For the first time in history, the majority of the world’s ten most valuable companies are from the same sector of the economy. All are household names: Microsoft, Apple, Amazon, Alphabet, and Facebook.
Established as disruptive enterprises in the early days of the internet, these tech titans have come to dominate big business. Today, Facebook is the largest social network worldwide with over 2.7 billion monthly active users. Amazon represents more than 50 percent of the e-commerce market in the United States. Google handles over 90 percent of all search queries globally. And Apple recently surpassed Saudi Aramco to become the world’s most valuable publicly traded company with a market valuation of more than $2 trillion.
Yet, in the wake of its growth, Big Tech has been the benefactor of profound corporate concentration unprecedented since the Gilded Age, when railroad tycoons hoarded wealth and inequality skyrocketed. Even as the COVID-19 pandemic crushes small businesses and adds mounting pressure on the middle class, the stock price of the biggest tech companies has continued to rise. According to the New York Times, those five aforementioned companies now comprise 20 percent of the stock market’s total worth, “a level not seen from a single industry in at least 70 years.”
Add to this the unprecedented and virtually unmitigated power of the tech companies to infiltrate our private lives, harvest our data and reap ever-larger profits, and you have a sector whose CEOs are indistinguishable from late-nineteenth and early-twentieth-century figures like John D. Rockefeller, Andrew Carnegie and J.P. Morgan. Today, Mark Zuckerberg, Jeff Bezos, and Bill Gates are members of the 2,000-plus-strong coterie of ultra rich executives who own more wealth than the 4.6 billion people who make up 60 percent of the planet’s population.
The unassailable power of Big Tech is the subject of economist and professor Rob Larson’s latest book, Bit Tyrants: The Political Economy of Silicon Valley (Haymarket, 2020), which pulls the curtain back on the “playful, cutesy nerd façade” of the world’s largest tech firms, exposing how, in our “feverish worship of innovation… technology companies have largely taken over the economy, hoarded our data, played dirty to crush challengers, and utterly reshaped our lives to their advantage.”
Larson, who also writes for Jacobin, Dollars & Sense, and Current Affairs, serves up a withering critique of Big Tech’s deep encroachment into every area of the economy—and our lives—showing how, in their efforts to out-compete and destroy one another, these companies behave more like bullying monopolists than the whimsical, philanthropic enterprises they are often portrayed to be.
In this wide-ranging interview, Canadian Dimension spoke with Larson to discuss the anticompetitive practices of the world’s biggest tech corporations, renewed pressure to rein them in, and his vision for a transparent, publicly-controlled and socialized internet.
Harrison Samphir: Thanks for speaking with me today, Rob. I want to begin by asking you about a term that plays a central role in your book, Bit Tyrants. I’m talking about network effects, or when the value of a good or service grows as more people use it, like Facebook or Amazon. Why is this concept so important to understand the power of Big Tech? Are network effects in the era of massive technology conglomerates simply a perversion of free market capitalism, or as William Bryan Arthur describes them, a “guarantee that the ‘superior’ technology will be the one that survives”?
Rob Larson: Network effects are a very common and very general sort of economic concept. And it’s one that tends to make markets less than purely competitive. So if you look at real markets, real capitalist economies, they have a lot of features, and what many people don’t spend time thinking about is that markets are very different from one from another, because the products and services we make are so different. Just think of the huge variety of stuff that we produce: back rubs, haircuts, legal services, shoes, sandwiches and electric power are all very different commodities. What they have in common is we produce them in markets. But it means those markets behave differently. That’s called market performance. So for example, things like economies of scale, those things happen in markets, where you have big upfront investments. So if I want to make a factory that produces smartphone chips, those plants can cost, let’s say, $2 billion in upfront investment. But as you produce huge batches of chips on a mass production basis, year after year, you take that big upfront cost and you spread it over more units. So the more you produce, your per unit costs actually go down. We call that economies of scale.
It’s a classic thing that we see all over manufacturing and telecommunications. And it means once you have a couple of big firms that are operating at the most efficient scale, there really is only room for a small handful of them, and we end up with several giant firms instead of the rich landscape of tiny competitors that people like to think of when they talk about how great free markets are.
Network effects, as you said, happen when you have a particular characteristic to a good or service that’s being sold. And the characteristic is that the good or service gets more valuable as others start using it. It’s the weird feature of services that are delivered through networks. The bigger the network gets, the bigger the potential value of access to that network is to you. So, when someone gets their first smartphone, that device becomes slightly more valuable, because that’s one more network that you’re able to potentially reach. Facebook is a textbook example (it’s even in the textbook that I teach out of), because it’s so clear. What’s more valuable: 10 networks with one-tenth of the people you know on them, or one network that has all your friends on it? It’s an obvious case, right? So network effects happen when the value of a service gets bigger as other people use it. It’s not true for cars or sandwiches or shirts, but it is true for things like Facebook, telecommunications, and even transportation networks.
But the connection here to the power of Big Tech is that network effects are similar to economies of scale, and that they encourage monopoly. There’s a strong inclination to have a uniform service because everyone wants to be on the network that everyone else is on. And early success in these kinds of markets tends to encourage future success by those network hubs, like AT&T, which had a phone service monopoly for most of the 20th century in the United States. Today, if you want to have a smartphone, it’s going to run on Apple’s iOS, or Google’s Android operating system. There aren’t 30 of them, there’s two. And it’s because people want a uniform technical standard, they’re attracted to networks that have other users and software developers on them. So we can play games and use word processing and so on, and this encourages the power of Big Tech. The argument that network effects will mean that only the best technology wins is, I think, a lot more dubious. What makes modern tech companies so profitable, after all, is the enormous amounts of data they collect.
HS: Right, and tech companies would like us to think that our data and private lives are safe with them. Why is this patently not the case?
RL: There are two big issues there. Take the obvious case, like Facebook, which in its earliest days did make very brief and cursory claims that user data was broadly secure, and the company promised you won’t have your identity immediately stolen. It gradually turned out that, in its haste to become a big platform, Facebook used access to data and the fact that users were not particularly cautious about offering it up as the inducement for other software developers. Over time it gradually became clear that Facebook was a platform for exfiltrating people’s data on a fairly large basis, especially through things like phony personality quizzes that Cambridge Analytica and other social media data miners went on to use to pull very detailed social profiles of us and all of our friends off the platform over the course of several years after 2007.
So that’s the obvious case, that companies including Facebook enjoy access to all of our data—and other information that we’ve entered into the system—through cookie technology, making it easier for them to track us. But to me, the more interesting ramification of data in this market is to look at a firm like Google, because data is a big part of its network effect. The reason why Google has become so dominant in search (with 80 and 90 percent market shares on PC and mobile search, respectively) is because of a network effect. Every time you do a web search on any search engine, including Google, they don’t just search and give you results and then forget about it, which is what I think a lot of people have thought is how it works. Every search anyone ever does is captured. Many data points are collected, including who searched, where they’re located, what kind of computer they were on, and so forth. All that data Google has over all these years since the company’s search engine first went online in 1998 has been stored. And so the reason why Google is broadly considered to have the best search result algorithm is specifically because of the huge amount of search and user data that they’ve been collecting for more than 20 years—two decades of gathering data from billions of users globally.
Google’s network effect is manifested through collecting our data. So it’s not just Google and Facebook collecting all our information to serve us ads, although that is how they make almost all their revenue (according to their government filings, which are pretty clear about that subject). It’s also that gathering our data is a big part of how their network effects manifest itself.
HS: Labour exploitation and sexism are key themes that run through Bit Tyrants. From overworked ‘microserfs’ to the treatment of female coders at Facebook to the horrendous conditions at Apple’s manufacturing plants in China (where “substantially all” of its products are made), the tech companies’ appalling mistreatment of their workers is well documented. Despite this, companies like Amazon, Google and Facebook often use lofty rhetoric about ‘decentralization’ to mask the reality of traditional capitalist workplace hierarchies. What does this reveal about the chasm between the public image of big tech, and the actual conditions for workers on the ground?
RL: That’s a great question. In Bit Tyrants, I go chapter by chapter, looking at each of the Big Five tech platform giants—Microsoft, Apple, Amazon, Google and Facebook. Those are the five biggest companies in the world, and it’s very unusual for all of them to be from one sector of the economy. I spent some time on each one of them, but the last section in each chapter focuses on labour issues within these firms and the working people who get it all done: everyone from the folks who write the code to those who maintain the servers to the Amazon of Foxconn workers who pack up and ship and make our phones and products. These companies have gigantic labour ecosystems.
The classic image of these companies is that they’re fun places to work. There are ping pong tables and games, and the workplace is very playful, and you get paid a lot, and you get free meals. And of course it’s very cool, and you’re told you’re helping the world. This is a key part of the image. But of course, these are businesses that have legal requirements to maximize their returns for their shareholders who are mostly wealthy people who own most of the traded stock in the US. So that’s who they are really serving. Of course, if you take a look, even the white collar workers, the folks writing the software algorithm code for Google, or the engineers maintaining the cloud computing functions that Amazon and Microsoft rely on for big portions of their profitability, they’re capable of being exploited just like the blue collar workers who are, as we speak, sweating inside of Amazon warehouses and shipping centres around the world. This is to say nothing of those Chinese and other international workers who are putting together all the components of our fancy smartphones, all the way down to the people at the bottom of the global economy, people working in tin mines in Bolivia, or gold mines in Africa and Central Asia, the workers extracting those raw materials so that we can have the phones do all the slick things we require.
It’s a huge system of labour exploitation, but it also affects white collar employees who are not paid anywhere near the value of the work they contribute to the company. And certainly the blue collar workers are not.
It surprised me during my research how frequently this comes up. What you discover is that these companies have a reputation for being very liberal, and very socially progressive, and wanting equality in the workplace and not wanting to do morally compromised work, like perhaps helping the Pentagon drone strike civilian gatherings across the developing world. But what you discover is, it is never the managers of the companies who are in charge and making the decisions who have any of these principled positions. Every damn time it’s the workforce who are taking these stands. It was Google executives who were very excited about cultivating the company’s relationship with the Pentagon. And Google promotes itself as the most idealistic of all the Big Tech firms. For years, they had the ‘Don’t Be Evil’ motto embedded in their corporate code of conduct. A couple of years ago, they dropped that, and now their motto is ‘Do the Right Thing,’ which is pretty flimsy.
It turns out that for years Google was trying to keep quiet that it was working with the NSA on DREAD, later known as Project Raven, which targeted accounts provided by companies including Google to exploit information on American citizens. Google also offered assistance to the Defense Department to apply artificial intelligence solutions to its hellish drone targeting software. The workers, of course, got very upset about this, but Google management would make the point that Well, you know, while this may not be popular, we have to keep the firm working and, you know, America fights for positive things! So it’s good if we help them develop drones that blow up cars in Yemen that maybe have a terrorist in them.
But Google and Facebook workers have staged some pretty serious walkouts, real labour action like we haven’t seen in America since the 1970s. We’ve also seen labour actions over systemic sexism and hiring. When Andy Rubin—the developer of the Android operating systems that the large majority of the world’s smartphones run on—left Google amid a flurry of sexual misconduct allegations, he was let go with this very large multi-million dollar golden parachute, which is very typical of executives in the corporate world. But workers got very pissed off about that, because he had a number of very credible sexual harassment complaints against him from his time at Android and at Google, and him leaving not just with his dignity intact, but with a large corporate payout, upset many people, and there were walkouts over that. That was the workforce, not management. The workers are the ones who know how things actually work, and how to keep the system running, and how to keep the sewers cleared, and how to keep food on the table. This is what’s positive about the platforms. It is management trying to cozy up to the Pentagon, not workers. Take Jeff Bezos, who went to court trying to fight Microsoft over who was going to run the big new cloud computing platform for the Pentagon’s new JEDI program (and how dare they use that acronym by the way). But that’s the reality: these systems are built on sweating the labour as hard as possible.
Workers in Amazon’s fulfilment centres are famous for being sweat so hard that they quit in droves. Even in the tight labour market of the early 2020s, turnover remains high at these facilities, because people get worked so hard and are tracked so continuously, that they leave after short periods of time, simply because it’s so exhausting. They endure work levels that nobody can sustain. So again, it’s all built on exploitation. Even if at the top you have some libertarian billionaire who’s saying, We believe in freedom and initiative, and we’re obsessed with the customer. Meanwhile, he’s using every opportunity to underprice small competitors and crush them and get multibillion dollar contracts from the Pentagon and CIA, for God knows what abominable data management activities. It’s a pretty ugly landscape, and sporadic labour action is one of the hopeful parts of it.
The image of these companies is liberal or progressive, but the reality is that they’re typically unprincipled corporations that will do anything to improve the performance of their business model for their investors, shareholders, and equity partners. What’s favourable about it is the workers who actually do have some progressive and solidarity-based positions, where they try to take collective action occasionally, including on issues like not working with the Pentagon. Sexism in the industry is an immense scandal on its own. I really recommend Wendy Liu’s book, Abolish Silicon Valley: How to Liberate Technology from Capitalism, which paints a very detailed picture of that issue.
HS: I was happy to see a chapter in your book on the origins of the internet and the central role played by the public sector in conducting the essential, basic research necessary to give us inventions as fundamental as the internet and Wi-Fi. Channeling the work of Mariana Mazuccato and her essential book, The Entrepreneurial State, you write that “nearly all the scientific and engineering research that went into today’s fancy high-tech products and services came from the public sector.” This origin story departs from the typical narrative that argues technological innovations most often come from individual inventors and market forces. Since private actors are under systemic and legal obligations to reward shareholders, is basic tech innovation and research best left to accountable public institutions, and if so, why?
RL: There’s been a lot of discussion about this for some time. You mentioned Mazzucato, whose book, The Entrepreneurial State, is impeccable on this subject. Of course, many folks are aware that the internet—this set of protocols that allow many different types of computers and phones and devices to intercommunicate broadly and seamlessly—was developed through the public sector, primarily the military, and a couple of research-oriented universities and research institutes including MIT and Stanford. During the Cold War, the Pentagon wanted an efficient way to organize the huge amount of data for its own global espionage system, and it wanted a computer system that could survive a nuclear attack, and therefore would have lots of redundant links, as the internet has come to do today.
But through the development of the internet, the private sector refused several times to take it over. At one point, the National Science Foundation (NSF) tried to offer custody of the entire early internet to AT&T, and the company declined because it was going to compete with its phone business. Of course, AT&T was operating under narrow Wall Street investor-driven priorities based on short-term profit, so they were basically disinterested. There are several episodes like that, and once the internet became functional enough in the early 1990s, the NSF was able to privatize it and sell it off to regional telecom companies. These firms took over the assets and all of the public technology that went along with it. So you can look at web pages, for example, and all the other technical standards. That stuff was all hammered out through the NSF and the Pentagon.
But what’s fascinating is that it’s not just the internet that owes its origin to public investments. Everything in our phone technology, including the definitive feature of our phones today, the multi-touch interface, was developed by publicly funded researchers. Apple later bought up that technology, incorporated it into its early smartphone, and then Steve Jobs went on stage during the iPhone launch and declared “Boy have we patented it.” In reality, they bought the patents from the person who invented the key technology with government support, and this is true almost across the board. The antenna technology that’s in the phone was developed by the signals intelligence arm of the US military—which has always been on the cutting edge of communications—while the chip technology was developed by various publicly funded research entities. Of course, once Apple and Google and other phone makers obtained these technologies, they developed and evolved them, but that only occurred once the market was created, because the basic research had already been done. I like to remind people that the internet’s original name was ARPANET, because it was first conceived and funded by the Advanced Research Projects Agency of the United States Department of Defense.
Indeed, Google’s original web address was not google.com. When it first went online in the late 1990s, it was google.stanford.edu, because it was developed at Stanford University, a recipient of large amounts of state and federal research funds. Google was initially developed in a lab that had NSF funding. The reason why so much of this research is done publicly has to do with incentives. That’s what we talk about a lot in economics. If I’m running a corporation, I’ve got an incentive to get revenue and profitability up in the near term, like right now, because I have investors breathing down my neck. And if I don’t bring in an improvement in profitability and earnings per share soon, the board who represents the big investors will start talking about replacing me with someone who can push earnings up in the direction they want. It just doesn’t make sense to expect private market businesses to make investments in basic research. Part of the reason is that most people just don’t understand how scientific and engineering research works. It’s expensive. And it’s inherently uncertain. You never know if a project you decide to invest in is going to make any money, you have no idea if you’re in a totally unproductive area, or if you’re days away from a major breakthrough. Therefore it doesn’t make sense to expect companies whose incentive is near-term profitability and investment returns for their shareholders to put large amounts of potential profit back into research that maybe will bring you some money, someday in the future.
Applied research and development has always been the province of the public sector, whether it’s the universities or the military, because these institutions are not under market pressure that creates that near-term profitability incentive. This isn’t to say that we should simply trust the government to do research and let the Pentagon figure out all of our technological problems. The point is just to show how basic research requires public funding, because the free market isn’t prepared to do it on its own.
The willingness of right-wing economists to recognize this is like a kid putting their fingers in their ears. It’s incredible. They just don’t engage, or they point to a corporation like Google and say it proves that all of this comes from the market. It’s just the most pathetic, religious, bead-clutching devotion to right-wing dogma that ignores the entire record, and the meticulous historical research done by experts like Mazzucato.
HS: I want to shift now to current events, and the recent flurry of antitrust lawsuits aimed at Google and Facebook. This marks the first time since the 1998 case against Microsoft that the US government accused a company of operating a monopoly under the Sherman Antitrust Act, a law that encouraged competition between enterprises. While court dates haven’t been set until 2023, what do you think is the significance of these suits? Will they have any lasting impact?
RL: In the last few years we’ve seen more and more government action to regulate or address the growing size and influence of the big tech platforms, and it’s a bipartisan issue. Most of the big platforms come from the United States, because this was the country where our government was able to pour money into developing these technologies in the first place.
The European Union has recently been more aggressive about this, putting in much more serious laws on data protection for users like the General Data Protection Regulation (GDPR). The EU has also been going after countries that are enabling companies like Amazon to engage in fairly naked tax avoidance by claiming all their revenue should go through Luxembourg or Ireland, even though they earn their money in every large country in the EU. The United States has been much more reluctant to do that, as we’ve always been a much more business-run society. Unlike Europe, the United States was born as a capitalist society, give or take, and the power of business has always been a much more fundamental, unopposed force, shaping its evolution through its history. And so in the US, we have anti-monopoly laws, we call them antitrust laws, which were initially developed in the 1890s. Before the rise of incorporating as a means of organizing big businesses as we do now, back then it was all done through trusts, like when Rockefeller had his large national monopoly on oil and petroleum products. So antitrust is about breaking up monopolies, and preventing restraint of trade.
So if I’m a monopoly, the government—whether it’s through the Justice Department or the Federal Trade Commission—can go after me and have my company broken up. This happens if big firms hike up prices on consumers to screw them over, or if they attempt to complete mega-mergers, and so on.
In the US, antitrust suits have to go through the court system. The Justice Department can’t just say, Alright, Google, we’re breaking you up. It has to convince a court judge, and then survive through inevitable appeals which the companies always want to exploit. The DOJ will have to convince judges and occasionally juries that the company should be broken up or put under some form of sanctions. As a result, US antitrust law has always been weaker than competition laws in other developed countries that retain more stringent regulatory authority. We haven’t broken up a big company through antitrust action in the United States since 1982 when we broke up AT&T. And we haven’t had any successes in the world of tech. The government lost its case to prevent a merger of Sprint and T-Mobile, two of our biggest cell phone carrier companies. So we’re on a losing streak lately.
Today, what the Justice Department is doing with Facebook and Google is arguing that the firms should face punishment, and maybe even be broken up over different monopolistic practices they’ve engaged in. This would involve forcing the company to sell off a chunk of its business to someone else. This is called a forced divestiture.
However, looking at these companies, and despite the fact they’re going to face an uphill battle, it’s still very difficult to get an antitrust victory in the US if you can’t show consumer harm. It’s not just that the companies are acting like monopolies under the Sherman Antitrust Act, because this isn’t necessarily illegal. It depends on how you got the monopoly. If you got it through network effects, like Facebook did with its social media monopoly, or Microsoft did in the 1990s with its monopoly on operating systems, this is still considered to be legitimate.
What you can get in trouble for is being a monopolist and hiking prices up, because then there’s a case for consumer harm. Or if you’re a monopoly, and you use that power to take over another market, that’s also illegal (what we call monopolization). Microsoft really is the definitive case. The short version of the story is that Microsoft had a monopoly on computer operating systems. Because of classic network effects, companies wanted to use a standardized operating system, in this case Windows. Software makers then had to ensure their programs worked on Windows because they wanted to go where there’s the biggest market. If I’m a video game developer in the 1990s, I want to be on Windows because that’s what all the computers run on. So then all the software is developed for Windows and that attracts more users. This created a familiar positive feedback cycle that led to a monopoly. So for most of the 1990s and the 2000s, Microsoft’s market share was well north of 90 percent. Apple existed through this period, but almost went bankrupt in 1999. It was a very small piece of the market.
The internet, having gone through all these years of public development, became a privatized space where users could sign up for one of the now defunct web portals used to access the internet like AOL. This is back before people knew a lot of web addresses or before search was very popular. But then Netscape came along, the first bonafide web browser, and it allowed users to type search terms for the first time. You could type in your web address in the URL bar, and then go to the different places you wanted to view online and the World Wide Web could be truly explored with this software. Well, Microsoft was pretty upset about this. Bill Gates had been writing off the internet all through the 1980s. As late as the early 1990s, in fact, he was refusing to talk about it in meetings or go to conferences about it, because it was all free. Gates would accuse people of being communists if they talked about putting anything up for free on the internet. It’s all on the record. But when Gates saw the success of Netscape, Microsoft immediately felt threatened, not just because there was this big computing related market they were not dominating, but the possibility that browsers could eventually do all the things an operating system does, and so would be able to out-compete them (which turns out to be true, just look at the Google Chromebook). So Microsoft used its existing monopoly in computer operating systems through their Windows monopoly to crush Netscape by making their terrible garbage browser Internet Explorer, which they kind of hastily made by copying the original code for Mosaic which was a predecessor to Netscape.
The key thing is they bundled it into all their Windows updates. So Windows 95 and Windows 98 came with these horrible buggy versions of Internet Explorer, and virtually every computer in the world that was updated had this new browser on it very quickly. Consequently, Netscape’s market share fell and fell and fell. Microsoft talked about trying to split the market with them at one point, which is also illegal. All this stuff happened. And some of the companies that Microsoft had crushed through the years started bringing complaints to the government, and eventually the Federal Trade Commission and then the Department of Justice started going after Microsoft for using their existing monopoly to take over another market. That crossed the line. And so they went to court and they were legally adjudicated to be a monopolist—a company running a monopoly in a market—and the judge ordered them to be broken up. The court case went on for years while everyone was getting Internet Explorer on their PCs and destroying Netscape’s ability to compete, and then the 2000 election happened, which is an incredibly ugly story. The Bush administration came in as a result of that election, and their Justice Department dropped the request to break up Microsoft and narrowed the scope of the antitrust violations facing the company.
What Microsoft settled for is what I expect will happen to Google and Facebook, which is a bunch of what we call “behavioral remedies.” In Microsoft’s case, this meant that, instead of PCs defaulting to Internet Explorer, users got a choice screen that provided them with an opportunity to choose which competing web browser they wanted to use. And a lot of the enforcement of this was left to Microsoft. After seven years, it was discovered that Microsoft wasn’t putting the code in its new operating system for computers to include that choice screen, and no one had noticed for several years. This is the level of wimpy oversight you get with behavioral requirements. So Microsoft was forced to offer more choices and couldn’t get away with the same sleazy tactics any longer.
Now, regulators are talking about breaking up Google and Facebook. I think it’s mostly talk: you go in with your biggest demand and then you compromise and you settle for what you really want. Good negotiators, unlike the Democratic Party, know to go in asking for the giant thing so they get a little of what they wanted. So I don’t think a breakup is in the cards.
Facebook’s another story, though. Facebook is in trouble for acquiring all these potential competitors, partially just for the extra business and extra ad revenue, but primarily to keep them from becoming a future threat to the company. This is the way markets actually work. You know, people think markets are competitive, and that we get everything we want, and that you have many options. The reality is that markets monopolize, they tend to become dominated by one or two gigantic companies. And that’s what happens when markets are ‘free.’ So Facebook has been doing the same thing that was common during the Gilded Age of monopolies in oil, steel, cigarettes, appliances, you name it—they are buying up competitors rather than compete with them. Instagram’s founder initially snubbed Facebook founder and CEO Mark Zuckerberg’s overtures, but acquiesced to negotiations due to his fear Zuckerberg would “go into destroy mode,” according to emails made public during the House Antitrust Subcommittee’s summer hearings on Big Tech.
Just like how Amazon crushed Diapers.com and several other small competitors by underpricing them, or how Microsoft crushed its competitors by offering a partnership, looking at their code, copying the code, and then saying we have a similar product, these companies all have their own style in terms of how they clear the market of competitive threats. I think it’s possible Facebook will be forced to sell off Instagram. WhatsApp is a lot less likely—it’s not a direct competitor. It’s just messaging based on encryption. So it’s a messier process.
We can’t forget, either, that the amount of money that these companies have to defend themselves is just satanically extensive. And the federal courts have grown more conservative, thanks to Bush and Trump packing them in with tons of appointees, and the Democrats basically acquiescing to that. And, as we’ve discussed, there are very limited ways that you can prove harm to consumers, and one of them is by hiking prices. Well, the first defense of these companies will be to say Our products are free, how can you say we’re hurting the consumer? Of course, you do pay for it by viewing ads, and by having all your personal information harvested to show you more specific ads, but it’s a lot harder to show consumer harm in that abstract way, or to say that the market would be different if Facebook hadn’t bought Instagram.
But this is an unpredictable era, so I’m not going to say it couldn’t happen. I just think that our landscape for anti-monopoly regulation is weak sauce, and these companies have been thinking for years about how to avoid it. It doesn’t help that, when Facebook bought Instagram and WhatsApp back in 2012, the Federal Trade Commission—the entity suing them now along with a bunch of US states—approved those transactions.
Third time’s the charm is probably not a great claim to be making in front of a federal judge. So we’ll see how they do. But it’s a longshot. So maybe social media will have two companies instead of one, or maybe three, if you count Twitter, which is much smaller than Facebook. The aims are so limited. Even if they do succeed, the impact is going to be pretty modest.
HS: Your book concludes on a positive note with organizing tactics for the public to take back what amounts to ownership from these companies. For example, users getting the rights to their own data, banning cookies that track them across the internet, and other privacy-invading techniques that Big Tech profits from—at users’ expense. Of course, none of these are corporate rights. What should activists do right now to weaken the power of Big Tech? Failing the success of the antitrust suits we just discussed, is a ‘user strike’ necessary?
RL: That’s a really good question. In my view there are modest things that can be done in the near term, measures similar to those being pursued by the EU that are breaking up these companies and going after them that way. Of course, that’s a big goal, and the law isn’t very favourable towards it, but there are a lot of things that can be done. One thing is to implement in the United States something like the EU’s GDPR, which places real restrictions on how much data web platforms can gather from us and places conditions on where they can store that data. Another thing is making the Big Tech companies pay taxes, which the EU is trying to do, by not letting countries like Ireland or Luxembourg charge effectively microscopic tax rates on unbelievably big and profitable companies like Apple and Amazon, which use these sneaky ways of putting all their earnings in one country.
In the United States, unfortunately, we’ve gone in the opposite direction on data and privacy. On a fundamental level, we need to recognize what’s positive at the Big Tech firms and look at—like we said at the beginning—what’s happening with the workforce. By and large it’s mostly decent people who are working at these companies, people who are saying we shouldn’t make AI for new Terminator robots at the Pentagon, or turn a blind eye to sexual harassment by senior figures like Andy Rubin and people like James Damour who blogged that women are too dumb to write code.
Fundamentally, we need to look at the problems of capitalism. We have a huge number of issues, and they’re mostly all tied to our economic system. So to me, it’s a broader systemic issue that we’re seeing tech as a manifestation of. So what I argue in Bit Tyrants, and what I’ve talked about in Current Affairs and other places like Jacobin, where I’ve written about this stuff, is we should look at different forms of socialism. We should look at having more worker control over the workplace and the means of production. Workers, after all, are the ones who know how to run the plants and get the food on the table, they should be the ones in charge, not some executive who’s put in that position by a CEO who’s taking orders from Wall Street and rich investors. Instead, the workforce should be in charge.
What online socialism would also suggest is that users are part of the workforce—in the real sense that it’s our work that gives value to the platforms. Google’s YouTube would be useless if we weren’t all making our goofy videos and putting it on there, which I do, and everyone else does. But I have no say in how YouTube works, I just contribute videos to it that make it more valuable, right? On Amazon, a majority of its sales are from independent third party sellers that you see when you look at product listings, and they have no say in how Amazon is run, but they contribute a gigantic amount of value to Amazon. That’s how Amazon’s network effect works. All their shoppers attract more independent sellers, and those sellers attract more users. It’s a classic network effect, but none of us have any control over this. Facebook and Twitter and other social media platforms are the most obvious cases. Without us making posts, and our boring movie reviews and our stupid political rants and our delightful cat videos, none of those platforms would have any value, right? The origin of their value is their billions of users, and all the free content that we give them all the time. So online socialism, in my mind, would be a system where rather than having these executives dictate terms of service to us, we users along with the workers that actually operate the platforms, and do all the crazy coding that none of us understand, we would be the ones who make the decisions about what the platform does, and what its policies are going to be and what you can and can’t do with it, and how our data is used.
That just seems like a much more sensible way of running platforms, which are now so important that our lives and our businesses depend on these things. We do our job searches online. During this health emergency, we’re doing everything through these platforms. They’re much too powerful to just be in the control of CEOs who serve at the pleasure of rich investors on Wall Street. We should have a socialized version of big tech, where we all make decisions on some kind of democratic basis. That basic sort of approach, I think, makes a lot of sense.
Why should YouTube get to decide which political figures get to be on and which don’t? Some of these people advocate violence, which is something that will get you thrown out of most media networks. It shouldn’t be up to these CEOs who are mainly focused on growing the platform and meeting Wall Street profit targets, than about what this is doing to our elections, and our political system and our public discussion. That’s all an afterthought for these companies. They only react when things get way out of control. And then they try to clean up some of the mess after the fact if it’s not too expensive. It’s a totally unacceptable way for these platforms to be run.
We and our parents’ generation paid to develop the technology. And we’re the ones that give these platforms most of their value, we should be at least involved in the decision making on how they work and what the terms are, and how our data is used. And that’s what I argue at the end of the book: there should be a more socialized approach. It’s at least worth thinking about while we watch the government try to make changes with our wimpy competition laws.
This interview has been edited for clarity and length.
Harrison Samphir is an editor, writer and policy analyst based in Toronto. His work has appeared in CBC, Jacobin, NOW Magazine, Huffington Post, rabble.ca, Ricochet, Truthout, and the Winnipeg Free Press, among others. In 2016, he completed an MA in International Relations at the University of Sussex. Harrison has served as Dimension’s web editor since 2014.