Have you seen advertisements on TV celebrating American technology and then warning ominously that “some in Washington” want to stifle our technological progress? I have seen many --- they usually feature small business owners praising American technology and warning about bad plans floating around Washington. They mention the advantages that would accrue to our enemies (if American technology lags) and they show pictures of Iran and China (sometimes even North Korea). The ads conclude with exhortations to tell Congress to not get in the way of improvements to American technology. I must admit after seeing a bunch of these ads, I had two reactions. The first one was --- what the heck are they talking about? But the second one (informed by years of understanding a bit of how big business always wraps itself in the needs of the “little guy”) was --- Oh Boy --- some giant business are worried about Congress taking action that will reducing their power.
Well, that second instinct was right. It took me a while but I found a great article put out by Brookings.com almost two years ago detailing how giant companies like Micro-Soft, Amazon and Meta (which used to be Facebook) and others are attempting to undermine reforms to the US anti-trust laws. The article is entitled “History Repeats itself with Big Tech’s misleading advertising,”
[It is written by Tom Wheeler and was posted June 15, 2022. It is available here.
Here are a couple of direct quotes from ads reproduced in the article: “I don’t understand why some in Congress want to take away the technology we use every day,” the owner of a small plumbing business worries …. Lamenting “the political campaign against American technology,” Larry Melton of Gilbert, Arizona warns, “our leaders need to strengthen, not weaken, American technology.” In another advertisement … small business owner Renee Carlton of Corinth, Mississippi, warns that “some politicians are pushing new laws that will weaken American technology.”]
At the bottom of those ads, we see that they have been purchased by the AMERICAN EDGE PROJECT. (Here is a self-serving description of who constitutes this group. )
According to the Brookings piece, the American Edge Project was founded and funded by Meta.
Now you might ask yourself, why is this giant business creating ads that many people watching will respond to exactly as I have done --- What are they talking about? The language is completely vague and does not specify which pieces of legislation they are against. THAT IS BY DESIGN. The whole point is to introduce a negative attitude towards government regulation in general. They don’t dare claim they are opposed to anti-trust legislation because from the very moment such bills were introduced (back in the 1880s – with the first bill passing Congress in 1890 – the Sherman Anti-Trust Act) the IDEA of breaking up monopolies was and remains very popular.
But in fact, that is the point of the ads. The underlying message that META does not want we the people to understand is --- People in Congress are worried that firms like META and AMAZON fit the definition and demonstrate the dangers of monopolies to a “T” ---
Getting the public to oppose all efforts to bring anti-trust laws up to date so they can take on the giants like META and AMAZON because it might STIFLE AMERICAN TECHNOLOGY is actually a very smart way to protect these monopolies from government scrutiny and from government action.
And these giants know what they are trying to avert. According to the NY Times, a law passed by the EU has just gone into effect. “The law, called the Digital Markets Act requires the biggest tech companies to overhaul how some of their products work so smaller rivals can gain more access to their users.” Notice the words --- “so smaller rivals can gain more access to their users.” The way monopolies keep their advantages is to freeze out potential competition by making sure people who use their products never even KNOW that there are potential alternatives. The EU law has put a stop to some of those techniques.
In the 19th century, oil giants arranged for railroads to refuse to transport the oil of smaller competitors. That behavior and the tactics that led to the formation of US Steel, Standard Oil of New Jersey, and other giant monopolies has been told many times over.
[There are many good books about the rise of the great American fortunes based on monopolies eating up their smaller competitors. For a somewhat popularized version, see Matthew Josephson, The Robber Barons. (Harper Paperbacks, 1962). But see also Gustavus Myers, The History of the Great American Fortunes. Vols. I, II and III, (Published in 1910: Charles Kerr and Co.)]
When Apple produced a charger that only worked with Apple products that wasn’t quite as obvious a way of squeezing out competitors. With the new EU law, “… future iPhones will have a charger that works with non-Apple devices.”
[The quotes are from a story about how digital giants are having to adapt to changing rules in the European Union. See “Forced to Change: Tech Giants Bow to Global Onslaught of Rules,” available here.]
And just on cue, the day after I recorded this commentary, the government sued Apple for violating the anti-trust laws here in the US.
[See David McCabe and Tripp Mickle, “U.S. Sues Apple, Accusing It of Maintaining an iPhone Monopoly,” available here. The lawsuit charges that “ … the company had violated antitrust laws with practices that were intended to keep customers reliant on their iPhones and less likely to switch to a competing device. The tech giant prevented other companies from offering applications that compete with Apple products like its digital wallet, which could diminish the value of the iPhone, and hurts consumers and smaller companies that compete with it.”]
In the US big business has fought long and hard against anti-trust enforcement. The history is very complicated because often the Supreme Court has held that being big was not evidence that one was (to use the words of the Sherman Anti-Trust Act) a “conspiracy in restraint of trade.” And then there was what came to be known as the “Bork consensus.” (Yes, THAT Bork, the guy Reagan tried to put on the Supreme Court.)
“….a group of conservative scholars began arguing that large corporations had been unfairly maligned. These scholars — led by Robert Bork, then an obscure law professor — made the case that big business was often efficient and innovative. And if a large company did try to take advantage of consumers, these scholars said, a competitor could swoop in and lure away those consumers. For years, Bork and his allies failed to persuade Washington to embrace their views. But after the U.S. economy struggled during the 1970s, policymakers became worried that antitrust laws were keeping American companies from competing with Japanese and European rivals. Slowly, the Bork view won converts among both Republicans and Democrats. Since the 1980s, that view has dominated, allowing corporations to grow much larger.”
[Quote from “Google on Trial: An antitrust trial is the most significant attempt in decades to undo the Bork consensus.” Available here.]
There even was a detailed economic theory developed that suggested that even a one-firm industry, such as the old AT and T, was constrained by POTENTIAL COMPETITION to price and behave AS IF it had lots of competitors.
I bring all this up as evidence that in the years since Congress began to attempt to break up monopolies and regulate the behavior of giant businesses, those businesses have fought back with lawyers, with “scholarship,” and with attempts to hoodwink the public.
Those ads that seem to be about nothing have a purpose -- and it’s an insidious one. The goal remains: They want the freedom to engage in predatory competition to keep out new competition and eat up existing competition. The ultimate goal is to have increased power to fleece us unwitting consumers.
Michael Meeropol is professor emeritus of Economics at Western New England University. He is the author with Howard and Paul Sherman of the recently published second edition of Principles of Macroeconomics: Activist vs. Austerity Policies.
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