Have Google, Facebook, Apple and Amazon gotten too big?

Tech giants are in the spotlight for their sheer size, with economists blaming the companies for economic malaise and politicians making noise about reining in their power.

The Democrats are pitching a new economic agenda Monday titled “A Better Deal,” in which they propose a U.S. crackdown on monopolies. Although they don’t mention the tech sector specifically — but they do mention cable and telecom — the reforms they’re calling for would presumably affect the sector’s biggest players, which dominate the dissemination of information, online ads, e-commerce, social media and more.

“In recent years, antitrust regulators have been unable or unwilling to pursue complaints about anticompetitive conduct,” the Democrats’ agenda (PDF) says. “Our new competition advocate would research current market activity, receive consumer complaints, and proactively recommend competition investigations to the Federal Trade Commission (FTC) and the Department of Justice (DOJ).”

Of course, the Democrats aren’t in power. As a candidate, President Trump expressed his opposition to the proposed merger of AT&T and Time Warner; its approval remains up in the air.

Meanwhile, Bloomberg reports that economists are pointing a collective finger at Big Tech, blaming the industry’s most successful companies for the rise of inequality, loss of jobs and more. They have become too efficient, too big and too powerful, these economists say.

“Stronger network effects are a related explanation for the increasing dominance of companies such as Google, Facebook, Apple, Amazon, Uber, AirBNB, Walmart, and Federal Express in their sectors,” said a recent paper by economists from MIT, Harvard and more. “The superstar firm model emphasizes firm heterogeneity in the evolution of industry-level and aggregate labor share.”

Smaller companies — and bigger companies that have an ax to grind — are making a big stink over competition. European regulators have listened: Last month, they handed down a record fine to Google after concluding that it favored it own comparison-shopping services over others’. Other tech giants such as Apple, Facebook and Amazon are also under scrutiny in Europe for antitrust and tax issues.

Jonathan Taplin is author of “Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy,” and former director of the Annenberg Innovation Lab at the University of Southern California. He wrote in an April 22 op-ed in the New York Times that Google, Amazon and Facebook are monopolies “in classic economic terms.” Among other things, he proposed blocking tech giants from buying smaller but major players, and regulating Google as a utility.

Cory Booker, the Democratic senator from New Jersey, also voiced his concerns recently.

“We’ve got to start having a conversation in this country: How are we going to measure the success of the tech sector?” Booker asked during a podcast interview with Recode. “Is it by its ability to create a small handful of billionaires, or the ability for us to create pro-democracy forces — empowering individuals, improving quality of life, improving financial security, expanding opportunity — the kind of things we want largely for democracy?”

 

Photo: A man walks past a building on the Google campus in Mountain View in 2015. (Jeff Chiu/AP)

 

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