Colloquium Synopsis : What to do about Big Tech

The Club for Growth Foundation Colloquia Series brings together the brightest minds in conservative thought-leadership to have an informed discussion on the pressing issues of our times.

Overview

Critical to the United States and the world economy are an array of seemingly intractable issues – the economy, individual freedom, and national security. Unsurprisingly, there is marked division regarding the optimal policy measures necessary to tackle these consequential issues. This division exists even among conservatives who are united by common principles such as: free markets, limited government, liberty, and an adherence to the original meaning of the U.S. Constitution.

To address the myriad issues we face, conservatives must come together, guided by our foundational beliefs and driven by our desire for American exceptionalism, to comprehensively analyze all facets of these issues if we are to forge consensus policy paths that bring unity and cohesion across the movement. Solutions should be thoughtful and thoroughly examined, considering both short and long-term implications, so that the best path forward may be pursued rather than that which is most politically expedient.

To bridge conservative divides, we must, as suggested by the late John McLaughlin, bring together the sharpest minds from the best sources in business, politics, and policy to have the hard discussions about the issues impacting our world and the very foundations of our society.

One of the most pressing and divisive issues across the conservative movement concerns Big Tech. Of primary concern is the censorship of conservative speech and the existence or creation of oligopolies.

In February, the Club for Growth Foundation convened thirty-five of the brightest minds in technology, academia, policy, and industry, for a colloquium to build consensus for tackling points of contention related to Big Tech. The three-day colloquia, “What to Do About Big Tech?” consisted of meaningful discussions among leaders from different backgrounds with divergent views. These leaders included expert witnesses in lawsuits defending state legislation on social media regulation to tech industry association representatives to U.S. Senators.

While points of consensus were reached on some issues, the participants were most appreciative of the ability to gather with fellow conservatives, of differing viewpoints, to have the hard, in-person discussions that heretofore have not occurred.

Session I: Big Tech and Content Moderation

In the first session of the day, the conferees explored the tension between the need for social media platforms to moderate content, and the obvious potential for manipulation of speech. They explored the contradiction between the letter of the First Amendment – which applies only to government control of speech and affirms the absolute right of social media companies to set their own standards – and the spirit of the First Amendment, in which the removal or dampening of speech from the central forums of the national debate goes against the principles of a free society.

They also delved into the subtleties, and perhaps contradictions, of Section 230 of the Communications Decency Act, which provides a statutory protection for platforms against liability for the content of users’ posts, allowing them to carry out many of the functions of a publisher – without being held to the same standards as a publisher.

Hammers and Lending Libraries

This discussion occurred in anticipation of the U.S. Supreme Court oral arguments in Gonzalez v. Google on Feb. 21. In that case, the family of a young woman killed in a terrorist attack accused Google of aiding and abetting ISIS because the tech company’s algorithm led it to automatically recommend ISIS content to some users.

As with the subsequent oral arguments in the Supreme Court, the discussants were far from agreement on the extent to which an automated recommendation implies responsibility. One discussant pointed to the age-old precept about the hardware owner who sells a hammer but is not responsible if a customer turns out to use the hammer to commit a homicide. Similarly, the law protects lending libraires from liability over tortious speech in a loaned book. “We don’t want lending libraries to be liable for their books because then we wouldn’t have lending libraries,” one conferee said. “We want platforms not to be liable for their users’ posts.”

In the early internet era, the courts held that CompuServe, which maintained a hands-off policy toward content moderation, was not liable for the comments made in its forums by users. Prodigy, which enforced standards to create a friendlier environment, was held liable for its users’ comments. (The plaintiff, ironically, was Stratton Oakmont, later portrayed in The Wolf of Wall Street.)  These two cases highlighted the moderator’s dilemma – one can escape liability, but only by presiding over a cesspool. Or, as Google attorney Lisa Blatt would later tell the Supreme Court that without 230 protections, sites would have to either be “The Truman Show” – bowdlerized and vanilla – or a “horror show” of violence, harassment, and pornography. The solution Congress adopted in 1996 was to craft the governing statute for the liability of websites and social media companies, 47 U.S. Code § Section 230, which states:

(c) (1): “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

In (c) (2), “no interactive computer service is liable for:

“(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected …”

“(B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described …”

One discussant said there is a “deep contradiction” in this statute. The first section treats a social media company as a lending library, enjoying immunity from liability. The second as “an editor actively watching and supervising everything.” Are these two provisions compatible? Is this extraordinary grant of immunity and privilege truly necessary to make the internet work?

Some discussants argued for policymakers to resolve what they see as this contradiction between the statute’s main two parts. In the second section, one discussant added that the qualifier, “otherwise objectionable” does not “seem to me to be on par with pornography and other improper kinds of content. I would suggest that when you talk about the phrase ‘good faith,’ the issue is that how can you be acting in good faith when, in fact, you’re biased for one group as opposed to another?

“It seems to me that good faith does impose the substance of obligation on the companies,” he said. “But the way in which it’s been interpreted thus far to date, it seems to have no limitation on the scope of that immunity.”

Another added: “As conservatives and Republicans who are concerned about the platforms using their own judgment to kick us off and to limit our ability to talk to each other, it’s very important that (c) (1) trim back so that laws of general applicability apply to the platforms as well.”

One conferee noted that the Supreme Court is moving toward cases in which it could give greater emphasis to either (c) (1) or (c) (2). The Justices are facing a Gordian knot of competing intents in the statute’s mere 26 words in its first provision. Like a telephone company held immune over slander voiced over its network, internet companies are immune from their user’s transgressions. But should this same privilege come with the right of the platform to exercise its own editorial judgments “kicking people off the web” and perhaps even defaming de-posted users by implying that their speech is somehow indecent?

Other conferees responded that it is not just this latter 230 provision that grants internet companies the right to remove content they do not want to carry. That authority is protected by the First Amendment.

Content Management or Censorship?

Most conferees agreed with the belief held by most conservatives that big social media companies discriminate against speech that offends the ideologies and standards of corporate leaders and their content managers, who are uniformly liberal if not “woke.” Another discussant said that further pressure comes from digital advertisers, who regard some content as unseemly.

“This is not a paranoid fantasy,” one discussant said, pointing to Elon Musk’s recent Twitter files disclosure of a close relationship between that company’s content decisions and the FBI. This discussant asserted that the FBI’s reported $3.4 million payment to Twitter was for “censorship decisions.” (The FBI publicly responds that this was money owed to reimburse Twitter for the cost of satisfying subpoenas and other legal requests.) This conferee alleged that the Biden Administration “has subsidized the censorship industry” with hundreds of millions of dollars. He described an alarming combination of private actors, universities, NGOs, government agencies, and news media and its “fact-checkers” that work together to create a permanent public-private partnership infrastructure to censor and control speech. The government agencies dedicated to this control of the national conversation, this discussant alleged, include not just the FBI, but the Department of Homeland Security (which, he said, is engaged in “permanent election censorship” concerning mail-in ballots and related political topics) and the National Science Foundation (concerning health issues). DHS funding is used for “pressure” on social media and “censorship coordination.”

This conferee concluded: “At both the legal and regulatory level, we now have a world in which the U.S. federal government is openly funding the censorship of so-called political misinformation.”

Other discussants agreed that if the government is paying platforms to squelch certain viewpoints, whether they are right or wrong, that would constitute “a very unhealthy development.” On the other hand, discussants pointed out, the government is allowed to have opinions. If the government wants to inform the public that mail-in order ballots work well, it is well within its rights to do so. It is not unconstitutional for the government to pay consultants or even platforms to advocate such an idea. It would be unconstitutional, one discussant responded, for the government to “hire people to make sure that nobody in the public is allowed to disagree with me by throttling the way in which they get access. That’s a per se constitutional violation.”

Such activity would be especially pernicious if, as one discussant alleged, Department of Homeland Security infrastructure is used to create a private-sector content moderation consortium for “the express purpose of stopping First Amendment protected protest activity or the bringing of lawsuits that could challenge mail-in ballots.” He added, that “if we’re concerned about making sure that one side of the political spectrum has any voice in today’s political discussion, we have to take that step [of protesting]. Otherwise, we risk being silenced.”

Another discussant focused on a California disinformation act, which aims to curb misinformation about covid online. Under AB 2098, signed into law by Gov. Gavin Newsom, doctors can be disciplined for “false information that is contradicted by contemporary scientific consensus contrary to the standard of care.” Critics noted that a physician who gives patients harmful advice can already be disciplined by professional medical groups and hit with malpractice lawsuits. Why, then, is such a law needed? And who gets to define what is and what is not “misinformation”?

Consider: Three years ago, the idea that covid could have an artificial origin was dismissed as a conspiracy theory. Posts along these lines were downgraded or banned from many social media sites. By 2021, however, new information caused the nation’s intelligence agencies to split on the question, with some intelligence officials leaning in favor of a lab leak. Banning deviations from “consensus,” as many observed, has a history of failure going back to Galileo. The California law was temporarily blocked by a federal judge in early 2023 while the court considers challenges to the law. One discussant expressed approval for that decision but criticized the judge for avoiding early on “the clear First Amendment issues associated with manifest forms of content discrimination.”

“The most important thing in the world is to allow for a shift in the consensus by having people express contrary views in order to upset the dominant paradigm, to allow movement to a different way of thinking about the same problem,” he said. With covid, it was noted, new information – about the educational deficits caused by school closures or the efficacy of masks – is always coming forward, perhaps even including the efficacy and safety of vaccines. One discussant, who ventured into this territory had his discussion removed by YouTube.

One discussant retorted that YouTube’s act was not a violation of the First Amendment, but the vigorous exercise of the First Amendment by that company.

“There are those people who think the vaccines are poisons and that you need to take Ivermectin and hydroxychloroquine, and there are other people who take exactly the opposite position,” the original speaker replied. “The last thing you want to do is to have the government come down on one side of this and prevent the discourse from taking place.” He warned, however, of opposing California’s law by focusing on the vagueness of language, such as the meaning of “consensus.” “If you’re interested in the rule of law, you have to believe that the language is strong enough to contain determinant meanings.”

There was widespread agreement that there are acts of misinformation that are, by any rational standard, harmful. The prime example is the “Tide Pod Challenge” in which internet trolls persuaded teenagers to across the country eat those brightly colored detergent pods. This is led to thousands of calls to poison control centers.

“There were not many social media services that had thought to write community guidelines that told people not to eat detergent pods,” one conferee said. “Nobody anticipated that.” There was widespread agreement that YouTube and other services acted appropriately in taking down such posts. The obvious next step is to include language in content moderation standards, as most companies do now, to exclude posts that encourage self-harm. But could a term apparently as limited as “self-harm” be twisted to exclude content that is offensive to a content moderator? Some people might regard being conservative as a form of self-harm.

The Scale of the Challenge

The discussion turned to possible legislative remedies that would require platforms to adhere to mandated procedures, from transparency in content moderation, to a process to appeal a removal or demonetizing of a site, to a potential cause to take a site to court. That some content moderation is necessary is beyond dispute. No one wants major social media sites to be avenues of child sex abuse material, human trafficking, or terrorism and other calls to violence.

This is a taller order than it seems. Twitter posts about a half-a-million tweets every minute. A similar number of posts are made on Facebook every minute, almost 300,000 status updates, 136,000 photos uploaded, and 4 million “likes” posted. Similarly, astronomical numbers pertain to other popular services like TikTok and Instagram.

One discussant pointed out what a big job Big Tech companies have in moderating all this content.

“The magnitude of the task is one that’s hard to imagine,” he said. “Facebook has 15,000 content moderators, 3 million posts a day that are referred by AI to a human for review. They estimate a 10 percent error rate … with moderation and take-down decisions made by recent college graduates who come with their own biases. Of course, the rule books and guidelines are constantly evolving and being updated as new situations arise.” To make matters more difficult for social media companies, what would be considered harassing, bullying, or defamatory in one country may be acceptable in another. In some countries, a site has 24 hours to remove unlawful content, in others just one hour.

“The difficulty with the argument is after a while you say, well, you’re just a conduit, and then you actually find these people making editorial judgments,” a conferee said. “And the question is, when you start making these kinds of editorial judgments, does that take you out of Section 230 or not? And I think that one of the ways in which you’d want to answer this is that you’d give them the benefit of the doubt. But if it turns out that somebody presents them with information that they made a mistake, at that point you might say that [they have] the obligation to correct.”

Given the daunting magnitude of content moderation, the operations of social media are to a great extent automated, while the nuanced judgments called for by some speakers requires human judgment. Google’s “recommend” function at the heart of Gonzalez is one of many such algorithmic devices social media uses to make the internet comprehensible and the user experience valuable. Without it, the internet experience would be a torrent of irrelevant and unwanted experiences for users.

“Google may privilege some results, but a content-neutral search engine would be useless,” a conferee said. “When someone asks, ‘how old is the Earth,’ Google is right to privilege geology over theology.”

Another said: “My own view is that private, non-government actors have the ability to discriminate against someone they disagree with on almost any basis, except those that we’ve with good cause made justifiably unlawful,” one conferee said. “But other than that, they can do that if they want to. I just think we need to make them be clear about it.” He argued that standards – even those that are “arbitrary and capricious,” such as being triggered by the Gadsden Flag – are allowable, but companies should be crystal clear about their standards with users in exchange for continuing Section 230 immunity.

Should Social Media Companies Be Regulated as Common Carriers?

Under Section 230, social media companies are allowed to make editorial decisions like a publisher, while enjoying the ability to be free of liability for speech that they carry. In this sense, they are like telecom companies, which are common carriers but cannot be sued for slander carried over their networks.

A common carrier – whether an airline, railroad, taxi service, or a shipping company – generally cannot exclude customers. An airline cannot just fly liberals. A delivery company cannot refuse to deliver religious books. In addition to mandated openness to all, such entities are often highly regulated and subsidized or enabled by government-subsidized infrastructure. Does it make sense to extend such requirements to social media, so they cannot exclude users with given political views? Given the large market power of social media companies, should they be subject to collateral obligations by virtue of either their size or the structure of the market?

“And if they’re common carriers, they would then have to be subject to certain kinds of obligations, most notably, in order to serve all reasonable commerce with very narrow exceptions for bad faith conduct … for reasonable price terms and on equal terms one to another,” a discussant said. That speaker said he had once suggested to a conservative journalist that social media companies be treated as common carriers. “There was a huge amount of blow back against this on the grounds that free entry and competition will erode the dominant position any one particular firm has. You are far better off letting individuals decide … rather than trying to have the United States government or any state government tell people what they should or should not do.

“The attitude I had at the time is that it is a close question,” he said. “And so I often said to myself on Monday, Wednesdays, and Fridays, I quite believe in the internet analogies to the common carriers. But on Tuesday, Thursdays, and Saturdays, I had exactly the opposite position because the nature of the market structure is such that you can never be sure of which way it’s going to go at this particular point in time.” But, he concluded, in light of recent events the case for treating Big Tech as “powerful carriers have gotten stronger.”

The question of how to treat social media is complicated further by growing allegations that the federal government is exerting powerful influence to suppress certain kinds of speech, as well as what this discussant said there are signs of cooperation among social media companies in deciding which content to exclude. “So far from just having autonomous people engage in these activities, we have a state action problem on the one hand because the government starts to intervene, and we have an antitrust problem on the other hand, because it seems that there’s some form of horizontal constraint that has been put into place in the way in which we start to deal with them.”

All common carriers are excluded from undue discrimination. Given that courts have ruled that common carriers are beyond the jurisdiction of the FTC, would that require the creation of a new regulator?

Another conferee addressed the idea some entertained that the “interplay between Section 230 and this idea of common carriage really is targeted at monopoly power?” He added that Section 230, written when Google, Facebook and Twitter were not yet imagined, did not arise over a concern over monopolies. Far beyond Big Tech, there are thousands of web-based companies that rely on Section 230 to protect them. Even Twitter, purchased by Elon Musk at $42 billion, is a minnow in a pond full of sharks with valuations in the trillions of dollars. Most social media companies are by comparison much smaller minnows.

Lending libraries enjoy a degree of liability protection, but not because of their size. They certainly aren’t monopolies. This conferee said: “The real issue is there was no form of adequate supervision that you could expect these people to do. And if you want to keep the lending libraries open, you cannot have them liable in a secondary fashion.”

Red State Regulations of Speech

The State of Texas passed a social media statute, upheld by the Fifth Circuit Court of Appeals, that a “platform may not censor a user, a user’s expression, or a user’s ability to receive the expression of another person” based on “the viewpoint of the user or another person.” If this law is enacted, it will force social media companies to post content they find objectionable, while making them liable for moderation decisions.

Another law passed in Florida, ruled as unconstitutional by a federal judge, would prevent social media companies from posting administrative comments by a “journalistic enterprise” to a political candidate’s posts, or make changes to how posts by or about candidates are displayed. Florida is seeking certiorari for this case before the United States Supreme Court. The Court has asked the U.S. Solicitor General to weigh in on both cases, an ask that is likely to delay consideration of cert for a year or more.

One conferee spoke strongly in favor of the Texas law as something “conservatives should strongly consider, otherwise our voices will not be heard.” Others asserted that the Florida law, as well as the Texas law, were flatly unconstitutional violations of the First Amendment. As state laws, they could not preempt the federal Section 230 statute, and – if realized – would turn social media into government-managed sites.

“My attitude is if you had a major competitor in this field, I would drop the common carrier proposal,” said the discussant who advocated for more consideration of common carrier regulation for social media. “But the one thing I would not drop is the concern with buying and selling users’ information.” Sensitive, personal, digital information of Americans online is routinely scraped from social media apps and sold to third-party data brokers, who in turn sell it to other companies and to the U.S. government. “That is absolutely so destructive. And I think what you really need to do right now is to have legislation that says that the government cannot decree national emergencies and then fund people to take down one side … (such as school shutdowns or masking) and then not disclose the fact that they’re doing it.”

Is a New Regime Needed?

Is the answer a new regulatory regime or statute? If Section 230 didn’t exist, could Congress come up with a law that could pass First Amendment muster?

“There are crimes, there are torts, there’s defamation, there are underlying things that harm people,” one said. “And it is absolutely a valid debate whether Section 230 is making enforcement of those laws and protection of people against those harms more difficult than it should be … But when we’re talking about [removing] 230, it’s not a sort of silver bullet to protect Republicans against vicious Silicon Valley libs.”

Some see improvement in the national debate and the potential for voluntary action. “I think there are a lot of good signs that the tech companies are on their own moving in a good direction.”

The Promise Act?

Others see a need for federal regulation, perhaps authorizing the FTC and states attorneys general to bring cases. The counter was that removing Section 230 would lead to an “avalanche of litigation” that could shut down the internet. “One way you could reduce the avalanche of litigation is by reducing the number of potential plaintiffs,” a discussant said, adding that severe restraints could be placed on the litigation, including wider discretion of a judge to dismiss a case.

A proponent of the Promise Act said he believes Section 230 has been misinterpreted and misapplied because “when it kicks in, it provides immunity only in a situation where you’re dealing with claims whose elements require you to treat the entity as the publisher or the speaker. But even assuming the Court accepts that argument, embraces it and then controls it, I don’t think that solves our problem necessarily.

“What I tend to regard as the biggest problem animating many of my colleagues who want to reform or in some cases repeal Section 230 is that it would backfire miserably in terms of what many of us as conservatives want,” he said. “It would empower Google and others to do even more of it (censorship).”

This discussant pointed to the proposed Promise Act, which would make deceptive trade practices by social media companies actionable under Section 5 of the Federal Trade Commission Act. This proposal would hold online interactive services accountable if they violate their official corporate statements, corporate policies, or commitments by their CEO. If a company violates its standards by engaging in political viewpoint discrimination, or if it disfavors a given set of politically conservative or religious statements, that would be an actionable deceptive trade practice under Section 5.

Others, less amenable to the idea of more regulation of speech, pointed to the great solvent of time to wear down large actors and open up new space for speech. At this writing, Big Tech companies are bleeding trillions of dollars in equity value. “Anybody remember Myspace?” Another added: “Historically, corporate control of speech is a concern of the left.”

Others were concerned about turning to more regulation to govern speech.

“It cannot be that you have to rely on the federal government to deal with these sorts of things when in fact it’s one of the problems,” a conferee said. “Private litigation is also a very difficult situation because you don’t have the constant supervision over what’s going on in order to deal with this. It’s probably the better of the alternatives, but it’s gonna be fraught with difficulties.”

This discussant also noted that the Promise Act was first introduced before FTC Chair Lina Khan brought what many consider a radical tilt to the agency, its policies, and theories. How would FTC management of social media work out for conservatives?

Judicial intervention has its own risks in managing viewpoint discrimination. The First Amendment implications and complexities are staggering. So are imposed regimes with heavy reporting requirements. “I don’t like this anymore than I like the Securities and Exchange Commission imposing enormous disclosures associated with climate law … I regard these things as essentially harassment devices.”

The supporter of the Promise Act shot back, “I am normally skeptic of creating new private rights of action, but this thing [censorship] has gotten so out of control that … it’s got me thinking that it might be about time.” He added that the Promise Act doesn’t prohibit any action in terms of content moderation. It merely forces companies to follow their own rules and commitments.

Another discussant noted that whatever one makes of some, admittedly, heavy-handed proposals for regulation, it is clear that liberal politicians have over social media that conservatives lack. When Rep. Alexandria Ocasio-Cortez put out a critical tweet about Amazon’s webhosting of Parler, Amazon soon removed that Trump-friendly social media platform. “Amazon either loves AOC or fears AOC,” he said. “When it comes to Republicans,” he said, big social media companies “neither fear nor love us. And, you know, you can argue with Machiavelli about which is better. But as far as Republicans, if we’re neither feared nor loved, I don’t think we have much we can do.”

Should We Restrict Government Jawboning?

One relatively modest policy might prove very effective where the influence of government on social media is concerned. Perhaps law and ethics restrictions could be imposed on government agents on how they can interact with social media providers.

One discussant noted it is appropriate, or at least constitutional, for government agents to express opinions to private actors. But when do such communications shade into collusion or coercion? How does one distinguish between helpful communications and intimidating jawboning or actual directives?  How do we judge that government actors are not just giving advice, but acting in the spirit of King Henry II to his barons of Thomas Becket, “Will no one rid of me of this troublesome priest?” (Or “Russian disinformation?”)

“And so when these companies come in and are innocently jawboned, that in itself is suspect,” a conferee said. “Government has to realize that when it acts in those ways, it’s not a normal interaction.”

In all these proposals, the meaning of words and the impact of language is decisive. Is it even possible to enact laws that are precise enough to govern something as slippery as content moderation? The late British legal philosopher and observer of the American scene, H.L.A. Hart, in a famous lecture said that law and the words that constitute them can create the potential for a nihilistic nightmare of unconstrained judicial discretion. A reliance on the solidity of language, however, can help create a “noble dream” that adds precision to the law and judicial restraint. The latter view may be naïve, one conferee said, but we must have a general assumption that “if we try to get it right, the tools that we have in the English language are good enough.”

Conclusion: How to Address Content Moderation?

The discussion revealed a yearning to uphold the letter of the First Amendment while also enjoying its spirit.

Without Section 230, the internet as we know it today would never have been fully realized. We focus today on the negatives of social media, while forgetting the transformational power digital technology has brought to human thriving. We think about angry tweets and Tide Pod challenges, but we lose sight of the Khan Academy, Wikipedia, instant news, global communications that are largely free, and access to most of humanity’s knowledge. Section 230 enabled that transformation.

Various plans to improve content moderation by modifying this law were hotly debated. All these solutions were found to be limited by the underlying First Amendment right of companies to not post content. And if Section 230 were scrapped, and social media companies were to become liable for moderation decisions, there was agreement among many discussants that this vacuum would be a disaster for both users of online content generally, and for conservatives specifically.

The majority of discussants believe, however, that thumb-scaling is being done against conservatives and their content online. This is concerning enough if the thumb belongs to “woke” billionaires. It is especially concerning if that thumb belongs to government. One discussant called this an “unhealthy development.” But government regulation of central forums of the national conversation would be far worse than that.

In coming Congressional hearings, we should get greater clarity into the accusations that the government is directing the censoring of conservatives and interference in political speech. Congressional hearings should also reveal the extent to which social media companies are using the overt techniques of deposting and deplatforming, and the subtle techniques of dampening.

The removal of content is concerning. The subtle, silent dampening of content is insidious, a loss that often goes unnoticed.

Might Section 230 be amended so there is less room for would-be censors to find content “otherwise objectionable” that can be removed or dampened in “good faith”? Have courts been too lax in interpreting the responsibility of companies under that statute? But would it be constitutional to require companies to be more transparent in their content decisions in exchange for Section 230 immunity?

Common carrier status would require social media companies to approach conservative content in a neutral fashion. But would that legal structure impede the development of the greater online ecosystem and its evolution? Other plans, like the Promise Act, to hold companies to their stated policies, could allow federal regulators to enter the thicket of words. What would be the consequences of that? It is telling that some conservatives are so frustrated with the status quo that they are ready to turn to Chair Lina Khan’s FTC for relief.

Many wondered if the U.S. Supreme Court was preparing to issue a thunderclap that would change the debate. The tone of the Gonzalez oral argument that followed suggests that the Court will rule in a way that will instead put the onus on Congress. But the split in federal courts between the Texas and Florida approaches to social media will inevitably force some new jurisprudence.

Perhaps conservatives should maintain their traditional faith in markets to sort things out. For all their outsized influence, today’s major social media companies show signs of decline and retreat in the face of new entrants. Are we better off letting Americans vote with their mouses than to have federal or state governments intervene with free markets and speech?

The current tumult and angst have the feel of something new stirring. Whatever solutions to content moderation emerge, it is clear the First Amendment must always remain first.

TAKEAWAYS

Section I: Big Tech and Content Moderation

The First Amendment gives social media companies the right to exclude content on their sites. But given that some platforms are at the heart of the national conversation, the perceived censorship against conservative speech seems a violation of the spirit of the First Amendment.

Some look to change or even strike Section 230, a law that immunizes social media companies from liability for their user’s posts, while allowing them to eliminate content that is obscene, violent, or harassing. With billions of posts made every day by billions of users, these legal protections are vital to keep the internet useful for consumers. There is no question that Section 230 has allowed a vast ecosystem of online services to flourish.

There was agreement among many discussants that a legal vacuum would be a disaster for both users of online content generally, and for conservatives specifically.

The majority of discussants believe, however, that thumb-scaling is being done against conservatives and conservative content online. This is concerning enough if the thumb belongs to “woke” billionaires. It is especially concerning if that thumb belongs to government.

In coming Congressional hearings, we should get greater clarity into the accusations that the government is directing the censoring of conservatives and interference in political speech.

The removal of content at the request of government would be a dangerous development. The subtle, silent dampening of ideas would be insidious.

There are many proposals, from legislative changes to Section 230, to laws from Texas and Florida to regulate social media, to proposed judicial remedies, that could ensure more ideological openness online.

Overall, however, most conservatives are looking to the natural evolution of markets to respond to consumers’ desire for a free and open national conversation. This remains a superior solution over heavy-handed regimes of federal and state regulation of the internet – and therefore, even more control of speech.

Session II: Big Tech and Antitrust

The Sherman, Clayton and Federal Trade Commission acts that created America’s antitrust regime were a response to massive trusts in manufactured goods – railroads, petroleum, coal mining, copper, and steel. Sen. John Sherman, author of the eponymous act and brother of the Civil War general, said: “If we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessities of life.”

Who is king today? In the 21^st century, large social media platforms – Google, Twitter, Meta –as well as Apple and Amazon, one a manufacturing giant, the other a retail giant, both technology companies that host content – have the equity values and financial weight of the largest corporations of the past. But they are fundamentally different. These Big Tech companies are the leading innovators and infrastructure providers for an information economy. They traffic not in steel, rails, or oil, but in electrons and ideas. Do they provide the necessities of modern life, or the enhancement of it?

Many believe it is the former. Many officeholders assert that Big Tech is a threat on the same order as the big trusts of the late 19^th century and that antitrust law provides the means to address it. Sen. Elizabeth Warren, who represents the leftward ideological pole of the U.S. Senate, says that “today’s big tech companies have too much power – too much power over our economy, our society, and our democracy.” Sen. Josh Hawley, who represents a contingent of the rightward pole of the U.S. Senate, says that breaking up Big Tech “is not only good for innovation, but it’s good for liberty.”

Standing in the way of antitrust measures aimed at Big Tech is the still-regnant consumer welfare standard. Courts have employed this doctrine for almost 45 years to judge mergers, acquisitions, and other business activities by whether they are injurious to the welfare of consumers. Are companies that grow large due to “network effects” – the tendency of consumers to use Google, Twitter, or Facebook because everyone else uses them – anything like a monopoly? Or are there sinister explanations for their size?

“Are our Big Tech and social media companies exemplars of the consumer welfare standard or are they examples of that doctrine’s pitfalls?” one speaker asked. “Are these companies big because of network effects giving billions of consumers what they want for free in one place? Or are they using market power to strangle rivals?”

The discussion between 35 policy experts – former federal senior officials, academics, think tank leaders and two U.S. senators – proceeded along these lines, while continuing to explore the tension between Section 230 and content moderation. Is the problem excessive content moderation that discriminates against conservative speech? Or is it a disinformation wasteland brimming with lies? One discussant asked, incredulously: “We have asked for free speech and now we have too much of it?”

Twitter’s 280-character limit, he conceded, “is not conducive to thoughtfulness. It’s too easy for people to consciously choose to hang out only with like-minded people. And it is still too easy for children to see things, beyond porn, that are bad for them, and for adults to see things that will make them less happy … I am certainly open to the proposition that sometimes more speech makes things worse. The question is: What do you do about that?”

This discussant noted that we’re in a “totally unregulated space for the first time since broadcast started being an important medium,” resulting in frustration because “the consensus seems to have broken down and there don’t seem to be clear rules.”

The central question: Are new antitrust theories and expansive enforcement the answers to solving the problems of Big Tech? Before giving their answers, the conferees first had to take stock of the current state of antitrust law.

Back to the Future

The discussion began with an assertion about the antitrust policies of an administration that “has sprinted away to a fast start in the wrong direction … There has grown up in recent years the pernicious notion that antitrust is some sort of open warrant for prosecutors to roam the business world like knights-errant, deciding for themselves, often in defiance of the obvious, which are the damsels, and which are the dragons. Right now, the chief of the Antitrust Division and the chair of the FTC seem to think they see a lot of mergers exhaling flames. Before they slay them, it is fair to ask their reasons, since they sometimes sound as if the antitrust laws were their mandate to pursue every social policy.”

The implication is that big government is making Big Tech out to be a dragon that needs to be slain. This statement, however, is not about the Biden Administration. It was a quote from a 1969 article in Fortune magazine by Yale law professor Robert Bork, a time when the largest tech companies were IBM and AT&T. The consumer welfare standard associated with Robert Bork was the product of intense intellectual ferment at the University of Chicago. (One panelist pointed out that the consumer welfare standard also has liberal roots, with antecedents in the writings of consumer activist Ralph Nader.) Nine years after the publication of his article, Judge Bork championed the consumer welfare standard in his 1978 book The Antitrust Paradox. It was a rare instance of an idea fitting a need so neatly that it was immediately adopted as the prevailing antitrust standard by the U.S. Supreme Court a year later in Reiter v. Sonotone.

Prior to the consumer welfare standard, a panelist observed, “we had what the British might call a dog’s breakfast of antitrust theories.” The reason is that the Sherman and Clayton Antitrust acts offered judges no econometric metrics and little in the way of evidentiary guidance in enforcing these laws. This left jurists free to impose their own subjective standards.

One of them, Justice Louis D. Brandeis, set out to protect “small dealers and worthy men.” It was unclear, however, how to establish a judicial standard of worthiness. Justice William O. Douglas took up the cudgel by thwacking companies for just being too big (which is another way of saying, “too successful.”) The courts were hungry to develop common law based on an objective metric that could fill the vacuum at the heart of antitrust law. Thus, came about the paradigm shift from the subjective standards of judges’ prejudices to the objective consumer welfare standard. This shift was summed up by William Baxter, antitrust chief under President Reagan, who said, “big is not bad – bad is bad.”

In today’s Department of Justice and Federal Trade Commission, however, big is once again bad. Large corporations are believed to exert undue political influence that harm society (though the current, intense hostility social media companies face from leaders in both parties would tend to undercut this point). To the extent that progressives think at all about consumer welfare theory, it is seen as elastic: Consumers are workers, diverse and often facing discrimination, as well as people who need to be protected against disinformation on the internet. So why not use antitrust law to fix all of that?

It is this line of thought that explains why Biden Justice Department Antitrust chief Jonathan Kanter and Federal Trade Commission Chair Lina Khan are reviving old habits and enacting policies that are by any historical standard radical departures from the past application of antitrust law.

The Breath-Taking Ambition of the Neo-Brandeisians

Antitrust progressives today are self-styled “neo-Brandeisians.” But are they truly in the tradition of Justice Louis Brandeis? Brandeis did famously distrust largeness in business. But he was a thinker in the Jeffersonian tradition, who also distrusted big government. This orientation led Justice Brandeis on more than one occasion to open conflict with the New Deal agenda of President Franklin D. Roosevelt.

Kanter, Khan and company hardly seem like Jeffersonians. They are weighing in on the side of a large and powerful government that picks winners and losers in the marketplace. Former White House advisor Tim Wu said that this administration aims to let business leaders know that they are always under “heavy surveillance” by the government.

Several discussants noted that Republican FTC Commissioner Christine Wilson, who recently submitted her resignation, sees Kanter and Khan as promoting the Marxist-tinged argument of Critical Legal Studies that the law can never be neutral. Laws are always expressions of political power. Is it healthy, one conferee asked, to apply such Marxist-tinged arguments to the social media companies that provide the town square of the national conversation?

“How do you weight costs and benefits in this space?” he asked. “They (progressives) hate having to answer that question. Their project is not really about Big Tech. It is about government control over the economy, where they feel they have carte blanche. And if you read their writings, and pay attention to what they are saying, they say this out loud.”

One discussant said that the progressive antitrust movement is “enormously well-funded,” with foundations established by highly successful (and long-dead) capitalists, now spending $500 million to advance antitrust ideas and practice. “They see the successes of the neoliberalism of the past 50 years not as the superior performance of a market-based economy, but as being primarily a product of an extraordinarily successful free market philanthropic campaign.

“Progressives are very transparent about emulating that exact strategy and that exact blueprint right down to emulating the creation of an analog to the Federalist Society and the Law and Economic Center to copy and replicate the strategies of the conservative philanthropic enterprise in order to unseat it and replace it with something that is it’s opposite,” this panelist said. “They’re trying to bring about a rebalancing of power between the government and the market. Antitrust is seen as being at the heart of this because of its perceived importance for shifting political power to large enterprise. Even if you have a strong state relative to the market, if the economic actors have any political power, then you haven’t won.” Thus, in their thinking, a free market must no longer be allowed to allocate resources for society.

Such thinking explains progressive attacks on common law, adjudicatory development of legal standards in antitrust, and Supreme Court precedent. “It is not meant to end with antitrust decisions. It’s meant to go to every victory that the conservative legal movement thinks they put under their belt over the past 50 years.”

One discussant warned that the widespread criticism from conservative legal thinkers that the neo-Brandeisians bring “bad ideas from academia” that cannot possibly be enacted is wrong. Just because an idea has been disproven doesn’t mean it cannot prevail.

“The strategy here is not to come up with good ideas and then get them implemented. The goal is to backfill them, to find the right people to say it, and then elevate those people into positions of decision making.” This explains the appetite for the current leaders of the administrative state to seek ways through legislation or regulation to try to circumvent Article III courts altogether.

Sen. Amy Klobuchar asserts that replacing all the judges wedded to the consumer welfare standard will take too long. “So to jumpstart the process, we just need to scrap the consumer welfare standard and initiate a brand-new antitrust law,” as this discussant characterized her thinking. Sen. Klobuchar’s bill, the American Innovation and Choice Online Act, would have affected a number of non-tech companies, and put coercive force behind Tim Wu’s regime of “heavy surveillance.” That bill languished in the last Congress, but not before picking up significant support from many leading Republicans, including vocal support from the Ranking Member of the Senate Judiciary Committee, Chuck Grassley, as well as from Sen. Josh Hawley.

Sen. Elizabeth Warren’s proposed “Prohibiting Anticompetitive Mergers Act of 2022,” would go even further. It would give federal regulators the power to bar any merger or unwind any acquisition going back to 2000. It expressly stated: “Neither quantitative evidence nor a definition of a relevant market or market share shall be required to establish a violation under this section.” Thus, even a business with a 20-year record of serving consumers well could not cite this economic reality in its defense. Instead, companies would be judged by perceived harms to workers, labor conditions, minority-owned businesses, rural or low-income communities, communities of color, entrepreneurship, and innovation – charges easily concocted against just about any economic actor.

“Offending the rule of law is a feature, not a bug,” of such proposals, a panelist said. It is rooted in that neo-Marxist legal theory that the law is just a bourgeois institution to enact rules to favor the propertied class. This philosophy explains why the Biden White House issued 72 orders to empower a dozen government agencies to seek out antitrust violations and reregulate transportation, healthcare, meatpacking, energy, and pharmaceuticals. The abiding concern is not how should the law be structured? It is about who has the power.

The Left-Right Coalition Against American Technology

Though many Republican senators now regret it, Lina Khan’s nomination to be commissioner of the FTC received an overwhelming 72 votes.

“On one side are progressives who want to extend government control over businesses of all sizes and the economy at all levels, and they see radically expanded antitrust as just the sledgehammer to do it,” as one panelist put it. “On the other hand, are conservatives who have been playing into the radicals’ hands in many cases. They are hopping mad about what they perceive to be censorship of conservative speech by Big Tech companies. Some conservatives such as Rep. Ken Buck and Sen. Josh Hawley want to breakup Big Tech – even though none of the regulations being promulgated by Lina Khan at the FTC or Sen. Amy Klobuchar in her legislation would change how content is managed in the slightest.”

One panelist said that he asked an antitrust attorney for a state attorney general about the tendency of radical antitrust proposals to make the country more socialist. Isn’t there something bigger at stake here than taking down Big Tech companies? His response was: “I don’t give a [expletive]. It’s not my responsibility.” And this panelist said that is typical of many conservatives. “I’m gonna get ’em, whatever it takes.” Another speaker added: “conservatives are orchestrating the seeds of their own destruction by entertaining coalitions with senators like Amy Klobuchar and Elizabeth Warren.”

One conferee, a conservative, added that for all the accusations of censorship, the advent of social media has brought an unprecedented unleashing of conservative content, dialogue, and networking unknown in the days when conservatives communicated mostly through National Review and similar magazines.

Progressive antitrust, on the other hand, if adopted by conservatives, would associate them with a line of reasoning that repudiates the successes of past Republican administrations. President Biden asserted that the nation went down the wrong path with the adoption of the consumer welfare standard, which he said resulted in more than “forty years of failure” with less economic growth, weakened investment, and fewer small businesses. One discussant noted that, contrary to Biden’s “hellscape,” the American economy of the last 45 years – up to the Covid era and the Biden Administration – was characterized by economic growth. The U.S. economy almost tripled in size from 1980 to 2020. Americans’ income nearly doubled. And “weakened investment?” The inflation adjusted annual rate of return on stocks was almost 10 percent. Small business creation also saw robust growth until recent years.

“It is not until you get to the recession of 2008 and then this current administration that we see these precipitous drops in real income and tanking stock markets. But if the Biden theory is correct, why did monopolies hide in the dirt for more than 40 years, waiting to pop up like cicadas to suddenly inflict economic harm? Or could our current economic woes just be the result of the policies of the current administration?”

How Does the Consumer Welfare Standard Apply to Technology?

The largest tech companies are the “very product of the consumer welfare standard,” the innovation that comes about from a free market economy in which government stays in its lane. The development of the world’s greatest and most storied technology companies in the United States – over the half-century since President Biden first entered public service – refutes the notion that the consumer welfare standard has held us back.

This realization still leaves us with the question of how to apply consumer welfare to Big Tech?

One panelist, who sees a vigorous application of the consumer welfare standard to correct problems with social media, presented his analysis with three sets of questions.

The first set concerns scope: What is antitrust law supposed to accomplish? Is it just an economic efficiency standard? Does it include labor market effects? And isn’t anti-competitive acquired monopsony power a consumer welfare issue? He answered all three in the affirmative – the consumer welfare standard lets us consider many of these effects of technology.

The second set of questions concerned the reasoning of applying this standard: Isn’t consumer welfare a matter of economic science, not a priori formalistic legal reasoning? In other words, shouldn’t it use applied economics to guide regulatory policy?

Thirdly, he asked, are we in danger of conflating consumer welfare as a shorthand description for all the views and arguments made by the University of Chicago school on many kinds of anti-competitive practices, whether tying, predatory pricing, or vertical integration?

Another panelist chimed in on that point. He stressed that the current ideological polarization leads many to overlook the contributions to consumer welfare by Nader and Carter era deregulators. But the consumer welfare standard has become polarized because many on the left see it solely as the creation of “right-wing nuts.”

A discussant stressed that “what’s important is that we follow the second principle, which is economic science.”

“As far as I can see, the forces of new entry are stronger today than they were 50 years ago,” he added. “The whole system of tariff protections and other kinds of protections are much weaker. It’s clear to me that to take the position that the only way in which a firm should be allowed to grow is through internal operations, not by way of acquisitions, whether it be big or small, is loopy … If I start looking at the landscape today, I see a strong case for less antitrust law than we had 50 years ago.

“For antitrust to be successful, one must join a grievance with something that hurts the larger economy, and ultimately hurts consumers. But the fact that a small firm has disappeared is, in and of itself, not relevant.

“We lose sight of the fact that the consumer welfare standard includes innovation, it includes quality. It’s not just a price test. And a lot of people who are not antitrust lawyers day to day, like to [assert that], but the staff at the FTC aren’t confused about what the consumer welfare standard is. And the lawyers who practice it day to day aren’t consumed by how we focus on harms to consumers. But now they’re being told to do things that are way beyond that. And if we’re not going to use the consumer welfare standard, what no one’s been able to answer on any side of the aisle is what, then, is the standard?

Is Big Tech a Free Lunch?

One discussant pointed to a 2019 Harvard Business Review article by Erik Brynjofsson and Avinash Collis reporting that Americans spend 6.3 hours per day on digital media – including search, Wikipedia, social networks, online courses, maps, messaging, videoconferencing, music, smartphone apps, and more. The authors asserted: “We listen to more and better music, navigate with ease, communicate with coworkers and friends in a rich variety of ways, and enjoy myriad other benefits we couldn’t have imagined 40 years ago. But if you were to look only at GDP numbers, you’d think that the digital revolution never happened.”

Because GDP is based on what people pay for goods and services, it cannot capture the benefits from services with a price of zero. Thus, the several thousand dollars consumers once spent on Encyclopedia Britannica counted toward GDP, while the far more extensive but free Wikipedia does not. By surveying consumers about how much money they’d accept to give up a given, free digital service, these researchers have found that social media and other digital companies add hundreds of billions of dollars in uncounted consumer value to GDP.

How can an antitrust standard be applied to services that are free to consumers to use? One conferee believes that these services are not free at all.

“The fact that you can go onto your device and perform a search on Google without handing over money, or the fact that you can post something on Twitter or on Facebook without money exchanging hands, doesn’t mean that the consumer welfare standard has no application here,” this panelist asserted. “It doesn’t mean that it escapes the reach of it. It certainly doesn’t mean that we have reached the far frontiers of the consumer welfare standards. Quite the contrary.

“The exchange of money with a particular transaction doesn’t have to be there,” he said. “In order for you to evaluate consumer welfare and harm to consumer welfare, something can cost you in a way that is cognizable, relevant and significant under the consumer welfare standard, even if there isn’t money involved.”

This panelist pointed out that to use a “free” social media service, the consumer interacts with an online interactive service provider. “If you’re not exchanging money, then you are paying for it in other ways. You’re paying for it by exerting the labor that goes into putting your eyeballs on there. The clicks and keystrokes you make, the data that you enter, you’re paying for it with your own privacy, your own data, your own time.”

This discussant argued that this contribution of data and time means the consumer welfare standard remains applicable to Big Tech.

“But it does have to be analyzed in different ways, not the direct calculation of dollars and cents being exchanged.” This speaker said “consumers are, in my opinion, being harmed by many of these same companies” in terms of privacy and content curation. But even here, he said, the solution is “not progressive antitrust enforcement.” Another panelist replied that producing a test under the consumer welfare standard is difficult for conventional products. How would one go about this task with social media?

One panelist countered that the consumer welfare standard is flexible enough to be applied to Big Tech.

“The idea that somehow monopolization law or merger law is all one sided in favor of defendants ignores the fact that there are scores of decisions in favor of plaintiffs, both private plaintiffs and government plaintiffs in monopolization cases and in merger cases in the last 10 or 15 years alone,” a panelist said. “So I just don’t think that we need a major change in the statutory standards to bring meritorious cases under a consumer welfare standard against Big Tech or anyone else.”

Another speaker pointed out that the business and revenue models of Big Tech companies are very different. She said the FTC in particular has gone down the wrong path by basing its analysis not on conduct, but on entities and their size. She said Big Tech is not just five companies, it is dozens of companies. And they are all different. “Apple doesn’t make money like Amazon,” she said. “Facebook doesn’t make money like Alphabet.”

A panelist agreed with that statement and added, “it is critical that we focus on conduct and effects not on companies, because otherwise, I think really we are undermining the rule of law.” And yet this approach outside of legal theory is being enforced by three FTC commissioners voting in lockstep, most recently to void non-compete contracts. “That’s tens of millions of relationships impacted, notwithstanding the fact that for hundreds of years we’ve had law on this, that there are numerous state laws at issue, and that this protects important interests that we all care about, like intellectual property.

“It is very much a crisis of due process and the rule of law enabled by bipartisan dissatisfaction with Big Tech,” he said. “The neo-Brandeisians lament is that they don’t have this same degree of leverage over all forms of business. FTC leadership’s hostility to the consumer welfare standard is to throw off the yolk of measurable metrics and pick whatever yardstick is needed to get predetermined outcomes for this politically motivated, ‘results-oriented administration.’”

The Biden Administration’s results-oriented enforcement is a seachange for a Democratic administration. The antitrust policies of the Clinton and Obama administrations were largely grounded in law, precedent, and consumer interests. Looking forward, defenders of historic standards should work to restrain the discretion the government has in interpreting and expanding the provisions of Section Five of the FTC Act – which concerns “unfair or deceptive acts or practices” – as well as the Robinson-Patman Act. Such broad interpretations of government power give the politically motivated Biden Administration “unlimited discretion to do whatever they want to pursue, whatever social policy they want.”

This conferee said: “Whatever antitrust does or doesn’t mean, it shouldn’t mean the ability by a small group of bureaucrats to dictate rules without due process, without a judicial basis, for the whole economy.”

Some asked if antitrust regulation of Big Tech should consider potential harms, mentioned early in the discussion about purported effects of social media on human happiness and the mental health of youth. One former official said the FTC felt at liberty to block a coal merger because coal was being replaced by cleaner burning natural gas. It blocked casino mergers because it would limit access people had to cigarettes and liquor. So would blocking mergers of tech companies reduce negative messages and disinformation? Or is that a simplistic solution that overlooks the role of competition in social media – not to mention the degradation of the First Amendment?

“The larger story is that Khan and Wu and company here, as in Europe and elsewhere, are people who believe they can design an economy,” one discussant said. “They think they can choose how many companies are going to make the products they choose, what products are going to be provided. And in doing so, of course, they determine what people are going to buy and what people will receive. And they’re quite sincere.

“That gives us a real problem – how are you going to find middle ground? Because they are looking at an end game that they want to design, while most of us think in terms of a competitive process.”

The progressive, neo-Brandeisian mindset concerns itself not with competition as classically understood, but rather with what the market is producing. “And if we don’t like what the market is producing, antitrust comes in when the market isn’t working well, right? This is especially true if you can argue that maybe the market for social media isn’t working well.”

A point of tension in the debate over the consumer welfare standard is that if antitrust is meant to maximize consumer welfare, does that welfare include something as nebulous as human happiness? Those who lock themselves in that position necessarily must enforce their own moral judgments as to what is good or bad for people, intangibles beyond the scope of economic analysis.

A panelist responded that “those on the right split into two camps. In one are people being duped into going along with really bad proposals because they hate Big Tech, they’re mad at Amazon, whatever. And they don’t read the fine print of regulation and bills. They don’t really care. They’re just looking for the sledgehammer that they can grab and swing.”

The other conservative camp says that antitrust is all a ruse, a Trojan Horse for government regulation, and we don’t need extra enforcement. “This create an extra harm of making it extremely difficult to advocate for a sensible antitrust policy of actually wanting to have enforcement against companies that are engaging in bad conduct,” he said. “Because it so easily gets lumped in with, well, now you’re just one of those crazy Lina Khan people, and you’re being extreme … People now are just talking past each other.”

From Brussels and London to Albany and Sacramento

More than one discussant pointed out that whatever happens in Washington, it is the European Union that has emerged as the world’s most aggressive and dominant antitrust enforcer. European ideas about what constitutes a monopoly are deeply influencing the way antitrust law is taught and practiced in the United States. The Competition and Markets Authority in the UK, despite Britain’s withdrawal from the European Union, exerts an outsized influence on world antitrust policy, as Meta learned when the CMA directed it to sell off the GIF-creation website GIPHY.

The European tendency to characterize firms that merge or acquire firms to boost market share or increase efficiency, as bad actors has filtered down to U.S. state law and the actions of attorneys general. Legislators from New York to California have introduced many bills that import European ideas and standards into the U.S. debate.

If you’re a tech company, “what are you going to do when you have to combat progressive antitrust ideas at the 50-state level? That’s a different and incredibly difficult problem.” This speaker had recently attended an American Legislative Exchange Council meeting – a group of conservative state legislators. “The hatred for tech was visceral.” In Congress, debate on a major overhaul of antitrust legislation took up the entire two-year cycle of the 117^th Congress. In the states, legislative sessions last a shorter period and can produce in a few weeks ill-considered legislation that sets a precedent for the whole nation.

Eager regulators, whether federal or state, overlook how hard it is to measure data and to stay abreast of current developments. One former FTC official said that “in the tech sector by time we’ve gathered the data, the market has moved on. And so actually doing the consumer welfare standard lacks some validity. I call it data decay. It’s just lost its relevance.”

He cited the effort by government regulators to make sure that one merger did not result in the monopolization of instant messaging. That effort? It concerned the ill-fated merger between Time-Warner and AOL, irrelevant to how the market ultimately unfolded.

ESG Complicates Further

Chair Khan recently took to the pages of The Wall Street Journal to deny that a company can buy slack from the FTC for a merger by adopting or deepening its environmental, social, and corporate governance commitments. “Companies can get creative when they want to fend off a government challenge to an illegal merger,” she wrote. “As chair of the Federal Trade Commission, I’ve heard would-be merging parties make all sorts of commitments to be better corporate citizens if only we back off from a lawsuit.”

A panelist compared Lina Khan to Captain Renault in Casablanca. She is “shocked, shocked” to find that companies will aggressively try to appease the Biden’s Administration’s leftwing agenda to buy mercy from regulators. “When you say that you’re going to include environmental, labor, and other metrics in antitrust law, you shouldn’t be shocked that firms try to come up with what you want. Firms are not passive recipients of regulation.”

Another discussant said that when he was a young attorney with the Federal Communications Commission, he was tasked with devising spreadsheets of “voluntary” conditions that firms accepted to acquire another media company. “There were handouts to every single important political constituency that commissioners were hearing from.” He added there were hundreds and hundreds of such concessions, “like ornaments on a Christmas tree.” The same effect is at work in FTC’s antitrust cases.

Tech Constraints and National Security

Some discussants see progressive antitrust as potentially degrading American national security.

This portion of the conversation began with the question: Do app stores and policies associated with Apple and Google smartphones actually constrain app development? “That competition might be constrained or limited because you might have two or three big firms in any of these verticals,” one discussant answered. “There’s great opportunity for competition above and below that. On top of those phones, you have a robust competitive ecosystem for apps. It’s hard to make an app that’s more than 99 cents because you’ll get priced out of the market.”

The real constraints are not in software but in hardware.

“In building chips we do in a lot of outsourcing,” a discussant said of the sophisticated chips imported from Taiwan’s TSMC. “There’s a lot more competition for chip fabrication than there are for the designing of chips. There are only a few designers. So I think it is important to think about the technical constraints.” This speaker saw the complexity of the software and hardware underpinnings of the market as important to understand before one grapples with these social media arena and its network effects.

“All of the firms we’ve referenced, they’re all American firms,” he said. “And for these endeavors that are on a civilization and planetary scale – building operating systems, building the chips to have smartphones – it’s a tremendous advantage to America both economically and on a national security front that these firms are based in the United States.”

The existence of major American technology comes “gives us a tremendous advantage to set the tempo for the rest of the world, especially in export control. When the United States cut off the export of [small, sophisticated] chips to China, we showed we can cripple and hamper China’s development of artificial intelligence by simply not letting them buy chips that are designed solely here in America. We can limit the proliferation of a technology that could be used to enable weapons of mass destruction.

“But if we break up some of these U.S. technology firms and go after them, we could create space for competition from overseas and out of our reach and ability to restrict the dissemination of this technology.”

This conferee noted that the dominance of American companies allows the CIA, FBI and other federal intelligence and law enforcement agencies to easily employ the Foreign Intelligence Surveillance Act to catch foreign terrorists and spies.

“I’ve talked to mentors and friends of mine who are involved in the intelligence community,” he said. “After the breakup of AT&T, this one singular monopolistic phone provider, it really impacted our ability to collect signals intelligence, because now they had to set up new wiretaps and pen registers and secret relationships with all these different firms. And that also left plenty of room for [surveillance] abuse … So I’d also note on the offensive side, having these social media firms in country, again, gives us a home field advantage.”

Considering the Harms of Progressive Antitrust

Another feature – not a bug – of progressive antitrust is the willingness of Kanter and Khan to advance novel legal theories in antitrust suits that are tossed out by one federal court after another.

“It may be that the FTC regulations eventually fail, but during the meantime the opportunity cost for business executives is huge,” one panelist said. “The chilling effect it has on trying new forms of organization, devising a new platform, or seeking new investment is large.” It is this regime of hyper-aggressive antitrust enforcement that explains why not a single major platform has come out of Europe. The European-style interventionism of the Biden Administration will surely degrade innovation in the United States.

One saving grace for American industry are the limits placed on government action by the First Amendment, and the exercise of their rights by technology companies.

“I’m skeptical of arguments that people who seek out things that make them angry and unhappy lowers consumer welfare,” he said. “I think, at least as it [pertains] to adults. It seems to me we have to count that as not a loss to consumer welfare because it’s the individual’s call” about what is good for them. “And if they want to watch something other than wholesome cat videos, that’s not something we can say is a negative.”

“The Sherman Act of 1890 largely delegated common law authority to judges to make this law work over time,” a panelist said. “The statutory interventions we’ve had since then, in antitrust have largely not been great successes.” He recommended that the best approach is to “stick with the common law method. It is not perfect, but it is adaptive. It allocates decisional authority in a kind of inductive way to courts that allow them to update as economic science changes over time.”

Conclusion: What to Do About Antitrust and Big Tech?

Large social media and technology companies are the fruits of the long and productive era of the consumer welfare standard, a period marked by consumer surpluses, innovation that outpaces imagination, and an almost bewildering array of choices for American consumers. A consumer today has access to knowledge and voice, video, email, navigation, and other services, much of it free, that could scarcely have been imagined in the day of expensive encyclopedias, costly long-distance calls, payphones, and maps.

But many on the left and right are unhappy. Network effects have elevated tech companies to unprecedented size. Questions about content moderation, censorship and pernicious influences from negative content and disinformation are leading to cries for new regulation.

Progressive antitrust leaders step into this debate with answers – posing new theories and expansive enforcement. They explain their policies as a revival of venerable American judicial traditions, but they are in fact radical departures from the law, its precedents and practice.

Progressive antitrust champions weigh in on the side of a large and powerful government to pick winners and losers in an effort to design the economy. They see the law not as an objective arbiter – but as a weapon of political power to be wielded by one side or the other. And in this effort, they have vast funding from foundations and the support of some conservatives who are so angry at Big Tech that they are heedless of the consequences of progressive antitrust.

It is tempting to believe that “bad ideas from academia” cannot possibly prevail in regulation, Congress, and the courts. But a discredited idea can prevail if it is supported by progressives elevated to positions of power – and this is exactly what is happening in the tenures of antitrust chief Jonathan Kanter and FTC Chair Lina Khan. In their quest, rejecting common law, tradition and precedents are necessary to wipe the board clean for writing new, subjective standards.

This development is arguably tragic. There are fewer barriers to entry into markets today than there were when the consumer welfare standard was first introduced in 1979. Some discussants see a strong case for less antitrust enforcement than we have had in decades.

Some skeptics of progressive antitrust do have serious critiques of social media and Big Tech. They assert that there are real costs – in terms of privacy and content curation – that consumers submit to when using social media. But they agree that progressive antitrust is no solution. As leaders in the center and the right debate ideas to regulate technology, antitrust progressives are joining with European regulators to degrade some of America’s most storied companies just as we need them to protect U.S. national security from threats from China.

To the extent that harms of social media and Big Tech can be remedied by antitrust – a proposition many are skeptical of – common law and the consumer welfare standard are adequate and appropriate to the task.

TAKEAWAYS

Session II: Big Tech and Antitrust

Large technology and social media companies are the exemplars of the era of the consumer welfare standard – bringing knowledge, communications, GPS navigation, and other services to Americans, often for free.

Network effects have enlarged these companies and made them the leading platforms with an outsized influence on daily living and the national debate. Prominence has its price. Conservatives are upset about content moderation and perceptions of censorship. Liberals are upset about disinformation and the negative side of social media on human happiness and health.

Progressive antitrust thinkers – now in positions of leadership in the Biden Administration – are exploiting this discontent to vigorously establish unprecedented and expansive enforcement of radical new rules. They see law not as a neutral arbiter, but as a weapon of political power – and they want to use it to design the economy to their liking.

Some on the right agree there are serious issues with social media and Big Tech, ranging from privacy concerns to content curation. But there was widespread agreement among discussants that progressive antitrust is a solution far worse than any problems.

The existing tools of common law developed and applied by courts, and the consumer welfare standard, are still the best tools to analyze and remedy any harms in social media and Big Tech.