Should you smash Facebook and Google?

Digitization 28.10.2019
Reading time: 3 minute(s)

Calls to break up big US tech firms are growing stronger. The impact could change global power structures.

Back in March when Elizabeth Warren, the Massachusetts senator and presidential hopeful, promised to break up Big Tech if elected to the White House, the idea seemed fringe and fanciful. In July, however, things got real – the US Department of Justice opened a wide-ranging antitrust review of Amazon, Apple, Facebook, and Google, following similar moves by the Federal Trade Commission (FTC) and Congress.

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©WIRED

Since then, Mark Zuckerberg and Facebook’s defence has been the threat of Chinese technology domination, warning in numerous talks and interviews that country “do[es] not have the values we have.”
Reactions to Zuckerberg’s statements have been along the lines of: "Well, he would say that, wouldn’t he?" But he does have a point. As of 2018, China is the home of nine of the world’s top 20 tech giants, according to VC firm Kleiner Perkins Caufield & Byers. These include Tencent, the Shenzhen- based social networking site that had one billion monthly users in 2018, while its instant messaging service had 820 million monthly users – roughly the same as the combined populations of the US and the European Union; Alibaba, the world’s largest online retailer, which handles more than twice as many sales as Amazon and eBay combined; Baidu, China’s top search engine; smartphone giant Xiaomi; and China Mobile, which has 800 million customers, making it the largest phone company in the world.

What happens when the US giants fall?

So how much power would breaking up US big tech firms hand to China? In his recent book Curse of Bigness: Antitrust in the New Gilded Age, Columbia Law School professor Tim Wu argues that an enormous gap between giant monopolists and their workers might lead to fascism.
US president Franklin D Roosevelt, he argues, broke up US monopolies thanks to strong democratic instincts. Ahead of World War II, German corporations had felt disadvantaged against British and American competitors, and German monopolists started to think Hitler might be good for them. “The rise of a figure like that doesn’t happen unless you’ve allowed corporations to centralise,” Wu writes. “It doesn’t happen in a nation of small businesses that’s even moderately decentralised.”

The race for the data of the customers

As a result, a complex debate has been unfolding around US big tech vs China. “There’s no doubt that big technology companies are starting to become a real threat to innovation,” said one partner in a Silicon Valley venture capital firm. “Tech giants try to squash start-ups by copying them, or scoop them up early to eliminate a threat. We’re tending towards an oligopoly – but on the other hand, if you break these companies up, who do we have that can defend us against Chinese giants like Tencent? Do you take your strongest players off the board?”
Nicol Turner Lee, Fellow for Technology and Innovation at the Brookings Institution, explains this as a race to be the first in the data-driven world of AI and autonomous vehicles. “There is some credibility to the argument that the US could fall behind,” she says. “Whoever gets there first will have unrivalled access to the patents and the tech running these systems." China has been plowing huge sums of R&D money into quantum computing and AI.

"Where the US and China differ is in their permission to use the data to contribute to innovation. US regulations are tighter," Lee says. "But none of this is an excuse for tech companies’ breaches of privacy, data security, and use by foreign operatives to interfere in domestic politics.”

When Facebook is smashed, the Chinese come

Anti-surveillance activists are aghast at the China debate. “Mark Zuckerberg says that if we break up or weaken Facebook, some Chinese company will just step in and take over – so, now we have to support our monopolies?” says Clare Birchall, a University College London academic and author of Surveillance: The Dangers of Openly Sharing and Covertly Collecting Data. “Once you’ve engaged in this sort of conversation,” she says, “you’re heading in a very dangerous direction. You shouldn’t hold up surveillance monopoly as a reason to undermine anti-monopoly and democratic rules.”

Read the full article here.


About the author

Stephen Armstrong is a staff author for WIRED, UK

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Who are we? How do we live today? And how will digitization change our lives? How the future will unfold is preoccupying society more than ever, with engineers, doctors, politicians – each one of us, in fact – seeking answers. This report on Facebook, Google & Co. is one of many contributions that shed light on the theme “Digitized Society” from a new, inspiring perspective. We are publishing them here as part of our series “Impact”.