4 September 2017

Fear the rise of info-monopolies over America

Summary: New giant info-monopolies arise and feel their strength. Here are tales of that new era in America (unlike Europe, which is already moving to control them), and guesses about how it will end.

We have seen this on TV. You wake up to a new day. You check your Gmail — and find your account is closed, your contacts lost. You turn to your website, hundreds or thousands of articles representing countless hours of work, and find it is gone.

Salil Mehta is a statistician and well-known public intellectual. See his impressive bio. He has been cited in major publications, such as the NYT. But Google closed his email and website (Statistical Ideas) down without notice or explanation. When he submitted an inquiry he got this. “After review, your account is not eligible to be reinstated due to a violation of our Google Terms of Service. We recommend viewing our Google Terms of Service …”

It’s like something from a dystopian science fiction novel. Unlike you and me, he has 177,000 followers. People who spoke out about this. Ann Coulter (1.7 million followers) and Nicholas Taleb (212 thousand). He was reinstated that evening. If that happens to you or I, all we can do is bend over and smile. If you need the revenue from your website …you should have been more obedient to the politics of the Plutocracy.

“Google, Facebook, Amazon are increasingly just super-monopolies, especially Google and Facebook. The share of the markets they operate in is literally on the same scale that Standard Oil had … more than 100 years ago — with the big differences that their reach is now global, not just within a single country.”

— Roger McNamee (co-founder of Elevation Partners) on “Squawk Alley“, reported by CNBC.

Google and Facebook have become monopolies exercising excessive power. Google has roughly 2/3’s of the global search revenue market. It as a ~40% share of US digital advertising, Google Chrome has a roughly 50%+ global market share. Google’s DoubleClick has 80%+ of the ad serving market (US?). Google’s Android has an 85% share of global smartphones. Slowly people have see this, and understand what must be done, on both the Left and Right.

“Facebook and Google that have become essential elements of 21st-century life should be regulated as utilities, top White House adviser Steve Bannon has argued, according to three people who’ve spoken to him about the issue.” (Source: The Intercept. He was fired three weeks after this, leaving the White House staffed with plutocrats and generals.)

Google is a monopoly — and it’s crushing the internet” by Ryan Cooper at The Week. He gives a powerful analysis, opening with a chilling example of Google at work. Conclusion…

“It could be that careful anti-trust action could build a market with several search competitors, and thereby create some competition. But certainly all search platforms should be forced to follow something like a railroad’s common carriage rules, where websites are not allowed to be ranked according to how much they might profit the platform itself, and get fair access to search traffic.

“Only one thing is certain: All monopolies are regulated. The only choice is between private regulation on behalf of executives and shareholders, or democratic regulation on behalf of the public.”

Others are writing about this, as the inimical aspects of these monopolies become obvious. 
For a brief analysis see of this see “Are Facebook and Google the New Monopolies? QuickTake Q&A” by David McLaughlin at Bloomberg. 
The usual suspects agree that Google is a monopoly, but say that’s just great: Peter Thiel (Venture Capitalism and libertarian), and the pretentious neoliberals at The Economist
For another example of Google flexing its muscles, see “Google’s Censorship, Plans to Restrict Publisher Advertising Raises Antitrust Issues” by Yves Smith at Naked Capitalism. 
A different perspective is described in “Who Owns the Internet?” by Elizabeth Kolbert in The New Yorker — “What Big Tech’s monopoly powers mean for our culture.” 

For a deeper analysis we can turn to Jonathan Taplin, director emeritus of the University of Southern California’s Annenberg Innovation Lab and the author of Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy. See this interesting interview with him. He gives us the bottom line in an op-ed in the NYT: “Is It Time to Break Up Google?” — Conclusion.

“There are a few obvious regulations to start with. Monopoly is made by acquisition — Google buying AdMob and DoubleClick, Facebook buying Instagram and WhatsApp, Amazon buying, to name just a few, Audible, Twitch, Zappos and Alexa. At a minimum, these companies should not be allowed to acquire other major firms, like Spotify or Snapchat.

“The second alternative is to regulate a company like Google as a public utility, requiring it to license out patents, for a nominal fee, for its search algorithms, advertising exchanges and other key innovations.

“The third alternative is to remove the “safe harbor” clause in the 1998 Digital Millennium Copyright Act, which allows companies like Facebook and Google’s YouTube to free ride on the content produced by others. The reason there are 40,000 Islamic State videos on YouTube, many with ads that yield revenue for those who posted them, is that YouTube does not have to take responsibility for the content on its network. Facebook, Google and Twitter claim that policing their networks would be too onerous. But that’s preposterous: They already police their networks for pornography, and quite well.

“Removing the safe harbor provision would also force social networks to pay for the content posted on their sites. A simple example: One million downloads of a song on iTunes would yield the performer and his record label about $900,000. One million streams of that same song on YouTube would earn them about $900.

“I’m under no delusion that, with libertarian tech moguls like Peter Thiel in President Trump’s inner circle, antitrust regulation of the internet monopolies will be a priority. Ultimately we may have to wait four years, at which time the monopolies will be so dominant that the only remedy will be to break them up. Force Google to sell DoubleClick. Force Facebook to sell WhatsApp and Instagram.

“Woodrow Wilson was right when he said in 1913, “If monopoly persists, monopoly will always sit at the helm of the government.” We ignore his words at our peril.” {From Wilson’s The New Freedom – “A Call For the Emancipation of the Generous Energies of a People” (1913). It was the slogan of his 1912 campaign.}

We fought monopolies once and won. Now we have to do it again.

The info-giants are an oligopoly, and increasingly aware of their power — and the few limits on it in America. They begin with crowd-pleasing actions. I doubt they will stop there. Why should they care what the peons think? Each of Google’s founders has the net worth of 500+ thousand American households.

These rulers of the info-giants feel immense peer-pressure to deploy it against those with heterodox opinions. Heterodox in terms of elite opinion. David French at National Review gives us a powerful warning of how this might work.

“Last week, multiple major Internet corporations essentially cooperated to kick a hate site, The Daily Stormer, off the Internet. Cloudflare, GoDaddy, Google, and various other companies withdrew their services, and now one of the Internet’s most odious sites lives mainly on the “dark web,” largely inaccessible to the casual user. This was an ominous development for free speech — and not because there is anything at all valuable about The Daily Stormer’s message. It’s an evil site. Its message is vile. Instead, The Daily Stormer’s demise is a reminder that a few major corporations now have far more power than the government to regulate and restrict free speech, and they’re hardly neutral or unbiased actors. They have a point of view, and they’re under immense pressure to use that point of view to influence public debate.

“It’s a simple reality that the lines of Internet communication are in progressive political hands, these progressive corporations look to left-wing activists to define hate, and a large number of leftists believe to the core of their beings that “hateful” speech should be censored and suppressed whenever possible. For example, just this week ProPublica, a respected journalism outlet, decided to study “how leading tech companies monetize hate.” The article begins by highlighting not the Klan or a white-supremacist militia but instead Jihadwatch.org. And how did it choose Jihad Watch? It relied on the Southern Poverty Law Center, a group that is notorious for supplementing its lists of white-supremacist hate groups with its own ideological enemies list, one that a university radical would love. …”
What might come next?

The past quarter-century has already seen immense — if seldom-mentioned — changes in American politics. The Democratic Party abandoned their long alliance with America’s workers in favor of a better-paying alliance with Wall Street, Silicon Valley, and the plutocratic class. Now the Republicans have thrown in their lot with faux economics (like those wrecking Kansas’ economy), faux history (the Confederacy didn’t rebel to preserve slavery) — and now face the ultimate challenge of responding to armed militia, mobs with Nazi symbols chanting anti-semitic and racist slogans.

Now comes another challenge to both parties. The Democrats must choose between their tradition of fighting against monopolies and for civil liberties — and the joy of an alliance with giant tech companies that crush some of their foes. The GOP chooses between their love of giant corporations and defending elements of the conservative coalition (e.g. the SPLC designates many social conservatives as haters).

My guess (emphasis on guess) is that the Democratic Party will (again) choose power, and the GOP will wait for the info-giants to overreach and then (reluctantly) move against them. Much depends on these decisions.

What role do the America people play in this drama. We are peons fighting each other in the mud. That’s the purpose of these wars about social issues. The fringes of Left and Right emerge and march. Everybody chooses sides. The Leftist mob, rioting to suppress speech they oppose. The Right, marching under the symbols of our dark past. The silent majority, the sheeple. The result is a week people, divided and so powerless.

A note from the past — by Teddy Roosevelt

“The greatest evils in our industrial system to-day are those which rise from the abuses of aggregated wealth; and our great problem is to overcome these evils and cut out these abuses. No one man can deal with this matter. It is the affair of the people as a whole. When aggregated wealth demands what is unfair, its immense power can be met only by the still greater power of the people as a whole, exerted in the only way it can be exerted, through the Government; and we must be resolutely prepared to use the power of the Government to any needed extent, even though it be necessary to tread paths which are yet untrod.

“The complete change in economic conditions means that governmental methods never yet resorted to may have to be employed in order to deal with them. We can not tolerate anything approaching a monopoly, especially in the necessaries of life, except on terms of such thoroughgoing governmental control as will absolutely safe guard every right of the public. Moreover, one of the most sinister manifestations of great corporate wealth during recent years has been its tendency to interfere and dominate in politics.”

— From his article “The Progressives, Past and Present” in The Outlook, 3 September 1910.

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