Monopoly money

river in between buildings during nighttime

In late July, four men who control companies worth nearly 5 trillion dollars told a congressional hearing that their businesses were not monopolies. Displaying suspiciously high levels of deference and humility, Sundar Pichai of Google, Jeff Bezos of Amazon, Tim Cook of Apple and Mark Zuckerberg of Facebook insisted that they faced robust competition in most of their activities. They politely deflected criticisms from legislators who had reviewed more than a million documents and hundreds of hours of interviews which detailed their anti-competitive practices.

The CEOs’ claims are, at best, contestable. Last year an American tech writer used special software to block content from Amazon, Apple, Facebook, Google and Microsoft. Kashmir Hill’s account of her six-week experiment is an eye-opener for anyone who may not grasp the details raised in the antitrust hearings. In the first week Ms. Hill blocked Amazon. Immediately 23 million IP addresses hosted by Amazon’s Web Services (AWS) vanished, among them the US Government’s Accountability office. Closer inspection revealed that many websites that remained accessible still used AWS, at one remove. (They had bypassed Hill’s software because they used content delivery networks to load web pages faster.)

Its dominance in web hosting earned AWS than US$17 billion in revenue last year. And, despite spending more than 4 billion on Covid-related adjustments this year, the company recently reported 5 billion in net income for its second quarter – a 40 percent surge over 2019. Amazon’s CEO, Jeff Bezos, just sold less than two percent of his 55 million shares for more than US$3 billion. If his remaining stock grows at current rates, Bezos’s holdings will soon exceed $200 billion.

In the week she blocked Facebook (and its associated services: Instagram, WhatsApp, Facebook Messenger etc.) Hill found that her devices tried to communicate with the platform 15,000 times. (In the previous week they had sought Amazon nearly 300,000 times.) The contacts with the platforms allow them to track a user’s movements, micro target ads and mine our web browsing for behavioural patterns. When Hill tried an alternative social network, the open-source Mastodon, she quickly tired of the effort needed to rebuild what she had already created on Facebook. Hill quickly lost touch with friends’ lives and when she called one, afterwards, to congratulate her on a new baby she was told: “I just assume that if I post something on Facebook, everyone will know about it.”

Blocking Google disabled ridesharing apps like Uber and Lyft, (which use Google Maps) and slowed websites that use its services – for fonts, ads, or traffic analysis – to a crawl. During this week, Hill’s devices tried to contact Google’s servers no fewer than 100,000 times. By the time she had finished her full six weeks of ‘digital veganism’ she concluded that life without the major platforms was practically “impossible” for a modern American. Anticipating the argument that consumers can choose not to use these companies, Hill notes that this is impractical since “they control a thicket of more obscure products and services that are hard to untangle from tools we rely on for everything we do, from work to getting from point A to point B.”

The Congressional antitrust hearings are a welcome pushback to the longstanding dominance of the large tech companies and to the lobbying influence which their vast profits have enabled. In a book about how Big Tech has betrayed its founding principles, FT tech writer Rana Foroohar writes that is was “quite difficult to locate completely independent voices” on tech issues because “most experts are funded in some way by either Big Tech firms or their corporate opponents, which goes to show just how thoroughly monied interests have captured the civic debate in the United States.” The bottom line, she concludes, “is that these companies have manipulated the system to ensure that they can continue to operate freely, without the burden of pesky government intervention.” As a result “they all too often exist in a universe of their own, not just outside of national borders, but somehow transcending borders altogether.”

Big Tech’s transnational monopolies affect anyone who uses the internet regularly. Scrutiny of these companies’ questionable practices is long overdue and although proper oversight and accountability mechanisms will likely take several years to develop, the recent antitrust hearings are a welcome step in the right direction.

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