12 Aug Government Big Tech

“Should Big Tech be under government control? No.” – The Lonely Realist

Everyone has grievances against Big Tech. Author Scott Galloway lists multiple ways in which the Biggest Techs – Amazon, Apple, Facebook and Google – harm society … by destroying jobs; prioritizing profit over privacy, national security and democracy; avoiding taxes; and eliminating competition. The Netflix show Social Dilemma focused on the corrosive effects of Big Tech manipulations. Jonathan Haidt, the Thomas Cooley Professor of Ethical Leadership at the NYU Stern School of Business, has highlighted Big Tech’s contribution to the rise of teen anxiety and depression and increased political dysfunction. Each has spotlighted serious concerns with Big Tech power and practices. Unfortunately, recent Congressional initiatives have been deployed as a tool in further politicizing the Big Tech problem.

Senator Lindsay Graham (R SC) says that Big Tech is responsible for “children being bullied to the point of committing suicide. Human trafficking. Exploitation of minors” – culture-warfare terms. Senator Elizabeth Warren (D MA) describes Big Tech as “exploiting consumers’ data, invading Americans’ privacy, threatening our national security, and engaging in anti-competitive practices that hurt our economy” – items on the Progressive agenda. In a joint press release, Senators Graham and Warren complained that “Big Tech companies have far too much unrestrained power over our economy, our society and our democracy,” and in a July 27^th editorial in the New York Times, they added that “Nobody elected Big Tech executives to govern anything, let alone the entire digital world. If democracy means anything, it means that leaders on both sides of the aisle must take responsibility for protecting the freedom of the American people from the ever-changing whims of these powerful companies and their unaccountable chief executives.” Kudos to Senators Graham and Warren for excellent political sloganeering and for adroitly doing so from opposite ends of the political spectrum. They’ve joined together to address “the Big Tech problem,” proposing to solve it by co-sponsoring the Digital Platform Commission Act of 2023 (DPCA) “to establish a new Federal body to provide reasonable oversight and regulation of digital platforms.” How righteous and public-spirited!

The DPCA proposal would substitute the “reasonable” judgment of a new Federal regulator for the unreasonable judgments of Big Tech executives. Senators Graham and Warren assert that government regulators would be more capable of protecting Americans from the presumed predation and mistaken profit goals of America’s largest and most successful technology companies than the entrepreneurs and executives who built and manage them. Their point is that America’s government should be the ultimate decision-maker for America’s globally-dominant technology businesses. Centralized government management – in the form of bigger-government-by-creation-of-a-new-regulator – is perceived as the better economic model. A more nuanced capitalist approach – private enterprise with guardrails, for example – is not regarded as a more appropriate solution. It was exactly that more than 40 years ago when smaller-government was championed by Ronald Reagan (and adopted as orthodoxy by the Republican Party (but not, it appears, by Senator Graham)). In his 1981 inaugural address, President Reagan staked his presidency on shrinking America’s statist reliance on big government: “From time to time we’ve been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people…. We are a nation that has a government – not the other way around.” The DPCA would reverse that Reagan priority. Its effect on Big Tech would be to oust capitalist “self-rule” in favor of rule by an elite government regulator.

The DPCA would delegate broad authority to a newly-created Federal Digital Platform Commission to, among other things, “develop appropriate regulations and policies grounded in the common law principles of the duty of care and the duty to deal, insofar as those principles are relevant and practical; and adopt, where relevant and practical, a risk management regulatory approach that prioritizes anticipating, limiting, and balancing against other interests the broad economic, societal, and political risks of harm posed by the activities and operations of a person or class of persons.” It’s unlikely that this political doubletalk is even intended to have meaning. These fuzzy platitudes will not protect Americans, further innovation or help America out-compete its global adversaries. The DPCA is not a recipe for a better America.

With that said, a combination of exceptional American innovation and lax antitrust oversight resulted in the concentration of market power in relatively few American technology behemoths, an undesirable imbalance, yet one that history shows will resolve itself over time. Although their size and scope has created a barrier to entry for potential competitors – at least for the moment –, monopoly power was not among the complaints cited by Senators Graham and Warren. Antitrust laws are not intended to intrude into the policies and practices of businesses, even dominant ones, which is precisely why the Trump and Biden Administrations have not taken legal action. Big Tech companies are not the monopolists that Standard Oil was >100 years ago. Moreover, Big Tech behemoths’ global  dominance is good for America. The concerns voiced by Senators Graham and Warren are not antitrust concerns. Senator Graham’s “human trafficking” rationale differs from Senator Warren’s “invading Americans’ privacy” one, but neither is at the core of Big Tech excesses. Rather, each is responding to complaints raised respectively by their Republican and Democrat constituents. However, not all complaints can or should be resolved by government, and few should be delegated to government-appointed regulators. After all, capitalism and democracy are messy. A free market creates benefits and burdens, more so with Big Tech. Despite politicians’ desires, government can’t and shouldn’t try to please all the people all the time …, although that’s precisely what Senators Graham and Warren are posturing to their audiences with the DPCA. Big Tech companies are America’s champions. They have been the principal drivers of American entrepreneurial success and America’s out-performing stock markets. Burdening them through creation of an ad hoc regulator is not in America’s interest.  The DPCA will not garner a majority of Congressional votes, as its co-sponsors undoubtedly understand. So why did they propose it? The DCPA is a measured pontification intended to produce a favorable reaction among partisan voters. Despite their New York Times editorial, the DPCA is not an example of bipartisanship. Clearly-articulated laws enacted by a strong Congressional majority with pragmatic enforcement mechanisms would be. The DPCA is a waste of Congressional time and resources that could be devoted to addressing important, and truly bipartisan, issues. How about America’s debt and deficits, or its panoply of overly-complicated entitlements, or Congressional term limits, or actual guardrails against Big Tech excesses? The DPCA is typical of today’s politicians. They adhere to a Groucho Marxism: “These are my principles; if you don’t like them, I have others.” Whatever will garner votes.

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