Tim Wu on Breaking Up Monopolies in the Age of Google
Tim Wu has the kind of résumé that would make the most ambitious helicopter parent smile. A graduate of McGill and Harvard Law, Wu trained under some of the legal world’s biggest names, including Stephen Breyer, whom he clerked for on the Supreme Court. Wu was a professor by the time he was 30; today, he’s settled at Columbia Law, where he co-directs the Program on Law and Technology. Oh, and he worked for the Federal Trade Commission and later the National Economic Council, both under Obama. You might know him for coining the term “net neutrality” or for his 2010 book, The Master Switch, or maybe you voted for him for lieutenant governor of New York in 2014, when he took 40 percent of the Democratic primary.
And yet, for all his time spent in the halls of power, Wu wants nothing more than to change the way America works. Wu’s slender but powerful new book, The Curse of Bigness: Antitrust in the New Gilded Age, is a full-throated call for the government to use its authority to break up our biggest corporations, particularly tech titans like Facebook and Google.
“If you want to change anything, first you have to handle the monopolies.”
The day after the midterms, I reached Wu on the phone at his office in New York. We talked about the future prospects of antitrust politics, his thoughts on socialism and the state of the Democratic Party, and whether he’s auditioning for the role of America’s next great trust buster. Wu says The Curse of Bigness isn’t a job application, but he’s suspiciously well-qualified.
Medium: Why is monopoly the most important, foundational issue for you? Why does everything come back to that?
Tim Wu: We’re dealing with a lot of questions that go back to the issue of concentration. If you look at decades of wage stagnation, huge inequality, that goes back to concentration. And our political system is controlled by those same monopolies too; you run into them whenever you try to make changes. It’s like if you want to change anything, first you have to handle the monopolies.
Americans’ interest in antitrust is just picking up from a kind of cyclical low. Why did the political base for antitrust politics disappear?
We’ve had periods in this country where antitrust fervor was very strong. Both Democrats and Republicans had strong antitrust planks in their party platforms. There was even a whole antitrust party at one point. But it moved out of public view, into long court proceedings and back rooms. Antitrust got technocrafied and lost touch with the public. And that passion has been redirected elsewhere. With Trump, you have him channeling that energy at immigrants, for example, saying that’s who people should be upset with for the state of things, when it should be this corporate concentration. And over the past 40 years, antitrust has fallen out of the Democrats’ agenda too.
The Democrats are currently split between the establishment, neoliberal wing that’s funded by the tech monopolies and the Bernie Sanders, democratic socialist wing that would rather negotiate against big companies than break them up. But reading this book, you seem like more of a capitalist in the Elizabeth Warren vein.
With the Dems split between Bernie and Hillary, is there space for a distinct anti-monopoly wing?
I think so, yeah. People are hungry for big ideas — American ideas — that explain what’s going on, and antitrust does that. I’m not a socialist; I don’t think government should just own industries. That didn’t work too well in the 20th century. I do believe that we should, you know, have public options available in certain markets, but we need to learn from history on that one.
What do you say to people who critique the antitrust focus from a labor position—who say larger employers are more efficient, they make it easier to organize labor and bargain, that they need those HR bureaucracies at big firms, that wages are higher than at small businesses, etc.?
I don’t think the two have to be opposed. Let’s say you’re a nurse in a small city, and all the hospitals are owned by the same company, and your wages haven’t gone up in years. You’ve got two ways of addressing that. The hospitals aren’t competing against each other for workers, because they’re concentrated, so you break up that hospital chain and you have a more competitive environment for labor and your wages go up. Maybe you also want to organize a union to handle it from that angle. But they don’t need to be opposed.
In this book and in some of your past work, you take particular aim at some of the big tech companies. What’s wrong with the tech industry?
Well, they convinced us — and maybe themselves — that they had a different business model, that they were giving things away for free, that antitrust didn’t apply in the same ways. I include myself in this, because I was at the Federal Trade Commission at the time, and we didn’t know how to deal with these companies. But then you start seeing the same sort of standard anticompetitive corporate behavior. You have these mergers, you have Facebook eating up Instagram, eating up WhatsApp, and then, let’s say, humbling Snap. They’re back to the regular corporate model.
We should distinguish it from something like Wikipedia, which is different, and they took the steps and made the decision to set it up as a nonprofit. And that affects how it works. With these other companies, I think what happened is these guys decided they had to be billionaires.
Have progressives and Democrats and policy intellectuals become too cozy with the new Silicon Valley monopolist billionaires? Let me put it this way: If Elizabeth Warren gets elected president and appoints you antitrust czar, you’d need to have some tough conversations with your former colleagues from the Obama administration who now work in tech.
That’s true. Look, these are not the evilest companies on earth. Okay, Facebook has had some moments. But Google isn’t using child slaves to mine diamonds. I’d rather we have companies that aspire to do good, or at least not to be evil, than not have that. I think what happened is people started to think they could do more good by working in tech than by joining the government, and tech starts recruiting the kind of people who work in government. But nobody gets a pass.
In the book, you write about the United States’ history of iconic trust-busting politicians—most famously, Teddy Roosevelt—but also a bunch of nonpresidential characters. For the trust-busting model to work, do you need that iconic trust buster? And are you interested in the job?
Ha, you mean is the book a job application? No, no, it’s not. But yes, I do think the iconic trust-buster/octopus hunter should make a comeback. That character helps connect the public to antitrust work. Trump is complicated, because he connects with the public in that way, fighting against companies as sort of rivals, but it’s not reflected in the policy.
We’re past the midterms now, which means the Democratic presidential primaries are about to start heating up. Are you planning to advise anyone? Do you have a candidate yet?
On the record, I’ll just say that I’m happy to work with anyone who wants to focus on antitrust. I’m especially happy to work with anyone who wants to appoint federal judges who are interested in antitrust. Economic thinking has fallen out of how Democrats evaluate judges, and it would be good to see that return. We need some neo-Brandeisians on the courts.
So, without giving too much away, do you expect antitrust will be part of the 2020 primary conversation?
Is one antitrust strategy to break down the U.S. government’s monopoly power and have the states take the lead? I’m thinking of California instituting its own net neutrality rules, and Phil Weiser was just elected attorney general in Colorado.
He won? That’s great! He’s a friend and another Obama administration vet.
And strong on antitrust.
Very strong. The states are going to have to step up. I ran at the state level. If the federal government doesn’t do it, then the states are going to have to. And there’s precedent for that: Minnesota took on the railroad, and Texas took on Microsoft early. But these cases can cost a lot of money and take a long time. Companies can wait states out.
One last question: Have you seen the 2001 movie ‘Antitrust’? And if so, can you rank it between one and five stars?
No, I haven’t heard of that one. I guess it’s so much of my work life that when I relax, it’s not what I search for.
Really? Tim Robbins plays Bill Gates as a serial killer. You’ve got to check it out.
Huh. I’ll have to do that.