Last week's landmark House Antitrust subcommittee hearing has left many with the conclusion that more action is needed to rein in Big Tech.
Although Congress waited years to get all of these CEOs to testify at the same time, they failed to provide our nation's representatives with straight responses to even the most basic of questions. Google's Sundar Pichai dismissed the fact that his company may be stealing content from other websites to undercut its competition and keep people on Google's own sites. Jeff Bezos couldn't guarantee that Amazon isn't violating company policies by taking website seller data to compete against them. Facebook's Mark Zuckerberg was unable to give a convincing answer to questions that pertained to his past e-mails that seemed to suggest his desire to undercut his competition. The list goes on and on.
Ever since the conclusion of the hearing, most of the bipartisan chatter in Washington has centered on breaking these companies up. Before that step is taken though, the question must be asked whether making these tech companies smaller would accomplish the desired outcome. Wouldn't a less massive Google that can still steal competitors' data remain a threat to the public interest? Isn't a smaller Twitter that continues to censor people and information that its staff disagrees with still a problem for free thought and free speech?
Another option to consider is to have the Department of Justice (DOJ) or Federal Trade Commission (FTC) implement clear rules for these companies to follow moving forward. This could be done independently of or concurrently with any antitrust action.
The typical remedies used by these government agencies are consent decrees. These binding agreements between the companies in question and the DOJ or FTC would set the parameters for what is and isn't acceptable behavior, and what the legal and monetary repercussions would be if the Big Tech giants act out of line.
The Big Tech consent decrees could stipulate that it's not permissible for them to take vendors or competitors' data, that it's not acceptable to bury the viewpoints of a specific political ideology, and that it's not OK for them to collude for anti-competitive purposes. In short, the DOJ or FTC could make whatever operational practices that the bipartisan congressional consensus deems harmful to consumers and businesses illegal under current law.
Consent decrees have a proven track record of improving monopolies' behavior. In fact, the Justice Department conducted panels that demonstrated the effectiveness of these antitrust agreements at the same time that Big Tech took questions from Congress.
The panels focused on the DOJ consent decrees between ASCAP and BMI — two entities that control 90% of the music licensing marketplace. Over 70 years ago, when their control of the music licensing marketplace reached a critical mass, the DOJ put these antitrust agreements in place to prevent price-gouging. The decrees simply state that ASCAP and BMI must, through one license, offer all of their songs at a fair rate, free of anti-competitive practices.
During the event, singer/songwriter Bon Jovi was clear: these decrees work well and should remain unchanged for the foreseeable future. By demonstrating to the monopolies precisely what is and isn't acceptable behavior and penalizing them with multi-million-dollar fines whenever they act against the interests of consumers and businesses, the DOJ has prevented these two companies from effectively taking over the entire industry. Because of these consent decrees, businesses' operational costs haven't ballooned, consumers have secured affordable access to music, and performers have reaped plenty of venues to be seen and heard.
Merely breaking up the music cartels, absent these DOJ remedies, wouldn't have secured the same effective results. Their anti-competitive activity would've continued — albeit within several, smaller organizations. This is evident through one of ASCAP and BMI's newer competitors who recently had to enter into an antitrust agreement similar to its bigger rivals because of anti-competitive behavior of its own.
Breaking up Big Tech may make for a good talking point, but it is unclear whether it would actually achieve the outcome Congress desires. Without codifying many of the concerns over operational practices expressed by Republican and Democrats' into law through binding antitrust orders, this bipartisan effort will lack teeth, and is not likely to change much within the industry. Marketplace competition, free speech, and user privacy all depend on our leaders' willingness to implement thoughtful, comprehensive policy remedies that protect the interests of the American people. Here's hoping everyone's up for the task.
Travis Korson is a veteran of politics with years of experience in campaigns, communications, and public policy. He previously served in the Bush White House and has also spent time at various conservative organizations and government institutions including the Heritage Foundation, Americans for Prosperity, and the Faith and Freedom Coalition. He is a graduate of the George Washington University where he studied International Affairs with a focus on International Economics. Read Travis Korson's Reports — More Here.