Government attempts to regulate Big Tech are a Sisyphean mess

Open this photo in gallery:

Gus Carlson is a U.S.-based columnist for The Globe and Mail.

A U.S. federal court decision last week declaring that Meta Platforms Inc. is not a social networking monopoly and does not need to spin off its two most popular platforms – WhatsApp and Instagram – is more than another big win for Big Tech.

The court’s rejection of the U.S. Federal Trade Commission’s complaint is another nail in the coffin of the antiquated antitrust laws that regulators continue to apply – and fail – to address the dynamics of the modern technology marketplace.

Or it should be.

The problem is twofold, at least. First, there seems to be little ambition to fix such an obsolete system of regulations. Second, and perhaps more acute, there is a severe lack of competence among members of U.S. Congress to do it.

Opinion: Warren Buffett’s words are a warm hug in a harsh world

Opinion: Mamdani is turning Wall Street enemies into friends

This is not small potatoes, money-wise. Meta acquired Instagram in 2012 for US$1-billion and WhatsApp in 2014 for US$19-billion. The company generates significant revenue from both platforms as its core business declines.

The facts of the case are straightforward. The FTC suit, filed in 2020, accused Meta of violating antitrust laws by acquiring potential rivals WhatsApp and Instagram to avoid competing with them.

Meta argued that it faces “fierce competition” from platforms such as YouTube and TikTok. Judge James Boasberg agreed, saying Meta held only a “modest” share of the total social-media market and those rivals prevented it from holding a monopoly.

Further, Judge Boasberg suggested the entire social-media landscape had changed since the suit was filed, specifically with the rise of artificial-intelligence content – a new reality that poked big holes in the complaint.

The spectre of AI as a new form of competition led to a win for Google Inc. earlier this year when a U.S. federal court refused regulators’ request to break up the company through the sale of its Chrome browser and Android operating system. The company was ruled a monopoly in certain aspects of its search and online advertising businesses, but that finding was less impactful.

And therein lies the crux of problem. The laws used to police the modern tech marketplace date back 135 years to the Sherman Act of 1890, one of the U.S. government’s first attempts to regulate businesses.

That law has been amended once – in 1914 – to expand its reach, not to modernize it. There has been no attempt to evolve it to address the new tech marketplace, particularly when it comes to AI.

As part of its defence, Meta argued – rightly – that the laws are so archaic they hinder innovation and put U.S. companies at a disadvantage in the global tech market.

The sad truth is that Congress is woefully underqualified for the task of revamping the regulations. Anyone who has watched recent congressional hearings on technology practices knows there is a dearth of even basic understanding among members of what social media is and how it works. To them, trying to grasp AI is like learning to understand Martian.

This is not an age thing, though it’s worth noting that the average age of members of Congress is about 60: 58 in the House of Representatives and 65 in the Senate. These people did not grow up in the tech-heavy or tech-savvy generations now driving the sector.

And the solution is not as simple as engaging the help of younger congressional staffers – as happened in the hearings – who by virtue of being active on social media are light years ahead of the elected representatives they work for.

It’s sort of the tech version of Plato’s proverb that in a room full of blind men, the one-eyed man is king. In the modern context, it’s more like, in a room full of tech illiterates, the man with the Instagram account is king.

The ironic truth is the most-qualified people to help modernize the antitrust laws as they apply to the tech sector are the tech people themselves.

Of course, putting techies in charge of framing laws meant to regulate the tech sector is like having the fox design the henhouse.

It may not be ideal, but it’s better than what exists now.

But to even move the ball a little there needs to be some ambition in government to tackle this, even if it is imperfect.

Until there is, regulators will be destined to a fate like Sisyphus, rolling the same rock up the same hill time and again, only to have it roll back on them. Apple Inc. and Amazon.com Inc. currently face antitrust suits brought by the government.

And the costs of such frivolous legal action, and the distraction it causes to the commercial rhythm of companies doing battle in an increasingly competitive global market, will continue to hamper innovation.