Gray "Lady" Bares Teeth at Tech

The Gray "Lady" has published an op-ed to the effect that the government should break up some of our largest tech firms or regulate (i.e., run) them like "natural" monopolies. The piece contains several glaring contradictions, not the least of which is its ridiculous assertion that the tech giants are somehow stifling innovation:

It is impossible to deny that Facebook, Google and Amazon have stymied innovation on a broad scale. To begin with, the platforms of Google and Facebook are the point of access to all media for the majority of Americans. While profits at Google, Facebook and Amazon have soared, revenues in media businesses like newspaper publishing or the music business have, since 2001, fallen by 70 percent.

Jonathan Taplin will "begin" a little late for many of his readers, namely, any reading the above on a smartphone, which is one of many recent innovations not to have emerged from Bell Labs. Call me crazy, but dirtying my hands on the old kind of "access point" to (day-old) news strikes me as a step backward. And excuse me for pointing out that it isn't the fault of Apple (Oops! There's another "access point!") et al. that newspapers either find new channels of distribution unacceptable or haven't yet found a better way to make money. Throughout history, genuine improvements to our standard of living have caught the unprepared off-guard or killed off entire industries premised on an old, outmoded way of doing things. Taplin's solution, by the way, would effectively reduce the two (major) "access points" to one, the government. No thanks.

That said, Taplin does raise a legitimate issue, although it has nothing to do with the size per se of any company: Some companies, like Google, have undermined protection of intellectual property, and not just copyright. The remedy for this problem is governmental, but it involves enforcement of intellectual property rights. Amazingly, Taplin, the same man who bemoans the loss of revenue to Old Media, conjures up as part of his solution to this problem, exactly the opposite type of measure:

In a 1956 consent decree in which the Justice Department allowed AT&T to maintain its phone monopoly, the government extracted a huge concession: All past patents were licensed (to any American company) royalty-free, and all future patents were to be licensed for a small fee. These licenses led to the creation of Texas Instruments, Motorola, Fairchild Semiconductor and many other start-ups.

If you're going to deny patent-holders the right to set their own terms, you have no business complaining about revenues lost when copyrights are violated. Furthermore, Taplin makes it seem as if the kind of licensing agreements that lead to start-ups would never occur without government strong-arming. This simply isn't the case as history amply demonstrated long ago in the case of the now taken-for-granted sewing machine, and has repeatedly, ever since.

I could go on and on about how self-contradictory, rights-violating, and antithetical to innovation and prosperity Taplin's proposal is, but I will leave it at that and the following question: If a single, large company (which must obey the law) controlling an industry is so dangerous, how is it an improvement for another large entity (which, because it must enforce the law, can be said to be above the law) to control that industry and all others? It is revealing that the same man who insults our intelligence with such a proposal speaks so enthusiastically of "force" regarding Facebook, Apple, or Google.

-- CAV