Even if you think that President Trump had it coming, this demonstration of corporate power is troubling, especially if you believe our country’s divisions are deepened by social media business models. In this view, the platforms’ ad revenue depends on user engagement, and engagement is driven by anger, so social media serves up content calculated to leave users angry. If that’s true, the violence-marred protests over the summer and at the Capitol are powerful arguments for forcing a fundamental change in how U.S. social media companies make money.
Faced with such a threat to their business, those companies are highly likely to use their substantial power to tilt the debate against such reforms.
Many on the left and right are appalled by the tech giants’ power, but they are reluctant to rely on the intervention of a government that could change hands completely over any four-year period. That dilemma undercuts the two most common proposals to trim Big Tech’s reach: revising Section 230 or enforcing antitrust laws.
Section 230, a segment of the Communications Decency Act of 1996, seems ripe for reform. Both presidential candidates questioned it, but Trump wanted changes that would discourage the suppression of conservative voices, while many on the left think the platforms don’t do enough to suppress right-leaning speech. Using Section 230 to drive speech-moderation standards would transform the law into a regulatory regime that could force Silicon Valley to curry favor with whoever holds power in Washington. Both the right and the left should fear such a result, unless they think they can keep the other side from ever controlling the regulatory levers.
What about the antitrust laws already on the books? The Trump administration kicked off litigation against Google and Facebook, almost certainly with a view toward spurring more competition, and thus more diversity, in social media. But that’s not the most likely outcome. Instead, the Justice Department would be lucky to win a few new rules preventing the platforms from favoring their own interests in third-party transactions or to force the divestment of a few subsidiaries. Either way, antitrust enforcers would essentially create a regulatory regime tailored to a specific company.
What is needed is a more dramatic and less politically tinged solution. Across the Atlantic, Germany and the European Union have recently proposed legislation that sets competition rules for digital “gatekeepers” such as social networks and cloud computing companies. This is another regulatory scheme and, therefore, of dubious value, but the notion of digital gatekeepers aptly summarizes what’s most troubling about Silicon Valley’s new role in our discourse. So why not combine that concept with the 3 percent tax France imposes on the gross revenue of large digital companies — but in the service of structural reform rather than regulation?
What if the federal government imposed a 40 percent tax on the gross revenue of gatekeeper social media companies that have more than, say, 30 million active users in the United States? Instead of fighting antitrust authorities in the trenches for years, companies faced with such a harsh tax rate would rush to break themselves up. (And if they didn’t, well, the treasury could certainly use the revenue after the bailouts of 2008-09 and 2020-21.) Efforts to avoid the tax would surely spur a proliferation of mainstream social media companies, each serving a broad audience. Some might adopt an editorial stance that leans to the left and others to the right, just as broadcast and other news media already do. But their ability to enforce ideological conformity or pursue a unified business interest would be shattered.
There are plenty of details to fill in. Among them: making sure that this wouldn’t simply allow Chinese social media platforms to use their domestic scale to seize the U.S. market; limiting application to companies that claim a right to control their customers’ speech; and, as with all tax measures, staying alert for unanticipated consequences. Still, the basic concept of a high tax rate to force decentralization has something for everyone. For those on the left, it constrains the clout of big business. For those on the right, it offers the possibility of new platforms that are both responsible and open to conservative voices.
This has at least a chance of attracting majorities from both the Republican and Democratic caucuses. And any legislative proposal that could do that in these times is worth serious consideration — and more than a little effort.
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