Last Friday presidential candidate Elizabeth Warren rolled out her campaign’s plan to tackle the growing power of “big tech.” In a Medium post, the senator advocated for the breakup of tech giants such as Amazon, Google, and Facebook, highlighting how their growing domination creates a laundry list of problems for consumers, content creators, and democracy itself.
“Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy,” Warren said. “They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.”
As if to prove Warren’s point, Facebook systems on Monday flagged and suspended a Facebook ad for Warren’s post on grounds that it violated the company’s brand usage policy, before widespread condemnation forced a reversal.
Supporting evidence for Warren’s broader argument is everywhere. Early internet fever dreams of a democratic and auto-healing techno-utopia have been supplanted by rampant propaganda, internet trolls, and a wide variety of newer, modern monopolies.
Amazon doesn’t want to simply dominate internet retail—it wants to control the underlying infrastructure of e-commerce itself. AT&T and Comcast enjoy monopolies over broadband access and now want to dominate the content flowing through them.
News revenue has been strangled thanks to the monopolization of online advertising by giants like Facebook and Google, resulting in less and less money reaching the pockets of actual journalists. Meanwhile, rampant consolidation among local broadcasters and the erosion of media ownership limits are creating local “news deserts” opening the door to corruption.
Much of Senator Warren’s proposal—like the call for greater scrutiny of America’s often mindless obsession with merger mania—is just common sense. Experts have noted for years that U.S. antitrust enforcement has tailed off, and the country desperately needs to modernize its definition of monopoly power for the interconnected internet era.
Jason Kint is the CEO of Digital Content Next, a trade group representing a broad coalition of digital content companies ranging from Consumer Reports to the Associated Press. Kint told Sludge that Warren’s plan to break up tech giants could restore essential competition, which in turn could motivate all online companies to behave more ethically.
“If Facebook didn’t own Instagram the last two years, it would have had to react much more aggressively to drive up consumer and public trust,” Klint argued. “And an independent Instagram would have used Facebook’s ongoing mess as a way to differentiate and lean into privacy, consumer experience and trust.”
Given Facebook’s seemingly endless privacy scandals, Warren’s proposal understandably fixates heavily on Silicon Valley giants. But the country’s monopoly and media problems go well beyond just “big tech.”
Warren’s plan doesn’t mention the telecom sector and its history of similarly terrible behavior. Nor does it address the Federal Communications Commission’s (FCC) recent efforts to slowly strip away decades-old media consolidation rules, originally passed with broad bipartisan support and designed specifically to protect the diversity and quality of local media.
When pressed as to whether Warren would press her own FCC to restore these rules, her office didn’t answer. The campaign did however direct Sludge to older speeches in which the senator noted a “free and independent media is powerfully important to the survival of democracy, and the FCC is on the verge of trashing the independence that we all rely on.”
Follow The Money
Sign up to get our next investigations over email:
Local news in particular faces a dire future. Giants like Sinclair Broadcasting increasingly hoover up local broadcasters, replacing local reporting with content that borders on disinformation. Small and mid-sized outlets trying to fill the gap often find that Google and Facebook’s domination of online ad money, which used to go to their publications, makes paying the bills difficult.
The first to pay the price aren’t executives or industry leaders, but reporters making a pittance and the communities those reporters serve.
The decline of local reporting not only opens the door to less political oversight and more corruption, it results in a less informed populace overall. Studies have shown the death of local journalism can actually swing elections as nuanced, localized coverage is replaced by nationwide outlets with a tendency toward more rigid, partisan thinking.
How to pay for quality reporting in such a climate is the sector’s multi-billion-dollar question, and it’s the most important question Warren’s plan will ultimately need to answer.
Stanford Professor Greg Martin recently penned a study showing how the death of quality local reporting is not only making us more divided, but less informed. He told Sludge that the Warren proposal laid a potentially strong foundation but would likely need to do much more.
“I think a reinvigorated approach to antitrust enforcement, which the Warren document proposes, would be good for the media industry as well as for other industries,” Martin said. “But I haven’t seen much directed at solving the specific problem that news outlets face, which is the collapse of advertising revenues at publisher sites and their migration to Facebook and Google.”
Other media scholars agreed.
“The journalism crisis requires policy interventions that include—but also exceed—antitrust enforcement,” Victor Pickard, a media scholar at the University Of Pennsylvania, told Sludge.
“Confronting the systemic market failure that is driving journalism into the ground necessitates public subsidy, especially for local journalism,” Pickard said. “Given their role in hastening journalism’s demise, the platform monopolies should contribute to this subsidy, perhaps through a specific tax.”
A consumer group by the name of Free Press has been pushing just this idea in a policy proposal that would apply a tax on targeted advertising. The goal is to bring some of the incalculable billions being absorbed by Silicon Valley giants back to the journalists actually tasked with informing readers and, when they do their job correctly, serving the public interest.
Free Press Director Tim Karr told Sludge that Facebook and Google control nearly 70 percent of the online advertising market, despite neither technically being in the news business. Only one of the top ten digital advertisers in the U.S. (Verizon’s Oath ad empire) is actually in the news business via its ownership of outlets like Huffington Post and TechCrunch.
“As a result there has been a massive transfer of capital away from media that once sustained commercial journalism to media that doesn’t,” Karr told Sludge. “Even under a scenario where the largest online platforms are broken into their component parts, digital advertising will remain under the control of non-news media; newsrooms will continue to be shuttered and reporters laid off.”
Warren’s plan acknowledges this is a conundrum that needs addressing, and she’s been historically consistent in highlighting the importance of a healthy, functioning press.
“We must help America’s content creators — from local newspapers and national magazines to comedians and musicians — keep more of the value their content generates, rather than seeing it scooped up by companies like Google and Facebook,” Warren’s post said.
But not all solutions are created equal. Those looking to fix the problem have often turned to draconian copyright protections that can create entirely new problems.
The European Union, for example, is attempting to address the issue with updated copyright rules imposing a controversial new tax simply for linking to articles. It also mandates automated copyright filters that digital rights groups like the EFF charge could lead to unintentional censorship of the internet. Copyright experts have urged Warren to avoid following a similar path.
On this as well, Warren’s office wasn’t yet able to provide specifics beyond what Warren included in her original proposal.
Again, the foundation for Warren’s plan is sound, driven by a well-established need for stronger antitrust enforcement in a country infatuated with growth for growth’s sake. But to address the deeper, exponential problems that giants like Facebook and AT&T are causing in the broader internet ecosystem, Warren’s going to need to get notably more specific.
Do you value our independent journalism?
Every day, the reporters at Sludge are relentlessly following the money to reveal the hidden networks and conflicts of interest that drive political corruption. We are 100% ad-free and reader supported, so we’re counting on our readers to help us continue calling out powerful politicians and lobbyists. If you appreciate the work we do, please consider becoming a member for $5 a month to support our investigative journalism. We can’t do this work without your support.