S07E15 of Connection Problem: A New Chapter of Big Tech Antitrust

Note: This is cross-posted from my weekly newsletter in an attempt to both to make it easier to read this via RSS feed and to have this in my own independent archives. You can subscribe to get it in your inbox here.

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I’m in a rush today so just the briefest of welcomes: Enjoy this week’s installment!

P

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You’re receiving this because you signed up for this newsletter on tinyletter.com/pbihr or through my company’s website, thewavingcat.com. The Waving Cat is a boutique research and strategic advisory firm; I also co-founded ThingsCon, a non-profit that explores responsible tech. On Twitter, I’m @peterbihr. If you’d like to work with me or bounce ideas, let’s have a chat.

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Brief updates from the engine room

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Earlier this week I had a great time talking to students at Umeå Design Institute as part of a course on Ethical Design of Internet Things at the kind invitation of Heather Wiltse. I gave a little input on Trust & Smart Cities. That’s one group of smart students for sure; they asked all the right questions. Gives me real hope for the future.

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Project KNOWLEDGEABLE KINGFISHER is in the heavy brainstorming & concept phase. This is going to take a while to manifest, but I’m sure collaborator Patrick Tanguay of Sentiers and I will come up with some worthwhile stuff.

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In last week’s newsletter I wrote up some thoughts about remote conferences. Over on Twitter, we’ve been having a pretty active thread collecting interesting and promising formats for virtual events.

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Recently on the blog

Home Office Rituals, Revisited

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Big Tech Antitrust: The Next Chapter

Matt Stoller, an author and Democratic political player in DC, has made anti-trust and tech his beat over the last few years, and he writes an excellent newsletter about it. In the most recent issue, he writes about something BIG (which, incidentally, also happens to be the name of his newsletter). In this year where there are so many big news that every day is take out the trash day, this could easily get swept by without much notice outside the industry, but it shouldn’t: It’s about how Congress is getting ready for an anti-trust move against the big tech companies.

And make no mistake, this is a game changer with wide-reaching consequences — even if the US government should end up not following through on this new impetus.

In his newsletter he offers a solid summary, because, let’s face it: I’m not going to read 400 pages of US anti-trust report. The money quotes that summarize the summary are these two:

  • The subcommittee found that Apple, Google, Facebook, and Amazon are abusive monopolies.
  • The report also noted that Obama and Trump era enforcers failed to uphold anti-monopoly laws, which allowed these corporations to amass their dominance.

Stoller also references Lina M. Khan, a legal scholar who’s been instrumental in this investigation. (Stoller calls her “the preeminent scholar of modern antitrust thinking”; I’m just quoting directly because this is too far outside my usual beat to recognize the scholars in that field.) She’s the author of Amazon’s Antitrust Paradox, a Yale Law Journal paper where she argues (highlights mine) that:

the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.

That’s quite something, and certainly rings very true.

Stoller also sifted a few other notable quotes from that report which I’d like to put out there because they seem, well, important to know just to get a feeling for what that space actually looks like. (These quotes all come directly from Stoller’s summary.)

(1)

“Through a combination of direct lobbying and funding think tanks and academics,” it wrote, “the dominant platforms have expanded their sphere of influence, further shaping how they are governed and regulated.”

It took the tech industry a long time to get into this game, and I used to wish they’d get there faster. But then they super-charged their efforts, and the power dynamics changed, and now things feel… less benign?

(2)
The market dominance of those competitor-platform hybrids shapes the behavior of the other market participants in a decidedly lop-sided way:

“Said one source, “It would be commercial suicide to be in Amazon’s crosshairs . . . If Amazon saw us criticizing, I have no doubt they would remove our access and destroy our business.” One attorney representing app developers said they “fear retaliation by Apple” and are “worried that their private communications are being monitored, so they won’t speak out against abusive and discriminatory behavior.””

(3)
It’s apparently not clear how much — in the government’s view — these tech behemoths are willing to play by the law:

“the key finding was that “courts and enforcers have found the dominant platforms to engage in recidivism, repeatedly violating laws and court orders,” which “raises questions about whether these firms view themselves as above the law, or whether they simply treat lawbreaking as a cost of business.””

These are all more than just juicy findings. The conclusions this leads to are that the rules are inadequate, but also often ignored by the dominant market players. It suggests the biggest players act in bad faith, and in direct violation of government rules / laws in a way that’s become hard to swallow by those law makers.

This, maybe, is the biggest change here: For a long time, most parties were willing to let tech companies get away with some rule-breaking either because it seemed relatively harmless or it was considered (implicitly) the cost of domination-through-innovation. Obviously, that’s not true anymore.

We’re witnessing a new and very interesting chapter being written.

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Small bits and pieces

Amazon’s foray into luxury fashion seems like a… cultural stretch? / I just received my copy of The 99% Invisible City book and it looks ace / Kiezblocks is a local initiative that takes inspiration from Barcelona’s Super Blocks and I really hope this will come to pass

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Currently reading: The Uncertainty Mindset, Vaughn Tan. The 99% Invisible City, Roman Mars and Kurt Kohlstedt. Ministry for the Future, Kim Stanley Robinson

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If you’d like to work with me or have a chat to explore collaborations, let’s chat! 

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Who writes here? Peter Bihr explores how emerging technologies can have a positive social impact. At the core of his work is the mission to align emerging technologies and citizen empowerment. To do this, he works at the intersection of technology, governance, policy and social impact — with foundations, public and private sector. He is the founder of The Waving Cat, a boutique research and strategic advisory firm. He co-founded ThingsCon, a non-profit that explores fair, responsible, and human-centric technologies for IoT and beyond. Peter was a Mozilla Fellow (2018-19) and an Edgeryders Fellow (2019). He tweets at @peterbihr and blogs at thewavingcat.com. Interested in working together? Let’s have a chat.

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