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Justice Department to Open Broad, New Antitrust Review of Big Tech Companies

327 points| mudil | 6 years ago |wsj.com | reply

311 comments

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[+] lanrh1836|6 years ago|reply
I just finished the Eric Weinstein/Peter Thiel podcast, and came away mostly agreeing with their assessment that we’ve really stagnated when it has come to progressing scientifically.

I definitely feel like there’s this illusion of tech innovation coming from these big companies that suck up all the tech talent, but at end of day the best and brightest are working on optimizing ad clicks (FB, Goog) or getting people to buy crap (Amazon) or working on incremental hardware improvements (Apple).

If anything, I would hope any outcome against big tech would level the playing field when it comes to attracting talent, and create an environment where working on true “moonshot” tech was not so risky.

[+] Yoric|6 years ago|reply
Historically, scientific progress has extremely rarely been made by companies. Most of the time, it's the result of academic research. Most researchers typically have neither time nor inclination to build a company/a product based on their own research, and having great research is no guarantee that the company/product will succeed. So the way research results become visible is typically through publications and teaching.

When companies hire graduates who have learnt from researchers, some of these graduates end up in position to "innovate", quite a few years after the actual research has been done.

For instance, I'm going to talk about the field that I know best: programming languages (to keep it simple, I'm not talking of VMs or compilers, just the languages). Pretty much everything you see in Java, C#, Python or Go dates back to the 70s (with broader testing and quality of life improvements, of course), Swift gets a few improvements imported from the 80s, but not that many. The only industrial languages that seem to have real innovations are F#, Rust and Scala, which are three cases in which the actual researchers managed to convince (or found) a company to support the language.

Anyway, it's really, really hard to measure scientific progress, and if you look at companies to try and gauge it, you're looking at stuff that is typically quite old.

[+] elamje|6 years ago|reply
I have had similar thoughts about big tech companies, but lately I have started to realize the progress they have brought.

To name a few: - Google, FB, Amazon basically wrote the book on distributed systems (Read Designing Data Intensive Applications), both from a research perspective and a very well architected, open source solution

- Google, FB have profoundly impacted front end development with cutting edge Javascript runtimes and open source front end frameworks

- Amazon, Google, Microsoft have basically invented/popularized a way to do computing(Cloud), server management that has enabled tiny tech companies to become giants by outsourcing IT infrastructure

- Apple/Google have created devices, OSs, and software that is nearly impossible to live without these days, additionally creating platforms for millions of developers to make a living on(App Store)

- Amazon has set the bar pretty high for automation in operations and made 2 day shipping a thing we expect from everyone

There are many other things I can’t think of right now, but long story short most of the companies you listed do have crappy parts of their business, but have also made incredible platforms that 3rd parties can leverage to make a ton of money.

I caveat all of this by saying that there are some practices that I don’t agree with at all of those firms, but by and large they have gotten so big because they are platforms.

[+] alevskaya|6 years ago|reply
Science hasn't stagnated yet. As someone with a long career in physics/biology, this attitude only reflects the myopia and ignorance of the people that hold it. We're in the middle of a revolution in our understanding of biological systems and our ability to engineer them. But because that field is so technical and intrinsically slower-paced people discount it in these discussions because they don't know anything about it.

There's much more to science and technology than "tech" companies.

[+] skybrian|6 years ago|reply
This is a reductive generalization, sort of like assuming people at Bell Labs were working on telephone equipment, or people at Xerox PARC were working on copiers. How a company makes its money isn't what determines the biggest impact of its research. In the end, it may be some other research area that they never figure out how to make money on at all.

Google famously has lots of "moonshots" and publishes lots of research and open source code. It's too soon to say what's going to turn out to be a real advance versus an "illusion".

[+] stcredzero|6 years ago|reply
I definitely feel like there’s this illusion of tech innovation coming from these big companies that suck up all the tech talent, but at end of day the best and brightest are working on optimizing ad clicks (FB, Goog) or getting people to buy crap (Amazon) or working on incremental hardware improvements (Apple).

Wasn't just this sort of thing said about the financial world? (That all of the brains were being sucked up by finance, because that's what paid the most for technical and math talent.) I remember talking to coworkers about 15 years ago, quipping that pretty soon, it would all just be enigmatic, undecipherable servers humming in server rooms, exchanging arcane signals, causing money to move around for inscrutable purposes.

Doesn't this fit the way people talking about YouTube and Google talk about "The Algorithm?" It just means that the enigmatic, undecipherable servers humming in server rooms have also begun to take over media and the culture. It's not just money moving around, commanded by machines for inscrutable purposes. It's now also the information, the connections, and the interactions comprising human culture itself.

Supposedly we're not yet at the point of AGI, but somehow we've already built the tools for the not yet existing AI overlords to control all of humanity. (In pAIperclips, this would correspond to "Release the Hypnodrones!")

If anything, I would hope any outcome against big tech would level the playing field when it comes to attracting talent, and create an environment where working on true “moonshot” tech was not so risky.

At this point, maybe we need all of the talent just to try and keep the "Hypnodrones" out of the hands of evil hackers?

[+] jinfiesto|6 years ago|reply
I used to think this, but I've come around somewhat. The economy as a basic premise is expected to grow at least 3% a year or bad stuff starts happening. Obviously no kind of exponential growth is sustainable, even at a low rate. The best minds are getting sucked into this at least partly because the work is necessary to keep the economic wheels spinning. If we give up on having an average % of yearly growth, we're committing to living in an economy that's a zero or negative sum game.

So yes, we are stagnating scientifically, but it's not necessarily for no reason. The longer we keep running the economy as is, the more smart people are going to have to be allocated to figuring out how to keep up with the exponential growth our system demands. Unfortunately, no one seems to have cracked steady-state economics, so it looks like we'll be doing this for the foreseeable future...

Additionally, I don't know how we're supposed to keep up with this absurd need for exponential growth without leaning hard on technology (at least if we presume we don't want to wreck the planet more.) I feel like big tech is actually doing something important with regard to growing the economy disproportionately with the physical resources they consume.

[+] mjevans|6 years ago|reply
There are several places where I feel proper regulatory oversight would improve the situation, however they can all be reduced to a single phrase.

Proprietary platforms that don't inter-operate are problematic.

Email is OK because like phone service providers anyone is free to run their own, and choose to use the services of a competitor while still inter-operating on a shared communications structure; much like actual postal delivery.

IRC is OK as a protocol (from the fair and inter-operable test), but was never designed to scale up to operate at this level.

Proprietary platforms, like Facebook, Discord, etc flavor of the week which have strong market dominance but which are closed are actively problems. That's an area where monopoly is clearly being used to keep out competitors and restrict innovation.

In Google's defense in this area they did try XMPP, and (as I recall) that experiment ended up as a failure since other platforms intentionally implemented a very poor baseline minimal interoperablity in ways that made communicating between platforms a very 'red headed step child' experience. That's why I believe whatever does come next has got to check all the boxes AND make them requirements of inter-operating, not 'extensions'.

[+] dboreham|6 years ago|reply
Hmm...as I remember it xmpp federation with Google worked just fine for us until Google turned it off.
[+] mrj|6 years ago|reply
Don't forget iMessage in there. The social pressure to not appear as a green message bubble is intense and helps protect Apple's market share. They promised to open it up a long time ago, but of course that'll never happen voluntarily.
[+] microcolonel|6 years ago|reply
> Proprietary platforms that don't inter-operate are problematic.

The fediverse is coming along very nicely. Gab's joining of the ActivityPub network is a strong demonstration that you don't need to be part of a bubble to participate, and you don't need permission from anyone to join.

I think if Facebook, Google, and Twitter keep up what they've been doing, the fediverse has a pretty good chance of growing into something that can be used to reach sizable audiences.

I've been looking at ways to get my local, provincial, and federal government agencies to join the fediverse as well, as I think that's probably a better way to do public status feeds than relying on some opinionated Californian megacorp. I'm thinking maybe a slick publishing system that also proxies Twitter.

(INB4 “hurr durr spoken like a smelly nazi, flagged!”)

[+] techntoke|6 years ago|reply
Much like postal delivery where I get a ton of u wanted flyers (spam) and the post office seems to help those make sure they get delivered to me rather than let me opt out entirely.
[+] bogwog|6 years ago|reply
> In Google's defense in this area they did try XMPP

The Google that would even consider anything like that died when the founders left.

[+] scarface74|6 years ago|reply
Anyone notice that the Justice Department under an administration who supposedly doesn’t believe in regulation all of the sudden is interested in regulating companies run by the “liberal elite”? Does it not worry anyone that an administration that’s not exactly friendly to the states where these companies are located are now all of the sudden cracking down on only certain big businesses?

Every time I post about the government is rarely the answer I get push back. Be careful what you ask for...

[+] malvosenior|6 years ago|reply
Maybe so, but in this case the consumer will benefit. These large companies have been abusing their monopoly or near monopoly status to push their own politics aggressively. It's no surprise that the other side of the political spectrum would react negatively.

That's why issues like free speech for all are so important. Someday, your enemies might be in charge and if you've been eroding human rights because you're powerful enough to do so, someone more powerful may show up and use the landscape you helped create against you.

The winning move for tech was to not become politicized and just focus on being a neutral platform. Hopefully this threat of regulation will scare some of the overt politics out of our industry and everyone will benefit.

[+] noelsusman|6 years ago|reply
It's certainly bizarre to watch Republicans argue that we can fix this by giving government bureaucrats more control over private businesses and Democrats argue that we should break them up and then rely on the market to fix it for us.

Of course, it's hard to establish a connection between what this president says and actual policy action on the ground, but this is also a president who has been open about his willingness to order the DOJ around, so who knows.

That's the whole reason why there's been a strong norm around DOJ's Independence. Without that you never really know what their motivations are.

[+] AaronFriel|6 years ago|reply
I don't think the President has been at all shy about this take either, especially with Amazon (see: https://www.thestreet.com/world/trump-vs-bezos-a-history-of-...). Recently the President tweeted a video about the Defense Department's 10 billion dollar contract that was during a segment called "swamp watch".

It's really hard to discern which, if any, of the President's actions translate into real policy decisions.

[+] khazhou|6 years ago|reply
This certainly looks like it's because they didn't bend the knee.
[+] riazrizvi|6 years ago|reply
It’s step 1 in a negotiation process to drive a laissez-faire attitude to anti-progressive communities and content. This step is called ‘obtain leverage’. You can see companies like Amazon preemptively putting filmmakers like DeSouza in your recommended play list.
[+] i_am_nomad|6 years ago|reply
Most of these companies have specifically used the power of their products to advance the political ideals of their executives and owners. It was wrong when General Electric did it, it’s wrong when Google does it. Seems like Google, Facebook and the like just thought they were too powerful to suffer any consequences.
[+] MichaelApproved|6 years ago|reply
> The Justice Department is opening a broad antitrust review into whether dominant technology firms are unlawfully stifling competition, according to department officials, adding a new Washington threat for companies such as Facebook Inc., Alphabet Inc. ’s Google, Amazon.com Inc. and Apple Inc.

> The review is geared toward examining the practices of online platforms that dominate internet search, social media and retail services, the officials said.

Interesting that Microsoft, the only company worth over $1 trillion, isn't mentioned.

The focus is on online platforms and they don't have anything dominating in that field. I wonder if it'll stay isolated to those companies or if Microsoft will get looped into this because they're so large.

[+] lettergram|6 years ago|reply
One thing Microsoft has going for it - they’ve been through this process in the 90s / early 2000s. Plus, their OS is clearly not a monopoly, their web browser is now based on Chrome, their a distant #2 in the cloud space, their a very distant #2 in search, etc

Literally, I can’t think of one thing Microsoft is top dog in besides OS.

[+] CobrastanJorji|6 years ago|reply
Also, of all those companies, Microsoft is the only one operating a search engine in China.
[+] ryeights|6 years ago|reply
Microsoft isn't a part of FAANG so they don't get mentioned often
[+] blackflame7000|6 years ago|reply
Microsoft enjoys a very close relationship with the DoD.
[+] res0nat0r|6 years ago|reply
Based on that this sounds like it may be more related to the politicization of the Justice Dept. under Trump than concern for actual monopolies.

> The review is geared toward examining the practices of online platforms that dominate internet search, social media and retail services, the officials said.

Trump has railed constantly that "conservatives are being censored" on Twitter and Google, which is utter nonsense, so this report in addition to the reports from last year of him wanting to tax Amazon just because Jeff Bezos owns WaPo and they don't print flattering stories of him daily sounds more likely to me the reason for an investigation than anything else.

[+] ngngngng|6 years ago|reply
I'm happy that antitrust is being explored. I do think free markets need to be protected, and the last few decades attitude of "if it's good for consumers it's legal" is short sighted. Something can be good for consumers right now, but stifle competition and be bad for consumers eventually.
[+] andrewstuart|6 years ago|reply
Tech companies have failed to buy enough politicians over the years.

That message is clear.

The need to employ the lobbyists who not only put big petroleum in a completely unassailable position, but got the government paying vast amounts of money to that industry.

[+] 40acres|6 years ago|reply
The #1 issue with big tech is that the major players are under-utilizing their talent base. It's never been easier to start a software company (idea, laptop, Stripe Atlas, AWS/Azure/GCP.. GO!), and yet the over-all number of new business in America is declining.

The threat of anti-trust, and perhaps trust busting, will spur competition and innovation. The US owes it to it's future citizens that STEM talent is not underutilized before it's too late, I support efforts to end this stagnation.

[+] gerash|6 years ago|reply
It sounds like tech. hasn't bought enough Republicans yet. That's all these investigations are about apparently. Otherwise Sinclair media, for example, should be investigated for having an actual monopoly over US local news TV stations.
[+] JaimeThompson|6 years ago|reply
I somehow doubt that the review of the major telcos, which are tech companies, will be all that involved.
[+] WalterBright|6 years ago|reply
The big tech companies are a major asset to the economy, driving growth and jobs. Breaking them up is a pretty risky proposition.
[+] tuxxy|6 years ago|reply
Is there anything keeping this out of the anti-encryption debate?

Is it possible that AG Barr could say, "We will go after you for anti-trust issues _unless_ you agree to weaken your privacy tooling", etc?

[+] lifeisstillgood|6 years ago|reply
Matt Levine (Bloomberg news letter) was good in this today: roughly speaking, if "we" as a society want to regulate Tech companies we can just pass laws to do it - stop relying on handfuls of poachers-turned-gamekeepers to extend their remits and just legislate properly

And if our legislators cannot do it, then that's is we the voters problem.

It's all in our hands.

Now - what is the vision? :-)

[+] omarhaneef|6 years ago|reply
Q: Does anyone know if it is typical for antitrust action to last into a new administration once it has started?
[+] bryanrasmussen|6 years ago|reply
In the past it was traditional that the justice department was somewhat separate from the administration - thus it would have been scandalous, in the past, if an administration had come in and cancelled investigations undertaken by an exiting administration - or at least scandalous if there could be any suspicion of corruption being the cause of the cancellation.

So big companies have generally donated to political campaigns and as such they should not, traditionally, have their investigations quashed because this would raise suspicions that there had been a quid pro quo.

[+] tick_tock_tick|6 years ago|reply
The DOJ normally acts with some degree of freedom with new administrations merely refocusing its most visible efforts. A large scale probe would be extremely unlikely to get dropped completely but could be marginalized.
[+] CameronNemo|6 years ago|reply
Q: Is antitrust action typical at all?
[+] debt|6 years ago|reply
Unfortunately for the current administration, it would be cheaper to remove them from office that it would be to comply with their investigation. A future administration may be much friendlier towards tech.

Big tech will likely drag this out as long as they can.

[+] dredmorbius|6 years ago|reply
Additional coverage:

Justice Department Opens Antitrust Review of Big Tech Companies

https://www.nytimes.com/2019/07/23/technology/justice-depart...

Matt Levine: Facebook Negotiated Its Rules

https://www.bloomberg.com/opinion/articles/2019-07-23/facebo...

DoJ opens review into Big Tech’s market power

https://www.ft.com/content/4f008ab0-ad8c-11e9-8030-530adfa87... (http://archive.is/ktmWP) Also/earlier: http://archive.is/xQ0hI http://archive.is/Nt7kl http://archive.is/TiDIB

Big Tech Hit With Broad U.S. Antitrust Probe as Scrutiny Mounts

https://www.bloomberg.com/news/articles/2019-07-23/u-s-opens...

Also worth revisiting: "Fred Turner: Silicon Valley Thinks Politics Doesn’t Exist"

https://032c.com/fred-turner-silicon-valley-thinks-politics-... (https://news.ycombinator.com/item?id=17669745)

[+] d1zzy|6 years ago|reply
I would imagine that each of the investigated companies cases is a multi-year effort with dozens/hundreds of specialists gathering evidence, processing it, etc. It seems rather weird to start such a gigantic effort against all companies at once because anti-trust law is very complex and for each of these companies there will be completely different criteria and circumstances to make the case against.

I guess what I'm trying to say here is that I suspect this to take decades to reach some conclusion. By then I'm not even sure how much of the original goal to the investigation will be reached.

[+] tasty_freeze|6 years ago|reply
I believe the US could do more with antitrust oversight. The DOJ under Clinton was pursuing Microsoft up until 2001, when the new Bush administration carried through on a campaign promise and took the bite out of the investigation.

This isn't to point the blame just at conservatives, who have historically been of the mindset that the government shouldn't interfere with business. Democrats haven't spent much political capital towards those ends either.

For 2.5 years president Trump has been raging at Bezos because he owns the Washington Post, and that has extended to Trump raging that Amazon needs to be taxed heavily. Despite playing the social media angle for all it is worth, Trump has been claiming that Facebook/Twitter/Google have been filtering out conservative opinions.

So pardon me for being suspicious that now the DOJ cares about looking into all of these companies. I'm for anti-trust regulation, but not when it is applied selectively for political gain.

[+] orev|6 years ago|reply
Kind of surprising that most of the comments here are taking the bait and think this is actually about anti-trust. This is 100% political, with us just having the “social media summit” that only included extremists, and the election coming up.

This is a direct threat aimed at social media companies telling them they better not censor extremist content that is in favor of the current administration, no matter how vile it is, or else the investigations will go deeper and the consequences will be worse.

[+] jdgoesmarching|6 years ago|reply
Eh I mean, if Trump throwing a tantrum is how we stumble into anti-trust legislation I’m still for it.
[+] awinder|6 years ago|reply

  “I don’t think big is   
  necessarily bad, but I think a 
  lot of people wonder how such 
  huge behemoths that now exist 
  in Silicon Valley have taken 
  shape under the nose of the 
  antitrust enforcers,” Mr. Barr 
  told senators
What hasn’t been occurring in broad daylight? This excuse is purpose-made to escape blame but these issues have been discussed for years while SEC has allowed acquisitions and mergers through on the anti-competition side of this argument...
[+] ryeights|6 years ago|reply
Buy the fear on this news. Various governmental bodies (Congress, the FTC, etc.) have shown that they're more talk than walk on the issue of antitrust litigation
[+] thomasjudge|6 years ago|reply
Hasn't antitrust enforcement/actions been pretty toothless over the past, say, 15 years at least? Think of telco mergers, airline mergers, ...
[+] root_axis|6 years ago|reply
Why doesn't the topic of data privacy laws ever enter this discussion? Data privacy laws would apply to everyone instead of targeting whoever happens to be at the top of the alexa rankings. Most of the big tech companies are not in violation of anti-trust regulations, so why don't we actually pass new laws to tackle the actual problem (systematic abuse of user data for profit)?