America’s antitrust apparatus prepares to act against big tech

A University of Chicago conclave of experts debates how far to go

The rise of the big tech firms is easy to spot in downtown Chicago. Apple’s minimalist store looms over the riverfront, close to a skyscraper carrying the name of another omnipresent brand—Trump. At a bus stop a Facebook advertisement promises that its new algorithm will combat fake news. On the Magnificent Mile’s digital hoardings Google urges pedestrians to swoon into the arms of its voice-activated assistant.

Inside the University of Chicago, a bastion of free-market thinkers and of free speech, tech has become more prominent, too. On April 19th and 20th most of America’s antitrust establishment—officials, economists and lawyers—as well as a smattering of Silicon Valley types, gathered to discuss whether big tech needed to be tamed. The conclave came just days after Mark Zuckerberg, Facebook’s chief, testified before Congress.

One Facebook executive was brave enough to show his face in Chicago, bearing the smile of someone stuck at the dentist for two days without anaesthetic. The experts agreed that government intervention in big tech is needed. But debate raged about which institutions should do it, and about the trade-offs between innovation and regulation, between privacy and free flows of data, and between stopping manipulation and protecting free speech.

When you assemble a room full of intelligent critics, the dizzying scope of the complaints against the tech industry becomes clear. They come in three flavours. First, antitrust worries, which take in big tech firms’ high market shares, buying-up of promising competitors, and potential monopsony power over suppliers and vendors. The five biggest American tech firms together make about a tenth of all corporate profits. Second, the externalities they may impose on their users, including a loss of privacy and tech addiction. And third, their probable pollution of the public sphere with fake news, mass manipulation and lobbying.

The view in Chicago was that Facebook and Alphabet (which owns Google) are the most vulnerable to regulation given their surveillance-based models and high market shares. Apple was viewed as less problematic given that it does not sell ads and has big competitors such as Samsung. Amazon divides opinion: its stratospheric valuation suggests it will evolve into a price-gouging monopoly but at the moment it is lowering consumer prices. Microsoft, which faced an antitrust case in 1998-2001, is now seen as big tech’s harmless uncle, a label which should delight it.

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