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Once the darling of D.C., leaders of Big Tech now receive a much cooler reception on Capitol Hill. On September 5, Twitter's director Jack Dorsey and Facebook's second-in-command, Sheryl Sandberg, spoke up at the Senate hearings. "You are going to have to do something," warned Republican Senator James Risch of Idaho, or risk a crackdown by lawmakers and regulators. Google, whose co-founder Larry Page refused to appear at the hearings, drew even more vitriol. "Maybe it's because they're arrogant," said Florida GOP Senator Marco Rubio.
It's not just talking. The biggest question at the confluence of business, technology and politics is whether US technological titans have become too big and should be subject to harsh new rules or aggressive antitrust measures. The answer may depend on the fact that the rise of political revolts is enough to overcome decades of anti-regulatory doctrine that narrowly – and perhaps naively – defines the harm that corporate giants could cause.
The political momentum seems to be growing. On the right, Utah Senator Orrin Hatch sent a letter on August 30 asking the Federal Trade Commission (FTC) to reopen an investigation into Google's online search and digital advertising practices. Trump's economic advisor, Larry Kudlow, said he's "reviewing" the regulation of Google's search results. And on August 31, Fox News presenter Laura Ingraham suggested that federal regulators could treat Facebook and Twitter as public services. On the left, Senator Elizabeth Warren has repeatedly called for antitrust enforcement to introduce competition in the technology space. "I am now officially bipartisan," tweeted Matt Stoller, former adviser to Bernie Sanders, referring to Hatch's letter to the FTC. Beginning in mid-September, the FTC will hold a series of hearings on the market weight of large technology companies.
That the titans of technology crush the competition simply by their size is not disputed. When Amazon announced plans to buy Whole Foods last summer, rival food chains lost market value of nearly $ 22 billion a day. When Facebook announced in May that it was launching a dating service, the company that owns Match.com lost almost 22% of its value immediately. In July, the European Union fined Google $ 5 billion for violating antitrust laws – the second time the company was punished in just over a year.
But winning an antitrust case in the United States requires more than gathering evidence that the size of a company is distorting a market. Since the 1980s, federal antitrust authorities have had to show that the size of a firm is actively hurting consumers, for example by raising prices, or reducing choices. In the digital economy, where technology companies allow consumers free access to their products, it is difficult to demonstrate that this type of harm is detrimental. In 2013, during the FTC's latest investigation into whether Google had manipulated its search results to favor its own properties, the commission found that it had done so, but that Google's practices as a whole have benefited consumers. The FTC did not file a complaint at that time.
But in recent years, antitrust thinking has begun to change. Since 2016, when the United States concluded that Russia had armed involuntary technology firms against the US electorate to influence the presidential campaign, the extent of potential harm that Big Tech can cause to citizens, not just consumers, has expanded. "Before 2016, there was this feeling that these companies were progressive and cool techies who were doing magic," said Stoller, now associated with the Open Markets Institute. "Now it's like, Oh. You are Big Tobacco.
This explains why technology leaders worked overtime on September 5 to convince legislators that they could address the concerns without Washington's help. "We were too slow to spot that and too slow to act," Sandberg said. "It's on us."
This appears in the September 17, 2018 issue of TIME.
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