Someone states the obvious, that if you want to rein in tech giants, start treating them like the criminals that they are.
Between criminal violations of anti-trust laws, violations of wiretapping laws, securities law violations, and conspiracies to violate laws and regulations (Uber, AirBnB, etc.) these guys should be subject to arrest, trial, and imprisonment"
On March 25, the CEOs of Google, Facebook, and Twitter will once again testify before a committee of the House of Representatives, this time about the spread of disinformation on their platforms.
Fortunately, there are two options to buy time, neither of which requires congressional action. It merely requires the government to apply regulatory tools that do not get used frequently, namely subjecting business executives to felony prosecution.
The first option is an antitrust case against Google led by the attorney general of Texas that alleges a price fixing conspiracy in digital advertising. The complaint names Facebook as a co-conspirator. Price fixing falls under Section 1 of the Sherman Act, significant because it does not require proof of harm. The attempt itself is a crime. And if, as has been alleged, there is evidence of an agreement for mutual legal defense, there may be a second count. When appropriate, executives can be subject to felony prosecution, punishable by up to three years in prison. Google denies any wrongdoing.
The second option would be a securities fraud investigation by the Securities and Exchange Commission. For a decade or more, journalists have reported evidence of overstated user counts and advertising views by internet platforms. They assert that a material percentage of advertising clicks are manufactured by fraudsters exploiting the lack of transparency in digital advertising. The opacity of all digital ad platforms relative to traditional media and Google’s dominance of digital ad infrastructure have prevented a thorough accounting.
Securities law requires public companies to report accurate numbers. For internet platforms, user count and ad views are key to investor sentiment, the latter an essential revenue driver. If ad views are overstated, then revenues must also be overstated. If the overstatement occurred over many years, with the knowledge of the executives, then the SEC has the option to pursue a felony case, creating legal jeopardy for senior executives who may face prison time. Such cases are not common, but the circumstances surrounding internet platforms certainly warrant a thorough investigation.
While it has not been a common practice to use felony cases to reform an industry, these are extraordinary times. The goal is not to put executives in jail, but rather to create incentives for good faith negotiation with corporations whose behavior poses a threat to society and the authority of the government.
It used to be common practice to use felony cases to reform an industry, just look at the prosecutions, and long jail sentences in the 1930s, see the fate of Richard Whitney, former head of President of the NYSE.
He was not the only one.
The Biden administration wants to restore faith in government. Its aggressive actions to distribute Covid vaccines and pass the American Recovery Act are important first steps, but not enough. Directing executive branch agencies to enforce the antitrust and securities laws against flagrant violators would be welcome next steps. Doing so against Google and Facebook would begin the process of reforming an industry that continues to act recklessly.
I know I say this a lot, but I want to see them frog-marched out of their offices in handcuffs.