The Week Big Tech Lost Power

It seems that Big Tech’s reckoning has finally arrived.

By Matt Stoller and cross-posted from his substack page, BIG.

Something changed this week. I’m not sure what, but it feels more and more like significant policy action against big tech is inevitable, probably break-ups but certainly restructurings of their business models. Though it’s impossible to pinpoint a shift in the political consensus, the signs are unmistakeable. It’s not just the constant drumbeat of announced investigations and leaks of potential antitrust suits. It’s the change in opinion leaders.

Two days ago, Joe Scarborough on MSNBC went on a seven minute rant straight to camera on Mark Zuckerberg and Sheryl Sandberg, accusing them of destroying American democracy in return for money, and screaming into the camera that Congress needed to stand up to billionaires in Silicon Valley. Scarborough is as close as you can get to representing Washington, D.C. conventional wisdom, his morning show often sets the terms for legislative action and political chit-chat.

Scarborough’s rant is part of a broader upsurge of rage at Google, Facebook, and interestingly for the first time, Apple. There are other signals of political anger; yesterday 60 groups, mostly progressives and unions but also the conservative Internet Accountability Project, sending letters to the House Antitrust Subcommittee asking for subpoena’s of critical documents to complete the big tech investigation. (My organization signed onto both letters.)

In Congress and among journalists, both sides are exposing big tech. On the left, Congresswoman Jan Schakowsky and Senator Richard Blumenthal demanded that the Federal Trade Commission force Google to stop profiting from pandemic-related scams proliferating on its search engine. This follows Judd Legum’s journalism through his newsletter Popular Information showing Facebook has refused to adhere to its own policies on promoting the extremist violent network known as Boogaloo.

On the right, Google kicked the right-wing site The Federalist out of its ad network, depriving the media outlet of revenue. In response, Tucker Carlson on Fox News called for a Republican primary challenge against Utah Senator Mike Lee, who he argues protects Big Tech. The Department of Justice, as well as a set of Republican Senators, escalated their campaign to strip the immunity for platforms that lets them avoid legal responsibility for third party content that flows over their properties

But the most interesting shift had to do not with the right or left, but with Apple. Apple has largely escaped the same anger enveloping Google, Facebook, and Amazon, because the corporation largely sells overpriced electronics instead of seeking to remake mankind in a weird techno-utopian image. But this week, Apple bullied Basecamp’s David Heinemeier Hansson, a well-known and outspoken technologist. Heinemeier Hansson is also politically connected, last year he testified before the House Antitrust Subcommittee last year on monopoly power of big tech platforms.

This week, Heinemeier Hansson’s company released a new email service called Hey, which cost $99/year and has a different user interface and privacy settings than competitors like Gmail. Apple, after allowing the release of the app Hey on its app store, decided to block an update to the app with bug fixes, claiming that Hey violates its app store terms. Specifically, Apple claims Hey did not implement Apple’s “in-app purchase” feature, which is Apple’s own payment and billing system for apps that lets users buy a service directly from within the app store. Instead, Hey allows users to go to its website, buy the service, and login to the app separately.

In reality, it’s not a technical squabble at all, it’s a fight over money and power. Apple charges 30% to most apps on its app store, essentially a tax if you want to get onto the iPhone. But it doesn’t charge that to every single app. Netflix and Dropbox, have special arrangements, probably because they are too big for Apple to push around. Uber doesn’t pay the fee either. Apple doesn’t impose the fee for its own apps, which Spotify, a competitor to Apple’s music and podcasting apps, has noted

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