Did Big Tech antitrust pick the wrong target?
Everyone thought Facebook was the 800-pound gorilla. Maybe it was Apple all along.
On December 31, 1983, Apple Computer released a TV ad that would go down in the history books. It showed a dystopian sci-fi setting in which masses received indoctrination from a Big Brother-style lecturer on a big screen, until a woman runs in and smashes the screen with a hammer. If you haven’t seen it, you really should:
Apple’s ad conveyed a powerful idea: that personal computing technology would be a liberating force, allowing individuals to control their own information diets, and thus leading to greater freedom in the world. This idea — summarized by Stewart Brand’s declaration that “information wants to be free” — was the force behind much of the techno-optimism of the following decades.
In the late 2010s, though, attitudes toward tech shifted. In 2019, Pew found that popular views of tech companies, which had been strongly positive in 2015, started falling precipitously in the years following, with almost equal drops among Democrats and Republicans. And in 2021 Gallup found that a plurality of Americans had negative views of Big Tech, with 57% supporting stronger regulation.
Elite opinion shifted along with popular opinion. The new antitrust movement, which was supported by both economists and the “Neo-Brandeisian” legal movement, and led by new FTC chair Lina Khan, directed its most intense fire at Big Tech, especially the quintet of Meta, Alphabet, Amazon, Microsoft, and Apple. But it’s not just Khan — Congress has introduced no less than five bipartisan antitrust bills.
Meta, especially, has been the subject of both the greatest popular outcry and the greatest regulatory scrutiny. One big spark for popular anti-tech sentiment was a widespread belief that “fake news” on Facebook, targeted towards susceptible people by the consulting firm Cambridge Analytica, was responsible for swinging the 2016 election to Trump. New York Times coverage of Facebook, which had been largely positive before 2016, became suddenly very negative. A poll from late 2021 showed that most Americans distrust Facebook and Instagram to take care of the personal data, while a plurality trust Apple and Amazon. Khan recently overruled her staff to sue Meta over a VR app acquisition, and some regulators have suggested using antitrust action to break up Facebook, Instagram, and WhatsApp into separate companies.
I was always fairly skeptical of the narrative around Facebook — and of antitrust’s focus on Big Tech in general. But in recent months, events have caused me to question whether there is a real monopoly problem in the tech world. And the company that keeps coming up is not Meta, but Apple. The company that produced the “1984” ad has become a behemoth — the most valuable publicly traded corporation in the world by a large margin — while Meta has shrunk to one-eighth Apple’s size.
Economics tells us that when we see a corporation that dominant, we should think about whether it’s collecting monopoly rents.
Network effects: the social graph vs. the App Store
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