Lawmakers Turn To Look At The Economics, Equity And Fairness Of Silicon Valley

Jun 4, 2019
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AUDIE CORNISH, HOST:

The House plans to hold a series of hearings on Big Tech and the threat of monopoly power. Meanwhile, regulators plan to probe four tech giants in particular. The drumbeat to crack down on Facebook, Amazon, Google and Apple is growing louder here in the U.S.

NPR's Aarti Shahani has been following the latest developments. And Aarti, to begin, it's been a long time - right? - where the American political establishment has been criticized for basically giving tech giants a pass. That doesn't seem to be the case now. What's going on?

AARTI SHAHANI, BYLINE: Yeah, that's right. The House Judiciary Committee announced yesterday they're going to hold multiple hearings on antitrust issues. So much like we saw lots of investigation and testimony on Russian interference in U.S. elections and the role of Facebook in that, lawmakers are turning to look at the economics of Silicon Valley and equity fairness.

I'd say this shift got a real jump-start with the presidential candidates earlier this year, especially Elizabeth Warren, calling for the breakup of the largest companies. What's interesting with the House move is that it is bipartisan. In a statement, Congressman Doug Collins, a Republican from Georgia - he said lawmakers have got to take a look at whether the market remains competitive. I don't think that means he's going to echo Warren's call any time soon, though.

And it's not just Congress. According to multiple news reports, the Justice Department and Federal Trade Commission are going to probe specific companies, and they struck a deal to divide up the work. Justice may take Apple and Alphabet - that's the parent company of Google - and the FTC, Facebook and Amazon.

CORNISH: What's the thinking behind that division of labor?

SHAHANI: So antitrust is a quick label for a long list of concerns. One concern is mergers that make a company way too big. The FTC formed a task force a few months back to look at that. Think Facebook acquiring WhatsApp and Instagram, Amazon buying Whole Foods and Audible. So that could be why the FTC is focusing on those two companies.

Meanwhile, critics have raised questions about what's happening inside the big app stores. Are developers of apps getting a fair deal? Are consumers? So it could be that's why Justice would take Google and Apple.

CORNISH: Aarti, how does this compare to the developments in the European Union? They've been at the forefront of the so-called techlash.

SHAHANI: Yeah. It is absolutely the case that Europe has acted quicker. They've drafted and passed laws on hate speech. They've leveled multibillion-dollar fines against Google and Apple. But whether or not they're a model of action - well, you know, that depends on who you ask.

I spoke with two lawyers, both antitrust experts - one from Paris, the other Chicago. The Paris lawyer says, listen; you Americans fell asleep at the wheel back in the 1980s. You let your antitrust approach focus way too narrowly on one issue. If consumers are getting a bum deal, because Facebook is free, according to the American approach, it can't be bad. But he said European regulators understand the real problem is competition. When companies get way too big, there's no space for startups.

Now, Randy Picker - he's at the University of Chicago Law School. He thinks the U.S. needs to take a hard look at Big Tech. But he does not want Americans following the European approach, even if they've been far more aggressive.

RANDY PICKER: I do not think they've accomplished very much. I do not. They've extracted a bunch of money, but have they actually changed competition on the ground in these areas? I don't think so.

SHAHANI: He says what might really matter is looking at specific, well-defined ways companies have gotten too much power - say, over data, over industries - and then make them share.

CORNISH: So what can we expect to see in the coming months?

SHAHANI: Well, I'd say years, not months. Tech CEOs are going to be sitting in hearings, answering hours of questions, much like we saw Mark Zuckerberg do last year. Investors are going to keep an eye on this. So stocks will go up and down a lot. And this question of whether tech companies are too big - the outsized role they play in everything we do, the fact that one platform can reach, you know, more than two billion people - that's becoming a mainstream political issue.

CORNISH: That's NPR's Aarti Shahani. Aarti, thanks.

SHAHANI: Thank you. Transcript provided by NPR, Copyright NPR.