Determining whether a company exerted monopolistic power use to be much simpler. In broad terms it was essentially based upon the welfare of the consumer, meaning that if prices were low and favorable, the company was not considered a monopoly. The crux of the argument was really about price. Monopolies can be considered an extreme result of free-market capitalism in the absence of any restriction or restraints, which is where Marx prophesized the road would lead.
Google, Facebook, Amazon and Apple have fought regulators in Europe on privacy, antitrust and taxes for years. Thus far the U.S. has been friendly ground for the tech titans. This all may be changing if certain regulators and advocacy groups have their way. The Financial Times in a September 12, 2018 op-ed stated, “For more than four decades, the US and most other nations have weakened laws that held the private sector in check and made it hard for companies to wield monopoly power. The result has been increasing concentration in many sectors of the economy, from finance to media to telecoms and technology.”
Last Thursday, September 13, the Federal Trade Commission kicked off a series of hearings to discuss whether the agency’s competition and consumer protection policies should change to better reflect new technologies and companies. According to FTC Chairman Joseph Simons, “The broad antitrust consensus that has existed within the antitrust community, in relatively stable form for the last 25 years, is being challenged. I approach all these issues with a very open mind, very much willing to be influenced by what we see and hear at these hearings.” One wonders if Jeff Bezos et al have consternation for the last statement.
There are two primary challenges to the status quo of regulation. The first is a growing field of evidence that power is being concentrated in certain industries by a relative few. For example, the airline industry is controlled by four carriers who fly 68 percent of the passenger miles. The second is a school of thought among academicians and advocacy groups stating that the focus should not be on price or price manipulation, but also with issues like labor standards, economic inequality and corporate influence on politics, where there’s now more evidence that industry consolidation is having an impact.
Former Supreme Court justice Louis Brandeis brought forth a premise that is now being referred to as “new Brandeis,” which believes that extreme concentration of corporate wealth represented a threat not just too shared prosperity, but to democracy itself. Bill Gates and Warren Buffett did not threaten the balance of powers, but the new data billionaires are changing the public view.
The public that is to be protected is enamored by how convenient Amazon has made their lives through expedited delivery and low prices. These creature comforts have overshadowed any real fear of Amazon being a data monopoly. Jeff Bezos has certainly known this day of possible reckoning would come, and has this to say about the governmental scrutiny. “It’s really important that politicians and others understand the value that big companies bring, and not demonize or vilify business in general. Nobody in their garage is going to build an all carbon fiber fuel efficient Boeing 787. It’s not going to happen. You need Boeing to do that.”
You have Republicans who also voiced concerns about the industry, and a growing number of economists are studying whether technology’s leading companies are increasing wage inequality. Then you have the companies arguing against broad changes. Google notes that it offers its search services for free, and there are multiple other places consumers can go online. The hearings will continue to provide an interesting landscape to business, politics and ultimately to the consumer.