Wednesday, September 06, 2017

Time to bust up our new Robber Barons

In terms of stock market value, attorney Mark Pulliam writes, the top five companies worldwide are the technology giants Apple, Alphabet (Google’s corporate parent), Microsoft, Facebook, and Amazon. In the technology industry, these firms—although hardly interchangeable—are the new Robber Barons.

I encourage you to read his entire piece, but here's the gist of it:
Apple’s famously based its business model on a “closed platform,” compelling users to accede to its vertical integration of software, parts, apps, and iTunes inventory. Amazon, with sales exceeding its 12 largest online competitors combined, captures 46 percent of all online shopping. Aggressive pricing—to the extent of consistently sacrificing profitability—and sharp competitive practices such as below-cost pricing of ebooks to promote its Kindle sales have enabled Amazon to swamp its competitors in an expanding array of product lines. 
Regardless of profitability, investors value these firms primarily because of their sheer scale—market dominance within the relevant segments. Uber and Tesla, each with a market capitalization exceeding General Motors, have never earned even a single penny of profit, defying traditional models of valuation. Investors presumably anticipate that monopoly (or near-monopoly) status will eventually yield monopoly profits.
These are the Robber Barons on steroids -- the force multiplier being the Internet. They reach right into your family room and your cell phone. And there are no controls.

Here's the problem.
In our digital world, the Internet and websites have become the indispensable medium for both commerce and political expression, serving as the modern equivalent of the printing press, Yellow Pages, mail delivery, checking account, and public library—combined. Companies servicing the Internet—and especially search engines—are de facto public utilities, with an obligation to operate fairly, responsibly, and without viewpoint discrimination. Unfortunately, the new Robber Barons have fallen appallingly short of this ideal.
The commerce clause of the Constitution talks about business, but what we're talking about today is the First Amendment.
For example, social media platforms such as Facebook and Twitter have been accused of censoring users’ posts; Google (through its ad placement service) has bullied conservative websites to alter their content or face financial retribution; online payment facilitator PayPal and domain administrator GoDaddy have banished or withdrawn funding services for websites whose content they disapprove of; and Google has reportedly skewed search results to omit references objectionable to certain Islamic organizations. 
Most ominously of all, as reported by Paula Bolyard in PJ Media, Google is working with a coalition of liberal groups—including the discredited Southern Poverty Law Center—to monitor conservative websites for “hate events.” In reality, they’re policing expression of views they find disagreeable, such as opposition to the LGBT agenda, criticism of radical Islam, or support for more stringent immigration controls. The goal is to blacklist “offensive” sites, smear them as “hate groups,” and ultimately to deny them access to digital advertisers, online donations, domain registrars, or similar tech support necessary for sites to function. In other words, Google is conspiring with Left-wing activists to suppress their political opponents.
If we had a real Congress it would be looking into this.

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