For Apple, Amazon, Facebook, and Alphabet, covid-19 was an economic blessing. Even as the pandemic sent the global economy into a deep recession and cratered most companies’ profits, these companies—often referred to as the “Big Four” of technology—not only survived but thrived. Collectively, they now have annual revenue of well over a trillion dollars, and the value of their stocks has soared: together they’re worth $2.5 trillion more than they were 15 months ago. 

Yet at the same time, they have come under unprecedented attack from politicians and government regulators in the US and Europe. While congressional hearings on charges that Facebook has been censoring conservatives or not doing enough to restrain disinformation and hate speech may have gotten most of the headlines and public attention, the companies are facing far more substantive threats, in the form of new lawsuits, proposed bills, and regulations.  

This past fall, the Federal Trade Commission and 48 state attorneys general filed suit against Facebook, charging it with illegally maintaining a monopoly over the social-networking space “through a years-long course of anticompetitive conduct.” Soon after, the US Department of Justice and 11 state attorneys general filed suit against Google, charging it with illegally maintaining a monopoly over the search and search advertising markets. Apple is currently locked in a civil trial with game developer Epic Games, which is challenging Apple’s control of its App Store on antitrust grounds.

Last summer, the US House Judiciary Committee concluded a 19-month investigation into alleged anticompetitive activity by the tech titans. The resulting 450-page report described the companies as “the kinds of monopolies we last saw in the era of oil barons and railroad tycoons” and recommended that the government take action against them. 

It’s easy, of course, to dismiss anything that comes out of Washington or Brussels as political posturing, but in this case that would be a mistake. President Joe Biden has named some of Big Tech’s sharpest and most vocal critics—including Columbia University professor Tim Wu, author of the book The Curse of Bigness, and Lina Khan, who served as special counsel to the Judiciary Committee during its investigation—to important roles in his administration. Europe is putting in place tougher regulations to try to limit Big Tech’s power. And antitrust action, at least with regard to the tech industry, has become that rarest of things: a bipartisan issue in Congress.

What’s arguably more important is that we’re in the middle of a radical shift in the intellectual discussion—one that has made it much easier to go after Big Tech. In many ways, we seem to be going back to the antitrust vision that determined US policy toward big companies for much of the 20th century, a vision that’s much more skeptical of the virtues of size and much more willing to be aggressive in keeping companies from exercising monopoly power.

America’s key antitrust laws were written around the turn of the 20th century. The Sherman Antitrust Act of 1890 and the Clayton Act of 1914 remain on the books today. They were written in broad, far-reaching (and ill-defined) language, targeting monopolists who engaged in what they called “restraint of trade.” And they were driven in large part by the desire to curb the giant trusts that had, via a series of mergers and acquisitions, come to dominate America’s industrial economy. 

The quintessential example was Standard Oil, which had built an empire that gave it essentially complete control over the oil business in the US. But antitrust law wasn’t just used to block mergers. It was also used to stop a host of practices that were deemed anticompetitive, including some that nowadays seem routine, like aggressive discounting or tying the purchase of one good to the purchase of another.

In reality, the four companies have very different businesses that raise very different antitrust questions and will lend themselves to very different antitrust solutions.

This all changed with the Reagan

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By: James Surowiecki
Title: What does breaking up Big Tech really mean?
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Published Date: Wed, 30 Jun 2021 11:00:00 +0000