Giving Google a shove. Workers move a Google logo during the opening of the new Alphabet's Google Berlin office in Berlin, Germany earlier this year.(Hannibal Hanschke/Reuters)
Who would have guessed that Rupert Murdoch, the billionaire conservative media mogul who helped make Fox News what it is today, would be on the same side as left leaning Democratic Sen. Elizabeth Warren?
Yesterday, Murdoch's News Corp added its voice to complaints that tech giants, including Google, Amazon, Facebook and Apple have become too dominant in the sectors they control.
News Corp, itself implicated in the past for having too big a stake in its own industry, took a position surprisingly similar to that of Warren, the U.S. presidential candidate who accuses big tech of being anti-competitive and therefore harmful to consumers.
Hurts consumers, advertisers and publishers
The media company's focus was on Google, and specifically in the Australian market, but complaints about the advertising search company's influence apply just as well in other sectors and other markets.
"Google leverages its market power in both general search services and ad tech services to the detriment of consumers, advertisers and news publishers," said the Murdoch company in a filing to an Australian competition commission. "To remedy these harms, Google could either sell Google Search, or retain Google Search and divest the rest of its businesses to a third party."
For her part, Warren's objections to domination by the technology mega-corporations, that repeatedly vie for the biggest listed companies in the United States, have been condemned by some commentators as anti-technology and left-wing.
When it comes to tech monopolies, is News Corp CEO Rupert Murdoch, seen here in London with this daughter, on the same side as U.S. presidential hopeful Elizabeth Warren?(Hannah McKay/Reuters)
"To restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last, it's time to break up our biggest tech companies."
Historically, moves to divide U.S. industrial monopolies in the early 1900s and again in the 1930s had considerable support from capitalists, said Joe Martin, who teaches business history at the University of Toronto's Rotman School of Business.
"Not only were left-wingers complaining but right-wingers were complaining because they wanted a truly free market and you could not get a truly free market if you've got monopolies," said Martin, author of the recent book From Wall Street to Bay Street.
The U.S. antitrust movement benefited Canada, said Martin. The break-up of Standard Oil into seven smaller companies opened the way for Canada's Irving family to compete in a North American market no longer dominated by a single powerful company.
U.S. Sen. Elizabeth Warren has been front and centre with her plan to break up the tech giants to help not just consumers but other businesses.(Brian Snyder/Reuters)
Martin said the similarities between the anti-monopoly era and the current period are remarkable. In the early 1900s, a growing popular progressive movement rose up because of the stark inequalities of the Gilded Age, when a few wealthy families and individuals including the Rockefellers, Dale Carnegie, J.P.Morgan and George Peabody controlled vast swathes of the country's riches.
"The wealth was not distributed evenly," said Martin. "There were great discrepancies and as a consequence to that there became a reaction to big companies and to big business."
Certainly, most analysts seem to conclude that the breakup of AT&T into the seven "Baby Bells" in 1982 under conservative U.S. President Ronald Reagan led to a surge in innovation and competition.
Amazon vs small retailers
Compared to moves against industrial firms, you might think the case of Amazon is unprecedented. However, in the 1930s something similar happened in the retail sector, including in Canada.
The Canadian conservative government under Prime Minister R.B. Bennett said the Canadian department store, with its catalogue business, was destroying the livelihood of smaller retailers.
"They accused Eaton's of the things you hear about Amazon," said Martin.
He said in the U.S., there were similar popular movements against Sears, including promotions where people who added enough Sears catalogues to a bonfire got free admission to a local movie theatre.
Irving Oil was a beneficiary of the breakup of U.S. energy monopoly Standard Oil. In a more fractured market, the Canadian company was able to compete.(Devaan Ingraham/Reuters)
While the complaint by News Corp in Australia shows the move to downsize the tech behemoths may have legs beyond the Democratic Party, it also reveals two differences from previous attempts to bring U.S. monopolies to heel.
One is that as global companies, Google and its ilk are no longer under the sway of any single government. Attempts to rein them in will have to be based on supranational agreement. That seems unlikely when the current U.S. administration can't even cooperate with the World Trade Organization.
While governments may decide short-term benefits make it essential to limit the monopoly power of their biggest companies, it is interesting to note that former dominating giants — names like U.S. Steel, IBM, Eaton's and Sears — have now been superceded by the new giants we worry about today.
Of course, the power over consumer information by concentrated private corporations is also unprecedented. The remedy for that remains uncertain.
Follow Don on Twitter @don_pittis
About the Author
Don Pittis was a forest firefighter, and a ranger in Canada's High Arctic islands. After moving into journalism, he was principal business reporter for Radio Television Hong Kong before the handover to China. He has produced and reported for the CBC in Saskatchewan and Toronto and the BBC in London. He is currently senior producer at CBC's business unit.
Credit belongs to : www.cbc.ca