Why U.S. Businesses Want Trustbusting
Trustbusting is back, and it’s a bipartisan effort. Last month, 50 state attorneys general, led by the conservative Republican Ken Paxton of Texas, announced an investigation of Google for anticompetitive conduct. Republican Sen. Josh Hawley of Missouri has been a fierce critic of big tech, as has the Democratic-led House Judiciary Committee, which is probing the sector. Several Democratic presidential candidates have pledged to address the problem of concentrated power not just in tech but in agriculture, defense and media too.
It might seem like both parties and the American public are turning against business creators and investors who put their hard-earned capital to work. But there’s a more optimistic way to see this dynamic. If you listen to the complaints against these large companies, they aren’t coming from Occupy Wall Street-style protesters. They are coming from business leaders who, in most cases, are just seeking the liberty to trade with whomever they wish and feel that they are being blocked.
Take complaints about Alphabet Inc.’s Google, which is such an important marketing platform that it is essentially the home page for every company. Google’s searches once primarily sent people to independent web pages, but the internet has increasingly become Google’s own walled garden. A recent study by the data analytics firm Jumpshot shows that more than half of Google searches now end with snippets from web pages displayed on the search page itself instead of visits to those pages, or else by sending users to Google apps or to sites that paid Google for ads—instead of to pages outside Google’s sphere. Meanwhile, Google has packed so many ads onto its results page that companies are finding that they have to buy ads even to reach people who search for their product by name.
This would not be such a problem except that Google is essentially a search monopoly, with roughly 90% of the web search market and a dominant share in other segments of the internet, like mapping. (Google counters by defining the market more broadly to include any online service that helps consumers to find something, such as Amazon or Expedia.) One small-business owner told The Wall Street Journal, in an article earlier this year about fake listings in Google maps, that he fears Google far more than the government. “The government will hit me with a fine,” he said. “But if Google suspends my listings, I’m out of a job. Google could make me homeless.”
Facebook has similar power over the advertising market for social networking, which is also critical for anyone with products or services to sell. Facebook can, in essence, impose its own tax on all businesses that have to connect with customers. “In a lot of ways, Facebook is more like a government than a traditional company,” Mark Zuckerberg said in a 2009 interview. Now Mr. Zuckerberg is putting together his own Facebook “Supreme Court,” as he describes it, for content moderation, and attempting to create his own currency with Libra.
Nor are monopolies just appearing in technology. Across the economy, dominant market power is more the norm than the exception. There are concentrated markets in industries as diverse as coffins, syringes, baby formula, mobile-home manufacturing and bank management software. Rabbis recently had to beg the giant Mexican bakery chain Bimbo, which together with Flowers Foods controls roughly three-fifths of branded bread sales in the U.S., to continue baking kosher bread. Fully 97% of missiles and munitions produced for the Pentagon are controlled by just two companies, Raytheon and Lockheed Martin.