The Heartland Institute

BIG-TECH DEFENDERS VASTLY UNDERESTIMATE ITS POWER RELATIVE TO GOVERNMENT’S

JUNE 22, 2021

By Scott Cleland

Big-Tech is much more powerful than its defenders assume.

THE HEARTLAND INSTITUTE https://www.heartland.org/news-opinion/news/why-the-internet-is-industrial-policy-not-free-market

WHY THE INTERNET IS INDUSTRIAL POLICY NOT FREE MARKET

MAY 25, 2021

By Scott Cleland

CLELAND: The Achilles Heel Of Big Tech’s Cancel Power | The Daily Caller

DAILY CALLER  OPINION SCOTT CLELAND |CONTRIBUTOR|May 17, 20211:04 PM ET

CLELAND: The Achilles Heel of Big Tech’s Cancel Power

Big Tech’s unchecked.

If the four CEOs of Google, Facebook, Twitter and Amazon collectively could cancel online a sitting Republican U.S. president and his political allies with impunity in January, what checks them from collectively cancelling tens of millions of Republicans again?

What checks Big Tech from using their Section 230 impunity in the 2022 midterm elections and collectively canceling many Republican Senate and House candidates, their political allies and online followers that express broadly held Republican views that Big Tech deems objectionable?

It is in the raw political interests of the government’s incumbent party and unchecked Big Tech to collectively cancel the opposition party online to retain control of their levers of power long term.

Do any checks stand in the way of “The Collective Cancel” political precedent becoming practice?

We all have been played.

One of Google, Facebook, and Amazon’s greatest innovations to date may have been deceiving the U.S. government and voters with the narrative that their core Internet business models and practices were only good, innovative, pro-consumer, and worthy of no regulation, when they knew it was untrue, while at the same time lobbying that if an ISP pursued their same Internet business models and practices, that it would be anti-innovation, anti-privacy, and worthy of maximal telephone utility regulation, including a permanent, user-subsidized, price-of-zero for Google, Facebook, and Amazon’s outsized, pure profit,  commercial downstream Internet traffic usage.

Can you say: “winner take all” industrial policy?

Can you say: “regulatory arbitrage” game?

Can you say: “unlevel playing field?”

After this year’s revelations of Google, Facebook, and Amazon’s many bad, unfair, and deceptive practices, it warrants revisiting if their past forceful policy positions that only ISPs are a risk to consumers, privacy, and competition, and only ISPs warrant utility-grade net neutrality, non-discrimination, and maximal privacy regulation, were self-serving, anticompetitive, and deceptive distractions from their own anti-privacy, discriminatory, paid-prioritization practices?

We have all been played like a fiddle.

Summary

Why do Google, Facebook, and Amazon apparently so befuddle, overwhelm, and run circles around antitrust authorities to date?

Google, Facebook, and Amazon defy normal narrow, static antitrust market definition analysis and understanding, because what is new and most defines them in an antitrust context is their exceptional, wholistic, centripetal-force dynamic, which is vortex effects and efficiencies, i.e. an effective whirlpool dynamic that in encircles, swirls, and sucks everything near, deeper into an increasing vacuum power trap.

Simply what is different and under-appreciated with these companies is the extraordinary and unprecedented nature, purpose, and effect of the efficiencies their platforms generate and proliferate.

To date antitrust authorities myopic mistake has been to narrow their scope to a market segment and miss the big picture of the enterprise’s combinatorial nature, purpose, and effect -- as a whole, because the purposeful whole can be much different and more powerful than the random sum of its parts.

Why is the techlash cloud following Google, Facebook, Amazon, and others around, like the cloud of dirt that followed Pigpen around in the iconic Peanuts comic strip?

One theory is advanced by Kara Swisher, a New York Times columnist and proven thought leader, who mused in her column “Who Will teach Ethics to Silicon Valley?” because Silicon Valley CEOs have evident ethics and maturity deficiencies.

Her lede was “I think we can all agree that Silicon Valley needs more adult supervision now” and asked: “Is the solution for its companies to hire a chief ethics officer?” 

Ms. Swisher is right in spotlighting that Silicon Valley, and predominantly its Internet platform leaders, need ethics teaching and more maturity.

What is non-neutral, neutrality nonsense?

When the world’s dominant biased-broker Internet platforms, Google, Facebook, and Amazon, are the biggest funders of network neutrality and utility common carrier regulation for competitive ISPs, and their dominant, increasingly utility-like, network-effect-driven, business models, regularly treat other businesses non-neutrally while misrepresenting to the public that they are neutral platforms.

Google, Facebook, and Amazon demand maximal ISP regulation for network neutrality, transparency, and accountability, when ISPs operate their networks neutrally, transparently and accountably without it, but Google, Facebook, and Amazon fiercely oppose operating their much larger, global, encrypted-networks, with network neutrality, transparency, or accountability.

The “techlash” has exposed Google, Facebook, and Amazon, as the most dominant companies in the U.S. warranting antitrust scrutiny, as inherently biased-broker non-neutral networks, and as privileged platforms who abuse Section 230 immunity from civil liability to operate non-neutral, non-transparent, unaccountable, and anticompetitive Internet platforms.  

This is the non-neutral, neutrality nonsense of Google, Facebook, and Amazon – i.e. their asymmetric regulatory recipe for a winner-take-all, unlevel playing field.

Consider the ways that the EU’s announced antitrust probe of Amazon is a game changer in spotlighting how Amazon Marketplace’s conflicted-expanse is a de facto unlevel playing field.

First, the ongoing probe will spotlight that Jeff Bezos, Amazon, investors, and U.S. antitrust authorities can no longer dismiss that Amazon faces antitrust risk.

The EU’s competition commissioner, Margrethe Vestager has launched a preliminary, expert, bulls-eye antitrust probe at by far the most antitrust-vulnerable part of Amazon’s online market-monopsonization model – i.e. the anticompetitive Amazon Marketplace structure where Amazon first commands unchecked, most of its competitors’ most sensitive business confidential information/data and metadata; and second non-transparently and unchecked, determines their competitors’ rank and costs to commercially access Amazon’s monopsonized online consumer demand.

Simply the EU is investigating whether Google’s unchecked dual role as an economy-wide merchant and platform make it an inherently anticompetitive biased-broker?

As the FTC prepares for their public hearings on “competition and consumer protection in the 21^st century” this fall, it would be reasonable and instructive for the FTC to seek to better understand the root cause of the need for these once-in-a-generation FTC hearings and to confront some of the most evident serious effects of this root cause problem.

First this analysis asks and answers “what most stunts the FTC’s antitrust and consumer protection law enforcement mission?

Second it asks a dozen of the most important questions the FTC should be asking to zero in on what problems are evidently happening with competition and consumer protection in the marketplace that the FTC’s mission and efforts evidently have been unable to deter, address or resolve since the Pitofsky hearings in 1995.

Below is the executive summary of my new white paper, “Internet Market Failure to Protect Consumer Welfare,” which can be accessed here.

It is a timely and relevant submission to two different and current U.S. Department of Justice efforts to learn more about the impact of Internet-related issues.

1.      Submission for: the U.S. DOJ Cyber-Digital Task Force June 2018 Report to the Attorney General
 Tasked to “…ensure that Internet-based technologies remain sources of enrichment, rather than becoming forces of destruction and vectors of chaos;” and