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OpEdNews Op Eds    H1'ed 11/22/18

Break Up Facebook (and, While We're At It, Google, Apple, and Amazon)

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From Robert Reich Blog

The New York Times revealed last week that Facebook executives withheld evidence of Russian activity on the Facebook platform far longer than previously disclosed. They also employed a political opposition research firm to discredit critics.

There's a larger story here.

America's Gilded Age of the late 19th century began with a raft of innovations -- railroads, steel production, oil extraction -- but culminated in mammoth trusts owned by "robber barons" who used their wealth and power to drive out competitors and corrupt American politics.

We're now in a second Gilded Age -- ushered in by semiconductors, software and the internet -- that has spawned a handful of giant high-tech companies.

Facebook and Google dominate advertising. They're the first stops for many Americans seeking news. Apple dominates smartphones and laptop computers. Amazon is now the first stop for a third of all American consumers seeking to buy anything.

This consolidation at the heart of the American economy creates two big problems.

First, it stifles innovation. Contrary to the conventional view of a U.S. economy bubbling with inventive small companies, the rate at which new job-creating businesses have formed in the United States has been halved since 2004, according to the census.

A major culprit: Big tech's sweeping patents, data, growing networks, and dominant platforms have become formidable barriers to new entrants.

The second problem is political. These enormous concentrations of economic power generate political clout that's easily abused, as the New York Times investigation of Facebook reveals. How long will it be before Facebook uses its own data and platform against critics? Or before potential critics are silenced even by the possibility?

America responded to the Gilded Age's abuses of corporate power with antitrust laws that allowed the government to break up the largest concentrations.

President Teddy Roosevelt went after the Northern Securities Company, a giant railroad trust financed by J.P. Morgan and John D. Rockefeller, the nation's two most powerful businessmen. The U.S. Supreme Court backed Roosevelt and ordered the company dismantled.

In 1911, President William Howard Taft broke up Rockefeller's sprawling Standard Oil empire.

It is time to use antitrust again. We should break up the high-tech behemoths, or at least require that they make their proprietary technology and data publicly available and share their platforms with smaller competitors.

There would be little cost to the economy, because these giant firms rely on innovation rather than economies of scale -- and, as noted, they're likely to be impeding innovation overall.

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Robert Reich, former U.S. Secretary of Labor and Professor of Public Policy at the University of California at Berkeley, has a new film, "Inequality for All," to be released September 27. He blogs at www.robertreich.org.

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