A Deadly ‘Fix’
The perils of gov’t solutions to Big Tech outrages
THE social-media wars are heating up. Congress has grilled Google’s CEO, and the British Parliament wants to hear from Facebook’s Mark Zuckerberg. Across the political spectrum, there are calls for the government to do something about Big Tech’s seemingly unaccountable power. Since we live our lives increasingly on social media, it’s understandable. But it’s a highly suspect idea. Let’s start with the left’s version of this argument. Critics like former Labor Secretary Robert Reich point out that Big Tech is too big, that Silicon Valley’s vast wealth gives it too much political clout. It’s a complaint that recalls the trust-busters of a hundred years ago.
Yet the threat of government intervention is going to give us more, not less, money in politics. Microsoft went into lobbying overdrive following a 1999 breakup order, and it’s vigilance against government intervention that impels Google to spend $17 million a year on lobbying.
And what would government do exactly — break up the megafirms? Imagine breaking up Facebook and sending half your Facebook friends into one company and the other half into a second. A to L here, Mt oZ there. Let them compete, but a year or two later only one company would be left. We’d all migrate to one of the companies to get our friends back together.
The network benefits of getting all your friends on a single platform are what permitted Facebook to become dominant in the first place, and that’s also why splitting it up makes no sense. The legislator can’t change the economic reality.
What about undoing the kinds of mergers by which Amazon bought Whole Foods? That’s more feasible, but recent economic history tells us it’s unnecessary.
What we’re seeing today is a return to the conglomerization of the go-go 1960s, when cash-flush companies grew by acquiring firms in different industries.
The idea was that you’d have fewer and better managers running the corporate behemoth, and you could fool investors with funny accounting tricks.
On closer analysis, many of the conglomerates were houses of cards, and they came tumbling down with the breakup and divestiture movement led by the financier Michael Milken in the 1980s, when managers realized that conglomerates were worth more when split apart.
When all the evidence was in, we saw that the vaunted managerial synergies of combination with firms in unrelated areas were a cost, not a benefit, of bigness. Managers of a firm in one industry simply didn’t have a clue how to run a business in another. We might already be starting to see this in the conglomerates the tech giants have assembled. Jeff Bezos worries that his empire might not last his lifetime, and he’s right to fear that a new Michael Milken will show us that splitting apart the social-media giants will increase the value of their separate parts.
Now let’s turn to the right’s Big Tech anxieties. What really bothers conservatives is the liberal bias of the social-media giants. Mainstream conservatives have been banned on YouTube and “shadow-banned” on Twitter. Terrible, yes, but the proposed cure would be worse than the disease.
When politicians have taken it upon themselves to promote “balanced” speech, it’s been a disaster for conservatives. Until 1987, the Federal Communication Commission’s fairness doctrine required broadcasters to provide honest and balanced viewpoints, and that’s what kept the Rush Limbaughs off the air. But that’s just what conservatives are now asking for when it comes to Big Tech.
They’re asking the swamp to regulate Big Tech, and not just the swamp but the deepest of swampdwellers: Democratic politicians who themselves have tried to silence opponents — as they did when they asked Lois Lerner’s IRS to slow-walk approving taxexempt status for Tea Party groups. Why would conservatives trust the same crowd to promote free speech online?
Tuesday’s hearing on the Hill gave conservatives a heads-up on what legislative pressure will look like in the next Congress. There are a number of issues here, said California Democrat Zoe Lofgren, and “it’s pretty obvious bias against conservative voices is not one of them.” What the Democrats will want to look at instead is conservative “hate speech.”
The First Amendment was meant to keep politicians from regulating speech — period. That’s still a good idea.