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Antitrust warrior Matt Stoller warns that if we don’t take on Big Tech, ‘we’ll become a fascist society’

In his fascinating new book, ‘Goliath,’ Stoller covers the history of antitrust in the U.S. He expands on those thoughts in a wide-ranging discussion, detailing the tools available to break up Big Tech and why we’re at risk of the end of democracy.

Antitrust warrior Matt Stoller warns that if we don’t take on Big Tech, ‘we’ll become a fascist society’
[Photo: Sophia Lin]

If decades from now historians look back at this era and marvel at how the richest country on earth, where corporate mergers were commonplace and “too big to fail” became a catch-all phrase for industries ranging from healthcare to telecom, was able to break up Google, Facebook, Amazon, and other behemoths, they’ll have Matt Stoller to thank (among others).

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Who?

While Elizabeth Warren and Bernie Sanders and even Donald Trump are the populists who make the headlines with their attacks on the tech giants, it’s actually policy geeks such as Stoller who are driving much of the antitrust debate right now.

After working in the shadows for years, as a staffer to the Senate Budget Committee and now as a fellow at the Open Markets Institute, Stoller has pushed his way to the heart of the conversation with frequent op-eds in the New York Times, Washington Post (and Fast Company), as well as appearances on CNBC, and the passion and acumen of his arguments have won him a huge following on Twitter. Asked about Facebook paying $5 billion to settle the FTC’s privacy probe, Stoller’s quip: “a parking-ticket-level penalty for destroying democracy” was made the Times‘s quote of the day.

Now, Stoller is out with his first book, Goliath, a deeply researched and masterfully written history of antitrust in the U.S., making a powerful argument that the desire for “economic equality” is at the heart of the American experiment. In a wide-ranging discussion, we talked to Stoller about the duel between Microsoft and Amazon to win a massive $10 billion Pentagon contract, the perversion of the free market in recent decades, the decline of democracy, and breaking up Big Tech.

This interview has been edited for clarity and concision.

Fast Company: I wanted to ask you about this big deal, Microsoft’s $10 billion Pentagon deal for cloud services. It made me think of this concept of the “national champion”—this argument that the U.S. military has unique demands that require companies with unique scale. What is your response to that argument—that whether or not it was Amazon or Microsoft, this idea that it had to be a big company, rather than a diversified group of companies.

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Matt Stoller: I don’t think that’s true. I mean, the CIA is looking for a new cloud provider, and they want multiple providers, a multi-cloud site. Whether you have one cloud provider or multiple cloud providers is kind of a different question than whether you need national champions. The premise of national champions is that you want to encourage monopolies because monopolies will invest, will have the scale and capital to invest. This isn’t true, that’s not what usually would happen. Typically, when you enable monopoly, what you get is political corruption. If we want to have the government investing to put out platforms and monopolize them, then the government should just do it directly. Like with the post office.

But the traditional model that was very successful was that you had the government in the 1950s to the 1970s as a large customer for a lot of Silicon Valley companies like Fairchild Semiconductor and Intel and a lot of electronics companies. But the government didn’t create monopolies. The government created competitive markets using procurement policy. So this is a good opportunity to actually structure a more competitive and open market.

FC: You’ve obviously talked a lot about Facebook and breaking it up. Can you take us through exactly what you think should be done and explain how that would help.

MS: Google and Facebook and there are others like TikTok, what they do is say they’re communication platforms or they’re information utilities—which means that their main product is facilitating your communication that you do. Right? And what is advertising? Advertising is just inserting information you don’t want at the behest of a third party. Right? And so what you see is mass manipulation. You see things like addiction.

This is something that [Google cofounders] Larry Page and Sergey Brin wrote about in the late ’90s before they found their business model. They were like, there’s no way to do a search engine ethically with an ad finance model because you’ll have the incentive to engage in self-dealing. So, you know that’s a huge problem. And we see this all over the world where this ad model is creating a corrupted public common. That’s what’s happened. To fix it, get rid of the ad model.

FC: I mean [Sergey Brin and Larry Page] never do interviews, but it would be nice to see either of them asked about that paper they wrote. And how they feel about that argument today. And whether they’ve been hypocritical in the management of their company.

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But how likely do you think such a breakup of these companies is going to be? There are so many arguments today about it and even people even on the right talk about it. But I feel like—and this points to a lot of issues in your book—over the last 30, 40 years, these monopolization forces keep increasing in power. On top of the power of corporate lobbyists and the influence of campaign contributions that have captured a lot of politicians in both parties, it’s very hard to disrupt the current structure in a meaningful way. The establishment and even the public will be wary of causing too much chaos. You saw that happen with the last financial crisis. The big banks really were too big to fail. And for all the arguments about breaking up big tech, I feel that in the end we’ll be left with a few little reforms here and there.

MS: There’s no “in the end,” you know. We’ll go fascist. That’s sort of what will happen.

FC: Go fascist?

MS: If we don’t do something about big tech, something meaningful, we’ll just become a fascist society. It’s fairly simple.

FC: OK. Is that the argument that has to be presented to motivate people to act and do the right thing?

MS: I don’t know. I think we’re acting. I don’t think people want to go fascist. I mean, you’re seeing a lot of investigations. A year ago, everybody laughed at Congress when they questioned Mark Zuckerberg. They were like, “Oh, you look like fools.” And then last month, everybody laughed at Mark Zuckerberg because he looked like a fool. So there’s a change that’s happening, just that people don’t notice it.

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As for the financial crisis, you said, “people were a little worried.” No, Obama was corrupt. It’s not hard to get this one. People actually were totally fine with structural change. We had a big, structural change. Obama, [former Treasury Secretary Tim] Geithner and [former Fed chairman Ben] Bernanke were corrupt. It’s just what happened. People don’t want to admit, because it’s embarrassing. But we screwed up. Our leader was bad, did bad things. That’s not a problem of people being worried about changes. That was just a problem of the guy in charge who screwed it up.

FC: So, this seems to tie into the abandonment of the middle class and the working class and their voices and concerns.

MS: There’s a long ideological path here. We are changing our ideology, right? That’s what’s happening in China. Big tech, climate change—all of these have presented us with problems, with the breakdown of neoliberalism, which doesn’t have any credibility anymore. So we might decide, oh well, neoliberalism doesn’t make any sense. We should get rid of democracy itself. That’s one particular path that we could do. We’ve done it before. We could go the other way, to kind of a New Deal framework. But we’re not going to stay where we are.

We could also just muddle along for a while, but basically you’ve got to choose. There’s no one governing right now, right? No one’s in charge. When something happens with Boeing [two airplanes it manufactured crashed last year due to a software malfunction], no one tries to deal with it. Trump’s not governing. The Democrats aren’t governing.

To the extent that anyone’s governing, it’s Mark Zuckerberg and the Chinese. The Chinese are the ones who can order people to do things and they do them. So if that continues—the status quo glide path is that we become a vassal state of China.

FC: How do you envision a breakup of Google, for example?

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MS: I’m not sure. You could do it in a lot of different ways. Typically the easiest way is to put a bunch of rules in place about what they can and can’t do and let them break themselves up.

Typically what happens is a court will give an order and say, “Here’s what you have to do. Here are the principles of the breakup. Here are the different divisions.” And then there’s like a negotiation about how to do it. That’s one way to do it. Another way to do it is lines of business. You already have existing divisions, and you say, “Well, these two divisions can’t be in the same company.”

You can also do it like they did with the electric utilities in the 1930s where they said, “Register with the FCC and you can’t be in more than one state unless we give you a waiver.” And over the course of several years, the utilities, the holding companies, split themselves up. Um, so it’s like, it’s a process basically of government in some form or fashion making a decree and then a negotiated kind of divorce over the course of a year or two.

FC: I assume it’d be a little easier with a company like Amazon where you could easily just say, “Okay, AWS is over here and then this division is over here.”

MS: It depends what you do. For example, if you wanted to sever Amazon and Whole Foods, it’d be pretty easy. And if you wanted to sever AWS. But if you wanted to sever toys and book sales, that might be harder because its warehouses are integrated. And if you wanted to sever maybe Fulfillment by Amazon from the Amazon Marketplace, that might be easier. I mean, this is why you do the investigation where you can figure out where you use the scalpel.

FC: One of the points that’s been made about monopoly is that the current laws that are on the books haven’t been able to really handle these big new companies like Amazon and Facebook is due to the whole pricing model. That obviously people aren’t paying more and that predatory pricing is good for the consumer. So then why haven’t laws—you mentioned the Robinson-Patman Act [which prohibits price discrimination—such as charging different prices to different buyers for the same product] and the Clayton Act [which bans anticompetitive mergers]. What about using those in a more effective way?

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MS: You can use them. There are plenty of cases you can bring on the consumer welfare standard. We’re facing a breakdown of the rule of law itself. You can trace consumer problems if you want to, pricing problems. I mean Google is raising their prices on certain things. Apple is raising their prices on the App Store or they’re charging 30% on the App Store. There are laws that exist that people can use. They just don’t.

FC: And why don’t they? Obviously corruption is one factor, but another factor is consumer apathy in a sense. Your book reminded me a little bit of Cornered: The New Monopoly Capitalism, by Josh Kosman, where he goes through so many monopolies that people have no clue about—how most pet food businesses depend on a single packager and the same with eyeglasses. Why is there not more consumer outrage at this new monopoly capitalism?

MS: Consumerism is the wrong frame. This is a political problem. It’s not something you can deal with as a consumer. People have been taught to think of themselves as consumers, so when they have a problem with a commercial relationship, then immediately it’s like, “Oh well, don’t buy from there.” They haven’t been trained to think of themselves as citizens anymore. So they don’t say, “Hey, we should restructure this market so there aren’t these problems that I encountered.”

And this is all part of the collapse of the rule of law. So monopolization is a form of theft. That’s really what it is at its heart. We have mass theft going on. Sometimes it’s monopolization. Sometimes, it’s just fraud. Look, I bought a Spirit Airlines ticket, and they just canceled the flight and they were like, “Oh, we don’t have any other flights for three days.” That’s a form of fraud, and it’s crazy that a business model like that exists.

FC: What did people do, like other passengers?

MS: I had to buy another ticket on a different airline. And then I tweeted about it. I think that they should be shut down. But some people just waited the three days because they couldn’t afford another ticket. And some people took Greyhound.

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FC: So people are used to being screwed and having to take matters up with the company that’s involved, rather than the politicians?

MS: I don’t think people are used to being screwed. But who are you going to complain to? Nobody in the government is going to do anything about it.

FC: I don’t know what you think about the current crop of candidates, but will there be another Wright Patman [a legendary Texas congressman who served for almost half a century and waged “constant war against monopoly power,” in Stoller’s words]?

MS: AOC is a lot like Wright Patman. Katie Porter [Democratic member of Congress from California] is a lot like Wright Patman. They’re emerging. They are teachers. Patman was a teacher. He believed in explaining to the people what their government did, what was going on, how things worked. So he was a teacher. And that’s what AOC and Porter do. And they also challenge power. I think they hate bullies. Patman hated bullies.

FC: And there are voices on the right, like Josh Hawley, they have the right approach, but then all of a sudden they get into on how Facebook is censoring conservative voices and that becomes their big obsession.

MS: That’s not his obsession. That’s not actually what he talks about most of the time. He talks about a lot of other things. If you were to measure what he talks about, that’s not a very important part of what he says. And if people would cover the other things that he says, then he would tweet more about that stuff. But it’s like if you talk about various forms of weakness at the FTC or if you deal with user interface manipulation or deception and nobody pays attention to it, then how many times can you say it? You need political support if you’re going to take on the most powerful companies in the world, which he’s doing. Where’s that political support gonna come from? Well, he’s tried to get it from social conservatives, which makes sense. They’re the only ones that are going to back him on this stuff. The problem isn’t that he is doing the wrong thing. The problem actually comes from the liberal gatekeepers who refuse to take corporate power seriously.

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This interview has been updated to correct some mistakes due to transcription errors.

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