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As US lawmakers attack its competitors, Microsoft warns of state over-reach

There is a mounting battle of wills in the US between its tech giants and its state apparatus over who gets to exploit its population more.

Writing in the Washington Post, Microsoft President Brad Smith opposed the secret gag orders exposed last week when the Trump Administration apparently forced Apple to hand over data on some of its users, which included politicians and journalists. On top of that Apple was hit with a ‘gag order’, banning it from even talking about the government action.

“The past seven days marked another bad week for the collision between technology and democracy,” opened Smith. “The abuse of secrecy orders is neither new nor confined to a single administration, and certainly not limited to investigations involving members of Congress or the news media. Democracy rests on a fundamental principle of government transparency. Secrecy should be the rare exception — not the rule.”

Smith’s objection is less with the state practice of issuing subpoenas to cloud companies in order to bypass device security when they want to spy on their citizens, and more with the accompanying prevention of those companies from even letting their customers know it has happened. While the rapid growth of mass digital surveillance in supposedly free societies is profoundly alarming, the forced conscription of companies into this policy does make it even more sinister.

The obvious parallels are inevitably drawn with Orwell’s 1984, in which everyone is constantly monitored such that even dissenting thought can be identified and punished. Smith himself didn’t hesitate to make the comparison in a recent documentary charting the AI arms race between the US and China. The US state, from which allied governments such as the UK’s typically take their lead, seems determined to out-do China when it comes to monitoring its own citizens.

Meanwhile US Congress has proposed no less than five new laws it claims are designed to deal with big tech monopolies. Microsoft isn’t one of them, for some reason, with the identification of Apple, Amazon, Facebook, and Google indicating a B2C focus. The proposed laws build on a platform created by a report, written in part by their lead sponsor David Cicilline, that concluded something needs to be done about the four consumer digital giants.

“The American people sent us to Washington to get things done,” said Cicilline. “Nothing is more important than ensuring every American has an opportunity to get ahead. Right now, unregulated tech monopolies have too much power over our economy. They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work. Our agenda will level the playing field and ensure the wealthiest, most powerful tech monopolies play by the same rules as the rest of us.”

Will it, now? The funny thing is that their position is not unique; the state has that power too, and then some. So what Cicilline seems to really be seeking is a return to the state monopoly on picking winners and losers. Having said that, big tech does have too much power and some of the claim aims of these news laws are commendable.

“Big Tech has abused its dominance in the marketplace to crush competitors, censor speech, and control how we see and understand the world,” said Representative Ken Buck. “Apple, Amazon, Facebook, and Google have prioritized power over innovation and harmed American businesses and consumers in the process.

“These companies have maintained monopoly power in the online marketplace by using a variety of anticompetitive behaviours to stifle competition. This legislation breaks up Big Tech’s monopoly power to control what Americans see and say online, and fosters an online market that encourages innovation and provides American small businesses with a fair playing field. Doing nothing is not an option, we must act now.”

Here are the laws as laid out in the announcement:

  • The “American Innovation and Choice Online Act” to prohibit discriminatory conduct by dominant platforms, including a ban on self-preferencing and picking winners and losers online. The bill is sponsored by Chairman Cicilline and co-sponsored by U.S. Rep. Lance Gooden (TX-05).
  • The “Platform Competition and Opportunity Act” prohibits acquisitions of competitive threats by dominant platforms, as well acquisitions that expand or entrench the market power of online platforms. The bill is sponsored by U.S. Rep. Hakeem Jeffries (NY-08) and co-sponsored by Ranking Member Buck.
  • The “Ending Platform Monopolies Act” eliminates the ability of dominant platforms to leverage their control over across multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition. The bill is sponsored by U.S. Rep. Pramila Jayapal (WA-07) and co-sponsored by U.S. Rep. Lance Gooden (TX-05).
  • The “Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act” promotes competition online by lowering barriers to entry and switching costs for businesses and consumers through interoperability and data portability requirements. This bill is sponsored by U.S. Rep. Mary Gay Scanlon (PA-05) and co-sponsored by U.S. Rep. Burgess Owens (UT-04).
  • The “Merger Filing Fee Modernization Act” updates filing fees for mergers for the first time in two decades to ensure that Department of Justice and Federal Trade Commission have the resources they need to aggressively enforce the antitrust laws. This bill is sponsored by U.S. Rep. Joe Neguse (CO-02) and co-sponsored by U.S. Rep. Victoria Spartz (IN-05).

In the US they like to lob in a bunch of extra stuff whenever they propose a new set of laws and this seems to be no exception. The ones designed to prevent monopolistic behaviour seem fine, although it’s appalling that existing law has proven insufficient in this regard. The last law is simply a grubby money grab for the state, from which we should expect no better.

The Platform Competition and Opportunity Act seems to be the most radical as it would probably tip the ‘picking winners’ scales firmly back in favour of the state. It essentially seems to ban all strategic acquisitions by the ‘platform’ companies. Not only is the pre-emptive banning of private M&A activity a remarkable step, it seems to leave the door open for the state to unilaterally block all such activity with minimal justification.

Specialist agencies already exist to assess the public interest implications of all M&A activity, so it looks like this law would give the government power of veto even over those given the all clear. Alternatively, we imagine, if the companies in question agree to be more accommodating when it comes to mass surveillance, the government could be persuaded to turn a blind eye. Good times.


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