Tim Wu, Biden's New Tech Guru, Is Deeply Wrong About What Makes the Internet Great
In many professional arenas, Wu's swings and misses would have consequences. In Wu's case, it landed him an advisory role in the Biden administration.
Once upon a very different internet era, law professor Tim Wu rose to intellectual prominence warning of the doom to come without "net neutrality," a term he coined. Throughout the '00s and into the late Obama years, Wu cautioned that without rules requiring internet service providers to treat all traffic and content equally, the internet as we had come to know it would cease to exist. Big corporations would create a digital fast lane for rich users and content providers, while average people would suffer through slow service and throttled access.
Without "a more frequent kick in the pants" from the government, these companies could subvert democracy, Wu hypothesized. "If a few companies have the power to control who and what gets heard, they can suppress or amplify news and wield a private control over democracy of the kind that terrified Thomas Jefferson," Wu—who would go on to be an adviser to President Barack Obama's Federal Trade Commission—wrote in 2008. Meanwhile, net neutrality rules would "preserve the open nature of the Internet—and keep it safe for unapproved speech and surprising innovations like Wikipedia and YouTube."
Without net neutrality rules, "we face the prospect of pricing wars pitting all against all, in the Hobbesian sense," Wu wrote in January 2014. "We take it for granted that bloggers, start-ups, or nonprofits on an open Internet reach their audiences roughly the same way as everyone else," he wrote later that year, after a federal court nixed the government's early attempt at such rules. "Now they won't. They'll be behind in the queue, watching as companies that can pay tolls to the cable companies speed ahead."
Early pleas for the Federal Communications Commission (FCC) to impose net neutrality rules were rejected. (The case for such rules was "unconvincing and speculative," said FCC Chairman Michael K. Powell in a 2004 speech. "Government regulation of the terms and conditions of private contracts is the most fundamental intrusion on free markets and potentially destructive.") And a federal court blocked the agency's fledgling attempt at enforcing net neutrality principles against Comcast. The FCC did pass "open internet" rules in late 2010, but these mainly applied to fixed broadband (not wireless) internet service providers, they still left a lot up to discretion, and they were mostly vacated in a January 2014 court ruling.
The closest the United States came to the sort of robust net neutrality policy Wu advocated was in June 2015, when the FCC classified high-speed internet as a telecommunications service, not an information service, and forbade internet service providers from blocking legal content on their networks, from slowing down certain applications/sites/services, or from charging extra for faster service. Less than two years later, under a new administration, the agency proposed rolling back that rule, which was officially repealed in 2018. Throughout all of this, Congress also considered—but failed to pass—a number of net neutrality measures.
Meanwhile, the internet continued humming right along. Wu's dystopian vision never panned out. In the years since net neutrality rules were undone, there has been no Hobbesian pricing war, no consumer content squeeze. If anything, smaller organizations—bloggers, start-ups, nonprofits—have more tools than ever before through which to reach people digitally and to monetize this outreach.
In many professional arenas, such a swing and miss would have consequences. At the very least, it might make people think twice before trusting your sky-is-falling predictions again. In Wu's case, it landed him an advisory role in the Biden administration.
In March, President Joe Biden appointed Wu to the White House's National Economic Council to work on technology and competition policy. Now he's predicting a new kind of online doom, and he's pushing for a bevy of new rules and regulations to prevent it. Wu has already previewed his heavy-handed approach, promising to crack down on large corporate mergers and to push for aggressive antitrust oversight. He has even suggested that, in his previous role under Obama, he might have been too lenient on tech companies—and that he now expects to take a harder line.
Fans of free speech and free markets should be wary. Wu's apocalyptic fears have never panned out. But from his new White House perch, he could push policies that really would make the internet more closed, more controlled, more centralized, less dynamic, and less free.
The Sky Is Falling (Again and Again and Again)
How did Wu parlay a decade-plus of misplaced doomsaying into such a position? It can't hurt that his rhetoric, then and now, aligns neatly with the Democratic Party's political agenda.
Now in his late forties, Wu has been a longtime critic of big businesses. And though Wu mainly couches his fearmongering now not in the language of net neutrality but antitrust and monopoly, he's still stuck on the idea that big companies are ruining the internet and the federal government must do more.
His scapegoats have evolved. Back in the mid-aughts, Wu worried that companies like AT&T would throttle the likes of Google and Apple, writing in 2007 that he hoped "industry power will begin to move away from the carrier oligopoly and toward Apple and other Silicon Valley firms." Once those Silicon Valley firms started doing exceedingly well, Wu turned on them. Google and Apple—along with Amazon and Facebook—are now among Wu's targets.
What hasn't changed is Wu's diagnosis that without intense regulation, the internet will be ruined for average Americans. A disciple of Lawrence Lessig's "gloomy gospel of impending digital doom," Wu's staple has been "frightful tales and lugubrious warnings" that "someone or something—quite often, the State" must intervene, as Mercatus Center researcher and Technology Liberation Front blogger Adam Thierer characterized it back in 2010.
Against Lower Prices
Another central tenet of Wu's economic philosophy—one initially brandished during his net neutrality crusade and now applied to his antitrust antics—is that policy makers shouldn't care about keeping consumer prices low. Corporate competition is itself the goal. If that costs consumers more, so be it.
Since the 1970s, consumer welfare, reflected most tangibly in consumer prices, has been considered the main focus of antitrust enforcement. Big firms competing in a way that harmed consumer welfare might be an antitrust violation; behavior that preserved or enhanced consumer welfare was not, even if it harmed business competitors or advantaged some services over others.
Wu wants this flipped. In a 2006 Slate piece on net neutrality, he wrote that he would rather see customers paying more for internet service than let telecom companies charge some websites extra for priority service. "AT&T can extract cash in other ways…like charging its customers higher prices," argued Wu. "I believe that it's better to have consumers pay more for service than to have AT&T picking and choosing winners on the network."
In one scenario, the internet is more affordable and accessible for everyone, and services that need extra bandwidth can choose to pay for it—thereby making the user experience for those visiting those sites better along the way. In the other, all internet entities must get equal bandwidth—potentially making the user experience at highly trafficked sites poorer—while consumers across the board must pay more, possibly placing the digital world out of reach entirely for some. In Wu's world, choosing the latter is a given because putting businesses on a level playing field, and punishing businesses that get too big, is more important than bringing lower costs and better experiences to individuals.
This philosophy is on full display in Wu's post-net neutrality writing, too, including the 2010 book The Master Switch: The Rise and Fall of Information Empires and 2018's The Curse of Bigness: Antitrust In The New Gilded Age. Both books weave historical narratives in an attempt to prove that without careful regulation of internet, media, and communications companies, the internet is on a glide path to self-destruction.
In The Master Switch, one of Wu's big boogeymen is vertical integration—that is, one company owning multiple rungs of a supply chain. It's a process that creates efficiencies that typically lead to lower prices. Wu stands against it. (He also fears consolidation in the media and tech industries.)
In his most recent book, The Curse of Bigness: Antitrust In The New Gilded Age, the "hero is Louis Brandeis, who served on the Supreme Court from 1916 to 1939 and coined the phrase 'curse of bigness,'" notes Alec Stapp, the Progressive Policy Institute's director of technology policy, in a review of the 2018 book. Legal scholar Robert Bork "is the villain of the story, having spearheaded the Chicago School's role in narrowing antitrust regulation to economic concerns and establishing consumer welfare as its lodestar."
Wu writes that he wants to bring antitrust enforcement to "a post-consumer welfare" standard. Rather than focusing on value, he insists that we focus on process, with courts weighing in not on whether business activity helps or harms consumer interests but on a question asked by Brandeis in 1918: whether conduct "promotes competition or whether it is such as may suppress or even destroy competition."
In other words, Wu wants to obligate businesses to help their competitors—even at the expense of customers—and use government force to do so.
Coopting the Language of Liberty
All of this, he asserts, would somehow "free the political process" and protect democracy, economic security, and human flourishing. It's a signature move for Wu, who often couches authoritarian proposals in the language of openness and freedom.
Back in 2006, Wu invoked Adam Smith in his push for net neutrality, arguing that companies choosing how to contract with one another (instead of being told by the federal government how they're allowed to do so) was actually not "a market at all, but a planned economy." By giving the central planners in Washington more control, we would actually "prevent centralized control over the future of the Internet," Wu argued in characteristic doublespeak.
More recently, Wu has argued that failing to forcibly break up big companies leads to "totalitarianism, nationalism, and fascism." In his worldview, a renewed focus on antitrust isn't just good for competition. It's essential to a functioning democracy.
Wu's topsy turvy language seems to stem from defining private business as de facto dangerous—and government actors as either inherently benevolent, or at least not troubling enough to warrant serious consideration. In Wu's world, handing the feds more power over internet infrastructure and content comes with no strings attached; it is only AT&T, Verizon, Apple, Amazon, et al with whom power is dangerous.
"I don't want to say that the First Amendment is useless, that government censorship isn't a problem, but most of the profound challenges to speech and speakers are coming from private parties," said Wu in a 2017 interview. "The government, while not irrelevant, is a bit player."
Both The Master Switch, which was published after years of debate over warrantless government surveillance of domestic communications, and The Curse of Bigness, which came on the heels of former President Donald Trump's first few years in office and the passage of internet censorship law FOSTA, display Wu's characteristic lack of contemplation on the perils of government control over speech and the digital realm.
In The Master Switch, "rarely is there any discussion of the nature of the respective forms of 'power' or the coercive nature of State power, in particular," complained Thierer in a 2010 review. "The fact that the State has a monopoly on force in society and, thus, can penalize or even imprison, is either ignored or treated as irrelevant compared to the supposed 'power' of private actors." Nor does Wu offer "a serious cost-benefit analysis of the trade-off associated with an aggrandizement of State power in the name of countering the supposed evils of private power. The solutions offered—to the extent they rise above amorphous calls to 'do something'—are presented as cost-free options." To Wu, "the real threat is not Big Brother but Big Corporate Brother," suggested Thierer. "Indeed, although he and other so-called progressives don't always come right out and say it, they often suggest that private power—however defined—s so insidious and threatening that greatly amplified State power to counter it becomes essential, even a good."
Most of The Curse of Bigness delves into the history of American antitrust enforcement, portraying government actors [like Teddy Roosevelt going after Northern Securities Company and Standard Oil, Woodrow Wilson's creation of the Federal Trade Commission, Clinton antitrust adviser Joel Klein prosecuting Microsoft] almost exclusively as a shining antidote to big business generally. It isn't until page 119 (of 139 pages total) that Wu actually gets to today's tech companies. Because today's big tech firms have already made it past five years, they won't fall prey to the forces that sank the likes of AOL, Myspace, and Friendster, Wu argues.
But there's no real argument for why this dubious claim might be true, except, perhaps, that it hasn't happened yet. "After a decade of open chaos and easy market entry," writes Wu, "a few firms—Google, Ebay, Facebook, and Amazon—did not disappear.…There stopped being a next new thing, or at least, a new thing that was a serious challenge to the old thing."
Some of the book's assertions about tech companies verge on self-evidently false, such as Wu's suggestion that there is only "one search engine." (What about Bing? DuckDuckGo? OneSearch?) Or that you can't quit Facebook without making "yourself a digital hermit." (Tell that to the tons of people who have quit Facebook—including the millions who left the site during the pandemic—but live decidedly non-hermitlike existences via Twitter, TikTok, YouTube, Twitch, Tumblr, Reddit, Clubhouse, LinkedIn, and so on.) Or that there are "no longer hundreds of stores that everyone" goes to "but one 'everything store.'" (While Amazon might seemingly sell everything, plenty of other stores still exist online and off. Amazon isn't even the planet's biggest store: Walmart remains the world's largest retailer.)
Still other claims are pure cryptic fluff. Wu complains that on Amazon, "you can check out any time you like, but you can never leave." (What is that even supposed to mean?)
After this collection of glib but dire warnings, Wu launches into a new agenda for antitrust law that would give the federal government unprecedented control over businesses of all sorts.
He wants stricter scrutiny and prevention of mergers, more action from the DOJ, and more forced breakups of big companies. He champions making Facebook divest of Instagram and WhatsApp—a much-repeated rallying cry from the left and right that would solve precisely zero of the problems people actually have with Facebook.
Wu also wants the Federal Trade Commission to automatically investigate companies—even those suspected of doing nothing wrong—if they have been a market leader for 10 years or more. "The market investigation would serve as a particularly effective tool for stagnant and longstanding but not particularly abusive or aggressive monopolies or duopolies," Wu writes.
What incentive would U.S. companies have to innovate or build long-term relationships with customers if after 10 years of success, the government is guaranteed to intervene? Wu apparently isn't concerned. (The White House press office did not respond to requests for comment.)
Wu Finds a Home in the Biden Administration
Wu's advisory role with the Biden administration is an especially bad sign when combined with the appointment of his similarly technopanic-smitten colleague Lina Khan to chair the Federal Trade Commission (FTC). Both Khan and Wu are "neo-Brandeisians" who advocate for a return to and expansion of policies under which antitrust law is a tool not to prevent consumer harm but to prevent "bigness" and market concentration.
"Both nominations depict a radical change of tone, not only from traditional antitrust policy, but also from [Biden's] track record during the Obama presidency," writes Aurelien Portuese, director of antitrust and innovation policy at the nonpartisan, nonprofit Information Technology and Innovation Foundation (ITIF) and an adjunct law professor at George Mason University, in a recent opinion piece for the Washington Legal Foundation.
The fact that Biden "decided to nominate a junior antitrust scholar with radical views on technology and competition as an FTC commissioner…represents an unfortunate weaponization of antitrust laws against large and successful companies," Portuese suggests.
The decision to have a White House antitrust adviser at all—let alone one as strong-minded as Wu—is also unorthodox and could portend bad things, as "it cements a shift towards a more politicized, hands-on approach to antitrust at the highest administration level, which will have profound implications for the U.S. economy."
Wu's and Khan's neo-Brandeisian approach is at odds with the kind of environment needed to spur innovation and competitiveness, say some policy experts and antitrust scholars.
"Politicians are wrong to kneecap 'big' business simply because they are big," said R Street Institute President Eli Lehrer in an April statement. "America cannot afford to let emotions and politics stifle our economic potential."
But progressives itching to "break up big tech"—or big business more generally—have been excited by Wu's appointment. "I look forward to working with Tim to modernize antitrust enforcement," said Sen. Amy Klobuchar (D–Minn.)—one of Congress' leading proponents of expanding antitrust laws—in a statement. (Modernize being a key codeword for expand.)
With Wu's veneration of government intervention in the marketplace (and blinders about the limits of federal power), it's no surprise that Biden would tap Wu as an adviser, nor that today's left-leaning politicians would eagerly embrace him. Biden, his administration, and their allies appear convinced that the feds can solve all social problems, unafraid of massive state interference in the economy, and suspicious of social media, open markets, and free speech online. They are also, somehow—just months out from a Republican administration that they claimed was ushering in the end of liberalism and democratic norms—now quite cavalier about the idea that the new powers they claim will ever give ammunition to political opponents.
This astounding short-sightedness fits right in with Wu's perennial panic playbook. We are forever in a precarious present, always this close to wily corporations subverting democracy. We are forever in need of new policies—net neutrality, bans on vertical integration, stricter antitrust rules—to thwart them. And when neither the new policies nor the imminent danger materializes, a new threat appears on the horizon. Another big tech company is always rising, and this time it's different. Just like those long histories of regulatory capture and government overreach will magically be different this time, too.
Politicians like Biden, Klobuchar, and Sen. Elizabeth Warren (D–Mass.)—another high-profile proponent of "breaking up" Facebook—might buy it, because it adds an intellectual veneer to their attempted power grabs. But peel back the misplaced civil-libertarian references and tech villains du jour and all we've got is the same rallying cry of authoritarians for time memorial: Bureaucrats know best.
In Wu's worldview, individuals and markets can't be trusted. Only government knows what's good for you. In the name of some nebulous promotion of competition, Wu's policies would let politicians decide which businesses succeed and on what terms. And in the process, they could end up allowing Facebook and today's other big players to capture their marketplaces via favorable regulation—creating exactly the sort of stultified, startup-hostile environment Wu claims to be worried about. If nothing else—by his own admission—Wu's policies would likely lead to higher prices for consumers. It's a bad bargain no matter what technopanic it's sold under.