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National Review
National Review
1 Aug 2023
Jonathan Nicastro


NextImg:The Latest Bipartisan Folly: A New Commission to Regulate Big Tech

NRPLUS MEMBER ARTICLE I n the New York Times, Senators Lindsey Graham (R., S.C.) and Elizabeth Warren (D., Mass.) published a polemic against technology firms. Besides whining about “Big Tech,” the senators call for the passage of the Digital Consumer Protection Commission Act (DCPCA) to “create an independent, bipartisan regulator charged with licensing and policing the nation’s biggest tech companies,” supposedly “to prevent online harm, promote free speech and competition, guard Americans’ privacy and protect national security.” But their economic arguments are specious, and their noneconomic arguments are dubious.

To their credit, the senators acknowledge the success of the digital revolution, which has “promoted social interaction, democratized information and [given] us hundreds of new ways to have fun.” Unfortunately, they fail to realize that this success hinges on the economies of scale and natural monopoly status earned by the biggest of the Big Tech firms. If the senators succeed in passing the DCPCA, they will unintentionally grant artificial monopolies that don’t benefit consumers to those firms big enough to afford the agency’s “licensing and policing.” The reality of regulatory capture is lost on Graham and Warren, which is both amusing and frustrating given their dedication of an entire paragraph to the history of regulatory agencies.

One expects such myopic, hubristic, technocratic scheming from Elizabeth Warren, a progressive Democrat. But one would hope that a seasoned Republican like Graham would be hostile to the creation of yet another alphabet-soup agency, this one intended to regulate Big Tech firms. Forget the fact that we already have two executive agencies tasked with antitrust regulation: the Federal Trade Commission (FTC) and the Department of Justice (DOJ). Why give the executive branch even more power over such companies in the wake of revelations from Matt Taibbi’s Twitter Files testimony and the hearing on the weaponization of the federal government about the executive branch’s proxy-censoring of Americans by intimidating social-media platforms?

Ostensibly, the senators are troubled by the fact that “nobody elected Big Tech executives to govern anything.” Nobody elected them to govern anything because they aren’t public servants: They manage firms’ private property. Ordinarily, Americans enjoy a presumption of liberty with respect to their private property; what we do in our homes and with our businesses is not up for a vote, nor does it normally sanction state intervention. Only that behavior which directly and demonstrably harms third parties, without consultation or compensation, is policed — rightfully — by the government.

Warren and Graham attempt to justify the DCPCA on the grounds of consumer welfare, arguing that “these massive businesses post eye-popping profits while they suppress competition.” But there is nothing ipso facto wrong with profiting from creating value for consumers through voluntary commercial activity. The notion that these firms are uniquely and unjustly suppressing competition is likewise unfounded. The senators provide the example of Apple, which “forces entrepreneurs (and thereby consumers) to pay crushing commissions to use its App Store.” The problem: Apple doesn’t force anyone to do anything. Entrepreneurs choose to create apps for iPhones and sell them on the App Store when they determine doing so would be profitable.

If Apple’s behavior were truly antagonistic to consumers, smartphone users would switch to Samsung — with a global market share surpassing Apple’s (22.5 percent versus 20.5 percent) — Lenovo, LG, or Sony, to name but a few of the myriad alternatives. Instead, the iPhone’s share of smartphone users is increasing, as Statista data show. Apple’s expanding user base suggests that users benefit from Apple’s exclusive ecosystem of devices, software, and App Store. Just as exclusive bundling has not harmed consumers in the gaming industry, antitrust action against Apple on these grounds is unwarranted.

Related complaints about companies besides Apple are put in similar, inaccurate language. They claim that “a few Big Tech companies stifle all competition before it poses any serious threat.” What the senators are actually describing here is something that happens all the time: smaller firms choosing to sell themselves to larger ones. There is, again, nothing inherently wrong with such voluntary market transactions, nor are they necessarily harmful to consumers. And if there were anticompetitive, fraudulent, and otherwise harmful firm conduct, the aforementioned FTC and DOJ already exist, as does the Federal Communications Commission (FCC), under whose purview falls internet regulation. So the new agency being proposed would be redundant even concerning its supposed aims.

Why, then, do Graham and Warren propose it? Well, it is common for politicians to resort to noneconomic language when their economics-based arguments falter. Thus, the senators complain that “certain digital platforms have promoted the sexual abuse and exploitation of children, suicidal ideation and eating disorders.” Which platforms promoted such heinous things? Graham and Warren marshal no empirical evidence for this grandiose claim. They do bring up the anecdote of the Bride family’s teenage son, who killed himself “after being mercilessly cyberbullied.” Cyberbullying is real, and its victims should be helped or, when tragedy occurs, mourned. But the platforms are just that: platforms, not publishers, i.e., not responsible for the content they allow. The still reserve the right to moderate content hosted on their platforms, which, unless you’d like your grandmother to log on to Facebook to find it inundated with obscene content from LiveLeak, is a good thing.

Still, pejorative speech is not obscenity: The senators’ mandate that, under penalty of law, Big Tech “mitigate such harms” as those psychological ones suffered by the Bride son is a thinly veiled attempt to police speech. Whether they like it or not, the First Amendment defends Americans’ caustic, vicious speech, be it delivered in person or online.

And it would appear Warren and Graham are not the biggest fans of the First Amendment. They lament that “platforms are protected from legal liability in many of their decisions.” The platforms are protected in this manner so that their users can freely express themselves and, if need be, be held personally accountable for their speech in the case of libel, fraud, and terroristic threats. Have social-media platforms lived up to standard of the First Amendment? No. Is that lamentable? If you’re a free-speech absolutist (like me), yes. But removing their protection from legal liability is far more likely to contract the window of permitted speech than to expand it.

Graham and Warren close with a dramatic one-liner: “It’s time for Congress to act.” That is, the same Congress they describe as “too slow” and lacking “the tech expertise” to pass piecemeal laws concerning Big Tech itself. If the senators were honest, they would close their piece thus: “It’s time for Congress to act . . . by delegating its lawmaking power and responsibility to the executive branch to unjustifiably restrict citizen’s economic freedom and unconstitutionally violate their First Amendment right to free speech.”