surpass, those of the government. Jeff Bezos told Amazon executives in private in 2004 that he wanted to “draw a moat” around the company’s customers. The comparison was clear: Amazon will have total leverage of access to those customers, essentially making it the only way for hundreds of thousands of other businesses to meet them.

And 16 years later, it’s clear that Bezos achieved his goal of transforming his business into the American e-commerce bridge, profiting from the tolls the Seattle-based behemoth imposes on the steady stream of products. In 2020, there will be more than 118 million Prime subscribers in the United States, equivalent to 129 million total households. Bezos was so active in digging his moat that it now encircles nearly the entire nation. The rules he establishes for that commerce have a significant impact on the rest of the consumer economy. “Amazon, with its scale, now substitutes for government in a lot of what it does,” says Harvard Law professor Rebecca Tushnet.

Here, the dangers are actual. Between 2000 and 2015, America lost over a hundred thousand small, independent retail companies, a 40 percent decline, owing mainly to Amazon. And this is bad for customers because Amazon allows thousands of counterfeit and dangerous goods to be sold on its website. After all, it lacks the same product liability as traditional retailers. Amazon copies the design of popular goods because of its Marketplace surveillance, eliminating the motivation to innovate.

In other words, these four companies control the digital infrastructure of large swaths of the American economy, acting as a conduit for our news, entertainment, products, and services. The quasi-governmental gatekeepers of America’s trade and communications are these dominant outlets, whose market capitalization exceeds several large nations’ gross domestic product. In reality, Mark Zuckerberg once said specifically that “Facebook is more like a government than a conventional business in a lot of ways.”

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Monopolies are manycan

Technology companies want to portray themselves as forerunners of the future. Still, to fully comprehend why this hearing is important, it’s necessary to revisit a long-forgotten history of American battles against monopoly control. Most Americans, including our politicians, are unaware that monopolies, especially those that create a barrier between people and the marketplace, have long been regarded as profoundly un-American.

The first anti-monopoly law was enacted in the Massachusetts colony in 1641, and its wording could not be more unambiguous: “There shall be no monopolies given or permitted between us,” except for patented inventions, and even then only “for a short time.”

The American Revolution was sparked by a monopoly, as Americans threw tea trafficked by the tea monopolist, the East India Company, into Boston harbor. Judges and politicians scorned monopolists in the nineteenth century. In striking down the unlawful monopoly of the proprietors of a bridge that suffocated Boston’s trade in 1829, the chief justice of the Supreme Court of Massachusetts observed that the original settlers “came to this country with a hatred of monopolies, and they requested, not that no monopoly should be given, but that none should be allowed.”

In the years that followed, Americans eloquently expressed the conflict between monopoly law and democracy. In denouncing AT&T’s telephone monopoly in the 1920s, the Ohio Supreme Court said, “Monopoly, whether of money, influence, industry, or whatnot, has always been most odious and reprehensible to our American people and their democratic institutions.” The court wrote that if the people want such monopolies, they should set the terms and conditions by legislation.

And legislatures took action regularly. Congress enacted federal antitrust laws in the manufacturing period in 1890, 1913, 1936, and 1950. In the twentieth century, it conducted four significant inquiries into corporate influence. Rep. Emanuel Celler, who headed one of these hearings on the same committee as Cicilline, made a case for corporate freedom as a bulwark of democracy in 1950, using his vantage point to investigate monopoly control in steel, ticketing, newsprint, aluminum, and baseball.

Since Americans and their representatives acknowledged the value of market access, they intuitively understood that democracy necessitates the dismantling of power concentrations. Congress broke up railroads, banks, and aerospace firms, and car and telephone corporations were barred from entering neighboring markets. Congress used to govern our needs, and in so doing, it regulated.

Citizens Became Consumers

So, what went wrong? How did four companies manage to hit such heights? In the 1970s, American elites embraced a modern governance ideology. On the right, the law and economics school at the University of Chicago, and on the left, the consumer rights movement, preached that markets’ government regulation was corrupt. Americans were no longer people, but customers and monopolies could benefit consumers, according to luminaries like Milton Friedman and Robert Bork. Fear Big Government rather than corporate control. Allow expert economists to make business choices, not the general public.

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By 1998, our ruling elites had internalized this ideology to the point where Larry Summers connected American global primacy to corporate and bureaucratic supremacy rather than values of liberty, noting that “whether it is AIG in insurance, McDonald’s in fast food, Walmart in retailing, Microsoft in software, Harvard University in education, CNN in television news—the leading companies are American.” Senator Dianne Feinstein said to a colleague in 2010, after voting against a bill to split up significant banks, “This is still America, right?” We had forgotten so much about ourselves that American leaders failed to understand the value of public influence over markets in their tradition.

Since the Clinton, Bush, and Obama administrations were steeped in this muddled anti-American philosophy favorable to monopoly, and they did not use merger rules. Congress did not control data or online commerce, allowing Silicon Valley to grow to gigantic proportions. To put it another way, Jeff Bezos and his fellow CEOs aren’t strong sovereign-like institutions because they’re smart, as their supporters might argue, or because they’re dastardly, as some of their detractors would say. While America has had its share of heroes and villains, few have come close to their degree of economic domination since the Gilded Age. They rule us because we, the people, have refused to govern ourselves through our democratic institutions. These men have stepped into the vacuum and filled it.

There are several complex technical issues on breaching Amazon’s or the other three tech behemoths’ moats. The political problem, on the other hand, is far more straightforward. In the commercial domain, restoring democracy or rule by the many entails reasserting elected representatives’ positions. As Chair Cicilline and the Antitrust Subcommittee members press the CEOs of these tech behemoths for answers, they are starting to fill the void left by our previous generations of leaders.

If they fill it correctly, they will be reinstating a 400-year-old tradition that is remarkably new.

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