Don’t Get Distracted by the Spectacle of Tech’s Big Antitrust Hearing
A top Amazon critic explains the big picture behind the media circus
Four of the world’s most powerful people will testify to Congress on Wednesday as part of a long-running investigation into whether their companies are, well, too powerful. After sending various underlings to previous hearings, this time Amazon CEO Jeff Bezos, Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg, and Google CEO Sundar Pichai will personally face questions from members of the U.S. House Judiciary Committee’s antitrust subcommittee, turning what would otherwise be a routine proceeding into something of a media spectacle. It’s the sixth in a series of hearings on competition problems in digital markets that the subcommittee began in June 2019 and is expected to culminate in a bipartisan report to Congress later this year.
At stake is a possible paradigm shift in antitrust law to adapt to the internet age — one that could reshape the playing fields that have allowed the largest U.S. tech companies to become some of the most dominant entities in world history.
Watching closely will be Stacy Mitchell, co-director of the nonprofit Institute for Local Self-Reliance and one of Amazon’s most influential critics. She testified as an expert witness in the second of the hearings last summer, and earlier this year was profiled by the New York Times as one of the people whose ideas have shaped the case against Amazon.
Last week, Mitchell made news by stepping down from her fellowship at a Yale University antitrust project, along with fellow antitrust scholar Sanjukta Paul. The two resigned their positions after The American Prospect reported that the project’s director, Yale economist Fiona Scott Morton, disclosed that she is a paid advisor to Amazon and Apple.
“I think that makes it hard to achieve the project’s goal of creating a space to grapple w/ the antitrust implications of Big Tech,” Mitchell said in a Twitter thread announcing her departure. She nodded to the irony of Amazon and Apple extending their reach to an antitrust project named after Thurman Arnold, the top trust-buster in Franklin D. Roosevelt’s administration.
I spoke with Mitchell by phone on Thursday, the same day she announced the move, about Amazon’s power, the upcoming antitrust hearing, and what people are getting wrong about why it matters.
This interview has been edited and condensed for clarity.
OneZero: This must be a hectic day for you. I noticed your tweet announcing your resignation from the fellowship is blowing up.
Stacy Mitchell: I feel a little sheepish, actually. I do have a day job. [Mitchell works full-time as co-director of the Institute for Local Self-Reliance; her Yale fellowship was an affiliation.] I expected a few people to notice, but I wasn’t really expecting it to be kind of this thing. I think a lot of people mistakenly assumed it was some sort of big sacrifice on my part.
I wonder if it resonated partly because it illustrates how these companies are so influential that, even at an antitrust project, you can’t escape their influence.
Right, and that’s not always transparent to people. They’re funding think tanks, nonprofit groups, academics, and even small-business front groups. There was that New York Times piece a couple days ago about the Global Antitrust Institute.
There’s also this advocacy group called the Connected Commerce Council, and it was placing op-eds from small business owners supporting the big tech companies. You’d read something they’d written and you’d assume they were genuine — that it was simply their opinion. In some of these cases, reporting has revealed the business owners had no idea they were having these things attributed to them. [The Washington Post’s Tony Romm reported on this practice here, and Alex Kantrowitz added more details in his newsletter Big Technology.]
Yeah, that’s pretty deceptive. So what do you think we might get from this hearing that we haven’t gotten from the previous ones? Having the CEOs instead of lower-ranking executives draws more attention to these types of hearings. But at the same time, it can distract from the main point because people get caught up in this or that soundbite, or in some of the less intelligent questions that the lawmakers ask.
The format of having all four of them in one hearing is not ideal. The companies fought for that, and unfortunately they seem to have won that battle. Each of the four companies is distinct, and raises distinct antitrust issues. Not having an opportunity to dig in deep on each one of them, one at a time, I think is really problematic. And it may prove to doom this hearing in terms of its effectiveness.
I can say from the hearing last July [in which Mitchell testified], the subcommittee members asked very sharp, well-informed questions. I guess not all of them, but most of them did. In that sense, it’s less like maybe Zuckerberg’s hearing before that Senate committee a couple years ago. [Much of the coverage of that hearing focused on Senators’ uninformed questions and Zuckerberg’s ability to dance around them.]
A lot is going to depend on the subcommittee members’ ability to ask follow-ups. When Jeff Bezos gives an effective answer, how do you pin him down? If you don’t understand enough about Amazon’s business, you’re not going to be able to do that. My hope is that because this subcommittee has been engaged in this investigation, the members will be prepared to do that. If they can’t, what we’re going to get is a lot of evasive answers that eat up the time and don’t accomplish anything.
“This feels like the wheels of democracy’s oversight mechanism finally sputtering back to life.”
So is this hearing maybe less of a big deal than it’s being made out to be, in terms of being a venue in which to finally get answers from the people who have ultimate responsibility at these companies?
Not necessarily. The thing to remember is that this is part of this long-running investigation. Congress has not done an investigation into monopoly power like this for about 40 years. It used to do these regularly, the most famous being the monopoly committee back during Thurman Arnold’s day in the late ’30s, early ’40s. They interviewed hundreds of witnesses and released numerous reports, and it took place over several years. That led to changes in antitrust law, at least one major antitrust case, and changes in patent law. In the ’50s and ’60s they continued to take on monopoly power in particular industries. That was the end of doing this.
So this feels like the wheels of democracy’s oversight mechanism finally sputtering back to life. My hopes are not so specific to this hearing, but rather that the hearing sits within a larger investigation that is going to produce a report and set of policy recommendations.
The real effectiveness of these hearings will depend on the report — the bipartisan support it has, and how it’s received in Congress, are in some respects much more significant than this hearing itself. This hearing is not for show. You know, we have a lot of hearings that are about giving an opportunity for Congress to demonstrate its concern about an issue that’s in the news. Whereas this is actually part of an investigation that’s meant to really accomplish something.
Why should the average consumer care about these antitrust issues?
This whole shift in thinking that happened in the 1980s and ’70s, where we embraced this idea of big corporations — we really embraced bigness, and the idea that big corporations were better, that they would deliver more, and we should allow them free rein. It’s really quite remarkable that what we have seen in the intervening 40 years is this incredible concentration of economic power, and most Americans are demonstrably not better off.
That was what we were sold on — the idea that there would be broad benefits to these companies’ success. And instead, we have just an incredibly unequal society, where huge numbers of people are unable to make a sustainable living.
The thing that I hear most, the undercurrent of what I hear a lot of Americans express when they talk about what’s wrong with the country, has to do with a sense of domination and a sense that their lives are controlled by corporate forces. They experience this at work a lot, of course. But there’s also a feeling that your institutions are controlled and run by big business. That’s a pretty broad feeling, not limited to the left or the right.
Part of how we have not paid attention to those linkages is that we have adopted this consumer mindset. Where we tend to default to this idea that our only response to corporate power is, you know, a boycott, or canceling your Amazon Prime membership, instead of really recognizing that we have tools to restructure markets in ways that would broaden the benefits and opportunities they deliver.
I think most people actually do experience and carry the concerns that are at the root of this investigation. But it isn’t about your shopping choices as much as it is about this sort of broader power.
You talked even before the pandemic about how this concentration of corporate power, and in particular the growing reliance on Amazon, would leave us vulnerable as a society. And of course we’ve seen that borne out in dramatic ways. What are you focusing on in your work these days?
On the good side of the ledger, if I can locate a silver lining here, there’s just more attention: A lot of people have suddenly realized that small local businesses matter, and there’s something rigged in the system. Because people tended to see Amazon’s growing dominance as just part of progress, market evolution, where traditional small businesses couldn’t compete. Now people’s eyes are more open. So I’m busy talking and writing about that. It’s particularly interesting on the left, which has kind of had an antagonistic relationship to small businesses for many years. There’s a new opening to say, that’s a mistake, and here’s why.
“So many American companies, large and small, live in fear of Amazon.”
I’ve been researching the Congressional hearings that led to the tobacco settlement in the ’90s. A turning point was when Big Tobacco lost the support of the Republican party, and that happened in part because it had lost the public’s support, and then the Democrats started painting the GOP as the Party of Big Tobacco. And that was untenable for the GOP. So with Big Tech I’m wondering, is it realistic to expect that both the Democrats and Republicans agree that their power is a problem in this sort of bipartisan way? Or is the more likely path that one party starts hammering on this idea that the other one is the party of Big Tech, until the other party eventually backs down?
I think the struggle you’ve outlined is the right one. The Democratic party actually has to be aggressive about hanging this around the necks of Republicans. What’s happening to small businesses, especially — Amazon’s market power is their number-one threat. There’s survey data and all sorts of stuff to back that up. Republicans have been able to pretend to be the party of small business, and of fair and open markets, or free markets. But I mean, who’s free in this scenario? So many American companies, large and small, live in fear of Amazon. There is nothing about this that is the land of the free. The missing piece, it seems to me, is that the leadership of the Democratic Party is not doing what you’re describing with tobacco. Yet. That seems to be the place where that needs to change.
I hope that the policy recommendations are strong that come out of the investigation. The report they’re planning to release in early fall. Obviously it’s going to come out in the context of the election, and the changeover in Congress is part of that. The things to watch are, is it a strong report that calls for meaningful policy changes? How does Congress react, and what happens next? And if Biden wins, who does he begin to appoint?
I think the pandemic has laid bare their incredible power in our society and it’s undeniable. Arguments that I had been making for a long time about the fact these companies have become like essential infrastructure really have proven to be the case. And all of the ways in which we’ve realized the incredible injustice and inequality. I mean, Jeff Bezos made $13 billion on Monday.