How Google, Facebook are Monopolising Ideas

In early May Google banned bail-bond companies from advertising on its platforms. Such companies profit from “communities of colour and low income neighbourhoods when they are at their most vulnerable”, it explained in a blog post. They use “opaque financing offers that can keep people in debt for months or years”.

That Google can ban ads from an industry that offends its values is not, by itself, noteworthy. Media companies have long decided what content or ads to carry for the same reason. The difference is that even after decades of consolidation, no media company enjoys a U.S. market share as dominant as Google’s in Internet search (close to 90%) or Facebook Inc.’s in social networking. Like earlier bans on payday-loan ads, Google’s bail-bond ad ban, which Facebook copied the next day, effectively kicked an entire industry out of a major advertising channel.

The debate over whether Google, a unit of Alphabet Inc., and Facebook are too big usually revolves around economics: Do they suppress competition for goods and services? The bail-bond ad ban raises a different, and potentially more troubling, possibility: that they also undermine competition for values and ideas. While Google and Facebook claim to be neutral platforms connecting users, advertisers and content providers, decisions about which ads to ban and which content to delete or reclassify are inherently value-laden, even when those values are embedded in an algorithm.

Data monopolies “can actually be more dangerous than traditional monopolies”, Maurice Stucke, a law professor at the University of Tennessee, Knoxville specialising in antitrust, wrote earlier this year in Harvard Business Review. “They can affect not only our wallets but our privacy, autonomy, democracy, and well-being.”

Bail bonds aren’t a sympathetic industry. For a steep fee, agents agree to pay the court’s required bail if the client doesn’t show up for a court date. They are, however, legal and, in most states, regulated. And the industry says it serves low-income and minority clients because they are caught up in the criminal-justice system without the means to post bail on their own.

Jeff Clayton, executive director of the American Bail Coalition, whose members insure bail agents, says Google gave the industry no opportunity to comment on or appeal the ban. A Google spokeswoman declined to comment. Facebook did consult with both the industry and criminal-justice-reform groups after announcing its ban, a spokesman said.

Bail-bond agents used to advertise in the yellow pages, but as the public abandoned phone books for Google, so did the industry. “There are just no other options,” Mr. Clayton said. The ban doesn’t extend to regular search results, but it makes it harder for individual companies to stand out.

Conservatives tend to see tech companies’ progressive leanings at work in what gets banned or reclassified — for example, Facebook’s labelling of videos by two prominent supporters of President Donald Trump as “unsafe”. Bail bonds and payday loans have long been targets of progressive activist groups.

But as the companies come under growing pressure to police their platforms and weed out “fake news” a growing range of content gets banned, labelled or deleted for often opaque or arbitrary reasons. ProPublica and Reveal, both nonprofit news publications, have had content dealing with hate groups and immigrant children, respectively, deleted or rejected by Instagram or Facebook. Video artists complain of viewership and ads being restricted because their content violated YouTube’s community standards.

Unhappy users, advertisers and content providers wouldn’t have as much to complain about if Google (which bought YouTube in 2006) and Facebook (which acquired Instagram in 2012) had strong competitors to which they could switch.

Absent such competition, expect pressure for the government to regulate it. But that’s a slippery slope. Politically appointed overseers may simply replace the companies’ judgements with their own. For that reason the Federal Communications Commission long ago gave up policing the nation’s airwaves for fairness.

Better that monopolies not arise in the first place. In a 2001 article Mr. Stucke and Allen Grunes, then attorneys in the Department of Justice’s antitrust division, noted antitrust law has long sought to preserve competition in ideas, not just products. In 1945 the Supreme Court upheld a landmark antitrust suit against the Associated Press for excluding some newspapers and limiting what member newspapers could share. The First Amendment “rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public”, Justice Hugo Black wrote. “Truth and understanding are not wares like peanuts or potatoes,” Justice Felix Frankfurter added.

This isn’t necessarily a reason to break up tech giants: The legal hurdles are almost insurmountable and the consequences highly unpredictable. It is a reason to ask, when these companies announce their next acquisition, if the market for ideas, not just for peanuts and potatoes, will be stronger as a result.  – Business Standard