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.
This all changed with the Reagan administration in the 1980s. Instead of worrying about big companies’ impact on competitors or suppliers, regulators and courts started to focus almost entirely on what was called “consumer welfare.” If a merger, or a company’s practices, could be shown to lead to higher prices, then it made sense to step in. If it didn’t, antitrust regulators generally took a hands-off approach. That’s why Facebook’s acquisitions of Instagram and WhatsApp, Amazon’s acquisition of Zappos, and Google’s acquisitions of DoubleClick, YouTube, Waze, and ITA all sailed through the regulatory approval process without a hitch.
No longer, though. Over the past four or five years, scholars, politicians, and public advocates have begun to push a new idea of what antitrust policy should be, arguing that we need to move away from that narrow focus on consumer welfare—which in practice has usually meant a focus on prices—toward consideration of a much wider range of possible harms from companies’ exercise of market power: damage to suppliers, workers, competitors, customer choice, and even the political system as a whole. They’ve done so, not surprisingly, with the Big Four squarely in mind.
But what exactly would reining in Big Tech’s power look like? Short answer: It depends very much on which company you’re going after.
While antitrust advocates often rhetorically lump Apple, Amazon, Google, and Facebook together, creating a memorable image of four giant “gatekeepers” collectively controlling access to the digital economy, in reality the four companies have very different businesses that raise very different antitrust questions and will lend themselves to very different antitrust solutions.
Take, for a start, Apple. It is the most valuable company in the world, as of this writing worth more than $2 trillion. It’s also the most profitable company in the world. And yet, when it comes to discussions of antitrust and Big Tech, Apple often seems like an afterthought. In Wu’s book, Apple barely makes an appearance, and in Senator Amy Klobuchar’s new book, Antitrust, which is a ringing call for remaking and enforcing anti-monopolization policy, the discussions of Apple seem more cursory than central to her thesis.
That may be in large part because Apple has become a behemoth mostly on its own—while it has made plenty of acquisitions, its recent growth is mainly due to the simple fact that it has introduced three of the most successful and lucrative technology products in history, and that it has continued to convince customers to keep upgrading to the next generation of products. Even in this new world, it is not illegal to become hugely successful by building the proverbial better mousetrap.
To be sure, Apple has antitrust issues, which center on its requirement that all developers who are making apps for the iPhone and iPad sell their goods through the App Store, with Apple collecting a 30% fee. So it’s possible Apple will end up having to let developers sell directly to consumers, or even allow independent app stores. Even so, it could still collect a licensing fee from any app that wanted to be on the iPhone. And most users would, in all likelihood, continue to use the App Store regardless, if only out of habit and convenience.
So in the grand scheme of things, Apple wouldn’t seem to have that much to worry about from increasing antitrust pressures.
Amazon’s situation is more complicated. It, too, has the fact of organic growth going for it; while it has made its share of acquisitions, it has grown mostly on its own, driven by its relentless appetite for selling more, its huge investment in infrastructure, and its willingness to spend huge amounts of money in order to win and keep customers. Its biggest antitrust problem stems, paradoxically, from something it created itself: Amazon Marketplace.
The Download: a long covid app, and California’s wind plans
1 The Twitter Files weren’t the bombshell Elon Musk billed them as
His carelessness triggered the harassment of some of Twitter’s content moderators, too. (WP $)
+ The files didn’t violate the First Amendment, either. (The Atlantic $)
+ Hate speech has exploded on the platform since he took over. (NYT $)
+ Journalists are staying on Twitter—for now. (Vox)
+ The company’s advertising revenue isn’t looking very healthy. (NYT $)
2 Russia is trying to freeze Ukrainians by destroying their electricity
It’s the country’s vulnerable who will suffer the most. (Economist $)
+ How Ukraine could keep the lights on. (MIT Technology Review)
3 Crypto is at a crossroads
Investors, executives, and advocates are unsure what’s next. (NYT $)
+ FTX and the Alameda Research trading firm were way too close. (FT $)
+ It’s okay to opt out of the crypto revolution. (MIT Technology Review)
4 Taylor Swift fans are suing Ticketmaster
They’re furious they weren’t able to buy tickets in the botched sale last month. (The Verge)
6 We need a global deal to safeguard the natural world
COP15, held this week in Montreal, is our best bet to thrash one out. (Vox)
+ Off-grid living is more viable these days than you may think. (The Verge)
7 What ultra-dim galaxies can teach us about dark matter
We’re going to need new telescopes to seek more of them out. (Wired $)
+ Japanese billionaire Yusaku Maezawa has some big plans for space. (Reuters)
+ A super-bright satellite could hamper our understanding of the cosmos. (Motherboard)
+ Here’s how to watch Mars disappear behind the moon. (New Scientist $)
8 An elite media newsletter wants to cover “power, money, and ego.”
It promises unparalleled access to prolific writers—and their audiences. (New Yorker $)
+ How to sign off an email sensibly. (Economist $)
9 The metaverse has a passion for fashion 👗
Here’s what its best-dressed residents are wearing. (WSJ $)
10 We’ve been sending text messages for 30 years 💬
Yet we’re still misunderstanding each other. (The Guardian)
Quote of the day
“There is certainly a rising sense of fear, justifiable fear. And I would say almost horror.”
—Pamela Nadell, director of American University’s Jewish Studies program, tells the Washington Post she fears that antisemitism has become normalized in the US, in the light of Kanye West’s recent comments praising Hitler.
The big story
California’s coming offshore wind boom faces big engineering hurdles
Research groups estimate that the costs could fall from around $200 per megawatt-hour to between $58 and $120 by 2030. That would leave floating offshore wind more expensive than solar and onshore wind, but it could still serve an important role in an overall energy portfolio.
The technology is improving as well. Turbines themselves continue to get taller, generating more electricity and revenue from any given site. Some research groups and companies are also developing new types of floating platforms and delivery mechanisms that could make it easier to work within the constraints of ports and bridges.
The Denmark-based company Stiesdal has developed a modular, floating platform with a keel that doesn’t drop into place until it’s in the deep ocean, enabling it to be towed out from relatively shallow ports.
Meanwhile, San Francisco startup Aikido Technologies is developing a way of shipping turbines horizontally and then upending them in the deep ocean, enabling the structures to duck under bridges en route. The company believes its designs provide enough clearance for developers to access any US port. Some 80% of these ports have height limits owing to bridges or airport restrictions.
A number of federal, state, and local organizations are conducting evaluations of California and other US ports, assessing which ones might be best positioned to serve floating wind projects and what upgrades could be required to make it possible.
Government policies in the US, the European Union, China, and elsewhere are also providing incentives to develop offshore wind turbines, domestic manufacturing, and supporting infrastructure. That includes the Inflation Reduction Act that Biden signed into law this summer.
Finally, as for California’s permitting challenges, Hochschild notes that the same 2021 law requiring the state’s energy commision to set offshore wind goals also requires it to undertake the long-term planning necessary to meet them. That includes mapping out a strategy for streamlining the approval process.
For all the promise of floating wind, there’s little question that ensuring it’s cost-competitive and achieving the targets envisioned will require making massive investments in infrastructure, manufacturing, and more, and building big projects at a pace that the state hasn’t shown itself capable of in the recent past.
If it can pull it off, however, California could become a leading player in a critical new clean energy sector, harnessing its vast coastal resources to meet its ambitious climate goals.
How Twitter’s “Teacher Li” became the central hub of China protest information
It’s hard to describe the feeling that came after. It’s like everyone is coming to you and all kinds of information from all over the world is converging toward you and [people are] telling you: Hey, what’s happening here; hey, what’s happening there; do you know, this is what’s happening in Guangzhou; I’m in Wuhan, Wuhan is doing this; I’m in Beijing, and I’m following the big group and walking together. Suddenly all the real-time information is being submitted to me, and I don’t know how to describe that feeling. But there was also no time to think about it.
My heart was beating very fast, and my hands and my brain were constantly switching between several software programs—because you know, you can’t save a video with Twitter’s web version. So I was constantly switching software, editing the video, exporting it, and then posting it on Twitter. [Editor’s note: Li adds subtitles, blocks out account information, and compiles shorter videos into one.] By the end, there was no time to edit the videos anymore. If someone shot and sent over a 12-second WeChat video, I would just use it as is. That’s it.
I got the largest amount of [private messages] around 6:00 p.m. on Sunday night. At that time, there were many people on the street in five major cities in China: Beijing, Shanghai, Chengdu, Wuhan, and Guangzhou. So I basically was receiving a dozen private messages every second. In the end, I couldn’t even screen the information anymore. I saw it, I clicked on it, and if it was worth posting, I posted it.
People all over the country are telling me about their real-time situations. In order for more people not to be in danger, they went to the [protest] sites themselves and sent me what was going on there. Like, some followers were riding bikes near the presidential palace in Nanjing, taking pictures, and telling me about the situation in the city. And then they asked me to inform everyone to be cautious. I think that’s a really moving thing.
It’s like I have gradually become an anchor sitting in a TV studio, getting endless information from reporters on the scene all over the country. For example, on Monday in Hangzhou, there were five or six people updating me on the latest news simultaneously. But there was a break because all of them were fleeing when the police cleared the venue.
On the importance of staying objective
There are a lot of tweets that embellish the truth. From their point of view, they think it’s the right thing to do. They think you have to maximize the outrage so that there can be a revolt. But for me, I think we need reliable information. We need to know what’s really going on, and that’s the most important thing. If we were doing it for the emotion, then in the end I really would have been part of the “foreign influence,” right?
But if there is a news account outside China that can record what’s happening objectively, in real time, and accurately, then people inside the Great Firewall won’t have doubts anymore. At this moment, in this quite extreme situation of a continuous news blackout, to be able to have an account that can keep posting news from all over the country at a speed of almost one tweet every few seconds is actually a morale boost for everyone.
Chinese people grow up with patriotism, so they become shy or don’t dare to say something directly or oppose something directly. That’s why the crowd was singing the national anthem and waving the red flag, the national flag [during protests]. You have to understand that the Chinese people are patriotic. Even when they are demanding things [from the government], they do it with that sentiment.