What Breaking Up Big Tech Might Look Like
AILSA CHANG, HOST:
This month in All Tech Considered, we're looking at why everyone wants to break up big tech. The Department of Justice, the Federal Trade Commission and state attorneys general from across the country have all begun to investigate the tech giants like Facebook and Google, and with Massachusetts Senator Elizabeth Warren leading the charge, Democratic presidential hopefuls now have to stake out their own positions.
(SOUNDBITE OF MONTAGE)
ELIZABETH WARREN: I'm not willing to give up and let a handful of monopolists dominate our economy and our democracy.
TOM STEYER: I agree with Senator Warren that, in fact, monopolies have to be dealt with. They either have to be broken up or regulated, and that's part of it.
CORY BOOKER: Anybody who does not think that we have a massive crisis in our democracy with the way these tech companies are being used not just in terms of anti-competitive practices, but also to undermine our democracy...
CHANG: That's Cory Booker, and before him, Tom Steyer. To explain why this has become a leading political issue and what breaking up big tech might even look like, I'm joined now by someone who has spent years thinking about it, Columbia law professor Tim Wu. Welcome.
TIM WU: Pleasure to be here.
CHANG: So I know you've explained this to lawmakers on the Hill already, but I want you to explain it to us now. What do you think the harm is that these companies are creating? Because they do offer free services, so we're not talking about, like, price gouging. Is this more about, say, elimination of choices?
WU: Yeah. It's the harms that come with monopolization, which is the ability of a company to get away with stuff. So if you take a company like Facebook facing very little competition, they've been able to decrease the privacy protections that they offer people. If you look at a company like Google with not much competition in search, they've been raising and raising their advertising rates. So it's less in the old-fashioned price-fixing kind of conspiracy but more about users having less choice, less places to go and, therefore, companies being able to get away with more.
CHANG: So do you think the Facebooks or the Googles, Amazons of the world are actually violating current antitrust law?
WU: You know, it depends on the company and the case, but I think there's enough evidence to look hard at the question. I've spent the most time looking at Facebook. They bought out a lot of their most dangerous rivals in the early 2010s. It's against the law to buy your competitors. Instagram and WhatsApp or two of their competitors they bought. So I think there's at least, you know, probable cause that they've done something. The case against Google is a little more complicated, but some people believe that there is enough there to take a look as well.
CHANG: Now, Elizabeth Warren, she has said that big tech companies - specifically Amazon, Google and Facebook - should be broken up. She says Amazon should not own Whole Foods, for example - should not own Zappos, the shoe company. Google should spin off Google Search - you know, things like that. So let me ask you, is breaking up these companies the best approach?
WU: It depends. I mean, I think sometimes, it is. Returning to Facebook, I think their acquisitions of WhatsApp and Instagram were illegal and anti-competitive, and so if they were asked to spin off those companies under the acquisitions, it would be a form of breakup, but one I think that would reintroduce competition. I think breakups or undoing of mergers are actually called for more than we have appreciated in the last few decades, but you don't want to create new problems.
CHANG: What kind of problems do you foresee?
WU: In any action, there's unintended consequences. If you imagine, for example, breaking up Apple into three little mini-Apples, there might be more competition, but it might be that people's phones don't work as well or, you know, they lose whatever magic mojo they had. So you don't want to actually make things worse for people, but that said, I think breakups have the positive effect of rebooting an industry, starting things afresh and frankly, historically, have often been better for people in the long run than anyone predicted.
CHANG: That's Tim Wu of Columbia Law School. He's the author of "The Curse Of Bigness: Antitrust In The New Gilded Age." Thanks very much for joining us today.
WU: My pleasure.
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