The biggest tech challenges for policymakers go far beyond “Big Tech.”
The digital revolution has transformed our civilization as dramatically as the industrial revolution two centuries earlier. Personal computing and ubiquitous connectivity change how information is created, stored, shared, applied, and consumed, upending the basic assumptions on which our market, our democracy, and our society have relied. As in previous technological revolutions, these changes portend extraordinary progress and can improve life in countless ways. Without guardrails installed on behalf of the common good, though, they will fail to fulfill their promise and threaten instead to undermine cherished values, institutions, and relationships.
The modern state, for all its flaws, imposes rules and provides resources that we take for granted as indispensable: prohibitions on child labor, permitting requirements for dumping waste in a river, and a speed limit, as well as public schools, Social Security, and deposit insurance. All those might have seemed out of place, if not downright nonsensical, in earlier eras; they emerged as waves of technological change brought new social and economic conditions. Of course, they emerged neither quickly nor spontaneously. Rather, they are the result of decisions made by policymakers after much trial and error, in response to challenges that had become too acute to ignore any longer. The process is rarely a pretty one, but reaching its end requires that we start and then persevere.
We are at the start of such a process now, which would benefit from greater clarity of thought. Political conversation swirls around “Big Tech,” which has become shorthand for a potpourri of overlapping issues, including monopoly power and market concentration, censorship and political influence, and consumer abuse and manipulation. Companies with business models—and, indeed, industries—as disparate as Apple, Google, Amazon, and Facebook are treated as a monolithic challenge. A remarkable share of debate centers on Section 230, a minor provision of the Communications Decency Act (1996) that, for all its flaws, has played only a small role in the digital age’s broader transformation and can offer little relief through reform. One could be forgiven the suspicion that this morass is precisely how the experts and entrenched interests like it, lest attention focus on the more fundamental problems at hand.
Old Questions of Power, New Ones of the Super Market
Making sense of the challenge requires dividing it into three separate parts. The first of these, as the “Big” in “Big Tech” suggests, is the market power and anticompetitive behavior of the firms that control the platforms on which key products and services are offered. Even here, though, it is important to note that “Big” is not quite the problem. Microsoft is many times larger than Facebook, for instance, but rarely finds itself the target of criticism. When Apple elicits fury, the issue is not its iPhone cash cow but rather its control over its (much smaller, as a share of the business) App Store as the only channel for getting software onto the phone. Amazon may soon pass Walmart as America’s largest retailer, but its distinguishing feature in Big Tech debates is its role as the primary gateway for others that wish to sell online.
The underlying complaint in nearly every case relates to a firm’s role as a platform—not merely a participant in a market or public square but a provider of one. Such complaints are more pervasive in the digital world because scale tends to be a source of value rather than cost and so creates many more contexts for natural monopoly. Even if you could “build your own YouTube,” why would you, and who would watch?
Fortunately, Americans have considerable experience dealing with market power and monopolies. Google is a different problem from Standard Oil, but it’s the same kind of problem, and breaking it up could provide similar relief. Twitter may not be as useful as a railroad, but it likewise represents a natural monopoly and likewise would benefit from utility-style regulation. If Amazon or Apple is restraining trade, a law called the Sherman Act of 1890 already prohibits “restraint of trade” and “attempt to monopolize” and, according to the Supreme Court, represents a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.” Perhaps it needs updating. But questions like these are ones that economists and policymakers have spent a century answering.
“As with economic questions of monopoly and competition, the political questions look different in the light of the digital age, but their contours have long perplexed policymakers.”
A second challenge, not unrelated but distinct in important ways, concerns the Internet’s effects on democratic processes and the application of free-speech principles to cyberspace. Here, again, the underlying problem is one of platform control. The free-for-all of early online publishing, in which individuals published their own thoughts on their own websites, has given way to the world of posts and videos made within the confines of services that facilitate their widespread dissemination to followers. Those services are natural monopolies, so competition is scarce, and they are interested first and foremost in ad revenue, not in preserving a public square. One is still welcome to shout into the void from one’s own website, but reaching an audience mostly depends upon playing by someone else’s rules.
Section 230 makes its appearance here. In the analog world, a newspaper gets to choose which op-eds to run, but it bears responsibility for defamation, incitement, and so forth in its pages. Under Section 230, Internet platforms can have it both ways. The firms controlling these platforms retain the power to censor and promote and obstruct as they see fit, but Section 230 relieves them of the obligation to do so. This indeed seems unfair, though a challenge for reformers is to specify which alternative would be preferable. Should Facebook be held liable for everything posted, prompting it to censor much more aggressively? Or should it wash its hands of any control over what happens on its pages? Neither option seems especially appealing, or likely to address the underlying political issues raised by the current online media environment.
As with economic questions of monopoly and competition, these political questions look different in the light of the digital age, but their contours have long perplexed policymakers. Once upon a time, there were only three television networks, broadcasting on a government-licensed spectrum. Some of the Supreme Court’s most famous cases concern application of free-speech rights to the media. Rules for managing speech in public places, as well as liability for reckless incitement, are also well established. These, too, may require updating, and will surely prove as imperfect in this era as in previous ones.
But while the political challenge touches on dearly held values and triggers some of our angriest fights, we should also be aware of its narrow scope. On the one hand, it implicates vital philosophical considerations about liberty and practical ones about allocation of power. On the other hand, it has little effect on the typical citizen in his daily life.
“The response should not be to resist progress and reject the benefits it can bring, but rather to impose guardrails that channel the progress constructively and to develop plan for replacing what it might unavoidably sweep away.”
The third challenge, by contrast, concerns the ways that recent technological change has altered basic parameters of economic behavior and social interaction. This challenge has received the least political attention, lacking the mustachioed monopoly men of a good trust-busting or the culture-war stimuli of a censorship fight. But it may be the most important one and certainly is the one whose questions are most novel, requiring answers that will depart furthest from current policy frameworks.
The defining feature of the digital age, from this perspective, is its creation of a Super Market that operates with unprecedented efficiency and in new domains. Often, this is a good thing. But the market mechanism has extended into areas where market logic does not necessarily hold, diminishing institutions, relationships, and goods of primarily nonmarket value—or, as the technocrats would say, market failures occur. The response should not be to resist progress and reject the benefits it can bring, but rather to impose guardrails that channel the progress constructively and to develop plans for replacing what it might unavoidably sweep away.
Lost in the Super Market
This collection focuses on three such areas: labor, attention, and personal information. By no means comprehensive, it aims to present key issues, both values-based and analytical, in three areas of particular concern. We have invited two experts to comment on how policymakers should think about each area, focusing on the extent to which the digital age presents a genuinely novel challenge and the extent to which existing policy frameworks can address it. While the discussions are not debates, per se—indeed, areas of agreement that emerge are often as interesting and important as areas of disagreement—the authors come to their topics from different perspectives, with one generally more concerned and one less so.
The first discussion, featuring the Charles Koch Institute’s Neil Chilson and Modern Markets for All (MM4A)’s Wingham Rowan, considers how digital platforms enable frictionless exchange and extension of the market mechanism to new domains. This transformation has yielded enormous benefits, from lowered barriers to entry and transaction costs to increased efficiency and flexibility. But so much disintermediation and competition can also create new costs, especially when the market in question concerns not merely some product or service but, say, people themselves or their homes and neighborhoods. Who is winning or losing as market-led innovation leads the labor market in a new direction? And would policymakers help or hurt matters by inserting themselves?
The second discussion, featuring Reason magazine’s Peter Suderman and the University of Virginia’s Matthew B. Crawford, considers how digital media commoditizes attention, which firms then monetize through advertising. Because their revenues depend not on satisfying users’ needs effectively (for which users would pay them) but rather absorbing users’ time spent on their products, platforms, and services, these firms make “engagement” (or, critics would say, “addiction”) a design principle. Does the uniquely interactive and malleable nature of digital media demand attention from policymakers? Or is concern here the latest iteration in a proud tradition of paternalistic overreaction that once targeted novels and pinball machines?
The third discussion, featuring the Progressive Policy Institute’s Alec Stapp and American Compass’s Wells King, considers how digital data enable all-knowing algorithms to predict consumer behaviors and preferences and thus optimize products and services. Firms appear to value users’ data more than users value their own privacy, creating the opportunity for an exchange that some find delightfully convenient and welfare-enhancing but that others see as manipulative and degrading. What kind of economic good is personal data? And under what conditions should data be used, bought and sold, or simply given away?
By disaggregating the Big Tech debate into its constituent parts, policymakers can give greater focus to the challenges of the Super Market, which require their attention now and will likely occupy much of it in the years to come.
How Industrial Policy Made the Desert Bloom
A case study on the public investments behind the Israeli economic miracle
Inside The Battle To Protect Kids From Big Tech
On this episode of “The Federalist Radio Hour,” Chris Griswold, policy director at American Compass, joins Federalist Culture Editor Emily Jashinsky to discuss how history can inform today’s technology debates Read more…
Myth-Busting Silicon Valley
American Compass’s Wells King argues that Silicon Valley’s founder myth has things backward, misunderstanding the source of the regime’s power and flattering its worst instincts.