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Tackling the monopoly problem

Submitted by Roy Schestowitz on Friday 12th of February 2021 11:48:50 PM Filed under
Misc

There was a time when people who were exploring computational technology saw it as the path toward decentralization and freedom worldwide. What we have ended up with, instead, is a world that is increasingly centralized, subject to surveillance, and unfree. How did that come to be? In a keynote at the online 2021 linux.conf.au event, Cory Doctorow gave his view of this problem and named its source: monopoly.

Doctorow started by saying that many see the people who pushed technology in the last century as blind, naive optimists. In this view, technologists thought that if we just gave everybody a computer, everything would be fine; they failed to foresee how technology could become a dystopian force. He knows some of those people, mostly through his 20 years working with the Electronic Frontier Foundation (EFF), and he does not agree with this view. The truth of the matter is that nobody starts an organization like EFF because they think that everything is going to be great. Those founders were excited about how amazing things could be, but also terrified about how badly it could all go. They wanted to get technology into people's hands, but also to get the technology policy right.

[...]

What we didn't understand, Doctorow said, was that antitrust law was destroyed in the US by a man named Robert Bork. He is a "perfect market" theorist, who thought that monopolies were good. Laws against monopolies, he argued, only applied if it could be shown that a given situation was causing harm to consumers. At the same time, he made proving that harm nearly impossible. In this world, companies could create monopolies with impunity.

It is fashionable now to say that the concentration in the technology industry is a result of factors like network effects, first-mover advantages, and data moats. But that is not how these companies created and grew their monopolies; when you have all the money you could need, he said, you can just buy success. Google has made "1.5 successful products" in-house (the search engine and a Hotmail clone); everything else has been bought from elsewhere. These are companies that Google would have been blocked from buying under a strong antitrust regime. Meanwhile many of the other things Google did try to create internally have ended up in the "Google graveyard".

Network effects are real, but they are also a double-edged sword when interoperability comes into play. One source of interoperability is technology standards, but another is what he calls "adversarial interoperability" or "competitive compatibility". AT&T used to block interoperability by forbidding the attachment of outside equipment to the phone network; once that ban went away, the market for telephone equipment took off. Myspace had a set of captive users — until Facebook created a bot to scrape users' information from the site and port it over.

Given a chance, companies will create interoperability one way or another, making the market more competitive. This kind of interoperability has been criminalized, though, through mechanisms like copyright, patents, and terms of service. Oracle's ongoing lawsuit alleging that Google violated the copyright on its Java APIs is a classic example. Companies that own this sort of monopoly are doubly fortunate, since the government will intervene to defend the monopoly against those who would try to break it.

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