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High Tech & Antitrust

I’m picking on Amazon because I believe there is more than enough evidence to break them up and evaluate their conduct against federal antitrust violations. A piece of popular antitrust history revisits the stranglehold IG Farben had in Germany’s WW2 economy and their role in financing the German war apparatus preceding a forced breakup which spit them into smaller constituent parts (like Bayer Aspirin). As many scholars including Sally Hubbard, Lina Khan, Zephyr Teachout, Tim Wu, and others have pointed out, there is little reason to believe that the largest tech conglomerates (especially Amazon, Facebook, and Google) should continue operating unpunished while they subsume smaller companies and continuously abuse their workforce.

The current doctrine that guides decision-making in the courts allow corporations to walk away from egregious marketplace and workplace abuses unscathed by primarily viewing harms through price and output effects. If this is the standard analysis, several other harms go unnoticed. There is a wide range of legal and progressive economic scholarship circulating to challenge the current legal paradigm and re-centralize moral concerns and political history in antitrust jurisprudence. Since Bork and the rest of the Chicago school economists succeeded in their Right-wing intellectual takeover of the courts, advancing the Law&Economics movement, major harms and socioeconomic concerns are eschewed. I believe that Sally Hubbard’s highlights such problems wonderfully and rightfully argues that high tech companies like Amazon should be evaluated for monopolization cases against this orthodox wisdom.

(Additionally, I want to share Tim Wu’s Wired interview concerning Facebook and Lina Khan’s amazing paper on Amazon)

After reading an excerpt from Hubbard’s book “Monopolies Suck,” I think that these tech companies, especially Amazon, should not only be evaluated for monopolization, but should be broken up into smaller constituent parts; and be transformed into public goods because of the sheer power of their infrastructure (like AWS and their shipping network). Monopolies don’t only harm consumers and workers, they are also a threat to a well informed citizenry and a healthy democracy. Columbia law professor and antitrust scholar Tim Wu descries how Facebook’s dominance means concentrating an overwhelmingly share of the flow and exchange of information to one single source is dangerous. I believe that in today’s marketplaces incubating these tech giants, maintaining a muscular “monopoly” doesn’t just mean “one seller” of something. This is an incomplete definition and hides the true threat of monopolies, which operate under their own forms of private governance. According to Zephyr Teachout, Fordham law professor and antirust scholar,  a monopoly is “any company that has so much power that it sets the terms of an interaction.” And because of Amazon’s total chokehold over web services, book publishing, and online commerce; and Google’s total dominance over internet searches, I believe Sally Hubbard righty points out that these companies should be evaluated for monopolization. This holds no matter what the actual percentage of that market they dominate. When Standard oil was broken up, they controlled 65% of the market. And companies today are evaluated for monopolization if they control so much as 5% of the market. 

Additionally, I think that because Amazon’s logistics network (as it pertains to delivery services) is such an essential service and so heavily relied on across the country, that the federal government should seize Amazon, break them up, and subsume them to strengthen and nationalize existing public infrastructure. Monopolies can only grow to their size and gain so much dominance over our lives through lax antitrust law and government sanctioning. These rules are a result of 50 years of Right wing ideological takeover and contemporary antirust jurisprudence is but a toxic holdover from this era. The original intent of antitrust law was inherently political. It was to stop tightly concentrated economic power from undermining democratic processes and competition, which is a deeply political value judgment.

Economic power cannot be concentrated into so few hands, because that only begets more and more political power into the arms of Facebook, Google, etc. I haven’t even talked about the tax competition and the amount of essential state and local government revenue lost because of these companies economic influence. Not to mention the toxic revolving door in Washington D.C whereby the regulators of the market (or those in government positions with the power to stop them) refuse to do the right thing because they are promised board positions on the tech companies that **they are supposed to be policing** (see: Jay Carney, former Obama administration official). To curb this, monopolization cases should be brought against the tech giants (Amazon) and progressive antitrust jurisprudence needs to change such that corporations are accountable to the public to which they serve.