Tim Wu thinks we’re sliding back into the Gilded Age, when titans like John Rockefeller and Andrew Carnegie held massive monopolies unchecked. Today, it’s not Rockefeller, but Jeff Bezos and Mark Zuckerberg who are building business behemoths. In his new book, “The Curse of Bigness: Antitrust in the New Gilded Age,” Wu argues that it’s time for another antitrust movement, not unlike the one that broke up monopolies in the early 20th century.
Wu, a professor of law, science and technology at Columbia University, is well versed in the intersection of tech and government – he coined the term net neutrality in 2003, was a special adviser in the Obama White House and the New York Attorney General’s Office, and ran for lieutenant governor of New York alongside Zephyr Teachout in 2014. Wu shared his thoughts with City & State on the future of net neutrality and what a new antitrust movement might look like. Spoiler alert: It might start in New York.
This interview has been edited for length and clarity.
Your book, “The Curse of Bigness: Antitrust in the New Gilded Age,” is about a new Gilded Age that mirrors the era when monopolies were legal. How are 19th and 20th century monopolies like Standard Oil similar to the big four tech giants you call attention to – Facebook, Amazon, Google and Apple?
Obviously they sell different things. But the way they’ve grown has been similar. Standard Oil grew by acquiring its rivals, and I think that’s how Facebook has grown in many instances, and Google as well. They’ve pursued an aggressive path of acquisitions. The tech world is kind of divided into fiefdoms, and there’s one company in each space. That’s unusual for a competitive economy.
Out of the big four tech companies, Amazon arguably looms largest for New Yorkers, with the company opening a new headquarters in Long Island City, Queens. In what ways has Amazon accrued power, and is that always a bad thing?
What I think is good about Amazon is sometimes they take on big guys – they’ve been talking about going into health care, and I’d love it if they’d go into airlines. And they do deliver lower prices for people. The problem with them: No. 1, I think they can be rough on little companies. The (Amazon) Marketplace has become a major channel for entrepreneurs to get started with something new, but there’s no shortage of people who complain they’ve been cloned or copied by Amazon and then Amazon makes its own stuff look better. What kind of future is that for American entrepreneurship? I think Amazon throws its weight around a lot. I think that is okay if the weight is directed at a big guy. When it starts throwing its weight at little guys, like employees and entrepreneurs, it has a pretty rough outcome.
Amazon is under a microscope with the announcement of HQ2 and the $3 billion in incentives New York shelled out. Do you think this kind of general scrutiny of a big company like Amazon can turn attention to the company’s magnitude and reignite an antitrust movement?
I think it could. I don’t know if you can link it to the Amazon HQ2 stuff. I think that’s a story that’s ignited a lot of people’s concerns about bigness overall. They’re wondering why governments are bending over backwards – it sort of feels upside down, like they should be working hard for voters and constituents.
You write that we need to enforce antitrust laws like the Sherman Antitrust Act to keep the economy competitive. Who might lead the way in an antitrust movement?
I think New York, in particular, can have a reinvigoration of state antitrust, as opposed to federal. I think you might see New York challenge the T-Mobile-Sprint merger that’s going on right now, that for some reason the feds are silent about. Beau (Buffier) is the head of the New York attorney general’s antitrust bureau, and he is an impressive figure who could make a name for himself.
Charter Communications acquired Time Warner Cable in New York in 2016, and now telecom regulators are revoking its license. Is this a backlash against trusts?
I think it’s a competition and bigness issue. Is it technically antitrust? It’s the kind of thing antitrust cares about, because that was a merger, and the basic argument is they didn’t do what they promised they’d do, so therefore the license to do business is in the process of being revoked. I was pretty proud of that agency (the state Public Service Commission). They’d always taken a lot of hell for being rubber-stamp central or something, but they showed they had some backbone. I think this is part of what we talk about with having a movement. One agency wants to do something, they notice the public’s behind them, and then they get a little more courage to do more, and then it turns into a movement. “If those guys are standing up, what am I doing sitting on my hands?”
Who else will join the antitrust movement in New York?
Beau might be the man of the hour. Especially if he challenges T-Mobile-Sprint. That’s a major national merger. If New York challenges it, it’s like New York is at the center of antitrust enforcement. Which is a big deal, because it’s usually been Washington, D.C., where the big federal agencies are.
You coined the term net neutrality and now those rules that protect a free and open internet have been repealed by the Federal Communications Commission. Do you think it’s likely that Congress will force a vote on the Congressional Review Act, which could reverse the repeal by the Dec. 10 deadline?
Yes, I think it is. And I think it would be terrific. One thing you have to know about net neutrality, it’s popular on the left and the right. It’s not like this idiosyncratic, left-wing thing. I think if anyone gets any popular attention behind it, then it will pass. And then once things go to Trump, you have no idea what’s going to happen.
When the repeal first happened, Gov. Andrew Cuomo signed an executive order to protect net neutrality in New York. What kind of power does that have?
I think the total sum power of state net neutrality rules is the Congressional Review Act, the sense that Congress might do something in the new term, and I think now, with the House changed, it’s almost a certainty that they’ll come up with some replacement of a net neutrality bill. It actually has, at least in the short term, in a Band-Aid way, saved net neutrality. Because the carriers don’t want to deviate and change all their practices, when there’s no certainty that there will not be net neutrality. It would be very dangerous for them to start slowing people down, speeding people up.
What would be the effects of losing net neutrality, and who would feel them most acutely?
It’s always been the case that net neutrality is the friend to smaller, new companies. The most negative effect – amplified by other effects – is it would make it yet another step harder to start business on the internet. No. 1, I think customers would start to suffer from new types of plans which try to create different levels of internet access – not by speed, but by what you get access to. You might see a fast lane, but on the consumer side, it’s a little bit like what you see on airlines, where you have economy or basic, which maybe doesn’t include any video. So if you want access to Netflix or Sling, that’s another kind of package. I think the airline industry has taught people a lot of lessons, which is you make your product worse, and then you charge for people to get back what they had in the old days. And net neutrality makes it very hard to do that, but I think you’d see a lot more of that with a full repeal.