Before We Consider Breaking Up Big Tech, Let’s Regulate Better

Two thirds of Americans support breaking up large tech companies, according to a poll published by Vox last week.

The study, conducted by the generally left-leaning Data for Progress and YouGov Blue organizations, showed that Americans across most age groups, education levels, demographics, and political ideologies believe that large technology companies have become too powerful, and should be broken up into multiple entities.

Perhaps because of the perceived popularity of such ideas, a break-up of tech giants has become part of the platform of various Democratic candidates for president – including Elizabeth Warren, whose team shared an opinion piece on Medium back in March explicitly endorsing the idea.

There is, of course, precedence for breaking up powerful technology firms. In 1984, the monopolistic Bell System was broken up – with the original AT&T divesting itself of the local telephone service providers that it owned, reducing the former’s book value by 70%.

While the idea of another round of breakups may be popular, I believe that there are far better first steps to take in reigning in “tech giants,” the first being to institute long-overdue regulations.

The “wild west” nature of the current Internet is the result of many factors – one of which is the fact that technology changes at a pace far faster than legislatures enact laws, and that legislators often have little grasp of the potential concerns created by new technologies until after the latter inflict widespread problems.

As I have discussed many times in the past, American lawmakers have done effectively nothing while tech companies have rendered existing privacy laws such as the Fair Credit Reporting Act all but impotent, and weakened First Amendment protections as the de facto venue for public discussion migrated from town squares to social media.

Likewise, several large technologies companies federate logins to many sites – e.g., you can login to many websites with a Facebook login – while others serve as advertising platforms across numerous sites, both of which allow various tech giants to correlate data and track user patterns in ways that many users do not have a clue is happening.

The European Union took a first step forward vis-à-vis privacy protections for consumers with its  General Data Protection Regulation (GDPR) – which, while clearly a Version 1.0 regulation that suffers from many deficiencies, still offers far better protection than the absolutely nothing that the US Congress has done to protect Americans.

It is essential therefore, that laws be enacted to protect rights that US citizens already have, but which have been de facto compromised by technology. Such laws must also prevent firms based outside of the USA from exercising unfair practices; there are no customs and border agents controlling our border in cyberspace, so we must find ways to ensure that any new regulations that apply to US-based companies, also apply to – and be enforceable on – foreign firms interacting with Americans or otherwise doing business in the USA.

Establishing enforceable regulations that give control over people’s data to its rightful owners, that ensure that The First Amendment remains intact as intended, and that prevent tracking via logins, ad networks, search results, etc. (at least without explicit permission), and that grant The Right to Be Forgotten, will go a long way to reduce the privacy problems that we have now.

On the other hand, if we break up tech giants without first establishing proper protections, over time we will likely end up with similar privacy abuses to those that we have now – just with other firms serving as the culprits.

Ironically, perhaps, there is another reason not to break up tech firms – technology shifts could cause today’s giants to lose their standings in the future. After the breakup of the Bell System, for example, the original AT&T Corporation first failed to enter the personal computer market, and then bet its future on the then lucrative long-distance voice call market that eventually would plummet in value with the arrival of the Internet era, VoIP, cellphones, and other technologies. AT&T – which just a few years before had been deemed too powerful to remain intact – went downhill fast. Eventually, in 2005, SBC Communications, which was itself comprised of several of AT&T’s 1984 spinoffs, bought AT&T and co-opted the name to form today’s AT&T Inc., marking the end of the original tech giant.