Later On

A blog written for those whose interests more or less match mine.

Why Is Clarence Thomas Attacking Google? — and more

leave a comment »

Matt Stoller has several interesting reports in his current BIG column:

Last week, conservative Supreme Court Justice Clarence Thomas issued two statements attacking Google’s concentrated market power. Thomas is an unusual justice, almost never speaking during oral arguments, but also quite influential on the right. So today’s topic is how, and whether, the right’s views about big tech are evolving.

Also short pieces on:

  • Why Amazon beat organized labor in Alabama
  • Why Logitech just killed the universal remote control industry
  • Google’s Eric Schmidt goes full Communism against telecoms
  • Why the big dumb ship in the Suez was Bill Clinton’s fault
  • How razor blade companies negotiate with Amazon and Walmart
  • How Google’s fancy lawyers screwed up and jeopardized Sheryl Sandberg, at $1500/Hour

And now…

Realignment Strain

Last month, in a little noticed House Antitrust Subcommittee hearing on big tech, conservative stalwart Congressman Jim Jordan and Republican FTC regulator Noah Phillips went back and forth over how to address the internet giants. Jordan and Phillips had, until recently, been quite aligned, as fellow Republicans.

But this time, something was different.

Jordan was disturbed about the power of big tech to remove important political voices, like Donald Trump, from the public square. He asked Phillips, as a regulator, what can you do about this? Phillips responded, “I’m afraid I don’t have a good answer.”

It was a shocking moment. Normally, parties defend their own, but in this case, much of the hearing was Republican members of Congress training their fire on their own commissioner. Phillips had voted against bringing the Facebook antitrust suit, and was the only witness who didn’t want to do anything about big tech. His own side wasn’t having it.

There’s an argument on the right, known as “the realignment,” which is that the GOP will break with big business and become a party of the working class. There are reasons to be quite skeptical of this possibility, because the conservative movement has been intertwined with large corporations since the 1970s. I’ve watched some Republican members shouting publicly about big tech, but when it comes to legislating, these same members will oppose any actual changes.

But being totally dismissive isn’t reasonable either. Trump, after all, did launch antitrust suits against tech giants, as did Ken Paxton, the right-wing Texas Attorney General. Wyoming, led by Republican state Senator Tara Nethercott, just strengthened its state antitrust law, and Arizona Republicans nearly pulled off an anti-monopoly coup against Apple’s app store monopoly. And Senator Josh Hawley just introduced an antitrust bill that would not only address big tech’s market power, but would block mergers for firms worth $100 billion or more.

Moreover, there’s also a push factor at work, as big businesses fight against Republican priorities, most recently an election bill in Georgia passed to restrict voting. To protest the law, Major League Baseball moved the All-Star game from Atlanta to Colorado, and Delta and Coca-Cola, among others, publicly criticized the state GOP. Senate Republican leader Mitch McConnell pushed back, warning that “corporations will invite serious consequences if they become a vehicle for far-left mobs to hijack our country from outside the constitutional order.” McConnell’s warning had little effect. On Saturday, 100 corporate leaders in media, airlines, tech, retailing, etc held a phone call to discuss how to coordinate in opposing conservative voting rights legislation.

This ferment has now reached the pinnacle of the Republican Party, the conservative legal movement, which sets the legal philosophy of the party. Clarence Thomas, who is deeply embedded in these conservative legal networks, is beginning to mark out a different path.

Thomas: Google Is a Monopoly

Last week, Thomas issued two remarkable statements criticizing the concentrated power of Google and tech platforms. In one decision, Thomas mused on a long-running battle between Oracle and Google, where Google copied certain parts of Oracle’s software under the guise of fair use. The specifics of the decision are heated and interesting in and of themselves, but what I’m interested in here is that Thomas called out Google as a monopoly.

“If the majority is worried about monopolization,” he wrote, “it ought to consider whether Google is the greater threat.”

Thomas noted that Google copied Oracle’s work without licensing it, and then develop a monopoly in mobile phone operating software. Whatever the other merits of the case, it was a stark, and accurate, observation.

In his second claim, Thomas went even further. In a case involving Trump’s right to block people on Twitter, Thomas issued a statement on the threat to free speech by dominant tech platforms. “We will soon have no choice but to address how our legal doctrines apply to highly concentrated, privately owned information infrastructure such as digital platforms,” he wrote.

Noting Google’s control over search, Amazon’s control over books, and Facebook and Twitter’s control over social media, Thomas observed these firms aren’t merely private, but are clothed with a public interest. He called for treating tech firms like public utilities, forced to serve all comers, citing precedents involving railroad, telegraph, and telephone regulation. He dismissed the idea of network effects as leading to inherently large firms, noting that network systems don’t need to be contained within the corporate form. While Facebook, Google, Amazon, and so forth are run by a few people, that’s not inherent to technology. “No small group of people,” Thomas wryly observed, “control email.”

The deeper you go into the opinion, the more extraordinary it becomes. Thomas tied big tech dominance to monopoly power, citing “astronomical profits” and a lack of new entrants as evidence of a lack of competition. These observations might seem obvious to you and me, but in the antitrust world, that’s a significant intellectual concession, because the law and economics movement has traditionally held that high profits are a sign of efficiency and not barriers to entry.

One can read these opinions as in some ways an endorsement of the 2020 Democrat-led House Antitrust Subcommittee Report, which called for treating big tech firms as common carriers, a sort of net neutrality for Google, Amazon, and Facebook. Thomas’ opinion marks a big shift for Republicans, who have generally been unfavorable to the idea of such public utility rules.

More fundamentally, Thomas’ recent work is a rebuke of the economics-heavy thinking that both conservative and liberal judges have prioritized. None other than Clarence Thomas, in fact, two years ago penned the notorious Ohio vs American Express decision, which essentially gave special antitrust immunity to big tech firms solely because economists said that network businesses are special. For Thomas, what was in 2018 network economies of scale, has now become tyranny.

Are These Shifts Mere Rhetoric?

For decades, the conservative movement has had a ‘fusion strategy,’ with white social conservatives and big business libertarians as close allies. The deal was that the social conservatives would supply the votes and the corporations would provide the money. . .

Continue reading. There’s more. The Suez Canal report is particularly interesting.

Written by LeisureGuy

12 April 2021 at 4:46 pm

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.