#22: Rich Uncle Pennybags

When is a tech billionaire a cyber baron?

Welcome to Civic Signals, where trust busting meets Silicon Valley.

This week: A congressional hearing on tech for the ages! Catching up with the history of antitrust and considering its silicon-based, aluminum-body future. Our advisory board members give us their key takeaways. And, finally, we ask whether incentive programs that have been established in some North American cities could be translated online.

The Monopoly Game

A century ago, several billionaire-owned corporations held monopolies over vast American industries — steel, oil, railroads, telephones, you name it. The trust busters of the Progressive Era went after these robber barons and created our modern antitrust laws and regulations. 

Fast forward to the 1980s. As Silicon Valley was on the rise, the Reagan administration embraced a philosophy that accepted as many large corporate mergers as possible, writes David Dayen in the Atlantic:

All Americans suffer from the wave of corporate consolidation that followed. Workers have fewer bidders for their labor and cannot secure decent wages. The number of start-up businesses has plummeted since the late 1970s. Products and services grow worse, and companies with little competition have no incentive to improve them. 

Even if VC culture and Shark Tank make it seem otherwise, the technology industry has been no exception to these trends. So, does Wednesday’s antitrust hearing herald a new Progressive Era? “In the 19th century we had the robber barons, and in the 21st century we have the cyber barons,” said Rep. Jamie Raskin during the hearing. “We want to make sure the extraordinary power and wealth you've been able to amass is not used against the interests of democracy and human rights around the world and not against the interests of a free market at home." 

How do cyber barons stack up against the original robber barons, immortalized by Rich Uncle Pennybags, the mascot of Monopoly, based on real-life baron J.P.Morgan? For now, tech companies, specifically the Big Four whose CEOs testified this week, remain very popular. But in our public spaces at least, these CEOs may already be acting the part. Kriston Capps, writing for CityLab, notes that Apple turning D.C.’s former Carnegie library (Eric Klinenberg told us about them recently) into an Apple store is a weighted with symbolism:

If Tim Cook were a philanthropist of the likes of Andrew Carnegie, then the company might have renovated the library for the city. Carnegie built some 1,700 public libraries at a cost of about $1.3 billion—an act of industrial whitewashing, for sure, but one that also transformed society. Apple is doing something like the reverse, scouring the world for historic sites to convert into retail outlets, from Melbourne to Madrid, on the flimsy premise that hosting classes on editing in iMovie constitutes culture. The world needs a better class of robber barons.

Perhaps the cyber baron equivalent of Carnegie libraries are the free online tools we’ve fully incorporated into our lives, including the Google Doc we’re typing this into right now and the YouTube stream we watched the hearing on. But is the goodwill generated by these assets enough to stem the regulatory tide that may be headed for tech?

Checking Our Network Privilege

We turned to some of our Advisory Board members to get a broader understanding of the hearing and what it means for Civic Signals and digital public spaces...

Advisory board member Ramesh Srinivasan, professor at UCLA and director of UC Digital Cultures Lab, stressed just how pervasive the Big Four have become:

We’re at this point where we realize that our lives are completely dependent on big tech. It’s not simply a question about using Amazon or Facebook, it’s actually that every experience we have, whether it’s communication-based, finding information, or even things like banking or housing, policing, all of these are mediated by digital technologies and the fact that those technologies are written by and for so few, creates these issues.

Fellow board member Ethan Zuckerman of MIT’s Center for Civic Media added that current antitrust law limits the available actions against these companies:

While the questions Democrats asked about the concentration of tech power suggest meaningful thought invested in the ways tech companies could be anticompetitive, it's hard to imagine meaningful antitrust actions given that contemporary U.S. antitrust law has focused on how lack of competition leads to increased consumer cost. Questions that examined Apple's cut of App Store purchases or Amazon's advantage over third-party sellers in bringing new consumer goods to the market suggest that they could be targets for antitrust action in a more progressive political environment, but I saw little to indicate that a future trustbusting era would have arguments to undo the Facebook/Instagram merger, for instance.

So, where does that leave us? And what was missing? For Ethan, an acknowledgement that a solution to the current state of the digital sphere will not come from these companies [bolded for added emphasis]:

If it was encouraging to see legislators being less deferential to the tech giants — there was less of the worshipful “thanks for ushering in an era of American growth” than we've seen in the past — it was discouraging to me to see the continued centrality of these specific companies. Our congresspeople understand that there's something wrong with Facebook, Google and other companies that control our digital public sphere. But they can't see that the solution is unlikely to come from those companies. The companies that created the specific dysfunctions of our present — toxic online environments, the spread of mis/disinformation, opaque and un-auditable systems that amplify divisive and polarizing conversations — are the worst possible entities to solve the problems we face. We need an affirmative vision of what a healthy and vibrant online life would look like, and there was no evidence in yesterday's hearings that our legislators were imagining that future, or what sorts of regulatory environments would make it possible.

 And from Ramesh, a question that we can’t stop thinking about:

On one hand there is the antitrust issue, but the second is, what happens in a world where everything is technologically mediated, where so few have so much power?

Who has the capacity, and the power, to create the next generation of digital public spaces? If the answer is “only the cyber barons,” then perhaps we need to think more about who the 21st-century trust busters could be. In the meantime, we’ll keep an eye on the outsiders innovating in digital public space, the ones who are ready to create something amazing if given the chance. When this works correctly, it can be like what Tim Wu calls “the cycle” in this book The Master Switch:

...from somebody’s hobby to somebody’s industry; from jury-rigged contraption to slick production marvel; from a freely accessible channel to one strictly controlled by a single corporation or cartel — from open to closed system.

This is about more than the “next” Facebook, it’s about how we get to a new, not just decentralized but democratized social media that we wouldn’t even recognize today.

What’s Clicking

🌐 Online:

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☞ This Week’s (Double) Double Click:

  • So … was the antitrust hearing theater or this generation’s equivalent of Big Tobacco? — Roll Call and The New York Times

Make It Digital: And a Little Public Space on the Side 

Privately owned public spaces — often referred to as POPS or POPOS, depending on the city you’re in — allow developers to bypass zoning regulations in exchange for creating and managing an open urban space for the public.

For our Make It Digital series: What kind of private-public programs, like POPS, exist digitally? If you can’t think of any, come up with one and tell us about it!? Send us a note with your ideas at civic.signals@gmail.com or @ us on Twitter with #MakeItDigital.

💻 On social: Give us a follow on Twitter. And we launched on Instagram and LinkedIn, too!

Dreaming of a non-monopolized future…

The Civic Signals Team

Illustrations by Josh Kramer

Civic Signals is a partnership between the Center for Media Engagement at the University of Texas, Austin and the National Conference on Citizenship, and was incubated by New America. Please share this newsletter with your friends!

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