America's favorite toothless watchdog FTC pleads with Congress to give it LESS power to tackle tech monopolies
Meanwhile, Facebook's co-founder goes public with call for end to social media monopoly
One thing you can't accuse people of in Washington DC is lacking an appetite for power. But not, it seems, if that power comes with responsibility.
This morning, co-founder of Facebook, Chris Hughes, launched a blistering but well-reasoned attack on his former company and his friend CEO Mark Zuckerberg in which he outlined why the company needed to be broken up.
That conclusion reflects what the tech press has been saying for years. And lawmakers in US Congress have recently joined the fray, noting that even the expected $3bn fine from America's Federal Trade Commission (FTC) over privacy violations will not be sufficient to force Facebook to change its ways.
But no one, it seems, actually wants the job of doing the breaking up. In an extraordinary hearing in Congress on Wednesday, the head of the FTC Joe Simons actively pleaded with legislators not to give him the power to act independently.
While both Democrats and Republicans talked about the need for new privacy laws, when pressed after their session what progress they have made on it, the answer was: nothing yet. Instead they had a back-and-forth about whether they should get the FTC to do it for them.
The chair of the House Energy and Commerce Committee, Jan Schakowsky, said she wanted to give the FTC greater rule-making powers specifically on the issue of users' data privacy as well as the additional funds to make it happen. Several other committee members agreed.
Even the top Republican, Cathy McMorris Rodgers, said she supported a data privacy national standard and greater accountability for tech companies like Facebook but was wary about giving the FTC more power.
Count me out
The only person dead set against it was the person who would actually get the power: the FTC's Simons. "Please do not do it. Do not give us broad rule-making authority. Give us targeted rule-making authority," he pleaded. "The last thing that we want is for you to dump that question on us."
It's hard to imagine how Washington DC could become any more dysfunctional but somehow they manage it. Now we have lawmakers who don't want to make laws, and regulators who don't want to regulate. It's always someone else's job.
And the job needs to be done. In his lengthy opinion piece, published in the New York Times this morning, the former Facebooker Hughes is forced to reflect on past times when government actually did its job and recognized that corporations that have too much power are damaging to the economy and the country.
Noting that Facebook has an overwhelming influence over every day discourse and information, and CEO Mark Zuckerberg has a dominant influence over anything Facebook does (courtesy of his 60 per cent share of voting shares), he argues: "Mark’s power is unprecedented and un-American. It is time to break up Facebook."
The "board" of Facebook "works more like an advisory committee than an overseer," Hughes says, adding that "Mark alone can decide how to configure Facebook’s algorithms."
And Zuckerberg joins the long list of people that agree Facebook has too much say and too much power but don't want to do anything to actually break it up.
Instead, we are forced to look back to the 1980s to see the last time that the US government acted strongly against corporate power – when it broke up AT&T. And before that to the 1890s when industry titans controlled oil, sugar and railroads.
Hughes quotes John Sherman – author of the Sherman Antitrust Act of 1890 – when he said: "If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessities of life. If we would not submit to an emperor, we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity."
The price of failure
Of course that last part – price – has become distorted in the decades since and antitrust actions have become centered on whether a company's market power has a negative impact on the price consumers pay. Some economists have argued with a straight face that because Facebook does not charge for its service, there is no antitrust case to answer.
It is amazing how power, money and influence has the ability to distort thought processes. And this morning presented the most acute example of that when Facebook's new head of communications – and former deputy prime minister of the UK – Nick Clegg put out a statement from Facebook in response to Hughes' piece.
"Facebook accepts that with success comes accountability. But you don’t enforce accountability by calling for the breakup of a successful American company. Accountability of tech companies can only be achieved through the painstaking introduction of new rules for the internet. That is exactly what Mark Zuckerberg has called for. Indeed, he is meeting government leaders this week to further that work."
This was the same Nick Clegg that less than two years ago said: "I remain perplexed at the way in which US competition law only seems to care about the effect of near monopoly market dominance by a tiny number of big players if and when it increases the prices paid by consumers."
So we can add Facebook's own head of comms to the list of people who want to break up Facebook – so long as they don't have to do it. ®