Politicians are rarely diffident before the cameras. David Cicilline, a Democratic congressman, said this week: “Our founders would not bow before a king. Nor should we bow before the emperors of the online economy.” He and fellow members of the House judiciary subcommittee on antitrust were questioning the bosses of Amazon, Apple, Facebook and Google.
Cicilline’s words may have seemed portentous but they were apt. The tech giants wield unaccountable power and curb competition. They do not work in consumers’ interests. They give capitalism a bad name. Armed with the conclusions of a long investigation into tech company practices, congressional critics are seeking tougher regulation but that is a limited aim. The tech giants should be confronted and broken up. For all its theatre, America’s adversarial political culture, along with the EU’s tough investigations, is a model for Britain to follow in holding these corporate behemoths to account.
It is a mere truism that the world has been transformed by online technology. The digital age, from grocery deliveries to dating apps, has improved lives and expanded consumer choice. But the corporate environment has not stayed the same. Though ostensibly there are low barriers to entry provided you have a good idea or product, there is copious evidence that the tech giants exploit their monopoly power to suppress competition. Because Amazon is the dominant global force in online retailing, other firms have to go through the Amazon marketplace to reach consumers. Their own margins are at the mercy of whatever cut Amazon takes. So far from being the champion of the consumer, the tech companies either gobble up their competitors or suppress them through predatory pricing and other expedients.
The longstanding retort of the tech companies is that they are being targeted by politicians not because of malpractice but because of success. They have grown big because they offer consumers what they want and they strive to maintain competitive advantage through constant innovation. It’s a threadbare case that not even the companies themselves can seriously believe. The data harvesting scandal, in which the Facebook information of as many as 87 million people was improperly shared, demonstrated that they wield power without responsibility.
A century ago, the great muckraking American journalist Ida Tarbell exposed the scandal by which Standard Oil, in collusion with the railroad companies, set out to crush competition. “They had never played fair,” she wrote, “and that ruined their greatness for me.” Their descendants are among us.
