When Uber and Lyft brought competition to the Seattle taxi
market, drivers fought back, asking
the city to let them form a cartel to demand higher wages from rideshare companies.
If that sounds anticompetitive, it is. But petitioning the government for
protection from competition is also completely
legal, because the courts expect that informed voters will make the right
call about whether the petitioners need a bailout.
That system works well enough for cabbies, but not for
another group that has been seeking government protection from competition of
late: writers. In their role as journalists, writers give voters the
information they need to make the right call about bailouts, but writers cannot
be expected to do that dispassionately when they are the ones seeking
Over the past fifteen years, writers’ earnings have nose-dived
thanks to competition from Google, Facebook, and Amazon directed at two of the
main industries that employ writers: newspapers, which have lost
advertising revenue to Google and Facebook, and publishers, which have lost
the ability to dictate book prices as Amazon’s bookselling business has grown.
As a result, writers have quite understandably come to view these companies as a threat to their livelihood. Through the Authors Guild and the News Media Alliance, writers are calling for government protection from competition in the form of antitrust enforcement against Google, Facebook, and Amazon, and an antitrust exemption for newspaper cartels.
But writers’ views on big tech have also carried over into their reporting, making it hard for the public to judge whether government aid is warranted. I will focus on reporting by The New York Times that appears to me—as an antitrust scholar—to be colored by writers’ sense of professional vulnerability to the tech giants. But examples can be found in many other sources.
A Bully Pulpit
One expression of the strength of anti-tech feeling at the Times is the sheer volume of Times reportage suggesting that Google, Facebook and Amazon should be broken up or otherwise prosecuted under the antitrust laws.
In the first seven months of 2019, the Times published more than 300 articles mentioning Google, Facebook, or Amazon and antitrust, including an Op-Ed by a Facebook founder calling for breakup, an article discussing legal changes required to “take down big tech,” and another musing on what Amazon will do once its “domination is complete.”
That’s a lot of ink to spill on an issue that lacks either public or scholarly support. Polls show that the public has little interest in breaking up companies that either employ them, or sell them products at low or zero prices. And although I have decried Facebook’s treatment of app developers, to my knowledge no antitrust specialist has argued for the breakup of Google, Facebook, or Amazon. To the contrary, probably the two most prominent scholars in the field, Herbert Hovenkamp and Carl Shapiro, have urged caution. (Tim Wu, who has written on antitrust, but has much broader interests, has made the limited suggestion that Facebook should unwind its acquisitions of WhatsApp and Instagram.)
Grasping for Scholarly Support
The absence of scholarly support for antitrust action was highlighted by the oddest episode to date in the Times’ reporting on the tech giants. In 2017, the paper reported extensively on academic work by a law student that sought to make a legal case for antitrust action against Amazon. What surprised antitrust scholars about the publicity wasn’t just that the Times had bypassed experts in the field in favor of promoting student work, but that the work itself broke no new ground.
Firms violate the antitrust laws by taking
steps to disadvantage rivals. But the student, Lina Khan, offered no
evidence of such conduct. Her closest attempt—the argument that Amazon had run
diapers.com out of business by charging very low diaper prices—fell flat
because charging low prices is anticompetitive only if the prices charged are below
cost. Otherwise, low prices are a sign of healthy competition. Khan offered
no evidence of below-cost pricing.
By reporting this work, however, the paper created the
impression that there is an antitrust case to be made against Amazon, one that
the paper reinforced by publishing two
by Khan and then a profile
by David Streitfeld that went so far as to call her a “legal prodigy.”
Khan’s association with Barry Lynn, a journalist and head of
Open Markets Institute, for which Khan worked both before and after law school,
highlights the close relationship between the Times’s reporting and writers’
grievances against the tech giants. Lynn has written
to the Justice Department on behalf of organized writers calling for antitrust
action against Amazon.
Creating the Impression of Crisis
Equally troubling is the paper’s reporting on the ongoing House investigation into big tech. The Times ran a front page story on the investigation under the headline “Antitrust Troubles Snowball for Tech Giants,” suggesting a groundswell of interest in antitrust action.
What the story did not disclose is that the Congressman
leading the investigation, David Cicilline—whom the Times quoted extensively
in that article—is a sponsor
of legislation pushed by the News Media Alliance that would allow newspapers to
cartelize for purposes of fighting Google and Facebook. Cicilline has,
Khan to help with the investigation.
Similarly, the Times recently gave front page coverage to a preliminary step by antitrust enforcers to consider an investigation into big tech, and suggested that a case would have merit. But the paper did not mention that the only major antitrust action brought by the Trump Administration to date was the politically-motivated, and failed, attempt to block AT&T’s acquisition of TimeWarner, owner of Trump rival CNN. Given the President’s animus toward Google, Facebook, and Amazon, the opening of an investigation tells little about whether a case would have merit.
The Giant that Didn’t Bark
Further suggestion that writers’ professional concerns are
coloring their coverage of the tech giants comes from the conspicuous absence
of Apple from the paper’s crosshairs. Under the standard measure
of monopoly power, the ability profitably to raise price, Apple has far more
power than Google, Facebook, or Amazon, earning twice
what runner-up Google earned last year.
But it has been hard to find a critical word about Apple in
the Times’s pages.
That may be because Apple has played the role of hero to a
beleaguered trade. In 2009, as the Kindle was sowing panic among publishing
executives, Steve Jobs entered into a cartel
agreement with the major publishers to sell ebooks via iTunes at fixed
prices several dollars above the prices Amazon insisted upon for the Kindle. The
Justice Department frustrated these plans, however, suing to break up the
cartel, and winning
at trial against Apple.
Against this backdrop, other connections between the Times and advocates of breakup appear in a new light. Times writers have repeatedly appeared to cast Elizabeth Warren, who has called for breakup, as the Democratic frontrunner, even as she has lagged in the polls. And the Times endorsed Zephyr Teachout in her failed 2018 bid for New York Attorney General. Teachout, who made her name as a scholar of corruption, rather than antitrust, is, to my knowledge, the only current law scholar publicly to call for breakup of Google and Facebook.
I don’t think there is a writers’ conspiracy here. But just
as you won’t hear a good word from a cabbie about Uber or Lyft—even if these
companies have made life for the rest of us much easier—you won’t hear a good
word from a writer about Google, Facebook, or Amazon. The difference is that
when writers complain, America is forced to listen.