Week 12

Week 12: Antitrust Mock Trial

Lead: Team 4
Blog: Team 2

Plan for Week 12: Mock Trial

This week will be a bit different from previous weeks. Most of Tuesday will be a discussion on the readings and topic similar to what we have done previous weeks, but on Thursday, we are going to mix things up a bit and conduct a mock trial!

We are going to split up into teams (we will be splitting the class into teams by the end of class Tuesday) and have teams debate and defend their assigned positions on Thursday. Your side will either be arguing for an anti-trust remedy that splits up big tech companies, or arguing against such a remedy. Your position should be based on the readings and any supplemental materials you find. In addition to the required readings, you are able to use materials from the Google case as supporting evidence for your argument. Once assigned a side, you can choose to read the relevant optional reading to develop your argument. We will go over the plan in more detail in class Tuesday, but wanted to give you some idea of what is planned now, and hope that you will do the assigned readings and discussion thinking about how you would make a case supporting or countering the “break up big tech” position. We hope everyone is excited and ready to debate!

Required Readings and Viewings (for everyone):

Optional Additional Readings

The materials here are organized around the position they argue for in the break-up big tech debate. You’ll be assigned a side to argue for on Tuesday, and these materials should be helpful in making your case (you can, of course, also read the materials recommended for the other side to prepare to debunk them!)

Arguing for breaking up big tech:

Arguing against breaking up big tech:

Response prompts:
Post a response to the readings that does at least one of these options by 10:59pm on Sunday, 18 April (Team 1 and Team 3) or 5:59pm on Monday, 19 April (Team 2 and Team 5):

Post a response to the readings that does at least one of these options:

  1. Do you believe that big tech companies should be broken up? Why or why not? If not, is there some other remedy you would propose?

  2. Considering the ongoing United States v. Google case, which side do you believe has the stronger case? Why?

  3. Respond to something in one of the readings/ videos that you found interesting or surprising.

  4. Identify something in one of the readings/ videos that you disagree with or are skeptical about, and explain why.

  5. Respond constructively to something someone else posted.

Discussion

Week 12 Discussion

Blog Summary

Team 2

20/22 April
Lead: Team 4; Blog: Team 2

Tuesday, 20 April

The topic of this week’s discussion was centered around Big Tech and antitrust. To start off, we took a survey asking our opinions on the debate on breaking up Big Tech. The following three questions were asked:

  1. Based on the readings/videos, which side do you agree with more?
  2. Which search engine do you use?
  3. What did you find most interesting in the readings/videos?

The results of the survey indicate 75% of the class think that breaking up Big Tech is not the solution, and 25% think that breaking up Big Tech is the solution. When asked about which search engine we use, the overwhelming majority of us use Google (85.7%) and 14.3% use DuckDuckGo. No one from our class uses Bing or Yahoo. In response to what people found the most interesting from the reading, many of us noted the dominance of companies like Google, how long this issue has been developing, and how long these debates and congressional hearings will continue to develop.

We then went into a discussion of our required readings. The speaker started with an overview and history of Antitrust. This included the Sherman Antitrust Act which was the first Federal act that outlawed monopolistic business practices. This act was designed to restore competition and protect consumers, and is a basis for the debate of the dominance of Big Tech.

The speaker detailed the United States vs. Google case, which is still under review. The main argument states Google is a monopolist in general search services, search advertising, and search text advertising. Google uses a web of interlocking contracts, preset default status on browsers, voice assistants, and other contracts that limit competition. It owns 80% of the general search queries 2019 and up to 88% in 2019.

Then, the team summarized the July 31 2020 hearing of the Facebook, Google, Amazon, and Apple CEOs. The claims against Big Tech included they reduce privacy, choices, and impede the innovation of other designers. They have more accurate algorithms because they have more data from the consumers. Additionally, CEOs justified collecting data from users by claiming it improves user experience.

The team summarized the reading “How Stronger Antitrust Rules Could Help Consumers”. The key components of this reading include how experts say bipartisan efforts could increase competition in the tech industry and could improve products and services. The author uses examples of Big Tech’s dominating practices, such as Amazon selling Amazon-brand products, Apple booting Fortnite from the App Store, and how Google takes a cut from ads. In response, Senator Amy Klobucher of Minnesota proposed The Competition and Antitrust Law Enforcement Reform Act of 2021, which would significantly toughen federal antitrust laws in a way that could encourage competition in the tech industry. Additionally, this article advocates for more money for enforcement of antitrust, including increasing budget, increasing FTC and DOJ employees, and establishing a new division at the FTC charged with researching the impacts of mergers on markets.

After summarizing these readings, we discussed the following questions centered around breaking up Big Tech in breakout rooms:

  1. Should the Sherman Antitrust Act still be in place today?
  2. What are some of Google’s key features that have identified the company as a monopolist?
  3. What are the arguments for breaking up Big Tech?

In response to the first question, one group argued the Sherman Antitrust Act is lacking. They think that further regulation or separate regulation would help it to be more effective for the present day.

In discussing the second question regarding Google as a monopolist, one group noted the social effects that have contributed to Google’s dominance. For example, instead of saying “I’m searching something,” we tend to say “I’m Googling something.” Additionally, the differences between Google and search engines such as DuckDuckGo were compared. For instance, Google search results are much more personalized than other search engine results. Another comment on the second question is that while these companies are not complete monopolies, the growth of the companies are extremely threatening. The features, the environment, the culture, data collection all contribute to Google’s potential to dominate. While it may not be possible to completely take out all of the competing search engines, 92% as of 2021 is a scary number.

In response to the third question, one person noted how these companies are using monopolistic business practices, as the Sherman Act defines, which is a reason in favor of breaking up these tech giants.

The team summarized the Harvard Business Review article, “Antitrust Isn’t the Solution to America’s Biggest Tech Problem.” The key points of this article include that antitrust action would be long and drawn-out and instead, we should focus on the bigger problem, which is getting reliable internet access for more Americans. The last point the team points out is that while some may disagree with making a deal with tech giants, it would be a practice step forward.

Finally, the team summarized Google’s response to the lawsuit. Google claims that the biggest flaw is that people choose to use Google because they choose to, not because they are forced to. People can easily download their choice of apps or change their default settings from Google to another search engine. The response also touches on how people access information in lots of different ways, for example, people receive news from Twitter and can find restaurants on OpenTable.

After summarizing these readings, we discussed the following questions centered around arguments against breaking up Big Tech:

  1. What are the arguments against breaking up Big Tech?
  2. Do you think antitrust is as problematic as other issues?
  3. Instead of breaking up tech giants, should regulators use them, their influence, and technological prowess to solve other problems?

Responses varied for these questions. For example, one group talked about how some people don’t have access to the Internet, so the break up of these companies would not affect them as much. This reinforces the class system in America, so there becomes the question of if regulators and lawmakers should shift their focus to other issues.

To end Tuesday’s discussion, students were assigned to one of two teams for Thursday’s mock trial: Team 1) In favor of breaking up Big Tech or Team 2) Against breaking up Big Tech. The remaining three students were on the jury.

Thursday, 22 April

The lead team began the class by giving an overview of the arguments found within this week’s optional readings: Crime Shouldn’t Pay: Why Big Tech Executives Should Face Jail by Matt Stoller, and Don’t Break Up Big Tech by Zachary Karabell. The former makes the argument for breaking up Big Tech, while the latter makes the argument against it.

In his article in favor of breaking up Big Tech, Stoller brings up antitrust lawsuits against Facebook and Google, among others. These suits include allegations that Google and Facebook monopolized the online ad market and that Google has been “manipulating its search results to disfavor specialized competitors” and “blocking competitors who seek to enter new search markets.” Google and Facebook are also accused of being in a cartel “to violate user privacy and fix prices in advertising markets,” which is prohibited under the Sherman Antitrust Act and easier to prosecute than monopolization allegations. The article argues that Big Tech is causing significant societal harm through monopolies and they must be subject to criminal enforcement.

Karabell’s article, on the other hand, argues mainly that the reasons behind wanting to break up Big Tech are valid but that breaking up such companies is not an effective solution to the underlying issues. For example, Karabell brings up past antitrust lawsuits that resulted in the mandated breakup of big monopolists like AT&T and Standard Oil; in these cases, the companies eventually reconsolidated and actually helped to make shareholders wealthier while still dominating the market. The lead team also brought up Karabell’s point that while breaking up Big Tech may allow for a more competitive field of industry players, competition itself does not guarantee the desired outcomes for consumers, such as better services and lower prices.

After the overview, the class split into two teams to begin the mock trial. The subject of the mock trial was related to the topic of Big Tech, and whether or not Big Tech companies should be broken up to address anti-trust issues, or whether Big Tech companies should be allowed to remain in-tact, as they are. Team 1 was assigned to defend the side of breaking up Big Tech companies, while Team 2 had to defend Big Tech companies and allow them to remain in-tact.

The class transitioned into a brief brainstorming session before beginning opening arguments. Team 1 began their opening arguments by stating that Big Tech companies have been participating in a combination of market share and anti-competitive practices that have allowed them to thrive and grow at rates that threaten competition within the industry. As an example, Team 1 referred to Google’s current 92% market share in search engines. Team 2 began their opening arguments by stating that historically, breaking up large companies has not provided a solution to increasing competition within an industry. Team 2 continued by stating that breaking up these companies does not lessen the advantage they have in terms of resources or overall popularity among consumers. Once opening arguments concluded, teams broke out into another brainstorming session before beginning questioning.

Below is a brief summary of some of the questions and answers that were given during each team’s allotted time for questioning.

Team 1’s Questions for Team 2

Q: Can you describe these tech companies’ business plans?
A: Provide an easy-to-use platform for consumers, which improves with increasing numbers of users.

Q: What is the priority in the US economy, consumer choice or business profits? A: Consumer choice, as this would increase market competition and lower prices for services.

Q: What does our current economy look like? A: Capitalistic.

Q: So you agree the free market is necessary in our economy and that free markets are attributed to having less regulation? A: Yes

Q: Which will lead to less regulation, breaking up Big Tech or increasing regulations? Q: A: Both are forms of regulation; breaking up Big Tech is regulatory in itself.

Q: Yes, but breaking up Big Tech only involves regulation initially. Regulation will not be needed after the companies are broken up. A: A lack of regulation after breaking up Big Tech allows for these companies to reconsolidate and creates a cyclical problem that would need to be repeatedly “fixed” by imposing regulations one way or another. This is not the most effective way to solve the underlying issues.

Q: Considering that these companies are prohibiting smaller companies from being competitive (Amazon, for example), why do you think breaking them up would not help? A: Because breaking up monopolist companies in the past has proved ineffective in the long run; even broken up, these companies retain great power and eventually just reconsolidate.

Team 2’s Questions for Team 1

Q: What would keep these companies from reconsolidating, considering you mentioned that you would not impose regulations after initially breaking them up? A: Having written guidelines/laws would prevent companies from becoming large, but if they do get back together it is inevitable. Hopefully enforcing stricter rules will deter them from doing so.

Q: Many small companies use these platforms as brokers for their own products (for marketing, advertising, and the actual selling in the case of Amazon). If big tech is broken up, might that inhibit smaller companies’ ability to use these platforms as effectively as before? A: No, you are only dividing the workforce so it would not hinder the quality of work. For example, different departments within a company would be broken up into separate companies.

Q: If a well-known company were to break up, do you think consumers would still prefer something they are familiar with or another less well-known alternative? A: They probably will prefer something they are familiar with, but overtime customers preferences can change. For example, TikTok was not a thing a few years ago, but now it is very popular.

Q: If big tech were to break up, how would this guarantee the desired outcomes (such as better services, lower prices, etc.)? For example, the Wired article argues that “perhaps there would be openings for companies with different business models, ones that brand themselves as valuing privacy and empowering individual ownership of data,” but that “the nature of data selling and data mining is so embedded in the current models of most IT companies that it is very hard to see how such businesses could thrive unless they charged more to consumers than consumers have so far been willing to pay.”. How will breaking up these companies protect the smaller companies or protect users’ data privacy better?
A: A single company does not have access to most people’s data compared to a bigger company.

Q: There have been many instances in history where monopolies have been broken up, many of these are ineffective, what would make this any different?

After questioning, Team 1 headed directly into their closing arguments. Below are transcriptions of each team’s arguments:

Team 1’s Closing Arguments

Big Tech companies have been able to grow in size and generate profits beyond their competitors by establishing a reckless feedback loop on top of their market dominance. In Google’s case, they used their search engine to establish dominance. This enabled them to generate enough profits to acquire companies such as YouTube in order to expand into the video industry. Then they dominated mobile with Android, bundling Android phones with the g suite apps, requiring the installation of Google’s apps into all android phones. They reaped the profits with Apple by allowing Apple products to use Google as their default search engine.

Facebook used their social network market dominance to increase their size by acquiring their rivals, such as Instagram and WhatsApp. profit by buying all their rivals. They even tried buying snapchat after replicating many snapchat features, but ultimately were turned down by the smaller social media app.

Amazon uses their dominant marketplace to collect data on products that they deem to be successful and then develop their own version of the products, undercutting competitors in order to maximize sales and profits.

Apple’s App Store is the only way to provide apps to iOS devices. They defend this decision by arguing that the App Store is what makes iOS arguably the most secure operating system. But Apple has complete control over who is allowed access to the market, which gives actual control over their competition.

Team 2’s Closing Arguments

In a data-driven economy, the process of monopolization is inevitable and enforcing laws seems cyclical. The majority of digital platforms are natural monopolies, meaning they result from high barriers of entry to the market. Breaking these Big Tech companies up would eliminate their fundamental advantage.

Although in the past antitrust regulation has had an effect, it is not the one desired by the public as seen in both AT&T and Standard Oil’s Antitrust cases, in which the industry later reconsolidated. The idea of having less regulation after these companies are broken up in order to maintain this capitalist free economy is good in theory, however without regulation as seen through precedent these companies will likely reconsolidate.

Breaking up Big Tech companies is not necessarily a solution to the key issues the solution is meant to address–more competition and data privacy. In regards to competition, many users prefer to use Big Tech platforms, they are not forced to use them as other alternatives still exist that are visible on pages (Safari displays Yahoo and Bing search) and settings can be easily changed (e.g. Apple’s search engine can be defaulted to Bing instead of Google).

Overall, we feel that a different solution is necessary rather than simply ‘breaking up’ Big Tech to better address these issues of data privacy, competition, and innovation.”

After deliberating for a few minutes, the jury took the stage with their decision. The jury found that Team 2’s arguments were more compelling and ruled in favor of not breaking up Big Tech companies.