Google subsidiary YouTube announced plans this month to suppress “controversial religious and supremacist” videos and the Anti-Defamation League will become a “trusted flagger” to help police the platform. Google has a monopoly on internet searches and YouTube is the most popular video sharing website—on pace to surpass all TV in total viewership. In contrast it is not even among the top 100 largest employers in the country. The counterculture novelist Robert Anton Wilson’s observation, “A monopoly on the means of communication may define a ruling elite more precisely than the celebrated Marxian formula of monopoly in the means of production,” is more apt than ever.
Steve Bannon reportedly wants to respond to this monopoly by regulating Google and Facebook as a public utility. While he has not publicly made this case, The Intercept reported that he believes these tech giants “have become effectively a necessity in contemporary life” and “there may be something about an online social network or a search engine that lends itself to becoming a natural monopoly, much like a cable company, a water and sewer system, or a railroad.” Bannon raises important issues, but there are less intrusive ways to respond to them than public utility regulation.
Unlike older natural monopolies like railroads or wireline telephone service, online platforms have low capital costs and few regulatory barriers. However, Facebook and Google also benefit from network effects, where a product’s value increases with the number of users on it. Facebook’s value derives from the fact that almost everyone is on it. Google’s algorithm becomes more accurate with each new search. Thus, a less censorious competitor would still have trouble attracting users without a large user base.
These monopolies have few incentives to stop censorship. In his seminal article, Natural Monopolies and Their Regulation, Richard Posner argued that if a monopolist arbitrarily refused service, “it not only gratuitously impairs public goodwill, but loses the profits that it would have obtained by serving him.” While this may have applied to old public utilities, it’s not true for online platforms which face enormous pressure from advertisers and the media.
Even if there was a market incentive for speech, Google and Facebook’s enormous size enables them to ignore these relatively small economic incentives. In Zero to One, Peter Thielwrote that because of its monopoly power, “Google’s motto—‘Don’t be evil’—is … characteristic of a kind of business that is successful enough to take ethics seriously without jeopardizing its own existence.” Unfortunately, many tech companies believe that allowing ill-defined content like “fake news” or “hate speech” on their platform is evil.
With all this said, regulating these companies exactly like public utilities would raise numerous economic, political, and legal concerns which make Bannon’s presumed proposal unlikely to come fruition anytime soon. However, there are more modest and free market reforms to prevent search engine and social media censorship.
Google, Facebook, and Twitter and other “interactive computer services” receive immunity for their users’ content under the Section 230 of the Communications Decency Act. In contrast, a newspaper can be liable for their classified ads. These special privilege are premised off the congressional finding that the services “offer a forum for a true diversity of political discourse.”
If tech monopolies use their market power to shut out unpopular opinions, they should not receive privileges designed to foster political diversity. Congress should condition Section 230 immunity on content neutral speech policies. This would create major incentives for more free speech without any burdensome regulation which would reduce the benefits these companies give to consumers.