The “Big Tech” Problem

The “Big Tech” Problem 

By Duncan Whitmore

“The legislature, were it possible that its deliberations could be always directed, not by the clamorous importunity of partial interests, but by an extensive view of the general good, ought, upon this very account, perhaps, to be particularly careful, neither to establish any new monopolies of this kind, nor to extend further those which are already established. Every such regulation introduces some degree of real disorder into the constitution of the state, which it will be difficult afterwards to cure without occasioning another disorder.”

                  –  Adam Smith, Wealth of Nations

The debate over the power of social media giants such as Twitter and Facebook has intensified this past week when both platforms attempted to restrict the distribution of reports concerning allegations of corruption made against Democrat Presidential nominee Joe Biden. The precise details are unimportant; suffice it to say that the reports are likely to prove damaging to the Biden campaign if disseminated widely amongst the electorate. Both Twitter and Facebook restricted the sharing of the New York Post’s story on the matter, while the White House Press Secretary was locked out of her Twitter account. All of this, of course, takes place against the backdrop of “cancel culture” and the censorship of information (even from authoritative sources) that challenges the official narrative of lockdown and restriction in response to COVID-19.

Although, in this particular instance, the social media companies may end up succumbing to the “Streisand Effect” – the phenomenon whereby any attempt to ban or censor information increases its allure and, thus, leads to a greater degree of exposure overall – those on the right have responded in at least one of two ways to this latest betrayal of the apparent leftist bias that pervades Silicon Valley.

The first is to point out that Facebook and Twitter are private companies serving their consumers, and so it is up to the latter to patronise alternative platforms in the event that they are dissatisfied. In other words, market solutions are best and the state should not interfere. Moreover, constitutional protections of free speech under the First Amendment are generally inapplicable to private entities.

The second is to suggest that these tech giants possess a de facto monopoly over the dissemination of news and information, lending them a disproportionate degree of power over public and political debate. Consequently, these companies must be either broken up or regulated to restrain their latitude in determining which content should appear on their platforms.

Unfortunately, neither side has grasped the situation correctly.

The error of the first group – the one that is more likely to regard itself as libertarian – is to assume that all outcomes created by private entities are economically optimal and, if done peacefully with their own property, should be left alone by the law. This, however, is true only when we assume the condition of a free market, which is not the case in the real world. Instead, we live in a heavily hampered market in which the state has blessed large corporations with subsidy and regulatory or monopoly privilege. In fact, it is doubtful whether the corporate form itself would exist in quite the same fashion but for the state’s endowment of corporations with full, legal personhood.

Thus, assessing either the economic optimality or the lawfulness of the actions of any private entity can be a complex exercise. In the case of the tech giants, however, even a cursory glance is enough to dispel the illusion that these companies are quite so squeaky clean.

For instance, social media companies in the US appear to enjoy an anomalous legal status, at least by traditional standards. Prior to the internet, communications providers were classified as “publishers,” “platforms”, or “distributors”. Briefly, a “publisher” may censor or regulate content but is, in turn, legally liable for that content; a “platform” may not so censor but, in return for sacrificing this privilege, escapes any legal liability for the content that is communicated; meanwhile, the liability of a “distributor” sits somewhere in between. A traditional example of a “publisher” is a newspaper, which can be sued for what is written in its articles; a “platform” could be a telephone company, which is not liable for the content of calls made across its cables (and, indeed, is usually barred from listening in on calls anyway); a “distributor” could be a bookshop which, while not initially liable for the content of the material on its shelves, could become so if, say, it continued to stock items subject to an injunction barring their sale.

Internet regulations made in the 1990s, however, appear to allow social media companies to censor and regulate the content on their sites in the manner of a “publisher” while allowing them to enjoy the same the legal immunities of a “platform”. This has led to the allegation that tech companies are effectively allowed to have their cake and eat it, in addition to being able to exploit their ambiguous status as and when it suits them. To libertarians – who generally believe that mere words should never be unlawful regardless of whether a person is their author, their host or their distributor – the precise categorisation of social media companies under this regime is unimportant. It does, however, serve to show how the state can distort the marketplace with its uneven distribution of privileges and regulations.

The more serious issue is that, in the current milieu, it is highly unlikely that the state will permit market alternatives to Facebook or Twitter to flourish. Any platform that becomes popular with the right would, most likely, have to suffer only a single allegation of “racism” or of breeding cells of “white supremacy” to see it hounded and restricted, even shut down. Such was the fate of a social network named “Gab” after it was revealed that the Pittsburgh Synagogue shooters had posted messages on the platform.

Moreover, the only reason why the censorious actions of Facebook and Twitter have become an empirical problem is precisely because the state wields such awesome power, and so information that could sway the outcome of elections carries such incredible weight. In a freer society where the state has, at least, been reduced to a bare rump, it is unlikely that any individual act of censorship could have such repercussions. Thus, the naivety of the “let the market decide” approach is laid all the more bare when we see that the problem exists only because we do not have a free market.

The second group, however – the one calling for the regulation or breakup of tech giants – is proposing the misguided solution of heaping another state interference on top of existing state interference, the equivalent of demanding the nationalisation of crutches after the state has helped someone to break your legs. Indeed, it should come as no surprise that this group is likely to be populated by conservatives who have little problem with using the state to enforce their own preferences.

The obvious error here is that this group ignores the possible unintended consequences from such further interference, which nearly always result from any state action. However, the more subtle, but arguably more serious mistake is that they are arming the state with tools that can be used against them as well as in their favour. In other words, it is yet another example of one group or faction proposing new laws and powers for the government while perceiving only how those powers can be used to their advantage by politicians who think as they do. They give scant thought to what could happen when the keys to power are in the hands of the other side.

For example, social conservatives in the US are likely to view abortion as an untrammelled evil, the literal murder of unborn lives anywhere and everywhere that it is practised. Thus, they are likely to favour the banning of abortion at the federal level, i.e. a blanket prohibition in every American state, blue or red. This, however, is to confuse the goal (the total eradication of abortion) with the method of getting there – in classic parlance, it is using the ends to justify the means. While such means may allow you to accomplish your goal temporarily, the reality of power is that it can be turned against you when the boot ends up on the other foot and the machinery of the state is taken over by those hostile to your values. Once that happens (as it inevitably will) we would see the federal government legalising abortion across the whole of America, and so the social conservatives would be back to square one.

The same is likely to be true of regulating and/or forcibly breaking up tech giants. These social media platforms may be of a leftist disposition today, and it would be beneficial for conservatives today if these platforms were to have their wings clipped by a Republican President or Congress. But what if, one day, a pro-conservative social media platform was to ascend to a position of dominance in the milieu of a leftist dominated state? What if the latter was to find some way – honourable or otherwise – of using the very same laws proposed by conservatives to regulate Twitter and Facebook in order to smash a dominant conservative platform? No doubt, in such a likely instance, conservatives would suddenly find the words with which to become pro-corporation and pro-market, protesting against the state’s use of the very laws that they once demanded.

Regardless of precisely how much social media giants today are a creature of the free market or of state privilege, we can neither just ignore them nor can we heap on more state power to deal with them. The only solution is to reduce the size and scope of the state as much as possible and eradicate all possible benefits and privileges that the state confers on both these and other companies. Only then can we be sure that private entities are genuinely serving the needs of their consumers under the competitive pressure of the marketplace.


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