Is Antitrust Law Appropriate to Regulate Google and Facebook?

Recently Makan Delrahim, Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice, publicly criticized Google and Amazon for their ruthlessness and size, actually and provocatively citing past government breakups of big private utilities like Standard Oil. If you’re surprised that someone in Trump’s DOJ would poke big business and invoke the progressive antitrust regulation of the past, some explanation is in order. 

The government has always regulated the market, so “free markets” have always been a kind of mythical creature. What governments typically do is regulate “competition,” but that doesn’t just mean keeping firms from becoming too big or stopping them from establishing monopolies through sheer size alone. It also means regulating certain behaviors, if those behaviors limit the choices or distort the autonomy of consumers. This is what’s behind the recent drive to use antitrust regulation to control big infotech. 

For example, digital advertising has both crowded out local and independent news, and intruded on consumer privacy. Both of those effects could be justification for antitrust regulation because that private data can be used in ways that disadvantage competitors who do not mine such data. Digital advertising is also a ripe target for regulation because this year, it’s expected to “exceed TV and print advertising for the first time ever,” and the Trump reelection team “is doubling down on its digital ad strategy,” according to CNN.

Just three companies–Google, Facebook, and Amazon–account for 70 percent of spending on digital ads, so that short list is another antitrust red flag. 

There is increasing public pressure to apply antitrust law to these big data giants. The public doesn’t like the Faustian bargain that has been made—search the internet and connect with others all you want, largely for free, but the companies get to surveil you “across the whole web” and use that data in any way they want. It’s like liberty is being traded for the right to communicate and gather knowledge. And in the meantime, competitors like Yelp have complained that the access power of Google has been used to crowd the smaller players out. Traditional data append and email vendors now represent just a sliver of the consumer data market.

“Outside of Google, Facebook, and a few others, the rest of the market, which includes thousands and thousands of independent news publishers (that depend on digital advertising as their primary source of revenue), will shrink by 11 percent” this year.

Sometimes size prevents competitors from developing. This can be true even if the size doesn’t translate into higher costs for the consumer. In fact, the largest tech companies today allow most of their services to be used for free, so we can’t really rely on price to test the assumptions of antitrust law. The data those companies gain in the process is really the problem, because the ability to take that data (which other companies have no access to precisely because those companies give their services away for free) and “identify untapped and under-served markets, spot potential competitors and prevent them from developing – the kind of edge that antitrust law is meant to thwart.” Antitrust regulation may also be warranted because those large companies create “natural monopolies.” Now, in the past, some natural monopolies were seen as acceptable as long as they were subject to additional antitrust scrutiny, like “price controls and oversight boards.” One could argue that Facebook, which is very close to being a natural monopoly, ought to be subject to a special government oversight board just for it. 

The European Union hasn’t wasted any time or parsed out any nuances here. Since 2010, the EU has investigated Google for antitrust violations three times and charged Google with violating EU competition law with Google Shopping, AdSense, and the Android system. The Google Shopping and Android charges stuck, and the company has handed over €8 billion to the European body. 

Despite this scrutiny (or maybe because of it), Google is acting impetuous and bold. Just a few days ago, the company, fully aware that it’s under antitrust scrutiny, announced that it was buying another company, the data analytics firm Looker, for $2.6 billion. It’s hard not to surmise that the company is testing the government to see who blinks.

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Big Data, Business, and Politics

Some candidates in the 2020 Democratic presidential primary are marketing themselves like products, running solely on familiarity—presumably like the familiarity of your favorite neighborhood restaurant or a carmaker whose models you keep buying over the years. Others are using a radically different approach: They are building movements while they campaign, because they see themselves as activist leaders, not products. So these campaigns are building movements, “thoughtfully and deliberately designed to create an unprecedented grassroots movement driven by hundreds of thousands of volunteers.”

We hear and read these all the time: shallow comparisons between running businesses and running political campaigns—particularly where the use of data, social media, and other infotech are concerned.

It’s not entirely unfounded. After all, big political firms do make many of the same mistakes that businesses make where tech and data are concerned. For example, while I might not put it in the stark terms that he does, there’s something to Igor Lys’s comments in a recent post that many of the promises of big data in politics, just as in business, are false, based on the assumption that “big data allows reliable prediction.” I do think it’s futile to “predict” outcomes and instead that it’s better to use data in combination with other forms of information gathering. Lys agrees, writing that “the real use these people make of massive data collection and analysis concerns less the prediction and the manipulation of the future result, than the better analysis of the already existing ones.”

Political campaigns might also parallel business practices in efforts to capture email addresses of visitors that don’t end up donating money (or in business parlance, buy the product). Such sites might use pop-up windows to offer free newsletter subscriptions in exchange for an email address and use email append and verification services to build powerful databases of supporter contacts and preferences.

But while both political campaigns and businesses analyze data and collect contact info, I am also cautious about drawing too many parallels between, on the one hand, an endeavor whose primary goal is to make profits and one whose primary goal is to engage people into voting for, financially supporting, and working for political candidates or issues.

Here’s why political engagement, even through data use, is different from profit-seeking: Profits are extracted from workers’ labor and paid to owners or shareholders. These are very exclusive dividends. But political support grows as relationships among people. Political support, and political solidarity, are not finite and can’t be exclusively owned or claimed. A group of volunteers for a campaign may feel that political energy growing inside of them and when they share it with others, that energy grows rather than thins out. I don’t have less of it when I give it to you.  

This is why it’s important to use data in combination with direct political participation, such as social media engagement, canvassing, and campaign communications. For example, you can use your data to plan solid social media messaging strategies, to nuance the language on a candidate or issue website, or to pick the appropriate language for your campaign emails. Those messages invite different kinds of interaction, from campaign volunteers reaching out to vocal supporters of a campaign on social media, to a web form offering many different options for a supporter’s participation. Businesses sell products and services and the entire process is rather binary: will you buy the thing, if yes, then profit into the hands of owners and shareholders. There’s not much else a loyal customer can do beyond buy more products and refer others to do the same.

None of this is to say that pouring massive amounts of money into big data operations will have an effect even if it doesn’t help build an organic movement. Michael Bloomberg’s plan to use big data to help defeat Trump is a notable example of an effort that will probably have an effect even if it doesn’t empower people politically beyond voting. But an approach that includes participation and lots of interaction produces organizations —like Bernie Sanders’ campaign— that have strength beyond their numbers.

And, although I recently wrote that small donor acquisition efforts rely on creating a sense of urgency (which some may see as similar to creating consumer desire), these efforts are really ultimately about creating political communities. Sure, we can tailor social media ad campaigns based on appeals to different interests and demographics, but the end goal is to get invite these people’s participation through small donations as alternatives to courting large sums of corporate or millionaire money. And such courtship of small donors almost always includes inviting them into the interactive and participatory aspects of a campaign.

This isn’t some hypothetical or abstract philosophical assumption. Key voting blocs for the Democrats want big ideas and morally sound positions from candidates going into 2020. Knowing the difference in ethos between a political campaign and a business selling products or services is critical in appealing to the values of those voters who will create a new majority in the coming decades.