Wednesday, October 27

Is Biden’s appointment of a pioneering young lawyer bad news for big tech? | John naughton

TO flashback: it is Wednesday, July 29, 2020. I am sitting glued to the American television network C-Span, which is broadcasting, live, a hearing of the House subcommittee on antitrust, commercial and administrative law. The hearing follows the publication of an extensive report of a year-long investigation into the market dominance of Amazon, Apple, Facebook and Google.

Arranged on giant screens before the subcommittee members are the four heads of the aforementioned tech giants: Amazon’s Jeff Bezos, then in the middle of his Star trek Apple’s Tim Cook makeover, who looked like the clean-living guy who never got the locker room jokes; Mark Zuckerberg of Facebook, with his trademark glued hairdo; and Google boss Sundar Pichai, every inch of the intern who cannot understand why he has been arrested by the feds. And on the vast mahogany bench towering over these mosquito netted moguls sits David Cicilline, chairman of the subcommittee and the politician who has overseen the investigation.

To be honest, I was looking down and with low expectations. All previous congressional interrogations of Zuckerberg and company had alternated between political bombast and farce. I expected the same from this encounter. And then I saw a young woman in a black mask standing behind Cicilline. It looked vaguely familiar, but it took me a few moments before I realized it was Lina Khan. At that point I sat down and started taking notes.

He had been following her for years, ever since an article she published as a graduate student at the Yale Law Review in January 2017. The title of the article: Amazon’s antitrust paradox – noted that something radical was coming, because since the mid-1970s, the American antitrust philosophy had been shaped by a landmark book by another lawyer, Robert Bork. His title was The antitrust paradox and argued that the main focus of action against monopolies should not be corporate power, per se, but consumer harm measured by unreasonably high prices. And since many of the products and services offered by the tech giants were “free” to their users, they could hardly be accused of doing so; its exercise of monopoly power should not, therefore, be penalized by the State, since doing so would be equivalent to “penalizing excellence”. Thus was formed the legal doctrine that allowed a small number of technology companies to acquire immense power without being unduly harassed by legislators.

This was the doctrine that Khan set out to demolish in his article. She argued that Amazon was a dangerous monopoly charging unsustainably low prices because the company knew that its shareholders would allow it to lose money longer than its competitors. And it was also able to operate a “market” that competed with companies that depended on it to reach customers, while accumulating data about them that further consolidated its advantages. In other words, he wielded significant power for which there was no real compensation.

Khan’s newspaper lit a fuse that has been bubbling ever since. He reported Cicilline’s investigation and subsequent report. And it’s what underpins four of the five new bills unveiled last week, each co-sponsored by Republican and Democratic politicians and each targeting the monopoly abuses identified in the report. The “Cicilline Salvo” is how the incomparable technology analyst Ben Thompson summarizes them. America’s Online Choice and Innovation Bill prohibits platforms from giving advantages to their own products and services in the markets they operate. The Competition Law and Platform Opportunity Bill prohibits pre-emptive takeovers by tech giants of startups that could threaten their dominance (like Facebook’s takeover of Instagram and WhatsApp, for example). The bill to end platform monopolies prohibits platforms from owning any product or service that sits on top of their platform and competes with third parties in any way. And the increase compatibility and competition by allowing service bill switching requires technology platforms to make it easy for users to switch platforms (and take their data and social graphics with them); in other words, it imposes on platforms what many jurisdictions now impose on mobile phone operators, energy companies, and other companies.

Of course, there are many drafts between texts and the statute book, but these are very important pieces of legislation that contribute in some way to bringing technology companies under democratic control. And to top it all, last week also saw the announcement that Khan would become chairman of the Federal Trade Commission, the agency which, along with the US Department of Justice, has the legal force to enforce what stipulated by these new laws. .

Which leaves us with two reflections. One is, as David Runciman pointed out in The trust trap, his historical study of the recent history of democracy, that although democracies can take a long time to awaken from their slumber, once awakened they can be very effective. The other is a confirmation of the power of ideas, even those of a young graduate student, to change history.

What i’ve been reading

Vacant status
About algorithmic communism is a long and thoughtful review by Ian Lorrie in the LA Review of Books from the book by Nick Srnicek and Alex Williams, Invent the future, about a world without work.

What’s in a sentence?
There is nothing as deep as the glowing surface of the aphorism is a pretty – aphoristic – test by Noreen Masud.

Net costs
The cost of the cloud: a trillion dollar paradox is a perceptual piece by Sarah Wang and Martin Casado on the expensive technology our networked world now depends on.

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