Businesses typically eschew regulation. In this country, one legacy of the Reagan years is that a significant cohort of politicians and voters do as well. Regulation is often held up as an inhibitor of innovation, while the remarkable inventiveness and growth of American technology companies is attributed to the country’s lax regulatory climate. Zuckerberg suggests as much when he says that “the rules governing the Internet allowed a generation of entrepreneurs to build services that changed the world and created a lot of value in people’s lives.” The Federal Trade Commission has been especially complaisant—it is only now getting around to fining Facebook for failing to abide by its 2011 consent decree intended to protect users’ privacy. Congress, meanwhile, has made a show of inviting Zuckerberg and other tech leaders, including Sundar Pichai, the C.E.O. of Google, to its chambers, ostensibly to call them to account, but then has done nothing to check the power of their companies.
There are numerous reasons for this. As we saw from their fawning, elementary and sometimes inane questions during those hearings, few members of Congress understand the technology that they are tasked with regulating. The Office of Technology Assessment, which could have guided them, was shut down by the 104th Congress, in 1995, when the Republicans had control of both the House and Senate. More crucially, legislators are under the sway of an army of lobbyists: Google alone spent more than twenty-one million dollars on lobbying last year; together, Google, Facebook, and Amazon spent an unprecedented forty-eight million dollars, which was an increase of seventeen per cent from the previous year, much of it to stave off regulation. (A recent tweet by the digital-rights activist and developer Aral Balkan put this in perspective, claiming that Eric Schmidt, the executive chairman of Google’s parent company, Alphabet, had told him, at a private book event in SoHo, “I wake up every morning and I fight regulation, it’s what I do, it’s my job.”)
So far, the only significant reckoning for the tech industry has come from the European Union, which pursued Apple for tax avoidance in Ireland, resulting in a back-tax bill of more than fourteen billion dollars; challenged Facebook’s acquisition of WhatsApp, by issuing a hundred-and-twenty-two-million-dollar fine; and is currently investigating Amazon for antitrust violations. Ten years ago, the E.U.’s Commissioner for Competition, whose office has brought these actions, began investigating Google for unfair advertising practices. During most of those years, Google shut out other companies that wanted to sell ads next to the Google search bar. In 2016, the company stopped the practice after receiving what was essentially a cease-and-desist order from the E.U. But the damage was done. “For a ten-year period, Google did the wrong thing,” Margrethe Vestager, the E.U.’s commissioner for competition, told me. “It denied other companies the possibility of doing business and it denied us, as consumers, the probability that we would have other ads, better ads. And there was a high risk that, because of what it was doing, ads were more expensive. And, when ads are more expensive, the cost will rebound to us as consumers.” Last month, Vestager fined Google $1.7 billion in the case. All told, Google has been censured three times since 2014, when Vestager became commissioner, and has been slapped with more than nine billion dollars in fines.
Vestager’s reputation in the United States as the toughest cop on the tech beat—a New York Times headline, “Who Strikes Fear Into Silicon Valley? Margrethe Vestager, Europe’s Antitrust Enforcer,” is typical—is evidence that, for the most part, she walks the beat alone. “Your tax lady, she really hates the U.S.,” President Trump told Jean-Claude Juncker, the president of the European Commission, last year. (In fact, much of Vestager’s antitrust work concerns big European companies, such as the Swedish furniture giant ikea.) “We are trying to get a hold on this industrial revolution that’s happening right now,” Vestager told me. “It’s been the nature of every industrial revolution, where you say, ‘Wow! That’s amazing,’ and eventually you realize there are things that you have to deal with—working conditions, child labor, harmful substances in the workplace, all of that. Here it’s very important that we get up to speed quite quickly, because these are fast moving technologies, fast moving markets, and if we want our democracies to set the direction, instead of businesses doing so, it’s a matter of urgency.”
© The New Yorker