Tackling the monopoly problem

Doctorow started by saying that many see the people who pushed technology in the last century as blind, naive optimists. In this view, technologists thought that if we just gave everybody a computer, everything would be fine; they failed to foresee how technology could become a dystopian force. He knows some of those people, mostly through his 20 years working with the Electronic Frontier Foundation (EFF), and he does not agree with this view. The truth of the matter is that nobody starts an organization like EFF because they think that everything is going to be great. Those founders were excited about how amazing things could be, but also terrified about how badly it could all go. They wanted to get technology into people's hands, but also to get the technology policy right.

When all this was just getting started, he said, technology was a fringe activity; the only reason to get involved was if you were truly passionate about it. Think about the first time you wrote some code; it was about crisply expressing your will. If this were done with sufficient precision, the computer would manifest your desire forever. Add a modem to the system and you could manifest that will around the world. Solve a problem you have, and everybody else can click a button to have your code perform the same trick for them.

Programs are often compared to recipes, but the truth is not quite like that; with a recipe, others still have to gather the ingredients and actually carry out the necessary steps. Software is a self-cooking recipe, which is much more powerful.

With software and the Internet, it also become possible to discover communities. There are, out there, people with rare traits that are important to you; these may be people who understand "black lives matter" or non-binary gender — or they may be Nazis. When you find people who know the words for the things you feel, it is empowering and makes you feel passionate. This ability, like the ability to write code, delivers self-determination, the ability to decide how life will go.

Fights about technology policy are all about self determination, he continued. He gave as examples Richard Stallman's lack of access to a printer driver (leading to the creation of the GNU project) and the classic Bill Gates rant against those who were copying his BASIC interpreter. Doctorow also talked about the USENET alt.* hierarchy as an example of how these stories can go. USENET was the first social part of the Internet; in its early days it was under the control of a group called the "backbone cabal". These were the administrators of systems that were able to get away with using large amounts of their employers' long-distance phone time for long-haul links. Worried that their bosses would discover a USENET full of "porn and bomb recipes", the cabal retained a veto on the creation of new groups (among other things).

The straw that broke the camel's back was a decision to block the creation of "rec.cooking", saying that it should be called "talk.cooking" instead. In response, the community created the "alt" hierarchy where anybody could create a new group; the first such group was "alt.gourmand". After a couple of years, the "alt" hierarchy was larger than the rest of USENET. Everybody, it seemed, wanted self determination.

A perfect market?

We could use more self determination now, he said. We have "total tech penetration", but also centralization, surveillance, and digital manipulation. "How did we lose so badly?" It comes down to a threat that was under-appreciated at the time. With such a dynamic environment, where new technologies could quickly supersede old ones and new companies were popping up left and right, monopolization seemed unlikely. But the technologists of the time didn't understand the role of anti-monopoly enforcers in creating the world they were seeing.

For example, he first got a modem in 1982, which happens to be the year that AT&T was broken up. Among other things, AT&T did not want people to own or use modems; managers there understood that the spread of digital technology would likely take the premium out of many telecom services. After the breakup by antitrust enforcers, though, modems and bulletin-board systems took over, thanks to the crash in long-distance rates.

Or think about the rise of the IBM PC — a machine without an operating system supplied by IBM. In those days, IBM was the bully of the computing industry and the subject of constant antitrust efforts by the US government. The company spent twelve years in "antitrust hell", but eventually settled the case. When it came time to market the PC, though, IBM was still recovering from that experience, part of which was the result of its forced bundling of hardware and software. Feeling that it couldn't create its own PC operating system without getting back into trouble, it instead bought one from Microsoft.

The first PC clones showed up almost immediately — clones that were able to run Microsoft's operating system. Soon there was a thriving, competitive industry among clone sellers, leading to the rise of companies like Dell and Compaq. These companies took over the market initially created by IBM. It seemed like that was just how the technology market works, but there is a fundamental reason why IBM didn't crush that industry at its birth: the antitrust case. IBM did not want to become the effort of renewed antitrust enforcement, so it had to stand by while the PC-clone market took off.

Then, there is Microsoft, which was an outcome of that antitrust enforcement. Microsoft, too, became a monopolist and became the target of antitrust action; that action arrived too late to save Netscape but, after enduring it for years, Microsoft was "terrorized" by the experience. So when Google was founded, Microsoft did not crush it; Google subsequently "ate Microsoft's lunch".

It seemed like we had a perfect market in technology; one just needed a cool idea and a keyboard, and there would be a global audience just waiting to hand over its money. Switching costs would always be low; if some firm became dominant, it was just a matter of reverse-engineering its formats and protocols to open things up again.

The end of antitrust

What we didn't understand, Doctorow said, was that antitrust law was destroyed in the US by a man named Robert Bork. He is a "perfect market" theorist, who thought that monopolies were good. Laws against monopolies, he argued, only applied if it could be shown that a given situation was causing harm to consumers. At the same time, he made proving that harm nearly impossible. In this world, companies could create monopolies with impunity.

It is fashionable now to say that the concentration in the technology industry is a result of factors like network effects, first-mover advantages, and data moats. But that is not how these companies created and grew their monopolies; when you have all the money you could need, he said, you can just buy success. Google has made "1.5 successful products" in-house (the search engine and a Hotmail clone); everything else has been bought from elsewhere. These are companies that Google would have been blocked from buying under a strong antitrust regime. Meanwhile many of the other things Google did try to create internally have ended up in the "Google graveyard".

Network effects are real, but they are also a double-edged sword when interoperability comes into play. One source of interoperability is technology standards, but another is what he calls "adversarial interoperability" or "competitive compatibility". AT&T used to block interoperability by forbidding the attachment of outside equipment to the phone network; once that ban went away, the market for telephone equipment took off. Myspace had a set of captive users — until Facebook created a bot to scrape users' information from the site and port it over.

Given a chance, companies will create interoperability one way or another, making the market more competitive. This kind of interoperability has been criminalized, though, through mechanisms like copyright, patents, and terms of service. Oracle's ongoing lawsuit alleging that Google violated the copyright on its Java APIs is a classic example. Companies that own this sort of monopoly are doubly fortunate, since the government will intervene to defend the monopoly against those who would try to break it.

What to do

Maybe, Doctorow allowed, early technology enthusiasts were a little blind after all and, once the money started to flow, they wanted some of it for themselves. The mythology of that age, where a bright idea developed in a garage somewhere could take over the world, helped to salve a lot of consciences. But those days are behind us; if you have a bright idea now, you are not going to be making a lot of money from it; nobody wants to invest in companies trying to compete with the big monopolists. The dream now is not to create a successful company, it's to be acquired by a technology giant. Meanwhile, big tech, which no long need fear losing its customers, has pivoted to abusing them. The code to carry out this abuse is written by techies like those in the audience, he said; for many people, their full-time job is now taking away others' self determination.

The last couple of years, though, have started to see mass walkouts from some of the big firms. There have been protests against the development of facial-recognition technology and pushes for workplace unionization. An early precedent for this kind of change of heart, he said, can be found in Robert Oppenheimer, who managed the Manhattan Project to create atomic weapons for the US. He came to deeply regret his role in the creation of those weapons and redirected his life toward fighting nuclear proliferation. Doctorow said that he has spent much of his life "trying to create more Oppenheimers" through his books.

In the early days of the ecology movement there was no "ecology movement"; instead, there was a large collection of individual causes. Some people were fighting to save owls, others were working on water issues, and so on. They all thought they were fighting for different things until the word "ecology" pulled it all together into a single movement, helped by the celebration of the first Earth Day.

We are, he said, approaching a similar moment with the fight against monopoly, which is not unique to the technology industry. Almost every field is dominated by a small number of companies, to our detriment. The fact that there is only one company in the US that makes the right sort of glass bottles has hampered vaccine distribution, for example. As people come to understand the fights against monopoly, they'll come to understand that there are allies everywhere; we are all on the same side.

The tech giants, he concluded, say that there is something special about the technology industry that leads to the creation of monopolies. But we have been there before, and we know how to deal with monopolies. We just have to mobilize and make it happen.