Cory Doctorow: Steering with the Windshield Wipers
Take off your glasses for a sec (you’re a Locus reader, so I’m guessing that you, like me, are currently wearing prescription eyewear) and have a look at the manufacturer’s name on the temples. Specifically, check to see if they were made by Armani, Brooks Brothers, Burberry, Chanel, Coach, DKNY, Dolce & Gabbana, Michael Kors, Oakley, Oliver Peoples, Persol, Polo Ralph Lauren, Ray-Ban, Tiffany, Valentino, Vogue, or Versace. If so, guess what? They actually came from a company called Luxottica, who also own Sunglass Hut, Lenscrafters, Pearle Vision, Sears Optical, and Target Optical – as well as the eye insurer Eyemed Vision Care and Essilor, the world’s largest manufacturer of contact lenses.
Luxottica’s growth is a story about power leading to more power. When companies like Oakley resisted Luxottica’s advances, Luxottica refused to carry them in stores, depriving them of sales until their profits – and share-prices – dropped so low that Luxottica could scoop them up for pennies. The bigger Luxottica got, the easier it was for them to apply this kind of strong-arm. Bottom line: if you bought your glasses from any of the major chain retailers, chances are the glasses and the lenses were made by the same company that owned that retailer – and if you bought your glasses through your independent optometrist, chances are those glasses came from that retailer. Oh, and the markup that retailer charges? Up to 1,000% (and climbing).
How did this happen? It wasn’t an accident.
Starting in the 1970s, a fabulist named Robert Bork began to push an alternate history of what the Sherman Act and other antitrust laws were intended to do. Bork invented imaginary evidence that the authors of these laws had never intended to prevent monopolies, and had only been animated by “consumer welfare” – ensuring that when monopolies occurred, that the new robber-barons limited themselves to squeezing their suppliers and competitors, while delivering lower prices to their customers.
Bork’s project coincided with a kind of decadent moment in antitrust enforcement, when overzealous prosecutors had created an incoherent mess. Notoriously, the southern California grocers Von’s was blocked from acquiring its competitor Shopping Bag Food Stores, because the new firm would control a whopping eight percent of the grocery market. This kind of over-enforcement brought the whole antitrust project into disrepute.
What’s more, Bork’s work coincided with important shifts in the distribution of wealth. The two World Wars had destroyed vast amounts of wealth, and since rich people owned most of the wealth, they had suffered the greatest losses. When WWII ended, the world’s wealth was more equally distributed than it had been in centuries, and the ability of the rich to influence policy was at its lowest ebb. This oligarchic nadir opened up breathing space for the creation of the welfare state: the GI Bill, expansions of public education and public services, increased unionization, and – not coincidentally – the longest run of growth and prosperity the country has ever seen.
But, as the French economist Thomas Piketty famously observed in his 2015 Capital in the 21st Century, even the fastest growing economy grows slower than the average rate of return on wealth, which means that the people who get richest from markets are the people who have money to begin with, not the people whose work and creativity create the growth that accounts for this wealth.
This rich-get-richer phenomenon meant that by the time Bork was working, the share of wealth in the hands of the richest 10 percent of the world had crossed a critical threshold, leaving them with enough extra cash to start buying policies that would make them even richer. As part of that, Bork was able to raise stupendous amounts of money to promote his alternate history of antitrust, eventually transforming the world of antitrust enforcement so that “consumer welfare” was the only thing judges really cared about.
(The same phenomenon of wealth reaccumulation that produced a budget for Bork’s backers also provided a financial base to support Ronald Reagan’s campaign, and Reagan threw a lot of gasoline on the inequality bonfire, and even tried to get Bork a seat on the Supreme Court, though that was too much for the Senate, who rejected him after grilling him about his opposition to voting rights, his belief in the unchecked power of the presidency, and his role in Richard Nixon’s crimes.)
Bork’s legacy is with us today. After nearly two generations of antitrust malpractice in which companies were allowed to grow by gobbling up their small competitors or merging with their largest ones, we are living through a new Gilded Age in which trusts are on the rise. Finance is dominated by a handful of giant banks; liquor and beer are dominated by a pair of giants, too. Cable, telcoms, shipping, oil, bookselling, movie theaters, and, of course, internet and media.
Media has got a bad case of overconcentration blues: we’ve got five major movie studios as I write this, but by the time you read it, there will be four, because Disney will have swallowed Fox. Four is also the number of major music recording companies. Publishing famously has the Big Five, but it might be four soon, as rumor has it that CBS will divest of Simon and Schuster (S&S’s champion at CBS was former CEO Les Moonves, who was ousted in a #MeToo scandal), and that HarperCollins will buy it up.
Concentration leads to all kinds of bad things. Take Facebook, a company whose day is long past. People fucking hate Facebook, which is why 15,000,000 people left the service in 2018, primarily 15-to-34 year-olds, way up from 2016. And where did most of those people go? Instagram, acquired by Facebook in 2012.
Facebook has a privacy problem and we should regulate to fix it, but the reality is that for as long as people who care about Facebook’s privacy dumpster fire end up on another Facebook-owned site, Facebook will slowwalk any kind of privacy protections.
Which brings me to copyright. As I type these words, the European Union is two weeks away from the final vote on its new Copyright Directive, whose odious Article 13 attempts to get artists paid more by holding online services liable if their users post infringing materials, upending the current “safe harbor” system that frees online services from an obligation to hold every tweet, Facebook update, photo, video, Minecraft skin, and other potentially infringing post until it can be assessed by a copyright attorney to ascertain its legal status. Instead, platforms will have to license the entire catalogs of the big rightsholder groups – the Big 4-or-5 publishers, studios, labels – and block anything that might be unlicensed, using automated filters.
This is a plan of almost unfathomable foolishness. In the first instance, it will not actually stop infringement. Filters are imperfect and prone to catching false positives, including dreadful scenarios like blocking a photo of police brutality at a demonstration because the filter detects a copyrighted stock photo in a bus-ad in the background (or blocking your video of your child’s first steps because there’s some distant copyrighted music playing at the time). They’re also cheap and easy to subvert, because attackers can create an infinite number of accounts and try various tactics to evade the filters for free until they find a blind spot, then exploit it at will. And filters are so prone to abuse: any inconvenient expression can be blocked by claiming it as a copyrighted work (to say nothing of the fraudsters who claim an artist’s work before the artist gets to it and divert the artist’s ad revenue or licensing fees to themselves).
As the saying goes: try anything to earn a living as an artist, but if your business model involves censorship, you are on the wrong side of the arts – and the wrong side of history.
But that’s just for starters. After all, the artists whose interests we are proposing to protect with Article 13 are overwhelmingly represented by giant media companies – the Big 4s of prose, moving images, and sounds – and even if the Copyright Directive enriches these massive multinational corporations, none of that windfall will reach artists. When was the last time Universal ended an upbeat earnings call by announcing that its record quarterly earnings meant that it was going to up its royalty rates? Any new revenues generated by the Directive will go to shareholders and executive bonuses, not the artistic sellers in media’s buyer’s market for our work.
It’s all about competition. When media companies don’t have to compete for artists’ copyright, artists make less money for those copyrights.
More competition: the Article 13 rule in the Copyright Directive will be fantastically expensive to comply with (YouTube’s Content ID, a toy version of the filters envisioned by the Directive, cost $100 million to create and maintain), and there are about five companies that can afford them, all based in the USA. The EU’s proposal would wipe out the entire EU tech sector at the stroke of a pen.
Ten years from now, if the Directive passes, Google and Facebook and Apple and Amazon and Twitter will only have grown larger, without the periodic inconvenience of having to strong-arm an uppity European competitor out of existence. If the entertainment companies think GAFA are a PITA in 2019, give ’em a decade with an entire continent to devour without the constraint of competitors, and watch how hard-to-negotiate-with they become.
A lack of competition rewards bullies, and bullies have insatiable appetites. If your kid is starving because they keep getting beaten up for their lunch money, you can’t solve the problem by giving them more lunch money – the bullies will take that money too. Likewise: in the wildly unequal Borkean inferno we all inhabit, giving artists more copyright will just enrich the companies that control the markets we sell our works into – the media companies, who will demand that we sign over those rights as a condition of their patronage. Of course, these companies will be subsequently menaced and expropriated by the internet distribution companies. And while the media companies are reluctant to share their bounties with us artists, they reliably expect us to share their pain – a bad quarter often means canceled projects, late payments, and lower advances.
And yet, when a lack of competition creates inequities, we do not, by and large, reach for pro-competitive answers. We are the fallen descendants of a lost civilization, destroyed by Robert Bork in the 1970s, and we have forgotten that once we had a mighty tool for correcting our problems in the form of pro-competitive, antitrust enforcement: the power to block mergers, to break up conglomerates, to regulate anticompetitive conduct in the marketplace.
Think of it this way: in the 1980s, Robert Bork tore the steering wheel out of this car we’re all riding in. For decades, we’ve been trying to figure out how to steer it without the wheel, arguing about whether we should use the windshield wipers, or try rolling down all the windows and rolling them back up again. The Copyright Directive is like an attempt to improve the wipers’ efficacy by affixing giant, ungainly sails to the blades in the hope that they will produce enough drag to allow us to navigate.
But just because we know where to find the copyright lever, it doesn’t follow that yanking on it hard enough will make it do the work of antitrust law.
Eventually, you just have to get a new steering wheel.
That brings me to would-be Democratic Presidential nominee Elizabeth Warren (disclosure: I am a donor to her campaign), who has proposed a new antitrust regime aimed at Big Tech, which would break up the tech monopolies, a plan that I have nothing but admiration for.
Warren’s plan has some odd rough edges, though: in proposing to break up Big Tech but not Big Content, Warren creates a situation in which some zeroes may be moved from Google’s balance-sheet to Universal’s, but this is unlikely to put an extra dime in the pockets of artists. When Big Tech and Big Content sit down to make a meal out of artists, does it matter which one gets the bigger piece?
More worrying is a seemingly thrown-away clause at the end of Warren’s announcement:
We must help America’s content creators – from local newspapers and national magazines to comedians and musicians – keep more of the value their content generates, rather than seeing it scooped up by companies like Google and Facebook.
This phrasing is lifted virtually verbatim from the EU Parliament’s legislative committee, from whose foetid loins the Copyright Directive and Article 13 sprang.
When companies get very big, we have a choice: either we cut them down to size, or we impose rules to make them marginally safer to share a planet with.
For example, when AT&T ruled America, it was exempted from antitrust enforcement and allowed to maintain an absolute monopoly on telcoms service, as well as a monopoly on phones and answering machines and anything you might plug into “the Bell system.” In return, AT&T was charged with helping police and emergency services, and with maintaining investment in the service. The obligations and the monopoly went hand-in-hand: if AT&T was split into smaller pieces, it would no longer have the capacity to manage its duties to law enforcement and disaster management, nor its duty to invest in infrastructure. Any time anyone proposed breaking up AT&T, they would point this out, and the proposal would die, and AT&T’s grip would tighten.
The breakup of AT&T in 1982 was the last spasm of real American antitrust enforcement before Robert Bork and Ronald Reagan killed it. Killing AT&T allowed for the growth of internet service providers, and hence the internet, which had been crushed under AT&T’s weight for decades. Breaking up AT&T was good policy, even if it meant losing some of those public duties we had deputized it with.
If we appoint tech giants with the unimaginably expensive civic duty of policing all online speech for copyright infringement (or “extremism” or what have you), that will make it impossible to unbiggen Big Tech: we won’t be able to shrink them into pieces small enough to manage, because those pieces won’t be able to manage their public duties.
I hope Warren will come to understand this. We need trustbusting, and not just to protect the arts: from our eyesight to our iPhones, monopolies are strangling the possibility of a pluralistic, egalitarian society.
Cory Doctorow is the author of Walkaway, Little Brother, and Information Doesn’t Want to Be Free (among many others); he is the co-owner of Boing Boing, a special consultant to the Electronic Frontier Foundation, a visiting professor of Computer Science at the Open University and an MIT Media Lab Research Affiliate.
This article and more like it in the May 2019 issue of Locus.
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