For months, Facebook co-founder Chris Hughes has been warning about the dangers of corporate consolidation, even advocating for a break-up of the social-media giant where he started his career.
Hughes and the organization he co-chairs, the Economic Security Project, announced Thursday the launch of a $10 million “anti-monopoly fund.” Backed by a series of high-profile philanthropies, including the George Soros-financed Open Society Foundations and the Omidyar Network, created by the founder of eBay, the new effort aims to shine a spotlight on competition and “move the issue from the margins to the mainstream,” Hughes said in an interview.
“You don’t need a degree in economics to know corporations and the wealthy have had a heavy hand in setting a lot of economic [policy] over the past several decades,” he added.
The fund, which will invest in projects until March 2021, aims to provide financial support to a wide-array of organizations. That includes academic researchers studying mergers and market power, policy advocates pursuing new rules to rein in tech and other industries, and grassroots groups that have battled bigness on the ground. The investments could serve as an early counterweight to the millions of dollars that Facebook, Google and other big businesses, well beyond tech, spend annually to furnish research in their favor and stave off regulation.
“Americans understand corporate power has gotten out of control,” Hughes said, “and a lot of [groups] are interested in organizing to push back against them.”
The launch of the new anti-monopoly fund reflects an evolution in Hughes’s personal engagement on antitrust roughly five months after he issued his first public call to break up and regulate Facebook. In an essay for The New York Times, Hughes said Facebook CEO Mark Zuckerberg’s influence exceeded “anyone else in the private sector or government,” granting him the power to gobble up rivals, crowd out investment and stifle innovation, threatening consumers and democracy itself.
Such concerns have resonated with regulators in the United States, who have embarked on a slew of antitrust investigations targeting big tech in recent months. Nearly every state attorney general has signed on to an antitrust probe of Google, and a similarly sized state-led probe of Facebook is now under way. In Washington, the Justice Department and Federal Trade Commission broadly have set their sights on the two tech giants and others in the tech industry, including Amazon, while Congress considers an update to federal antitrust laws. (Amazon founder and chief executive Jeff Bezos owns The Washington Post.)
Hughes has played an early role in those investigations, working with well-known competition experts and former government officials to make the case to regulators that Facebook, in particular, needs to be broken up. This spring, Hughes also began speaking to potential donors about committing money toward coordinated “anti-monopoly” investments. The term is supposed to encompass regulatory fixes and other solutions beyond the application of federal law to break companies apart, he said.
In practice, the new $10 million fund could invest in organizations that craft or advance privacy legislation, Hughes said, or activist groups akin to those that fought against Amazon as it sought to expand its headquarters in New York City. He did not name the initial set of funding recipients but said they would be broad in nature, akin to the kind of bets that his Economic Security Project has made in its previous work around guaranteed basic income.
But Hughes said the new research, advocacy and grassroots investments also will span well beyond tech — to focus on other areas of the economy where corporate giants had wielded their dominance in damaging ways.
“There was a sense concentration in the economy has gotten completely out of control, and we need to do something about it,” he said. “There have been a good number of groups working on this for some time, and some funders working on this for some time. But it felt like the right next step would be creating a fund that would be catalytic, and time bound, to invest in a cross section of groups — to include groups fighting tech but also in the agriculture and pharmaceutical spaces.”
Researchers have found merging hospitals in major metropolitan areas can result in higher prices for admissions. State attorneys general have sued major pharmaceutical companies for conspiring to fix the price of generic drugs, running afoul of antitrust laws. Beyond health care, some experts contend the agriculture sector has faced the same troubles, resulting in big businesses that result in serious economic hardship for farmers, a new report this year found. And the financial sector long has been the target of those who feel the government is captured by the very industries it’s supposed to oversee.
“The increased awareness and interest in this issue [among] the American people as well as American lawmakers has been 20 years of growth in two years,” said Tom Perriello, the executive director for domestic programs at the Open Society Foundation, which has committed funding. “We need to meet that moment, meet that demand from Americans that are very concerned about this.”
The list of initial commitments also includes the Ford Foundation, the Nathan Cummings Foundation, the Knight Foundation and others. Some, like Soros, have funded some of tech’s most potent antagonists in the past, including Open Markets Institute, which has advocated for the break up of companies including Facebook and Google.
Joining them are former tech executives such as Hughes; the Hewlett Foundation, which had been established by the computer-maker’s co-founder; and the Omidyar Network, established by Pierre Omidyar, the founder of eBay.
Anamitra Deb, a senior director at the Omidyar Network overseeing tech and antitrust work, said the roster gave them the “credibility of insider knowledge,” adding: “To us it’s a positive sign that people who are insiders, if you will, are now saying, ‘Hang on, maybe some things have gone too far’.”
Even some of the fund’s donors acknowledged that the initial size of the fund, at $10 million, represents a small fraction of the $1.7 billion that companies and their lobbying organizations have spent already in Washington just over roughly the past six months. Hughes, however, said the goal isn’t to get into an “arms race.”
“There’s more concentration now than 20 years ago,” he said. “It’s our view we need to be having a conversation about what this is doing to the economy more broadly.”