Streetwise Professor

April 5, 2021

Justice Thomas Echoes SWP, But Alas Our Proposals Regarding Tech Companies Are Futile In Today’s Corporatist State

Filed under: Economics,Politics,Regulation — cpirrong @ 7:17 pm

Over four years ago, to address social media platforms’ exclusion on the basis of viewpoint (i.e., censorship) I advocated treating them as common carriers subject to a non-discrimination requirement. The thrust of my argument was that these platforms have substantial market power and are subject to weak competitive discipline due to network effects and other technological factors.

In concurring with a Supreme Court decision to deny cert in a case that found Donald Trump violated First Amendment rights by blocking users on Twitter, Justice Clarence Thomas came out strongly in favor of the common carrier approach to regulating Twitter, Facebook, and Google.

Justice Thomas’ reasoning follows mine quite closely:

It changes nothing that these platforms are not the sole means for distributing speech or information. A person always could choose to avoid the toll bridge or train and instead swim the Charles River or hike the Oregon Trail. But in assessing whether a company exercises substantial market power, what matters is whether the alternatives are comparable. For many of today’s digital platforms, nothing is.

Justice Thomas also notes, as I did, that limiting common carriers’ right to exclude is a longstanding element of the American and British legal systems: “our legal system and its British predecessor have long subjected certain businesses, known as common carriers, to special regulations, including a general requirement to serve all comers.” To this, somewhat more perfunctorily Justice Thomas adds more modern public accommodation laws as a restriction on business’ ability to exclude. Common carriage is a narrower conception because it generally requires some market power on the part of the company, and for this reason I find it a superior basis for regulating social media companies. But regardless, this is hardly a radical proposal, and is in fact deeply embedded in law dating from a classical liberal–i.e., laissez faire–period.

Thomas notes that imposing such a restriction is up to the legislature. Alas, that’s not likely, especially given the influence the social media and tech companies have on the legislature, and more ominously, the clearly expressed interest of the party in power to use the social media and tech companies to exclude and censor speech by their political opponents–whom I daresay they consider political enemies, and indeed, beyond the pale and deserving of banishment from the public sphere.

The leftist party in power cannot restrict speech directly–that would violate the First Amendment. And this is where Twitter, Facebook, Google, Amazon etc. can be quite useful to the leftist party in power. As private entities, their exclusion of speech from their platforms does not facially violate 1A. So note with care the pressure that leftist legislators are putting on these companies to police speech even more than they do already. These members of the party in power are outsourcing censorship to ostensibly private entities as a way of circumventing the Constitution.

As their previous behavior indicates, moreover, these companies do not necessarily need much prompting. They are ideologically aligned with the party in power, and are implementing much politically-slanted censorship of their own volition.

This symbiosis between the private businesses and the governing party is the essence of the political-economic model of fascism. At times, the relationship looks like an Escher etching. Like this one in particular:

Which hand is the Democratic Party, and which one is Twitter et al? That is, is the Democratic Party driving social media companies, or are social media companies pulling the strings of the Democratic Party?

The answer is both–like in the Escher. And that is the essence of the political-economic model of fascism. Corporations are acting as political actors, and politicians and those in government are using corporations to advance their political agenda. This is true in any political system, but the symbiosis is far, far stronger in fascist ones, and the antagonisms far weaker than in more liberal polities.

And as we’ve seen in recent months, it’s not just social media and tech companies that are involved. Corporate America generally has adopted a leftist political agenda, is advancing this agenda, and is attempting to pressure governments–especially state governments–to do so as well.

The injection of companies like the major airlines–all of them–and Coca Cola into the Georgia (and now Texas) voting law controversies is the most recent example. But entertainment companies–including professional sports as well as Hollywood, music businesses, etc.–are also exerting substantial political muscle.

Corporatism–a strong symbiotic relationship between government and powerful economic entities, especially corporations–is the essence of fascist economic systems. That is exactly what “capitalism” in the United States is today.

In such a system, the public-private dichotomy does not exist, and libertarians/classical liberals who act as if it does are useful idiots for the corporatists.

This model is also a good characterization of the Chinese system, which although is ostensibly communist, has become clearly corporatist/fascist in the post-Deng era. Interestingly, the main struggle today in China is between the state/Party and large corporations that Xi and his minions believe are too powerful and hence too independent of the state. Even in symbiotic relationships, there is a struggle for power–and for control over the rents.

So while I applaud Justice Thomas for advocating legislation to impose common carrier status on tech behemoths, it must be acknowledged that this proposal is naive in the current environment. The mutual interest between the current party in power and corporate interests in advancing political agendas generally, and suppressing speech in particular (in part because it also helps advance those agendas), is so great that such legislation cannot come to pass today. It is doubtful that it would have come to pass even had Trump won reelection. The slide into corporatism/economic fascism has progressed too far to hold out little hope that it can be reversed, absent some social convulsion.

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  1. The common-carrier approach is probably unworkable. Even the phone company was allowed to track and block obscene callers.

    Nobody wants an unfiltered social medium where there is no “content discrimination.” Even if one took all moderating and editing functions away from the central platform and allowed users to purchase filtering services separately, there would be strong pressures for concentration in the filtering market, and the problem would simply migrate to those filtering regimes.

    Meanwhile, Justice Thomas isn’t that convincing about the unshakeable network effects of many of these platforms. For example, DuckDuckGo and Bing are not a big step down in functionality from Google, and in some cases seem to work better. Their problems are on the branding side, and in DDG’s case, in convincing advertisers that their privacy policy barring targeting wouldn’t reduce the effectiveness of campaigns by very much.

    Comment by SRP — April 6, 2021 @ 3:33 am

  2. They key problem with Big Tech, as so often happens in the tech world, is excessive vertical integration. Then-dominant IBM gratuitously commingled mainframe hardware, software, and ongoing services (as late as the 1990’s, for example, IBM 3090 owners were not permitted to turn the machine back on after a power outage but had to call in field service to do it), which greatly complicated customers’ migration to near-peer competitors like Unisys or CDC. In the end, it was the PC revolution, combined with limits on the scope of intellectual property to permit clean-room cloning, that brought freedom and diversity to the computing world, whereas the anti-trust action against IBM went nowhere. I would claim that this freedom would have arrived sooner if, for example, courts of the 1960’s had ruled binary blobs (being functional objects rather than artistic expression) ineligible for copyright, or, in a weaker form, not without the source code also being released. (The 1976 copyright act basically codified case law precedent on this topic.) Or if IBM’s competitors had co-operated more on competitive standards (which happened mostly by accident with Unix, AT&T being enjoined by consent decree from making computers).

    Today, Big Tech commingles hosting, software, and content moderation to entrench their position. Expansive scope of copyright retards the separation of these concerns. There is no *technical* reason I can’t get spam filtering in Facebook from a company I trust more regarding political bias, but granting FB a copyright claim over their users’ data (as happened in Facebook v Power Ventures) makes such a model possible only via cyberpunk methods (e.g.

    So, what guidance can the PC revolution of the 80’s give us to lead us out of today’s predicament? I doubt anti-trust will work here any better than against IBM. I wouldn’t expect much rollback in copyright law either: after all, binary blobs are still eligible for copyright, though the copyleft GPL quite brilliantly turns this on its head to actually enforce software freedom ( A more urgent need is to have a clear limit on copyright scope akin to the clean-room cloning of IBM products in the 80’s. Facebook has sued makers of scraper tools on the *output* side, but they haven’t yet tried to sue the makers of tools for content creators to cross-post across platforms on the *input* side. I doubt this situation will last, and such tools need to be protected either by law or by decentralization. IBM lost control of the de-facto hardware standard when their patent-encumbered Micro-Channel Architecture got beat out by an industry association’s EISA. We need similar industry-wide co-operation to challenge social media network effects and app store lock-in. Finally, the biggest item, in my view, is the need for open standards for mobile handset hardware. Making an open-source phone is much harder than it needs to be. The biggest public policy obstacle here is excessive regulation of the radio, though I expect that falling costs will make modularization (qualify the radio module once and use it in many products) possible. This has already happened for machine-to-machine applications like vending machines that take credit cards, and the M2M world is much freer than consumer mobile computing.

    A previous commenter posits that moving filtering to a separate provider will lead inevitably to centralization of filtering providers. The experience with email spam filtering suggests that filter providers will eventually sort out into an oligopolistic Zipf distribution, with a few big providers and many small fry, but more importantly, because the concerns are separated, spam filtering is much more transparent than Big Tech practices. A 3rd-party spam blocker can’t implement a shadowban, for example, but Gmail can, and Twitter has. Gab won’t filter beyond the legal minimum, but I believe they are making a big mistake in not providing an API for users to get 3rd party filtering. Parler and MeWe are just as monolithic as the big guys, so the closest we get to separated concerns in social media is federation on Mastodon, insofar that users can choose which instance (and whose moderation policies) to subscribe to. We see a Zipf-like distribution there, with a few bigger instances and a long tail of niche ones. And regarding DDG’s privacy policy, they themselves have stated that forgoing user tracking costs them less than 15% in gross ad revenue, so from a business standpoint, privacy is a sort of loss-leader to get users.

    Comment by M. Rad. — April 7, 2021 @ 9:09 pm

  3. Thanks for a thoughtful response, M. Rad. I actually think the key value-add of any of these social networks is precisely its rules and interfaces. So the one thing that they probably would not want to outsource would be moderation and site design, which are intimately related. There is probably high asset specificity and need for ongoing compatibility between the rules of interaction, the overall design of the network and the revenue model.

    Perhaps some decentralized or open standard, such as Berners-Lee’s Solid, could be developed and some open-source networking apps could be deployed, so that people could control their own advertising and data, much like the days of blogging in the aughts only with better interaction and filtering. Given the troubles that entailed for just keeping spam out of comments, I’m not sure how plausible that is.

    Comment by SRP — April 9, 2021 @ 5:37 pm

  4. @SWP…>>These members of the party in power are outsourcing censorship to ostensibly private entities as a way of circumventing the Constitution.<<
    Thank you for that.

    Comment by Richard Whitney — April 11, 2021 @ 4:46 pm

  5. Funny irony to me is everything the left accuses the right of doing the left actually executes and performs on. Of course while couched in some “social good” it’s really for the benefit of the left and to the detriment of free will and liberty embraced by some on the right….

    I am so old I remember when corporations were supposedly Republican.

    Latest breaking news, Northwestern and UChicago Law schools social media megaphones trumpet the fact that some of their professors were put on a committee to study the make up and selection of the Supreme Court by the Biden Admin. We know the results already of their “study” before it’s issued-peer reviewed by sympathetic peers of course-that adding more SCOTUS justices will ensure “balance” and “fairness” and “Protect people” and will “de-politicize” a politicized court. Leslie Mouch would be beaming…..

    Comment by Jeffrey Carter — April 12, 2021 @ 9:47 am

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