Big Tech Antitrust Bills Ignore What Makes Silicon Valley Powerful | Opinion

How far we've come. The internet was once the new frontier, the next Wild West where enterprising entrepreneurs could make a name for themselves or strike gold. Now, Sen. Amy Klobuchar's (D-Minn.) American Innovation and Choice Online Act is making its way through the Senate. The bill targets "self-preferencing"—when a tech company like Amazon or Google discriminates in favor of its own products on its e-commerce platform, or its own sites in its search results. It, along with Klobuchar and Sen. Richard Blumenthal's (D-R.I.) Open App Markets Act, has been hailed as our "best shot" to rein in Big Tech.

But while these bills might help small business owners, app and website developers, it's not clear how they will help users. Preventing online marketplaces and app stores from disadvantaging hosted vendors may be the one regulation Democrats and Republicans can agree on, but "self-preferencing" is nobody's number-one beef with Big Tech. Of far greater public concern are free speech, fake news, lobbying, data collection, code theft, collaboration with dictators, social media's addictive properties and its propensity to target children.

Self-preferencing has taken precedence over all these problems because, perhaps ironically, tech critics like Klobuchar are too focused on a narrow understanding of Big Tech as a monopoly. While true in some ways, that characterization misses what makes these companies so powerful. The problem is not that Amazon, Google, Facebook and the rest outcompeted everyone else on the open market; the problem is that they are the market.

One thing the Big Tech behemoths have in common is that their business models depend not on selling you a product, but on charging you regularly, in dollars or data, to access their space. And they take up a lot of the space on the internet. Fully half of global internet traffic in 2021 went to Amazon, Apple, Facebook, Google and Netflix. In rural areas, five companies take up 75 percent of broadband traffic. These sites function primarily as conduits to other things—mediums for connection and movement, platforms for transactions and "content" aggregation.

Being a conduit instead of a competitor has turned out to be the only reliable way to make money on the internet. The two richest tech tycoons in America got their money from Paypal—a platform for other people's commerce—and Amazon. The vast majority of Amazon's profits come from Amazon Web Services, which stores data and offers infrastructure that others use to conduct business on "the cloud."

That's the real source of Big Tech's power, and of its biggest problems. It's why there's no recourse—other than appealing to the companies' own bureaucracies—for demanding that Facebook's privately owned public square not restrict information or speech, or that Amazon not censor books or that GoFundMe not block disfavored political donations. It's why TikTok and Snapchat can calibrate their user experiences for maximal addiction and attractiveness to minors. The internet is their house, their rules.

In short, Big Tech firms are more like massive digital landlords than traditional commodity monopolies. Sen. Klobuchar's "self-preferencing" bill focuses on the limited way in which they act as market competitors in territory they already own. It takes for granted that these few private entities own the ground the market's built on, and only asks that they compete "fairly" in that market. Under this law, Mr. Potter can still turn Bedford Falls into Pottersville and charge you regular fees to open a hat store there; he can even start his own hat store next to yours and use sweat-shop labor to undercut your prices; he just can't shove people away from your establishment.

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PARIS, FRANCE - FEBRUARY 03: In this photo illustration, The logos of applications, WhatsApp, Messenger, Instagram and facebook belonging to the company Meta are displayed on the screen of an iPhone in front of a Meta logo on February 03, 2022 in Paris, France. Share prices for Facebook's parent company, Meta, slumped in after-hours trading after the company reported that social network's daily active users declined to 1.929 billion in Q4 of 2021 from 1.930 billion in the previous quarter. Facebook is losing users for the first time in its history, Mark Zuckerberg's company has seen its profits decline, and the transition to the metaverse promises to be chaotic. Chesnot/Getty Images

The same thing happened on the old frontier. The great fortunes didn't go to the most enterprising individuals in the West, but to those who controlled access to it. Early on, that meant the federal government, which in the days before income tax drew much of its revenue from selling land recently opened up (whether via treaty or forcible removal of prior inhabitants) for settlement. After the Civil War, railroad monopolies became the big winners, thanks to massive federal land grants. Railroads could pick winners and losers among farmers and merchants in the West by charging different rates and shutting off market access to some. They sold their extra land at inflated prices to farmers desperate to get close to stations—much of that land ended up in the hands of rich absentee landlords, under whose ownership it was comparatively unproductive. Individual pioneers, though reified in national memory, were perpetually insecure or simply in deep debt. Eventually, the railroad scramble blew a bubble that in 1873 caused America's biggest financial crisis before the Great Depression.

Private competition, whether of ideas or products, needs public space. But there is no public square, no public marketplace, on today's internet.

Halfway measures are the worst thing Congress can do to restore public space. Leaving the task to unaccountable regulatory bodies will most likely solidify existing monopolies, and lead to revolving doors and beltway cronyism. That's the kind of regulation Facebook and the like are hoping for.

Meaningful reform that makes internet platforms responsive to democratic mechanisms and values can follow one of two paths: decentralization or centralization.

The notion of a decentralized internet has prompted utopian longings since the web's early days. It inspired open-source, nonprofit web conduits like Mozilla/Firefox and, more recently, blockchain technologies that promise a "distributed" internet where anyone can own a piece. Left alone, however, it's not clear what will prevent this new "internet 3.0" from re-concentrating. Indeed, blockchain-based cryptocurrencies and NFTs are already being concentrated in the hands of a few users, just like Big Tech domains are. But policymakers can try to encourage decentralization while ensuring everyday users have their own carved-out space. A digital homestead act could give Americans the right to their own cyberspace property, meaning data, and require mega-owners like Google to actually pay suppliers (users) for the commodity (data) their business trades in. More difficult is the question of how to prevent the proliferation of content like child sex abuse material in an internet without gatekeepers.

On the other hand, maybe the public sector is the only reliable guarantor of public space. Back when railroad monopolies dominated the West, the pro-farmer Populist Party called to nationalize them, declaring "the time has come when the railroad corporations will either own the people or the people must own the railroads." The former happened. To avoid a repeat, populists of today should consider public ownership of key components of the nation's internet infrastructure. National Security Council officials in the Trump administration tried it with 5G, but were shot down by other parts of the administration. Publicly owned web browsers, social media or commercial platforms would in theory be accountable to the First Amendment as well as to laws governing obscenity and abuse material, and wouldn't be incentivized to become addictive in pursuit of a hidden profit model. They may be prone, as state-run industries often are, to corruption—but any more so than our for-profit, hyper-concentrated internet is now?

There are no perfect proposals, and any route that departs from the status quo would be politically difficult as long as the GOP is tied to Reaganism and prominent Democrats remain close with major tech companies. But the alternative (which we're already nearing) is a digital gilded age, in which tech oligarchs are free to dictate policy, to control the flow of information and commerce, to put out products that ruin brains. We need to consider these possibilities and decide which we want—or perhaps, which we fear the least—and soon.

Philip Jeffery is deputy opinion editor at Newsweek.

The views expressed in this article are the writer's own.