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Summary:

It’s not just overbearing web giants and mighty broadband mergers that threaten to destroy competition — there’s also a case for seeing the surveillance state as a potential monopolistic blocker in the marketplace of ideas.

Fierce Competition
photo: Flickr

There are several trends in today’s tech landscape that I find worrying, and at first glance they seem to be a varied set: mass online surveillance; the erosion of net neutrality; and web giants that are growing in a seemingly unstoppable way. However, I’ve come to realize they all have something in common.

All of them — including the rise of the U.S. National Security Agency (NSA) and U.K. Government Communications Headquarters (GCHQ) — are anti-competitive in one way or another. In their respective fields, all the trends I’m about to discuss create the potential for a monolithic, monopolistic player to block the rise of new entrants and ensure its long-term dominance. Each case involves an over-concentration of power that becomes deeply threatening to plurality and progress.

The inclusion of state surveillance in that lineup may surprise you, but I believe it fits and I’ll explain why in a moment. First, let’s examine those of my worries that more traditionally fit into the context of competition, so you can see where I’m going with this.

Predators and behemoths

When I heard of the proposed Comcast-Time Warner Cable merger, my first thought was that in a market where you already have a depressing lack of choice, such as broadband access in many parts of the U.S., this merging of the two biggest players would be a grossly anticompetitive deal that would harm consumers. Given the lack of net neutrality laws, the creation of such an unassailable monolith could also injure the content and tech startup industries.

Monopoly

For the sake of U.S. consumers and industry, I can only hope regulators will nix the deal or put very heavy conditions on it in order to protect all those it would otherwise unfairly disadvantage. That, after all, is the purpose of competition law: to stop power being overly concentrated in a way that could harm the consumer and distort the market itself.

Here in Europe, Google provides a worthwhile point of comparison. The European Commission also has a very good reason for trying to harness Google, as the company has more than 90 percent of the European search market. If left unchecked it can pretty much do what it likes to the market. That’s why the current antitrust case is important — it’s not merely unfair that Google can downrank its rivals into obscurity if it so chooses, or lock advertising clients into its ecosystem; it effectively makes it impossible for new entrants (vertical search firms and ad networks in this case) to take the company on.

I’m increasingly viewing Amazon through a similar lens, even though that company’s situation probably doesn’t technically count as antitrust. Over on Slate, Matthew Yglesias recently suggested that Wall Street allows and perhaps even encourages Amazon to make next to no money on the items it sells. That way, Amazon gets to be the only player that doesn’t have to worry about profits, which means it can always charge less than everyone else, which means it will always win. By this thesis, Amazon can enter and own just about any sector that operates at scale — Yglesias believes Amazon could even crush Walmart in the produce sector because of its unique, ongoing advantage.

Surveillance as power

And so we return to the NSA, its British counterpart GCHQ, and all the other intelligence agencies that we now know to be more powerful than they appeared a year ago. The competitive issue here is not one of pricing, scaling or advertising prominence; it is one of ideas.

True democracy, at least as I understand it, is a system based on and committed to the preservation of a free marketplace of ideas. Anyone can come up with and promote their conception of the truth and, if they can gain enough traction, they can get voted into office, where they can put those propositions into practice. As with anything, various factors corrupt this ideal, but at its core it is a meritocracy, a system where there are no insurmountable barriers to entry.

Argument, debate

Mass state surveillance changes all that. Without the option of privacy, we already begin to self-censor; we become less likely to express dissenting ideas online or over the phone. And that’s just in the developed world today, whether authorities are very jumpy about keywords like “terrorism” and “Yemen,” and where we’re already seeing the formation of a dangerous imbalance of power — think GCHQ attacking Anonymous activists using the same methods that saw Anonymous members jailed — but where we don’t actually live in totalitarian states.

The greater danger of the surveillance state is what happens if overtly authoritarian leaders take over and try to change the rules.

In a healthy democracy, this event can be met with a democratic response — once you’ve tolerated a term of misery in which dissent spreads, you just vote the incumbents out. When you have allowed a vast surveillance apparatus to be built, however, you’ve given potential autocrats the tools they need to actively monitor and stamp out any hint of dissent, should they flip the switch. You’ve set the stage for the marketplace of ideas to be utterly dominated by an incumbent, with no rivals able to play a meaningful role in the mainstream.

As with the corporate situations described above, the danger lies in permitting a framework that once it has been allowed to form can be swiftly twisted to permanently shut out potential threats. Of course, in all these situations you will inevitably have fringe players (Etsy-type vendors in the Amazon case, or the muttering radical in the political context), but a monopoly will leave them forever consigned to their niches, unable to become a real threats to the incumbent.

Acting in time

The key issue in antitrust, and also in the case of state surveillance, is one of timing — how far you let things go before somebody has to step in.

In the case of Google in Europe, regulators acted after rivals complained – a degree of abuse had already taken place. With Comcast and Time Warner Cable, the upcoming regulatory scrutiny of the proposed merger will hopefully stop problems before they occur. In the case of Amazon, the novelty of the situation may make it impossible to stop before (if Yglesias’s thesis is correct) the company has done immense economic and societal damage.

And what of the NSA/GCHQ situation? It obviously doesn’t fall into the legal framework of competition law and will require very different solutions, but I do believe similar principles are at play, and the difficulty of fixing the problem after things go horribly wrong would suggest that fixing it beforehand is the smarter option.

That, after all, is what constitutions are largely for: to establish preventative and protective principles. Free speech in itself may be of no value in a given instance, but allowing the suppression of free speech creates an imbalance of power that can lead to a darker place. The same goes for due process and other checks on official power — they are designed to place limits of principle on the amount of power that can be concentrated at the top, because history and human nature dictate that those with unchecked power will eventually abuse it.

Without these lines in the sand, almost everyone is a loser, including progress itself. That is how we move forward: a constant flow of new ideas and new entrants. If those players don’t have a chance to shine, we don’t evolve, and ultimately we stagnate.

So as we consider what to do next about surveillance — and those potential Omnicorps — let’s focus on competition, making sure that the marketplace will always remain open, and take it from there.

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  1. You kinda need to include money in politics as a third segment ,since it’s for now the bigger issue in some places.Ideas with more money get a voice ,and with globalization “money” got a lot bigger so you even got ways to compare it to competition and monopolies.

    About Amazon ,they are not quite everywhere in Europe and a lot of EU citizens have no idea what Amazon is so there is still room for others to win. EU should make it easier for online stores to sell and ship everywhere,.maybe even unifying the VAT and controlling shipping rates would not be a bad idea ( and ofc copyright but there is some movement there i think) .The online market doesn’t really work as one market and that’s rather odd and nonsensical.

    1. That’s a really interesting thought regarding money and ideas – thank you. And you’re right about Amazon’s geographical limitations limiting it, though I wonder whether creating a true digital single market in Europe would give it a helping hand or limit it through the creation of a new major EU player, perhaps. Experience suggests the former.

      1. The digital market has to be created regardless , what is done about Amazon is another matter. A truly single market would lower the entry cost for other players and ,in theory at least, a wider pool of potential players is better.
        And maybe someone should look at distributors and exclusivity contracts ,no idea if any regulators ever looked at that

        1. Oh absolutely, it makes no sense having the fragmentation we see today. Was just pondering theoreticals :)

  2. Good article – I can only see these powerful organisations becoming more powerful until something huge shakes them up…

    I have to question the use of the word “progress” in this context and what it actually means. The head of the NSA will probably have a very different idea to your idea of progress. Defining such words is essential to understanding what it is that we are trying to achieve though technology and through social and political change.

    Instead “progress” is one of those elastic words like “war on terror” that is could be used to justify the NSA’s surveillance and also fighting back against surveillance depending on your point of view.

    1. Progress for all, let’s say :)

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