If We Don’t Break Up Big Tech, We’ll All Be Uber Drivers Soon

The Left has yet to properly absorb two major revelations of 2020: 1) The ruling class, for all its platitudes, decisively does not care about small business, and 2) We are all small businesses now. To the first point, a court-ordered Small Business Administration data dump in December confirmed that more than half of the $521 billion doled out in April’s CARES Act small business rescue program were snagged by just 5% of well-heeled recipients, including sectors like construction and law that were merely inconvenienced—certainly not decimated — by Covid-19 shutdowns. Meanwhile, the clique of gig app developers behind California’s successful passage of the terrifyingly absolutist Proposition 22 in November — which effectively repeals the very concept of employment for any worker who takes orders from a smartphone app — have vowed to nationalize the law.

We can expect the collapse of the service sector to lead millions of displaced sous chefs and bartenders and fisherpersons to open Etsy and LawnStarter accounts, live on couches while renting out their apartments on Airbnb, sign up to drive for DoorDash, cook for a CloudKitchen, or sign up to be a third party seller on Amazon. Thanks to the business model codified in Prop 22, they’ll be the CEOs of their own immiseration: sourcing their own equipment, withholding their own payroll taxes, shopping around for insurance and, inevitably, hiring other gig workers to assist with the unmanageable workload of the 21^st-century subsistence entrepreneur. The line that once distinguished workers from the small-time merchant-farmer class Marx called the ​“petit bourgeoisie” will be all but obsolete, erased by the hands of a few deep-pocketed data-mining conglomerates that are (generally) yet to even make money. 

It’s important to belabor that point: None of the companies who brought you Prop 22 is actually profitable; Uber has lost $26.5 billion since 2014. Uber’s partners on Prop 22 have bled another $9 billion. Critics of capitalism tend to view profit as the system’s original sin, but for gig apps and Amazon, the ability to burn through cash is what actually makes them unstoppable. The rest of Silicon Valley learned it from Amazon, which uses its grotesque cloud-computing earnings to subsidize the billions it loses shipping diapers overnight for free. 

Sell­ing any­thing indef­i­nite­ly at a loss is tech­ni­cal­ly ille­gal, because the seller typically does it to crush competition in the short term so as to secure absolute pricing power in the longer run. Case in point: the gig app cartel and Amazon have increasingly mitigated its losses by forcing retailers, restaurants and delivery drivers to subsidize them; one study esti­mates Door­Dash dri­vers lose mon­ey on near­ly a third of their orders, while restau­rants that do not radically overhaul their menus and pricing formulas generally lose mon­ey on most delivery app orders, a predicament they share with untold legions of Amazon (and increasingly Etsy) sellers. A full-time rideshare driver recently broke down his finances in a Jalopnik column that concluded he had paid $250 for the privilege of Lyft and Uber driving in 2019. 

This whole despicable business model might have been nipped in the bud with stronger enforcement of Section 2 of the 1890 Antitrust Act, which prohibits anti-competitive business activities. But no one really paid attention to antitrust until a few years ago, when some Belt­way wonks dis­il­lu­sioned by the finan­cial cri­sis began lay­ing the ground­work for a legal crack­down on cor­po­rate concentration. 

The so-called ​“hipster antitrust” movement’s biggest achievement thus far has been the House antitrust subcommittee’s investigation of the big four tech giants (Amazon, Apple, Facebook and Google); the subcommittee recently filed a 450-page report report that laid out a damning case that the firms had effectively and deliberately installed themselves as gatekeepers over all online activity, extracting enormous fees and/​or valuable proprietary data from virtually everything Americans do on a phone or laptop, and that they had used their power and control of information to either buy off or crush anything they interpreted as an even a plausible threat to that gatekeeper status. The report was written by Democratic committee staffers, but quickly scraped and deployed by Republicans in the Trump Justice Department and state attorneys general offices, who sued Google for monopolizing search in October, and in December Trump’s Federal Trade Commission sued Facebook alongside a bipartisan group of 46 state attorneys general (plus the AGs of Guam and Washington D.C.) for essentially conspiring to Googlefy social media. This is the other big achievement of the new trustbusting movement: It has successfully harnessed Trumpian astroturf populism for a legitimately populist cause. Eighty-five percent of Americans think big tech has too much control. It’s not hard to see what’s in it for Republicans: 95% of big tech employees spend their campaign donation dollars on Democrats; in 2016 Silicon Valley spent 60 times as much contributing to Hillary Clinton as it did Donald Trump. The antitrust subcommittee even handed the MAGA crowd some useful talking points by eviscerating the Obama Administration repeatedly in its report over its laissez faire attitude about problematic big tech deals like Facebook’s acquisitions of WhatsApp and Instagram. But where the intellectual basis of the Obama FTC’s classic ​“neoliberal inaction” stance toward corporate concentration was masterminded by right wing University of Chicago economists, Missouri’s Republican Sen. Josh Hawley’s crusade against the big tech giants is fundamentally, not that he’d ever admit it, anti-capitalist. 

Case in point: in April Hawley formally asked the Trump DOJ to open a criminal investigation into the Amazon private label department’s practice of systematically mining data on third-party sellers for popular products to copy, then undercutting their price by a few pennies or using other methods to abuse its marketplace power to give its own copycat versions preferential treatment. Libertarians scoffed at this demand; after all, plenty of grocery stores sell their own downmarket private label sandwich cookies right alongside Oreos. What’s different now is, of course, the gaping power imbalance. Multiple third party sellers and other ​“market participants” contacted by the antitrust committee stopped cooperating with the investigation or politely refused to talk even anonymously out of fear of retaliation, explaining that they ​“live in fear” of an all-knowing company that, as the subcommittee’s chairman Rep. David Cicilline (D-R.I.) put it, is ​“the only game in town” in retail anymore. 

This understandable fear is shared by the company’s workers. As Amazon has hiked commissions for selling merchandise over its platform it has also slashed wages; warehouse workers in one South Carolina county saw their salaries shrink by 32% after Amazon opened a site.

No group of Amazon workers has successfully unionized — though some at a fulfillment center in the former steel town of Bessemer, Alabama are currently trying. Workers rightly fear Amazon’s omniscient surveillance apparatus, which tracks everything from physical worker movements to private Facebook groups formed by its ​“independent” Flex drivers. (In Europe the company even hired the Pinkerton spy agency to infiltrate nascent union drives.) And if the usual union-busting tactics fail, with unemployment at multi-decade highs, Amazon can easily do like Walmart and just shut down any facility that tries to organize, just as unceremoniously as it shuts down the accounts of sellers it deems somehow disobedient. Notably, Uber has ripped off Amazon’s labor relations blueprint, notoriously using its systems to spy on workers and other enemies while bombarding drivers’ phones with Prop 22 propaganda and, when a California judge attempted to force the company to comply with state labor law in August, threatening to shut down service altogether in the state.

There is simply no way to win against Amazon or Uber without making them less powerful first. Antitrust at least gives us some tools to do so, and the Left should relish the opportunity to join forces with GOP opportunists like Josh Hawley if it gives us the chance to snatch them from the negligent hands of the Democratic Party’s ruling corporatist hack establishment. Unfortunately, I think mostly because the ​“break ​‘em up” movement is identified with Elizabeth Warren, antitrust has few allies on the Bernie Left (and I am wearing a Bernie 2020 T-shirt as I write). For years, socialist intellectuals — such as Bhaskar Sunkara and Nicole Aschoff of Jacobin, the People’s Policy Project’s Matt Bruenig, and (deservedly!) beloved podcaster Virgil Texas—have argued that antitrust law is ​“quaint” at best (in Texas’ estimation) and counterproductive at worst. In Bruenig’s view, big business is better for labor because ​“fetishized” small businesses are exempt from certain labor laws; Sunkara believes the larger socialist goal of nationalizing the means of production is accelerated by corporate consolidation. 

This view is misguided. Amazon is infinitely scarier than the most tyrannical pizzeria owner, taxis were easier to regulate than Uber, and nationalization is meaningless outside of ​“big structural change” (and we know because ​“we” did it to AIG and Fannie Mae). Even if your goal is to collectivize Amazon by bloody force, the information derived from the antitrust clique’s string of subpoenas is your ammunition. 

Bernie Sanders himself is an ardent supporter of breaking up monopolies — he said as much in an online event this week co-sponsored by People’s Action and the American Economic Liberties Project (an advocacy group for which I sometimes conduct research) — but it’s not one of his committee assignments; the gory arcana of how to unwind bad mergers and police predatory practices is not really his thing. Nor is it technically Warren’s thing; most of the legwork has happened in Cicilline’s House antitrust subcommittee, while the small Senate subcommittee’s ranking Democrat Amy Klobuchar has shown heartening signs of willing to be at least as opportunistically radical as Josh Hawley.

Given all of the big business victories in 2020, the Warren Wonks and the Bernie Bros would be wise to stop getting distracted by how annoying they find the other.