The EU, Tech Trustbusting, and Trade Wars
There’s a difference between protectionism and political will
Competition regulators in the EU, the UK and the US are all looking hard at concentration in the tech sector, and well they should: an industry that was once hailed for its dynamism — for being a sector where yesterday’s world-spanning titans are sold for parts to companies that were mere napkin doodles a year or two before — has calcified into “a group of five websites, each consisting of screenshots of text from the other four.”
The reasons for tech concentration are pretty straightforward. Despite a lot of fatalistic tech exceptionalism about “network effects” leading to inevitable monopolization, the actual means by which tech companies consolidated is actually easy to see in the historical record.
As competition law enforcement faded, tech companies were able to engage in predatory acquisitions (like Facebook buying Instagram to recapture users who had quit Facebook), anticompetitive mergers (like Yahoo’s endless, mindless, destructive company purchases), fraud (like Facebook’s “pivot to video” accounting fictions), conspiracies (like Google and Facebook’s ad-market rigging), predatory pricing (like Amazon’s war on its own sellers) and monopolization of ancillary services (like Apple’s control over apps and repair).
Of course, it wasn’t just tech where these tactics were used to crush competition and concentrate whole sectors of the economy into a few hands: there’s a long list of heavily concentrated industries, from beer to eyeglasses, banks to professional wrestling, athletic shoes to health care, publishing to pharma, mattresses to candy, and beyond. Look closely at the recent history of these industries and you’ll find that the only thing the tech industry doesn’t monopolize is monopolistic tactics — every one of these industries grew concentrated through a version of the Big Tech playbook.
Tech is neither exceptionally evil nor exceptionally great, and its leaders are not exceptionally brilliant or exceptionally foolish. But tech trustbusting is having a moment, prompting some commentators to ask why we’re set on breaking up tech but not cable, finance, or our other systemically harmful monopolies.