All Hat and No Cattle?
Republicans have yet to prove they can deliver more than words on antitrust reform
In a serious blow for antitrust campaigners this week, the Federal Trade Commission (FTC) lost its attempt to block Meta’s acquisition of the virtual reality rival Within. The lawsuit was based on the argument that Meta’s entry into the market would threaten future competition, shifting from the original claim that the two companies are direct competitors. Having already established a monopoly in social media, Meta is looking to monopolize virtual reality (VR) and augmented reality (AR) too.
When CEO Mark Zuckerberg revealed the Metaverse in 2021, the launch video was incredibly goofy at best, eerily creepy at worst. The recent news that the Metaverse avatars would be gaining legs has only heightened the skepticism toward Zuckerberg’s vision for the internet’s future in VR and AR. But Zuckerberg is clearly taking this new mission seriously and will do everything he can to dominate and shape this developing market unless effective antitrust policy and enforcement can keep Meta in check.
Despite struggling with falling user numbers, the arrival of TikTok, and Apple’s new privacy policy, Meta remains a formidable social media power. The FTC lawsuit to undo Meta’s acquisitions of Instagram and WhatsApp is still proceeding, but antitrust campaigners cannot rely on the FTC and the Department of Justice (DOJ) to resolve the problems with Big Tech alone. Political pressure needs to be brought to bear on the tech giants. The populism of Bernie Sanders and Donald Trump has certainly shifted the dial, encouraging more Republicans and Democrats to make their mark on this issue.
Since 2016, there has been hope that Republicans could take the initiative on antitrust reform. Senator Josh Hawley has distinguished himself as a member of the Committee on the Judiciary, grilling social media executives, pushing for a ban on TikTok, and publishing The Tyranny of Big Tech (2021). Freshman Senator J.D. Vance, another strong Republican voice against Big Tech, has been assigned to the Senate Finance Committee where he could make difference. Despite a host of verbal attacks on the tech giants in recent years, the Republican Party as a whole is still falling far short of what is needed.
In a sign of returning to business as usual, Thomas Massie, very much from the libertarian wing of the House Republicans, has been chosen by Chairman Jim Jordan to head the new judiciary subcommittee on “the administrative state, regulatory reform, and antitrust” instead of prominent antitrust campaigner Ken Buck. Just like in 2017, when Republicans gain power in the House their first thought is to follow the same stale agenda of tax cuts and deregulation. The force of old ideological reflexes and the influence of party donors has made it seemingly impossible for Republicans to adapt as quickly as their Democratic opponents.
During his first year in office, President Joe Biden signed an Executive Order on antitrust enforcement and appointed antitrust activists to important roles, such as Lina Khan at the FTC, Jonathan Kanter at the DOJ, and Timothy Wu as special assistant to the President for Technology and Competition Policy. This is welcome progress, but the judiciary has proven to be a major obstacle partially because of antitrust law being out of date and unsuited to address the challenges created by Big Tech. Fresh legislation from Congress is needed but action from the Republican leadership has not been forthcoming.
Bipartisan antitrust reform has happened before, and it can be achieved again. When the Sherman Antitrust Act was passed in 1890, both parties failed to use the legislation to stop the ascent of the robber barons. Monopolies in railroads, oil, steel, and meatpacking still emerged in the decade that followed, often with the approval of Republican legislators such as New York Senators Roscoe Conkling and Thomas C. Platt who stood by the party’s business interests. It took the unexpected elevation of Theodore Roosevelt to the presidency to set in motion the action needed to fulfil the Sherman Antitrust Act’s purpose.
President Roosevelt’s first target was the Northern Securities Company founded by James J. Hill, E.H. Harriman, and J.P. Morgan, which dominated railroad shipping from Chicago to the Pacific Northwest. The Roosevelt administration used the Sherman Antitrust Act to sue the trust in 1902, leading to the Supreme Court ruling that broke up the company two years later. It was a psychological shock to the wealthy business elite that had prospered during the Gilded Age of the 1890s. As a trustbuster and regulator, President Roosevelt went on to pass the Hepburn Act of 1906 and authorize lawsuits against Standard Oil and American Tobacco.
Next up was President William Howard Taft who doubled the number of antitrust lawsuits, including against U.S. Steel to the anger of his predecessor. The resulting 1912 Republican split allowed the Democratic nominee Woodrow Wilson to win and oversee the passage of the Clayton Act of 1914 which revised the nation’s antitrust law. Progressive Era victories against monopoly power were the works of many hands and many years. Investigative journalists and legal experts exposed abuses of power and gave legislators of both parties the tools they needed to hold corporations to account.
There were certainly differences between the two parties and within them too, which remains the case today, but the collective efforts of the antitrust movement transformed the nation. With antitrust reform back on the agenda, Republicans and Democrats ought to engage constructively with each other to bring about the right policies. Breaking up Alphabet and Meta would be major wins but the challenge for antitrust campaigners is much broader than that. Regulatory oversight is needed to manage the impact of Big Tech on free speech, data privacy, and labor rights, ensuring these companies play a productive and benign role in American life.
The passing of the antitrust baton from Trump to Biden is a necessary part of a sustained and successful campaign against Big Tech and other concentrated markets in the American economy. While there is an appetite for antitrust reform among Democrats, it is less clear that the next Republican administration will also fight for the cause. Republicans like Hawley and Vance have more work to do in convincing their party to move on from the teachings of Robert Bork and the Chicago School. Failure to embrace antitrust reform will only leave the Republicans further removed from working class voters and untrusted to govern.
This article is part of the American System series edited by David A. Cowan and supported by the Common Good Economics Grant Program. The contents of this publication are solely the responsibility of the authors.
David A. Cowan is a Ph.D. Candidate in history at the University of Cambridge and a former staffer and researcher in the UK Parliament. He has been previously published at American Affairs, Engelsberg Ideas, and National Review.