Pando

Big Tech’s monopoly power as a threat to democracy

By Mark Ames , written on October 1, 2015

From The Disruption Desk

“A man always has two reasons for the things he does—a good one and the real one.” Pierpont Morgan

It was a year ago this month that the New Republic’s then-editor Franklin Foer published its controversial cover story on Amazon.com.

In it, Foer accused the online retail/media behemoth of being a coercive monopoly and calling for breaking the company into pieces, Teddy Roosevelt-style.

Foer’s article, “Amazon Must Be Stopped”, sparked a heated and often vicious debate that most people probably missed, a debate about the politics of tech power and private monopoly power. That’s because — as I’ve said and written many times since uncovering the wage-theft Techtopus conspiracy — what Big Tech fears most in politics is not Guy Fawkes-masked revolutionaries, NSA snoops or anti-NSA whistleblowers or anything else that dramatic—but antitrust law and anti-monopoly politics. Taxes and other regulations are also big worries—but for Big Tech, the number one threat is antitrust law and America’s long tradition of antimonopoly politics, a dormant political volcano since the Reagan years.

Under the subheader—“It’s too big. It’s cannibalizing the economy. It’s time for a radical plan.”—Foer wrote:

Shopping on Amazon has so ingrained itself in modern American life that it has become something close to our unthinking habit, and the company has achieved a level of dominance that merits the application of a very old label: monopoly

That term doesn’t get tossed around much these days, but it should. Amazon is the shining representative of a new golden age of monopoly that also includes Google and Walmart [and Facebook—M.A.].

By calling out Amazon as a coercive monopoly that should be busted up — and by giving a deeper political-historical context to anti-monopoly politics in the US — Foer’s article stirred up the Silicon Valley billionaire class’ deepest fear: The resuscitation of anti-monopoly politics adjusted to the new circumstances and new realities.

And that was exactly the purpose of his New Republic article: To reanimate America’s antimonopoly political consciousness, adjusted for a new political economy and Big Tech’s unique species of coercive monopoly power. As Foer wrote:

The Internet-age monopolies are a different species; they flummox our conventional ways of thinking about corporate concentration and have proved especially elusive to those who ponder questions of antitrust, the discipline of law that aims to curb threats to the competitive marketplace. Part of the issue is the laws themselves, which were conceived to manage an industrial economy—and have, over time, evolved to focus on a specific set of narrow questions that have little to do with the core problem at hand.

Whether Amazon, which does $75 billion in annual revenue, has technically violated antitrust laws is an important matter, of course. But descending into the weeds of predatory pricing statutes also obscures the very real threat. In its pursuit of bigness, Amazon has left a trail of destruction—competitors undercut, suppliers squeezed—some of it necessary, and some of it highly worrisome.

And then he dropped the bomb that probably lost him his job: Foer called out Big Tech’s monopoly power as a threat to democracy—:

In effect, we’ve been thrust back 100 years to a time when the law was not up to the task of protecting the threats to democracy posed by monopoly; a time when the new nature of the corporation demanded a significant revision of government.

Antimonopoly politics is an old tradition here, from the rebellion against the East India Company in Boston Harbor through the Populists and Progressives and throughout the 20th century. It was woven into the political DNA here until it came to a weird screeching halt under Reagan—and nowadays, beyond the legal and governmental antitrust structures still in place, there’s hardly even a vestigial tailbone of antimonopoly political consciousness to speak of, certainly not on the left. And that’s how those who have benefited most from the disappearance of antimonopoly politics would like to keep it.

Among the many Silicon Valley heavies and media tools outraged by Foer’s article was Foer’s boss, Facebook billionaire Chris Hughes, whose wealth comes from his stake in another monopolistic company. Less than two months later, Hughes pushed Foer out of the New Republic, and the magazine’s staff quit en mass in sympathy.

The collapse of Chris Hughes’ New Republic came just as Pierre Omidyar’s First Look Media was imploding in a circus of egos, lies, and low-rent slapstick. Until late last year, there was a popular delusion going around the East Coast thinking classes that tech billionaires would save journalism with their riches, while staying out of the newsroom because they were “idealistic” and “earnest” (in Manhattanspeak: culturally unsophisticated, thus easier to manipulate) billionaires, nothing like the Murdochs or Zells or Tisches or other nefarious media tycoons.

No one saw any danger or downside to Pierre Omidyar buying up the Snowden files and the cream of America’s “adversarial journalism” crew — what could possibly go wrong? We were assured by the Columbia Journalism Review, a Pulitzer Prize winner and an Academy Award nominee that Omidyar was a “civic-minded billionaire” whose only interest was to “save journalism” and that he was further from the corrupt halls of government power as anyone.

And then we discovered that Omidyar partners with USAID and Samantha Power to advance US interests around the globe, that he was one of the most frequent White House guests of Obama’s first term, and that Omidyar micromanaged the Intercept newsroom to the point that they couldn’t expense a cocktail or taxi ride without the eBay billionaire’s consent.

It’s a shame that Omidyar’s “adversarial journalism” fairytale imploded at the same time as Chris Hughes’ first New Republic go, because it allowed for a misleading and snotty explanation by the east coast media idiots: To them, it proved that Silicon Valley billionaires are the dweeby unsophisticated dupes they initially took them for. When in reality, this is a story about dangerous concentration of wealth and power subverting democracy, a story that none of the adversarial journalists still on their tech billionaire sugardaddies’ payrolls want the rest of us talking about.

You get a glimpse of how this monopoly power works on journalism and democracy in Ryan Lizza’s post-mortem in the New Yorker, “Inside the Collapse of the New Republic”.

Foer’s cover story on Amazon.com’s monopoly came out October 9, 2014. Two weeks later, Yahoo’s Guy Vidra, whom Hughes hired to be the CEO and transform the New Republic into a “vertically-integrated digital company,” made his first appearance at the Washington DC office. Vidra gave a powerpoint presentation on his plans for the New Republic:

“We’re going to be a hundred-year-old startup,” he said. The magazine needed “to align ourselves from the metabolism perspective” and create “magical experiences for both the content and the product design” and be “fearless in innovation and experimentation” and “change some of the DNA of the organization.”

Sneer all you want—but in this context, this isn’t just silly tech cant. It’s the language of political power.

Lizza writes,

[O]n October 27th, three days after the infamous Vidra presentation, Amazon’s ad agency sent T.N.R. an e-mail concerning a campaign for its new political TV show, “Alpha House.” “In light of the cover article about Amazon, Amazon has decided to terminate the Alpha House campaign currently running on The New Republic,” the e-mail said. “Please confirm receipt of this email and that the campaign has been terminated.” It was signed “Team Amazon.”

Hughes forwarded the note to Foer . . . Foer wanted to make Amazon’s suspension of advertising public, but Hughes insisted that he not.

Elsewhere in Lizza’s New Yorker article, he describes Hughes inserting himself into editorial debates, defending Apple’s tax avoidance schemes as “legal” and pretty much scaring away Alex MacGillis out of pursuing his line of thinking:

Hughes’s eroding relationship with the staff took on an ideological edge. On the morning that Tim Cook, the C.E.O. of Apple, announced that he was gay, MacGillis wrote a note to “the Plank,” T.N.R.s internal e-mail listserv for writers and editors. “I see the celebration of his announcement, while entirely justifiable, as another sign of what’s happened to liberalism today, where rights/identity liberalism trumps economic liberalism,” he wrote. “This is, after all, a guy who embodies so much of what’s amiss in the age of inequality—pulling down $378 million in 2011 alone; Apple skirting taxes more brazenly than anyone else—yet those revelations have caused barely a stir.”

Hughes responded to the note six minutes later: “I think those are valid issues, although Apple has acted squarely within the law,” he wrote. “The law itself is fucked up. But I don’t think you can underestimate the difficulty of his decision or how tone deaf that argument would be today.”

The other editorial employees on the list were surprised by the response. It was an internal listserv for writers and editors, and the staffers didn’t realize that Hughes, who had relinquished his title as editor-in-chief when he installed Vidra, was on it. MacGillis responded by saying that he would hold off on writing, but added, “Just for the record, though, it is not so clear that Apple acted squarely within the law. The law’s a mess, but Apple pushed the bounds of it more than anyone.” He pasted text from a piece in the Times that questioned some of Apple’s practices.

“I’m confused,” Hughes wrote back. “Has anyone, including this article, said what they did was illegal? Companies have an obligation to their shareholders to maximize shareholder value, including through strategic tax planning.”

As the number of independent tech publications dwindles down to one, and as tech billionaires convert their wealth and private political power into acquiring more and more public political power, it’s worth taking another look at Foer’s article, and at his attempt at getting people to talk about what monopoly power means in the age of hi-tech.

It’s not just about the ability to jack up prices on consumers. It’s about how much control one has over their life and their fate. As we learned in the Techtopus conspiracy, even the best paid Valley engineers had their wages stolen and their opportunities manipulated by a small handful of powerful tech billionaires, without ever knowing a thing about it.

There was a time when antimonopoly politics—the politics of fighting submission—were so much a part of the cultural DNA here, that even an old stiff like Woodrow Wilson had to tell the public what they wanted to hear to get elected president in 1912. It’s an interesting speech that sounds radical today— and it’s worth repeating, in spite of Wilson’s many terrible faults, to see how far we’ve gone away from this:

“Which do you want? Do you want to live in a town patronized by some great combination of capitalists who pick it out as a suitable place to plant their industry and draw you into their employment? Or do you want to see your sons and your brothers and your husbands build up business for themselves under the protection of laws which make it impossible for any giant, however big, to crush them and put them out of business, so that they can match their wits here, in the midst of a free country with any captain of industry or merchant of finance . . . anywhere in the world?

“[The United States] is never going to submit to monopoly. America is never going to choose thralldom instead of freedom.”

And then came Silicon Valley...