It might seem a Silicon Valley cliché, but it was a garage — a pretty dumpy one for those who got to visit it just over two decades ago — that served as the birthplace of what the U.S. government today is calling a crippler of competition, a reducer of consumer choice and a stifler of innovation.
Big allegations, all aimed at Google, the multicolored wonder of the digital age that has managed to grow from those modest beginnings as just another search engine in a nascent industry to the linchpin of a trillion-dollar conglomerate called Alphabet.
“For the sake of American consumers, advertisers, and all companies now reliant on the internet economy,” the Justice Department said on Tuesday in an antitrust lawsuit it is waging along with 11 states, “the time has come to stop Google’s anticompetitive conduct and restore competition.”
Actually, the time to do anything substantive about the overwhelming power of the giant tech companies was very long ago. Instead, state and federal governments — on both sides of the partisan divide — charged with protecting small businesses and encouraging innovation did squat.
The action taken on Tuesday is akin to closing the proverbial barn door not only after the horses have left, but also after those now billionaire horses have trampled over key parts of the economy and society.
Still, for all the huffing and puffing by Attorney General William Barr — whose actions always seem slick with the oily sheen of dirty tricks and who has shoved this case forward faster than many prosecutors had thought prudent, weeks before the election — I give him kudos for at least finally stating the obvious and taking concrete action to do something about it. It’s refreshing to hear the government acknowledge that the unlimited money and influence of the major tech companies need some guardrails.
It was so much easier when the Justice Department filed United States v. Microsoft Corp. in 1998 — as with Google, just over 20 years after the software company was founded. Back then, Microsoft was the only Darth Vader character, able to crush small companies with a single glance through the ubiquitous power of its Windows operating system. The government won its case years later, and it made for a neat and simple narrative that kneecapping a tech giant was critical to the flowering of the start-ups that followed.
Maybe — the real impact of that legal action is still up for debate. But what followed undoubtedly had a lot to do with the power of a new technology — in this case, the internet — which fueled the cheap creation and drastic escalation of a series of major companies. Like Google in search. And Amazon in commerce. And Facebook in social media. And too, the revived Apple, which seized the next major tech trend — the mobile phone explosion — and rode that to its impressive $2 trillion valuation.
That is trillion with a T, and it is those five companies that now top the list of the most valuable companies in the United States. And since these are all founder-based companies, the executives in charge of these companies are among the richest people in the history of the planet, too.
I have nothing against the creation of wealth through ingenuity — and I never could have imagined Google’s future when I visited that garage back in 1998. But I stood by for years in astonishment as each of these companies grabbed more and more power without a peep from regulators and often with the assistance of salutary legislation, like the much misunderstood Section 230 of the 1996 Communications Decency Act.
That law — which among other things gives broad immunity to internet companies for what travels over their platforms — has also become a piñata in Washington. Abolition of Section 230, as it’s known, is thought to be the silver bullet to solve the problems with Big Tech.
But here’s the trouble: There’s no such thing as a single entity called Big Tech, and just saying it exists will not cut it. The challenges plaguing the tech industry are so complex that it is impossible to take action against one without understanding the entire ecosystem, which hinges on many monster companies, with many big problems, each of which requires a different remedy.
Certainly reforming Section 230 could help. But other tools may be needed, like significant fines, as well as new state and federal laws, enforcement of existing regulations and increased funding for agencies like the Federal Trade Commission, along with more aggressive consumer action and media scrutiny.
Apple’s control over the App Store and its developers? Perhaps some fairer rules over how to operate when it comes to fees and approvals, since separating the apps from the phones is a near impossible task.
Amazon’s problem with owning a critical marketplace platform where it sells its own goods alongside third-party retailers? Simply put, should Amazon be allowed to sell its own batteries if it also controls the store for a lot of batteries? It sounds like separating Amazon retail products from the store itself might be a possible solution, as well as establishing much less porous walls between the various Amazon businesses.
Facebook and its damning “land grab” and its “neutralize” emails (referring to squelching rivals), as well as its worrisome domination of the online discourse and news distribution across much of the world? This one is harder, but some breakup of its units, say a cleaving of Instagram and WhatsApp, might be a step in the right direction, along with figuring out a way to make its controversial editorial decisions more transparent and systemic rather than the more random Whatever Mark Zuckerberg Says This Week they have become.
And Google, of course, which is now for the first time ever in a real fight with the United States government? It was in early 2013 that the F.T.C. commissioners decided unanimously to scuttle the agency’s investigation of Google after getting the company to make some voluntary changes to the way it conducted its business. This despite a harsher determination by its own staff in a 160-page report, which came to light in 2015, that Google had done a lot of the things that the Justice Department is now alleging, including that its search and advertising dominance violated federal antitrust laws.
Which is to say, the government knew then and did nothing. Now it is finally taking action, but the question has to be asked: What does it know about all the others?
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