You know that moment when you are playing the Monopoly Game, and it dawns on you that the dynamics are such that you are going to lose?
In the last 30 years, acquisitions and mergers are up 700%, while Justice Department enforcement is down 75%. In any industry we can name, the insiders are forming oligopolies and raising the barriers to entry into the market. How can the TMobile people tell us with a straight face that letting them gobble up Sprint is going to make for more competition?
Because of lax enforcement, four or fewer companies now control over 80% of each the following industries: banking, railroads, drug stores, search engines, wireless carriers, overnight parcel delivery, pay TV, smart phones, social media and airlines.
There are the even larger number of stealth mergers. Until 2001, the non-reporting merger cap was $15 million, but it has now been raised to as high as $360 million. The 4,000 acquisitions of kidney dialysis centers, for example, has resulted in two companies controlling 77% of facilities.
Many of the behemoths are what used to be called “natural monopolies” who, because of size and industry alone, were deemed to be prohibited from engaging in certain activities. They were represented in cartoons as an octopus with tentacles reaching everywhere – Amazon would be prohibited from buying Whole Foods, and Facebook would be prohibited from creating a cryptocurrency bank or buying up WhatsApp.
When President Trump, Sen. Elizabeth Warren and Sen. Ted Cruz are in basic agreement, we know a consensus is developing. Warren suggests divestment of WhatsApp and similar purchases. Cruz says “By almost any measure, the giant tech companies (of today) are larger and more powerful than Standard Oil when it was broken up.”
The ABQ Journal editorialized that, while normally a private company is free to exclude speech as it deems fit, the same might not apply to a monopoly or oligopoly.
The U.S. Supreme Court ruled the Sherman Anti-Trust Act was to be read in conjunction with the First Amendment, which “rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the Public.”
Another developing consensus is about free speech, when both Trump and Warren condemn monopolistic censorship. Trump said that the oligopolies’ censorship was “destroying an American democracy that depends on a free flow of information and freedom of thought.”
In much of Europe, freedom of speech basically means the freedom to say something, so long as it doesn’t offend anyone else. Which is no freedom of speech at all! Not so in America. In recent cases, the U.S. Supreme Court has strongly affirmed and strengthened the right of Americans to say just about anything they want, no matter who is offended, with few exceptions, such as inciting a specific crime.
Nazi Germany burned books, Russia closes opposition newspapers, and Turkey imprisons journalists as a way to block unpopular or disfavored thought. In this age of new social tech, anyone with a keyboard might be a journalist with an opinion to share.
Privately owned or not, the new natural monopolies of social media such as Twitter should not be able to ban any constitutionally protected speech. Sen. Warren recently had some of her speeches removed, although she was powerful enough to get them reinstated.
Facebook’s Mark Zuckerberg recently wrote in the New York Times that government, tech and experts should be tasked to define permissible speech. While Reich Minister of Public Enlightenment and Propaganda Joseph Goebbels and George Orwell’s 1984’s Ministry of Truth might welcome such an endeavour, the U.S. Supreme Court would certainly strike it down.
The new social media oligopolies ought to have the full weight of antitrust enforcement brought to bear to stop their efforts to censor free speech. Our free enterprise system isn’t a game of Monopoly, and to function properly, American democracy demands freedom of competition and expression.