Is it time for a ‘Digital New Deal’ to rein in Big Tech?
A University of Maryland law professor says the government must address the way "power has been accumulated" by Google, Facebook, Amazon and Apple.
Frank Pasquale was raising concerns about Google's market dominance before it was cool. His academic literature about the outsized power of Big Tech stretches all the way back to 2008, when he wrote a paper called "Internet Nondiscrimination Principles: Commercial Ethics for Carriers and Search Engines," predicting that "search results" would be the next hot-button issue for regulators.
As it turns out, he was probably right. Over a decade later, the Department of Justice and a group of state attorneys general are preparing to file antitrust lawsuits against Google over its enormous advertising business as well as its dominant search platform.
Pasquale, who is a professor of law at the University of Maryland, is ready to meet the moment. This week, he will release a working paper titled "Internet Nondiscrimination Principles Revisited," which revamps and dials up his previous proposals.
He said he was "timid" in his previous paper, written at a time when it might have been verboten to criticize the "upstart" Google in academia. But now, as appetite for action against the platforms increases, he said he feels it's "time to intervene again."
Protocol spoke to Pasquale on Wednesday about how he thinks the government should go about reining in the power of Big Tech.
This interview has been edited and condensed for clarity.
What is the "Digital New Deal" that you're proposing in this paper?
The "Digital New Deal" is, for me, a good overarching framework for the breadth and depth of reform that is necessary, given how power has been accumulated by these dominant digital platforms. I termed it the Digital New Deal because I feel that in a lot of the policy space, we get incrementalist reform, and we get very small proposals to tinker at things around the edges. I wanted to provide something more comprehensive, based on the latest scholarship and on watching the field for over a decade.
Can you lay out the basic contours of what the Digital New Deal calls for?
First is more robust antitrust enforcement. We really need to take a second look at the accumulation of mergers and acquisitions of so many companies by the dominant platforms.
The second are nondiscrimination principles. I realize sometimes there can be big efficiencies from having massive firms, but even if we conclude that the efficiencies outweigh the costs, we still have to make sure they don't discriminate against rivals, and especially against rising rivals.
The third is transparency. We just don't know what's going on in so many of these situations, and we need to ensure that really qualified people can look under the hood and understand how this is working.
And the fourth is aspects of public utility regulation, and that would include limits on prices. So for example, if Apple or Google can't justify these cuts they're taking from apps in their app stores, then there should be a reasonable rate of return for them, but it shouldn't be 30%, it shouldn't be so high. I have not seen a really good justification for why they take 30% in the first year and they take a large chunk of the app developers' revenue.
How have your thoughts on the dominant digital platforms changed since you first wrote "Internet Nondiscrimination Principles: Commercial Ethics for Carriers and Search Engines" over a decade ago?
I was very timid in that paper. Because the problem was that, the mainstream still at that point thought of Google in particular as this upstart challenger. The mainstream thought that Google and other tech firms had just broken the power of the music industry and "big content," that they were the good guys in the fight for net neutrality. But what I started noticing in them was that even though they were saying the right things about net neutrality at the time, they themselves were pretty powerful bottlenecks, but they weren't accepting the same types of responsibility they were calling for for the ISPs. Still, everything in that paper is explained very narrowly and very cautiously because there was so much enthusiasm for Google.
Nowadays, I feel that over the years, there have been so many troubling privacy practices, competition law violations, other issues that have arisen — not just with Google but with all of the dominant digital platforms — that I felt it was time to intervene again.
The DOJ and state attorneys general are meeting on Friday to discuss their antitrust cases against Google. Are you hoping your paper is going to provide these regulators with some kind of framework to think about their cases and potential remedies? What are you hoping regulators could take away from your paper?
I think what my paper does, particularly in its attention to the development of the European case against Google with respect to search, is that it provides concrete examples of the types of remedies that could be pursued that respond to the usual "search neutrality" objections. Usually, people object to intervening in this process by saying, "If you're trying to regulate search, you must want neutrality, and that means we'll randomly order the results." I think what my paper does is it says, "No actually, the model here is nondiscrimination." It's not forcing them to do any particular thing. The model, rather, is to stop them from discriminating against entities that appear to be disfavored unfairly.
Can you talk a little bit about that "nondiscrimination" model? What exactly does that mean, and how does it get ahead of the concerns people have about Google's search harming rivals or small businesses?
One of the basic ideas is that when someone's searching for something, and there is a Google-owned entity or an entity that's paying for placement out there, that Google also gives equal prominence to a rival entity. That would be one idea within the search nondiscrimination framework, is that it's not just a way of presenting the Google-aligned or Google-owned results, but it also is going to always give at least structure for some rival. There could be further guidance as to what that looks like but I think you can trust whichever regulatory body to develop that over time.
Attorney General William Barr said as recently as this past week that he's concerned that the dominant digital platforms are potentially censoring conservative viewpoints. That has generated a lot of interest and support among Republicans. Do you think that antitrust law can or should be used to address alleged viewpoint bias?
In terms of viewpoint bias, one of the objections I address is about First Amendment issues. And so I talk about how there were some critics of my perspective who said we shouldn't deploy antirust, and other forms of platform regulation, against search engines because they have free expression rights, and to deploy commercial law against them could be violative of that. What I do in the paper is say that, to the extent we're using antitrust or other forms of law to keep them from favoring their own products and services, that doesn't raise a First Amendment concern. However, when you have the government saying, "We think you need to include X because it's a valid viewpoint," you might start treading on First Amendment issues.
Some critics have raised concerns that Barr is bringing a case against Google not out of legitimate antitrust concerns, but rather to carry forward a political battle on behalf of President Trump, who has made it clear he doesn't like online platforms, including Google. Do you share those concerns?
I think there are legitimate worries that expanding antitrust enforcement thanks to discretion given to political decision-makers can be politicized. However, I think that the way to best mark this type of a case is to think, "Globally, what are the regulators doing? What are some of the big ideas among scholars? Does this have a foundation in rational, scholarly commitments and research?"
If you look at what the ACCC is doing in Australia, certainly the long record of work in Europe, and other countries as well, I can say lots of jurisdictions have found cause for concern with dominant digital platforms. Then I think those concerns lessen in that sense, because there does seem to be both a research-based scholarly foundation for what's going on and comparatively, the U.S. is a laggard on many of these competition law issues.
What do you predict is going to happen next, first when it comes to the cases against Google and then the possibility of updated antitrust legislation in Congress? Is significant action imminent?
It's hard to predict the future here, but I do think that, looking at the broader political economy of so many businesses struggling and very large tech platforms doing so well, that a rebalancing is due. If you look at some of the statistics on level of profits, revenue generated by Big Tech firms versus the rest of the economy, it's remarkable the divergence there. I think that's why we're now going to see a rebalancing. Even when there's a traditionally deregulatory party in power like the Republican Party, some things become too big to ignore, and I think this may be one of them.
What do you hope is the major takeaway from your paper?
I think the key takeaway is that a lot of the firms we venerate and admire as the most innovative in today's economy built their power and profits at least in part on some pretty unethical and even illegal actions. And we really haven't reckoned with that as a country yet. And we need to do so. This Digital New Deal is part of doing that.