Fearing Communist Chinese competition, U.S. government will never break up big tech

Logos. AP

 

In recent months, reports have been swirling that U.S. monopolies Amazon, Apple, Google, and Facebook—so-called “Big Tech”—may soon be broken up. Presidential candidate Elizabeth Warren has proposed a plan to do so using antitrust law. Meanwhile, the Department of Justice and Federal Trade Commission are reportedly preparing for antitrust investigations into the four firms, and the Justice Department recently announced an additional review. House Democrats are planning a similar “sweeping review.” These companies, lawmakers say, have simply grown too big, hindering “competition” and violating users’ privacy.

All of these actions beg the question: Is “Big Tech” facing a reckoning? The answer, most likely, is no. Silicon Valley is an indispensable asset for the U.S. government and its imperial ambitions. Amidst the U.S.’s increasingly hostile posturing toward China and its tech sector, that relationship, in all probability, won’t be threatened any time soon.

Some members of the media have, rightfully, questioned the prospect of antitrust action against tech giants. Writing for Variety, Todd Spangler cast doubt upon the probability of tech-busting. It would take at least five years, Spangler contended, for antitrust law to be enforced. Additionally, as Variety and various other outlets have observed, antitrust law is outmoded in the age of internet titans: Traditionally, monopolies are judged based on whether they artificially inflate prices, but digital platforms like Facebook provide many of their services for free. What’s more, Amazon’s acquisition of Whole Foods at least temporarily lowered some prices.

Yet, in focusing strictly on procedural details, these critiques don’t tell the whole story. Analysis of the issue commands a broader understanding; to start, it’s worth examining Silicon Valley’s role in the U.S. economy. In early 2019, Apple and Amazon ranked among the five most profitable companies in the U.S. Apple was the world’s second-most profitable company in 2018, and the most profitable in 2017. In 2017, Google’s parent company, Alphabet, weighed in at the fifth-most profitable in the U.S.; the following year, its profits rose to an all-time high.

These rankings dovetail with the U.S. government’s increasing aggressions toward China, whose formidable tech sector may eclipse that of the U.S. in the not-so-distant future. In an attempt to dissuade policymakers from a breakup, Facebook and Google executives have invoked U.S. chauvinism, arguing that monopoly-busting would only aid China. “While people are concerned with the size and power of tech companies,” Facebook Chief Operating Officer Sheryl Sandberg said in a CNBC interview, “there’s also a concern in the United States with the size and power of Chinese companies, and the realization that these [Chinese] companies are not going to be broken up.”
Sandberg was likely referring to internet giants Tencent and Baidu, as well as e-commerce conglomerate Alibaba, which have grown steadily in recent years.

While politicians seek to appear adversarial toward Big Tech, many of them align with Sandberg on the issue. In May, a source from the Brookings Institution, a Washington, D.C., think tank that routinely receives funding from both Silicon Valley and the U.S. military, told Wired that U.S. legislators “don’t necessarily want to intervene in tech company operations, but they want tech companies to behave responsibly.”

Indeed, it would seem, lawmakers aren’t interested in taking a hammer to these companies; rather, to borrow a phrase from Spangler, they’re interested in “mak[ing] it look like they’re trying.” Rep. David Cicilline (D-R.I.), who’s among the House Democrats planning to review major tech companies, told The Hill that “a breakup of a company is a final resort.” In the same article, Democratic Silicon Valley Rep. Ro Khanna, who’s been exalted for advocating tech regulation and shepherding an “Internet Bill of Rights,” waxed nationalistic: “… we don’t want … the only big tech companies to be Chinese—Alibaba, Baidu, and Tencent.”

Rendering tech monopolies’ outlooks even rosier, the head of the Department of Justice’s antitrust division, Makan Delrahim, was a lobbyist for Google and Apple in 2006 and 2007; the Department of Justice will reportedly be investigating both companies. (Sen. Warren has called for Delrahim to recuse himself from the investigation. So far, Warren’s request hasn’t yielded results.)

Sen. Mark Warner, D-Va., who plans to introduce multiple bills to regulate social media companies, echoed Khanna’s fearmongering in an April interview with CNBC. He fretted: “… if we were to kind of chop off the legs of Facebook and Google … they might be replaced by Alibaba, Baidu, Tencent—companies that are totally enmeshed with the Chinese government in their global economic plan.”
Warner, it should be noted, is vice chairman of the Senate Intelligence Committee—a position that likely colors his stance on disassembling the tech giants. Amazon has counted U.S. intelligence agencies among its clients for years. It hosts cloud computing for U.S. intelligence and defense agencies as part of a notorious $600 million 2013 CIA contract and is currently vying with Microsoft for a “war cloud” contract with the Pentagon, which would allow the U.S. military to use artificial intelligence to expedite war planning. Combined with Amazon’s, as well as Google’s, history of selling facial-recognition software to the defense industry, these moves are quickly ushering in what some call a “cloud-industrial complex.”

This is far from an exhaustive list of reasons to distrust the prospect of large-scale tech trust-busting. A deeply entrenched symbiosis between Silicon Valley and Washington, D.C. rests on jingoism and profit. Were the aforementioned policymakers truly interested in challenging the ills of U.S. tech monopolies, they would, perhaps, call for tech’s demilitarization and decommodification—but ultimately, their loyalties lie exactly where the tech industry’s do.

https://www.reddit.com/r/Socialist_/comments/cjapd8/fearing_communist_chinese_competition_us/