Jonathan Taplin: Government Needs to Reckon With Edge Powerhouses

Treating them as public utility could be one fallout from 'natural monopolies'
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Jonathan Taplin, director emeritus of the University of Southern California’s Annenberg Innovation Lab, warns that the government will soon have to decide whether to regulate edge-provider giants like common carriers. 

The FCC has already done that with internet service providers under former chairman Tom Wheeler and with the blessing of President Barack Obama, though the new Administration is set on reversing that Title II classification. 

But in an op ed in the New York Times, Taplin says that the power of the edge is something the government will need to reckon with, now or later.

He suggests that the government is likely going to have to step in given that "Google has an 88 percent market share in search advertising, Facebook (and its subsidiaries Instagram, WhatsApp and Messenger) owns 77 percent of mobile social traffic and Amazon has a 74 percent share in the e-book market."

He says at a minimum those Big Three should not be allowed to do any other buying-up of companies like Snapchat or Spotify, and if left to their own devices, the government may have to ultimately force them to divest—"force Google to sell DoubleClick. Force Facebook to sell WhatsApp and Instagram"—as it ultimately forced the breakup of AT&T's natural monopoly.

He said other steps the government could take include regulating them like public utilities, requiring them to license out patents for nominal fees, as the government required Bell Labs to do, or remove the safe harbor from the Digital Millennium Copyright Act, which allows Facebook and YouTube to take a "free ride" on content produced by others. 

He suggests that might not be a priority for the Trump Administration given that Trump is close with "libertarian" tech moguls like Peter Thiel. The Obama Administration, by contrast, was generally thought to be tight with the folks at Google, and Wheeler consistently held to the position that the FCC could not regulate the edge and did not use the bully pulpit to suggest that its most powerful players were a gatekeeper threat to internet openness on par with ISPs.

But Taplin sees it differently.

"We are going to have to decide fairly soon whether Google, Facebook and Amazon are the kinds of natural monopolies that need to be regulated, or whether we allow the status quo to continue, pretending that unfettered monoliths don’t inflict damage on our privacy and democracy," he wrote.

Taplin is the author of Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy.

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