Democrats’ ‘Better Deal’ Is Silent on Google, Facebook, and Amazon
Fighting corporate power is a big theme of the Democrats’ new agenda, but three of the world’s most powerful companies aren’t feeling the heat, at least not yet. Google, Facebook, and Amazon.com escaped criticism on July 24, when Senate Minority Leader Charles Schumer of New York and House Minority Leader Nancy Pelosi of California unveiled what the party is calling its Better Deal agenda.
One problem for Democrats is that “these companies have been seen as friendly, as allies, as contributors to the cause,” says Barry Lynn, who directs the Open Markets program of New America, a think tank whose ideas helped shape the Democrats’ new platform.
Another problem for Democrats in confronting the power of the tech giants is that traditional antitrust policy isn’t well-equipped to deal with them, Lynn says. The companies don’t jack up prices to consumers, which is the usual litmus test for anti-competitive behavior. In fact, Google and Facebook Inc. offer their services free, and Amazon.com Inc. tends to push down prices in markets it enters. Instead, the giants’ victims tend to be other companies—such as newspapers, whose advertising revenue has dried up as advertisers have migrated to Google and Facebook.
But Lynn says that, as awkward as it may be for the Democrats, a day of reckoning is inevitable. “The window is closing,” he said in an interview on July 24. “It’s becoming harder and harder to ignore the power that is controlled by Google, Facebook, and Amazon.”
Some liberal Democrats have already gone after the tech giants. Senator Elizabeth Warren of Massachusetts, who was a Harvard Law School professor before entering politics, gave a speech at New America in June 2016 in which she argued that Amazon, Google, and Apple Inc. are uniquely powerful because they control widely used digital platforms “that lots of other companies depend on for survival.”
More recently—July 22, to be exact—Representative Keith Ellison of Minnesota tweeted about a Bloomberg Businessweek column by Paula Dwyer that was headlined “Should America’s Tech Giants Be Broken Up?” His one-word answer: “YES!”
If Democrats are looking for a sure vote-getting issue to use against Republicans in 2018 and 2020, going after three or four companies that Americans have a close working relationship with might seem like a long shot. Lynn admits as much but says some private polling indicates a strong current of distrust of the companies—even stronger than distrust of banks. His explanation? “People can like an interface, their personal relationship, while at the same time thinking that the corporation has too much power.”
That said, Lynn doesn’t see this as primarily a consumer issue, at least at first. “It’s not a wide uprising. What we do see is a number of other businesses with a lot of influence are starting to say that something has to be done about these three companies.” Adds Lynn: “Once people get their heads around the idea that action by the government won’t wreck the economy, won’t wreck these companies, but will make them serve the interest of the average entrepreneur, customer, civilian, we shouldn’t have much of a problem.”
I also spoke with Marshall Steinbaum, a fellow and research director of the Roosevelt Institute in New York. “We have the strongest antitrust laws in the world, but we have the weakest enforcement of any leading economy,” he said. “I definitely think this is a step in the right direction. If they live up to those words, it will represent a major change in policy.”