This is the first of an intermittent series that will focus on the growing need to impose limits on corporate power in communications and on the communications market as a whole. In the current moment of right-wing mobilization and social polarization, it will also be important to try to examine some of the Left’s assumptions about its reliance on communications systems.
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On 6 August 2024, Judge Amit P. Mehta of the U.S. District Court for the District of Columbia ruled that Google had maintained a monopoly in search, and therefore violated U.S. antitrust law. [1] Google said it would appeal the ruling.
After more than two decades of promoting neoliberal policies of unregulated growth for the internet sector, antitrust activism has revived among policymakers, think tanks, and academics.[2] Starting at the tail-end of the Trump administration and continuing under the Biden administration, the U.S. government has renewed anti-monopoly investigations to rein in the tech giants. The government has sued four of them: Amazon, Google (twice), Apple, and Meta.[3] This has been welcomed across the political spectrum.
These anti-trust actions, according to Lina Khan, Chair of the Federal Trade Commission (FTC), are “part of protecting the free market [to] ensur[e] that market outcomes – who wins and who loses – [are] determined by fair competition rather than by private gatekeepers who can serve as de-facto private regulators.”[4] This argument is rooted in neo-classical economics: The FTC asserts that the current market requires correction because it has “deviated” from “fair” competition, as would exist in a “perfect” market. This view resonates among those who, on the left, embrace a critique of “monopoly capital.” [5]
This renewal of antitrust is to be welcomed, even if it is undertaken for an inadequate reason. A stronger rationale for mounting a political attack against the titans of the internet would be anchored not in neoclassical economics but, rather, in a sweeping critique of corporate power. Google, Amazon, Meta, Apple and the rest are bad actors for a panoply of reasons. Economically, they stomp all over smaller businesses, whether customers (e.g., advertisers) or suppliers (e.g., news media). Politically, they damage democracy through lobbying, government contracts and other means. Culturally, they saturate us with commercialism, pushing away alternatives. Environmentally, their mammoth data centers force the pace of global heating. In addition to all this, their business model is built upon privacy transgressions, as it surveils and channels individuals as corporate preferences demand.
We should welcome vigorous antitrust policies, therefore, inasmuch as these make it more difficult for the tech companies to continue to have free rein, even if these policies are not based on a far-reaching critique of corporate power – and even if, paradoxically, in the real world of contemporary capitalism, corporate competition has actually intensified.
For, contrary to many accounts, corporate competition has not lessened but increased, alongside the financialization and transnationalization of the political economy. Without a clearer understanding of how competition is structured within the larger framework of today’s capitalism, we won’t be able to strategize on how to limit corporate power – via antitrust or other, more comprehensive means.
Competition is a consequence of capital’s inherent drive for profitable expansion.[6] It is in turn the feature of capitalism that spurs technological change, the search for new markets, and the re-organization of labor to be as productive as possible. In the process of competing, firms may temporarily ally with competitors out of corporate self-interest, to maximize profits.
The intensity of competition often is presumed to correspond to the number of firms in a given industry; if that number is small, then it is supposed to be less competitive. However, this is not necessarily true. Anwar Shaikh, Stephen Maher, Scott Aquanno, and others have argued that competition is, first and foremost, over profits rather than sales or market shares (though the latter are not unimportant).[7]“It therefore takes the form of competition between investment opportunities” within and between industries.[8] Intensity of competition is in turn not a function of the number of firms; rather, it hinges on the mobility of capital regulated by profitability: “the mobility of capital implies that new investment will accelerate relative to demand in industries with higher rates of profit and decelerate relative to demand in industries with lower rates of profit.”[9]
This mobility is facilitated by finance, and by new forms of financialization, which ease the flows of capital across and within industries and countries. Financial capital is notably well-integrated into today’s tech sector.[10] The search engine industry constitutes a major example.
In 2023, the global search engine market was worth $ 205.48 billion, and it is expected to reach $507.37 billion by 2032, with a compounding annual growth rate of 11%.[11] Competition in this sector is in fact intense.
Three big asset management financial firms – BlackRock, Vanguard, State Street – are all major shareholders of Google, but that does not preclude them from also investing in new search engine companies. Even if one captures a small fraction of $205.48 billion, this is enough incentive for capital to invest, if the profit rate is high enough. A stream of search engine start-ups continues to spring up.[12]
Foremost, Microsoft Bing is still in the search engine game, as is Yahoo!, which is majority-owned by investment funds managed by Apollo Global Management. Apple has plenty of cash on hand to develop its search. It has spent billions of dollars building out its mapping service and app search. Amazon and Meta function as vertical search engines which index a specific domain, and they are eroding Google’s main source of ads revenue. As of 2023, Amazon is the third-largest advertising platform in the US with $49 billion in ads revenue, trailing behind Google and Facebook.[13]
Google has tried mightily to defend its market share and to deflect competition, including paying Apple $22 billion in 2022 aloneto be its default search engine, but it faces a Sisyphean task to eliminate competition. Economist Howard Botwinick explains the theoretical issue: “Within the context of large-scale enterprise, the relentless drive to expand capital value is necessarily accompanied by a growing struggle over market shares. These two dynamics, accumulation and rivalry, are inextricably bound up with one another.”[14]
In addition, competition has spiraled as firms seek to adapt never-ending new technologies to build adjacent and profitable new markets. Search, social media, e-commerce, mobile, cloud, AI, etc. appear to be separate domains, but all are in play among the major tech companies – which foray into each other’s territories while defending their existing profit centers. In each case they are competing to carve out new profitable businesses, even beyond the internet sectors, through ventures into military, automobile, pharmaceutical, agriculture, education, and healthcare markets.[15]
With AI technologies, there are still further entries into the search market. Open AI, backed by Microsoft and major venture capital, is building its own search engine and threatening Google’s core business. During the first six months of 2024 alone, Alphabet, Microsoft, Amazon, and Meta spent $106 billion on AI capital investment.[16] As Geoffrey Hinton, the so-called Godfather of AI, puts it, now that the genie has been unleashed they have no choice but to compete in this domain.[17] Other AI entrants have also plunged into the fray. AI-based search engines Perplexity[18] and Genspark[19] have already raised millions of dollars from asset management firms and venture capital.