How did our tools for addressing corporate power become so blunt?

In the US and Europe, politicians are once again reckoning with monopolies.

Amazon chief executive Jeff Bezos (Photo By Emma McIntyre/Getty Images)

It is difficult to pinpoint what caused America to reckon once again with monopolies. It could have been Obama’s cosy relationship with Google, Facebook’s purchase of Instagram, or presidential hopeful Elizabeth Warren’s anti-monopoly stance. By 2017, the wind had dropped, the pressure changed and talk of monopoly power was everywhere.

The anti-monopoly agenda attracts support from conservatives and progressives alike. It invokes the ideal of fairness to counter the realisation that something has gone wrong with capitalism. This is the predicament that Tim Wu explores in his short book, The Curse of Bigness. Wu wants to reinvigorate the antitrust laws that first opposed monopolies in the era of Vanderbilt and Rockefeller. He warns us of historic patterns; corporate concentration has often proved a route to political autocracy.

Such was the case with the Nazi party, Wu writes. Like Jair Bolsonaro or Donald Trump, whose policies transfer wealth upwards, Hitler’s ascent was bolstered by corporate concentration – in particular IG Farben, a cartel of eight chemical companies. Today, Elizabeth Warren and others argue that enervated lawmakers in America and Europe have steered capitalism towards a new age of concentrated power.

Wu finds his answers in history. Capitalists of the late 19th century positioned themselves above the law, so Congress pushed back: the Sherman Act of 1890 introduced antitrust laws to break up monopolies. Restoring the equilibrium between state, corporation and individual, Wu thinks, will supply answers to the modern empires of Mark Zuckerberg and Jeff Bezos.

In an era where corporate money touches almost everything, we may ask how our tools for addressing its power became so blunt. In the 1970s, influenced by the teaching of an academic called Aaron Director, a small group of lawyers at the University of Chicago dreamed up a new logic that would later migrate to the European Union. This followed what Director termed the “consumer welfare standard”. According to this standard, the aim of antitrust was to benefit the consumer, usually in the form of lower prices.

This was a devastating sleight of hand that reframed the citizen as a consumer rather than a political agent, and divested antitrust laws of their political intent. Monopolies, it seemed, were no longer a threat – as long as they kept prices low.

Wu captures these strands of history, yet his argument – that answers to technology platforms can be found in historic case studies – makes sense only if one accepts that Facebook, Google and Amazon aren’t really new. “Business and economics had not quite been reinvented forever,” Wu writes. Data, speaks that common adage, is simply the new oil.

But it isn’t. Charmed by bright technologies and disarmed by an absence of precedent, regulators failed to grasp the new threats that technologists pose, falling back instead on categories that belonged to a different era. At Google’s annual developer conference in 2013, the company’s CEO Larry Page told the audience that “our old institutions, like the law, haven’t evolved to keep pace with the rate of change”.

Page identified what writers including Nick Srnicek and Shoshana Zuboff have since understood. Technology platforms are a new development in political economy distinct from what came before. Facebook and Google’s objectives are to make humans’ actions, thoughts and feelings legible, rendering them for sale as data that can predict – and monetise – future decisions. They rely on a citizenry of passive consumers and offer a form of anodyne individual freedom that is divorced from material politics. Recall that Zuckerberg only ever intended to “bring the world closer together” with his vapid brand of emancipation.

Wu is correct when he writes that regulators could have done more – they could have blocked Facebook’s buyout of Instagram in 2012, for instance. And Zuckerberg certainly fears categorisation as a monopoly, rejecting the term at a Congress hearing on the Cambridge Analytica scandal last April. But busting Facebook’s dominance achieves little if it simply spreads the market across 50 surveillance capitalist firms instead.

Like Western imperialists who built empires in the 19th century, Google and Facebook have taken control of a continent where normal economic laws seem not to apply. They extract profit from data that is collectively produced and penetrate ever-more intimate recesses of daily life. Antitrust advocates such as Wu pursue the issue of market dominance while sidestepping a more fundamental set of questions. Are the products of surveillance capitalists legitimate? And should apparatuses that render profit from private selves even exist?

The Curse of Bigness: Antitrust in the New Gilded Age
Tim Wu
Columbia Global Reports, 154pp, £10.99