Trumping ‘Big Tech’ — How the president will balance the ledger
In case you haven’t noticed, President Donald Trump is on a tear. Acquitted by the Senate in the impeachment trial. Shielded by federal courts on the release of financial documents. Insulated from criticism by a vibrant economy. Buoyed by strong ratings in the polls. And odds-on favorite to win if the election were held today.
It now appears the president might add to his growing list of winnings by trumping the titans of “Big Tech.” Leave aside the Congressional inquiries, Democratic calls for breakup and the push for internet regulation for a moment. Look at developments affecting the bottom-line business of Amazon and Google, two companies that could be directly affected by key decisions of the Trump administration.
First, is the award of a $10 billion Pentagon contract to Microsoft under the Joint Enterprise Defense Infrastructure (JEDI) program. Amazon was seen as the front-runner to provide cloud services under a multi-year deal — but IBM, Microsoft and Oracle protested the bidding process, and the president investigated. Following that, the Pentagon pivoted, selecting Microsoft for the multi-year deal. Amazon then cried foul and petitioned for a temporary injunction, which is where things stand today.
Next, and maybe more significant, is the Google v. Oracle case scheduled to be heard in the U.S. Supreme Court on March 24. In this dispute that has been brewing since 2010, there are two key issues: first, whether Oracle can claim copyright protection for a software interface; and second, whether Google’s use of Oracle’s software interface in creating a new computer program constitutes fair use.
At stake is Oracle’s claim for nearly $9 billion in damages for Google’s copying of nearly 11,000 lines of software code in its Android mobile phone operating system. Against this backdrop, the Trump administration urged the Court to deny the review and rule in favor of Oracle. Whatever the outcome, the case will be precedent-setting and closely watched by the entire tech ecosystem.
In both instances, the administration made a deliberate decision to oppose Amazon and Google — the exemplars of unbridled Big Tech. The legal and technical issues are complex, but the positioning is simple, reflecting a dichotomy in the tech sector. As technology pioneers, Oracle and Microsoft are in the business of making things — computers, software and such. Amazon and Google, not so much. Both Oracle and Microsoft have separated themselves from the Big Tech crowd in other ways, primarily through their staunch independence on key policy matters; in fact, Microsoft has been known to either go it alone or adopt an Alpine neutrality on issues such as privacy, broadband deployment and spectrum.
The animus between Trump and Big Tech transcends policy differences. It’s doubtful whether the president would have a kind word to say about Amazon or Google beyond their trillion-dollar market cap and contribution to a hot stock market. And with good reason. While Big Tech has recently pivoted to the right, it spent decades loading up the left. Amazon’s recent request to depose the president only deepens the divide.
Big Tech has held sway in Washington since the Clinton era. They have marched to a different beat, promoted different standards, and played by different rules — all with a sense of smug entitlement. Eschewing the traditional ways of Washington, Google and Amazon have flaunted their outsized fortune in the face of longtime legacy industries like advertising, broadcasting, finance and telecom, all of which — unlike Tech — are heavily regulated. Under scrutiny, Tech has retreated behind the opaque veneer of innovation and reminded critics of its importance to the global economy — all with impunity.
But not anymore.
Congress became enamored with Big Tech and blinded by the bling of chic Silicon salons. It brushed past the glass ceilings, closed doors and exclusions of the Valley to tap into its lobbying largesse. While it has taken Congress a long time to see the forest beyond the trees, Trump had no such myopia. Thus, it was no surprise that he supported Oracle and Microsoft in two commercial deals of consequence.
In both cases, the opponents are Big Tech stalwarts who receive more than enough deference from the U.S. government on everything from advertising, conflicts of interest, federal contracts, mergers, privacy, and intellectual property infringement. At some point, the rule of reason suggests that enough is enough.
Absent a breakup of Google and Amazon, an unlikely and undesirable outcome, the leviathan will live on. Challenging a few contracts, albeit big ones, is noble. But it will take more than brake-pumping to slow the steady roll of Big Tech. After all, why should Amazon or Google be the institutional default for federal government services?
Unfortunately, Congress appears mired in the here-and-now, rather than the what-is-to-come. After a spate of high-profile hearings last year, there has been little legislative action to rein in Big Tech. With all the harrumphing from committee chairmen and presidential candidates, something should have happened by now. The reality is that Congress is unlikely to find time to do what is needed on Big Tech.
In the meantime, Amazon and Google proceed apace. Their call for voluntary regulation stops the clock while they are ahead, and we should be suspicious. More than others, these two companies have mastered the fine art of making minor adjustments at the margins and heralding them as major. A concession here, a tweak there, and Congress is appeased just enough to turn their attention to other things.
But not Trump, whose Justice Department and Federal Trade Commission investigations remain relentless. The case for tougher enforcement is present and compelling, and now is the time for bipartisan action to bring a semblance of control, if not contrition, to Big Tech.
Adonis Hoffman is CEO of The Advisory Counsel, Inc., chairman of Business in the Public Interest, Inc. where he leads the Responsible Technology Initiative, and founder of yourprivacymatters.org. He is a former chief of staff and senior legal advisor at the FCC and served in legal and policy positions in the U.S. House of Representatives. He has also served as an adjunct professor at Georgetown University.Hoffman has no business, equity, financial or lobbying interests in any of the companies mentioned in this article. Follow him on Twitter @AdonisHoffman.