google big tech

The noose is tightening around Big Tech. In the UK, the Tory government — not entirely distracted by Brexit — is moving to significantly toughen up competition laws for tech companies. Meanwhile in the US, both sides of politics are talking about using competition laws against them. Here, the ACCC is finalising its digital platforms inquiry.

This is creating some interesting bedfellows — none more so than News Corp and progressive Democrat Elizabeth Warren. Warren last week put forward a structural separation policy to break up Google, Facebook and Amazon by designating them “platform utilities” and banning them from both operating, and participating in, those platforms. “Platform utilities would be required to meet a standard of fair, reasonable, and nondiscriminatory dealing [FRAND] with users. Platform utilities would not be allowed to transfer or share data with third parties.”

That’s similar to what News Corp wants the ACCC to do to Google here. News Corp wants “functional separation” of Google’s ad tech “and a requirement to grant access to their data on FRAND terms”, allowing greater competition in ad tech services for buyers and sellers. And it wants forced divestment of Google’s search function.

The biggest difference is that Warren’s aim is to benefit consumers and protect privacy — in part by curbing the capacity of large companies to monetise personal data by on-selling it. News Corp — despite its pretence that consumers would be the big beneficiaries of its proposed changes — is interested in diverting the flow of ad revenue to Google back to itself and creating a level playing field in the exploitation of consumer data. Instead of Google knowing everything about you, News Corp wants any company to be able to compete to exploit your privacy effectively — including itself.

The irony is, for decades, Rupert Murdoch has been the 800lb gorilla of media, devouring competitors and market share and cajoling or intimidating governments and competition regulators into not intervening. Now he has met an 80,000lb gorilla and is begging for intervention. According to the Murdoch of a previous era, you don’t need to worry about monopolies: in 1994, he told the Centre for Independent Studies “because capitalists are always trying to stab each other in the back, free markets do not lead to monopolies. Monopolies can only exist when governments protect them.” A quarter century later, News Corp wants government protection from a monopoly.

The ’90s-era Murdoch was expressing the neoliberal wisdom of back then: a key part of the neoliberal project was the shift from the intensely pro-competition views of early neoliberals to the pro-monopoly views of the Chicago School, developed to justify the rise of powerful US corporations and the non-intervention of regulators in mergers and acquisitions. Like much neoliberal dogma, that has now been left behind as both the Left and the Right move to more economic interventionism. The result is very ideologically different people saying quite similar things. The American Conservative has been pushing for a new era of trustbusting for a couple of years. Democrats began rediscovering the issue in 2016 and 2017; unusually, Republicans also began raising anti-trust and monopoly issues at the same time (Rolling Stone has a good brief history of the re-rise of trustbusting activism here).

Big Tech is a further excuse for both sides to converge on anti-trust. Democrats see Facebook and Google as enemies of privacy that helped Trump — however unwittingly — win in 2016. Republicans, conversely, think Big Tech is biased against the GOP. And Big Tech are behaving exactly like big monopolists in other industries: Robert Reich claims “Google has quietly financed hundreds of professors at universities — like my own — that help Google defend itself against regulatory challenges to its market dominance.” The major tech companies together spend tens of millions of dollars lobbying politicians. Facebook is now under criminal investigation for its use of data.

The problem is, anti-trust law is a poor tool to deal with so many issues. Competition law is about improving consumer welfare by enabling greater competition between firms; using it to address other problems risks sub-optimal outcomes. Even Trump’s Attorney-General cavilled at regarding bias as an anti-trust issue. And as one Fox News critic of Warren notes, competition laws are not the right tool to address privacy — as News Corp’s proposal shows, you can seek to break up Google, but with the aim of allowing a whole lot more players to exploit and abuse our privacy to make us buy stuff.

The other problem is that consumers don’t pay money to use Google and Facebook; nor are they bundled with other products. We get those services for free, and pay only indirectly through the abuse of our privacy by those firms and the firms they hand out information to. News Corp wants Google Search to be broken away from the rest of Google’s products. But no one forces consumers to use Google Search; there are an array of other search engines, often better ones that don’t abuse your privacy, like Duck Duck Go. True, price isn’t necessarily the only signal to be considered in competition law, but it does lead to regulation based, effectively, on concluding that a company should be broken up simply because it’s too popular with consumers.

Like corporations, Australian politicians have little or no interest in protecting privacy — in fact political parties are some of the worst privacy abusers in the country. And as with media law in Australia, in the regulation of Big Tech, ultimately the interests of consumers may come a distant second to the demands of big media players like News Corp who are interested in themselves and no one else.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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