Yesterday, Amazon announced that it was opening two new campuses in Crystal City, Virginia, and Queens, New York. The preceding audition process, with dozens of local and state governments offering ridiculous financial incentives to Jeff Bezos’s megalith, made Amazon’s power over the public sector plainly clear. Elsewhere, the parliaments of five separate countries are banding together in an attempt to force a meeting with Mark Zuckerberg, the head of Facebook, the world’s largest social network — which it became without a peep from regulators.
What happened to the antitrust movement? In his new book, The Curse of Bigness (out this week from Columbia Global Reports), Tim Wu examines the history of monopolies in America and asks why we’ve stopped fighting them. A century ago, trustbusters like Theodore Roosevelt took on Standard Oil and U.S. Steel, setting a precedent that would last up until the 1990s, when the government took on Microsoft. But that was 20 years ago. Since then, there have been no big antitrust cases and private power has only grown.
Wu, a professor at Columbia Law School, has been a crusader for fairness in the electronic era for decades; he coined the term “net neutrality” back in 2003, later advised the Federal Trade Commission and served on President Obama’s economic council, and last year ran for lieutenant governor alongside Zephyr Teachout. He spoke with Intelligencer about Zuckerberg’s bot-like apology tour, the case for breaking up Amazon, and his hope that the midterm elections — and even anti-corporate Trump fans — might lead to the restoration of federally-enforced competition.
What led you to write this book?
Hanging out in the White House at the very end of the Obama administration, I started thinking that the untreated problem in the American economy was over-monopolization, over-oligopolization. It has a lot to do with private power and its influence — either keeping all of the money for itself, or directing outcomes politically way, way away from what people want. I decided that was the root cause and the time had come to bring back a lost American tradition.
You write that the trust movement in the Gilded Age was guided by a belief that the economy should be “centralized, run by great men, free from any government interference,” but was also “largely indifferent to the plight of the weak, the poor, and the unfit.” Nowadays, Big Tech claims to care about everyone. Do you believe it?
I don’t think a company like Google can really be compared to Standard Oil at its darkest or U.S. Steel. Those guys, when they had labor problems, they hired soldiers to shoot the workers. But if you read the work of someone like Peter Thiel — who has had such an influence over Facebook — I think he, and they, very strongly believe in the idea that there are winners and losers. Even the tech industry at its most idealistic does have a certain indifference, a certain blindness, to the consequences of what they do. Google and Facebook have taken almost all of digital advertising. What did that mean for the media? It meant that the media started to starve. YouTube gives everyone the chance to be a star, but the internet age has impoverished what was once a middle class of creators and musicians and so forth, and forced them to strive for virality. They have that engineer’s mindset: “We solve one problem and let the chips fall where they may.” Which is cool when you’re a startup with a hundred guys but when you get a little bigger, not so cool.
Do you think these companies are actively seeking monopolies?
I do think people thirst for power and greatness and there’s very little question in my mind that people like Mark Zuckerberg and Jeff Bezos have the desire to rule other men. It’s not anything new, you know? They thrive on influence and the idea of their own greatness. Maybe they want to use it for good or for evil, who knows, but there’s no question in my mind that they have the ancient thirst for power that characterized Alexander the Great and Napoleon and other figures. Now it’s more rarely found in politicians, with some exceptions, and more often found in the fully unaccountable power of the corporate executive. People of Silicon Valley, whatever they may say in public, do believe that they are more powerful and more important than government. And there’s some truth to it.
Their arguments are situational. They’re very powerful when they’re doing good for the world and yet very surprised when their ideas backfire. Zuckerberg has been on an apology tour this past year. Why even take that posture?
Somewhere he decided he needed to reprogram the robot (i.e., himself) to be apologetic. He seems to me a man who decides what he needs to believe before he believes it. I was reading Mark Zuckerberg’s entry in the Wired 25th anniversary issue. Maybe he didn’t write it himself but it was so devoid of anything approaching a sense of humanity, even though it was about a sympathetic topic like the Dreamers. It felt like it was written by an algorithm. The reason people don’t believe it is because they can see little signs, where the metal shows through — little pauses while the algorithm calculates what to say next. Mark Zuckerberg on his apology tour reminds me of those AIs that are pretending to be human in a chat.
The dude is a recidivist. He did all of this same stuff in 2012 while I was at the FTC, and then it was all apologies, but nothing really penetrated. The apology is what you say to get back to what you were doing. Facebook gets under my skin. If we’re gonna talk about the case for monopolies, it’s usually because they do something profound that you aren’t able to do without that level of scale. I had friends before Facebook, I saw my friends’ photos before Facebook. I don’t know what the case is for what one giant social network can do for us.
You devote some of your book to the subject of Teddy Roosevelt. Is there anyone who could fit that trustbuster mold today?
Currently active today? No, and we need [someone]. Every time I go to Washington, I hang out with enforcers, and the excuses for inaction are … encyclopedic. “Oh, Congress took away our authority.” “Oh, we’ll never win in the courts.” “Oh, it’s too expensive.” We found a million reasons not to stop any tech mergers over the last ten years. Google bought its principal map competitor, Waze. How is that legal? Ultimately, it has been a decade of cravenness.
If this deep freeze started with the second Bush administration, what prevented the Obama White House from reversing course?
I think it has to do with the soul of the Democratic Party. Everyone knows Obama won the [2008] election and Hillary Clinton won the transition. I was just on a panel last week, a hearing on antitrust at the FTC, and most of the arguments were between first-term Obama people and second-term. Some of the first-term Obama staff were indistinguishable from the Bush people. People talk about the establishment, and there is one, and its approach to antitrust laws is “look like you’re doing a lot but do nothing.” Those forces prevailed. At the very end of the administration, six years in, the ship had started sailing in the opposite direction. They were starting to challenge mergers, starting to get more aggressive, and then lost the election.
You describe how Robert Bork’s perspective on antitrust — that the only metric to evaluate a monopoly on is the consumer price — has penetrated so thoroughly. It seems like every judge now uses this sort of test. How do you reverse that?
Big things have small beginnings. In the 60s, people looked at Bork’s ideas as fringe. In some ways, Bork is my inspiration: if he can get somewhere with a theory that was much more implausible than suggesting that we should enforce the laws, then we can get somewhere too. I hope books like mine set a sort of intellectual framework. Then you need enforcers, and maybe almost as important, judges. The Democratic Party has been very focused on civil rights and civil liberties, and these are important things, but economics has been like, whatever. Usually, successful lawyers are corporate lawyers, but it can’t be that every single nominee is essentially deregulationist in their economic policy.
And yet there’s a Republican-controlled Senate ramming through judicial nominees at a breakneck pace.
You know, the fight is long, and not without its challenges. I don’t deny it. Let me also suggest that things have gotten so extreme that the Republican party, parts of it, are also starting to switch over. For his many flaws, Trump does represent the right wing’s concern with economic concentration. Many supporters of Trump are dissatisfied with an economy that doesn’t work for them, which has poured almost all of the proceeds into a smaller number of highly concentrated industries. Now, the way this is articulated — “Immigrants are to blame,” “China is stealing all our money” — is sometimes different than I would articulate it. There is hope for the Republican party rediscovering its own roots in trust-busting. They’re the ones who invented this! Teddy Roosevelt was a Republican, and the Sherman Antitrust Act was passed by Republicans. Nixon brought the AT&T case.
What is the case against Facebook?
That the acquisitions of Instagram and WhatsApp were illegal at the time and should be undone. I think it would put more checks on their power. I also think that the tech-lash going on is its own power. Ultimately, when there’s unaccountable power in the United States, there’s a constitutional revulsion. Whoever leads the case to break up Facebook will have the political winds and the public at his back. The case against Facebook is easy.
A recent study showed that people have more confidence in Amazon than in the government. I have plenty of problems with how they treat their workers but, as a buyer, is there a downside to their monopoly?
Amazon is a more challenging case, because their argument is that their great scale allows all of these things to happen. I think, however, that everyone should be concerned about the long-term, systemic effects of an Amazon monopoly. If you let Amazon control the future of retail and insulate themselves from competition, then ultimately that will hurt the American economy in profound ways. If you have one retailer for all of the United States, you have essentially one gatekeeper for all of American sales. I don’t think we should accept economic dictatorships, even if they seem well-intentioned.
Do the midterm results change anything?
The Democratic House majority has shown that people want answers that don’t involve blaming immigrants for all of our economic problems. I don’t think antitrust is the only solution but it targets the root problems. We can have a House that will actually tell the enforcers to do their job.
You write about the symbiotic relationship of monopolies and dictatorships. Some have described the president as dictator-esque. Do you think monopolistic companies stand to benefit from this administration?
Here’s the danger, which I think is confirmed by the experience of the ‘30s: you have populist extremist figures come to power, often by promising some kind of vague anti-big business mandate, but in truth they seek the support of big business and monopoly. They have similar interests. If these companies enter into a union with the government, you have a union of private-public power that presents all the dangers that the fascist governments of the ‘30s presented. The Nazi regime was a union of the government and its major monopolists.
Today, what do we have? We have a leader with fascist leanings and tendencies, and we have a highly concentrated industrial sector. That shows that we are involved in a very dangerous experiment. The conditions are there for an intermingling of private and public power whose results would be terrifying. We have a lot of advantages over the ‘30s. We have an independent press, we have a large percentage of the population opposed to the president, we have institutional safeguards, we have term limits. But some of the structural factors look similar.
This interview has been condensed and edited for clarity.
