Why breaking up the tech giants won’t work

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In 1984, the telecoms giant AT&T (or “The Bell Corporation”) was broken up for violating US anti-trust laws. If you have been following this topic, this is a fact that you will no doubt have read about in a dozen other opinion pieces in the last fortnight. The pioneering antitrust suit which broke the company up is being touted as a model for how the government could (and for many should) go about breaking up tech giants like Facebook, Google, and Amazon. It’s a shame, then, that this isn’t the whole story. What proponents of breaking up these companies won’t tell you is that by the time AT&T was broken up, it had been 77 years since the company was first taken to court for breaking antitrust regulations. Regulators came after the company again in 1949, 1956, and 1974, before finally breaking the company’s monopoly up in 1984. Seven decades, suffice to say, is a long time, and we don’t have that long to take the kind of action which is needed to protect internet users from the kinds of breaches of privacy which we now know the likes of Facebook commit.

To return to AT&T for a moment, that case does show some of the potential benefits of breaking up telecommunications monopolies – the years after were some of the best in American history for innovation in that sector, after all. Ending the corporation’s monopoly freed up the so-called “Baby Bell” companies to pursue more innovative policies in a more competitive environment. It is entirely possible that without the breakup, we would not have the Internet we have today, as sluggish monopoly capitalism would have stifled or at the very least slowed down innovation. Yet the Bell breakup itself shows exactly why breaking up tech companies won’t work. In 1984, AT&T was quickly and precisely broken up. By 2018, almost all of the former company (and other assets it never owned) had been re-consolidated into a single corporation. Antitrust laws are often only a temporary measure; a corporation can be broken up, but if it keeps the same executives, the same employees, or even the same shareholders, then re-monopolisation will always be a tantalising possibility. Breaking up a corporation can be beneficial in the short term, but it could also stifle further regulations of that sector of the economy and long-term fixes in favour of this short-term success. In the case of today’s social media giants, it is not even clear whether these temporary gains would be beneficial, or if they are even possible.

Facebook, Google, Amazon, and even YouTube work so well because they are a single platform, consolidating vast reams of data into a single, easily accessible location.

This is the major problem of breaking up the tech giants; does doing so eradicate the benefits their services may provide? Recent revelations and the general bad behaviour of some of Silicon Valley’s biggest players aside, social media, online shopping, and the integration of online services do have their benefits. Facebook allows you to connect with people across the world, and has fomented radical political action from the Arab Spring to the March For Our Lives. Google has put almost all the knowledge of mankind but a few clicks of the keyboard away. Amazon has made shopping infinitely easier than at any other point in history, driving down prices for ordinary consumers. Many of these benefits arise from one common factor – the unity that these services provide. Facebook, Google, Amazon, and even YouTube work so well because they are a single platform, consolidating vast reams of data into a single, easily accessible location.

If the breakup of the tech companies means breaking up these platforms then they become useless; who would go to a Facebook which only has Americans or one that only has Europeans? Or a Google that could only return, say, 50% of possible results? If such a breakup were even possible (which it isn’t – who would stop non-Americans signing up to American Facebook or Google’s algorithms from accessing certain websites?), it would destroy the Internet as we know it. All of these infinitely valuable services would be gone with a single stroke of the legislative pen. The other option would be to strip these companies of their other assets, to take Instagram off Facebook or YouTube off Google, but one has to wonder if this would help at all? Like AT&T, the original company with its primary asset could remain and, in time, rebuild its old empire. What’s worse, the benefits of doing so would be negligible – if Mark Zuckerberg still controls Facebook, have we really solved the problem of his abuse of that power by taking a photo sharing app off him? The abuses of the present would carry on all but unabated.

If this is a pessimistic picture, that is because there is a difficult road ahead. Reform will not come easily, and nor will maintaining the enormous benefits we derive from Silicon Valley companies whilst preventing them from abusing their tight grip on our lives. To break them up may do nothing, or it may destroy them – both, I would argue, would be as bad as each other. Rapid and substantial reform is vital, both to save users’ rights and to protect the advances the Internet has brought. A radical reconceptualization of government oversight on these companies would be a good start, but Mark Zuckerberg’s refusal to testify before any government other than his own may present a roadblock to taking an international stand. A change is needed to protect users in a digitalised world, but breaking up the tech giants is not that change.