Even conservatives have lost patience with ‘big tech’

Digital platforms can no longer count on the votes of their once long-time ally as the last line of defence

‘Big tech’ has been losing friends for a long time, but now it’s losing the support of its staunchest supporters: conservatives. To illustrate just how much, consider what happened just two weeks ago, at the United States Supreme Court. The court was examining a Texas law that restricts how social media platforms deal with nuisance users. Critics of the law argued that if the law was allowed to stand, platforms would be unable to enforce their own contracts. Normally, you would expect the most conservative judges to agree, and defend the sanctity of private contracts, under Al Murray the Pub Landlord’s principle of “my gaff, my rules”. But something unusual happened instead.

While the court did indeed strike down the Texas Law, as expected, three of the most conservative Supreme Court justices disagreed.

It was now reasonable, one wrote in a dissenting opinion, to consider the technology platforms to be so dominant that they are natural monopolies. If you’re banned from Facebook and Twitter, you cease to have a digital voice at all, as the former president Donald Trump has discovered. One of the three, Judge Samuel Alito spiced his dissent with a particularly incendiary aside. Alito has been described as the most conservative Supreme Court justice of all time, who “seldom sided with consumers suing big business”, according to one analysis of his record.

But here, Alito went out of his way to cite a hero of the modern antitrust Left: Louis D Brandeis. Brandeis was a brilliant populist justice appointed over a century ago, who coined the phrase “the curse of bigness”. Biden’s appointee as federal trade commissioner, Lina Khan, hails the new movement of competition activism as the “New Brandeis School’.

The change of heart is new. For decades, conservative policy elites have regarded “bigness” not as a curse, but as a blessing. The Chicago school of antitrust theory successfully argued that consumers were best served if business was left alone.

But this has changed, as the economist Hal Singer explains. “Today, Republicans don’t perceive antimonopoly action as regulation,” he says. “They don’t want to cede action on this zeitgeist issue to the Democrats”. Singer says that it’s a reflection of sociological changes within the movement: “the Chamber of Commerce, old guard Republicans have lost their grip on the party.”

Two competition bills aimed squarely at big tech are now making their way through Congress, and both have sailed through on the votes of Republicans. One bill dealing with app markets passed the Senate Judiciary Committee by 21 to 1, and the other, which focuses on self-preferencing, was passed by 16 votes to 6.

So Alito’s warning shot is very significant: it’s a signal that the technology giants can’t count on a conservative majority court any more as their last line of defence. Sadly, this is a debate that has become febrile, even by the overheated standards of American rhetoric. In a recent speech, one trade commissioner complained that her agency was now overrun by “Marxists and critical legal studies fans”, comparing the leading antitrust hipsters to presidents Putin and Xi.

The implication was that this was a civilisational cultural battle for the American way of life. But fewer and fewer American conservatives are inclined to agree with her. The diminishing number of supporters of big tech in academia and policy consists of voices it largely pays to be there, and their mantra of “innovation!” and “start-ups!” sounds a bit thin after so many years of stasis.

The two Congressional bills are far from perfect, and the hipsters have a mountain to climb. The Chicago school made lower prices a clinching argument in competition cases, and this became enshrined as a legal principle known as the Consumer Welfare Standard.

It’s a pretty good one, too, for in a consumer society, we value what benefits consumers, not producers. Competition laws had originally been introduced because cartels and monopolists were gouging the consumer, charging higher prices than a competitive market would see.

But lower prices don’t tell the full story of our platform era, where digital services are given away for free, and the platforms are so dominant they control both supply and demand, which is something no company has ever been able to do before. For example, while the East India Company could control the supply of many vital commodities, it did not run any shops. The company could not rearrange entire virtual high streets as you blink, which is what Amazon is able to do when you hit the refresh button. The promotion of no brand, low-quality Chinese landfill – which seems to be Amazon’s goal – has deep consequences. And troubling ones too, once the potential entrepreneurs of tomorrow realise that playing a rigged game is for mugs. We can’t count the innovation we don’t see.

Anyone hoping for market-friendly competition measures from Europe will be disappointed. The European Union has imagined a digital utopia and believes that it can will one into existence. Some of the demands are odd. For example, by demanding interoperability between messaging apps, it allows a third party to sit in the middle of the conversation, monitoring traffic. Funnily enough, this is just where the EU typically likes to be. The commission’s record on promoting markets falls short of the rhetoric. And Britain? For now, it’s taking a cake-ist approach: of both having big tech and beating it. The Government has created a Digital Markets Unit, but it can only cough politely from the sidelines until it gains statutory powers. Which will be “as soon as parliamentary time allows”, the digital minister Chris Philp promised last week.

There’s certainly room for a rational, market-centred approach to competition that is both liberal and pragmatic, and that views policy as releasing market forces rather than punishing what Brandeis called bigness. But the longer that big tech’s supporters insist on the Panglossian view that the market is working just fine, and everything is for the best, the biggest casualty will be the very idea of free markets themselves.