Twitter is changing ownership, following a purchase by Elon Musk, who has explicitly said he intends to reorient the company's approach to online speech. Netflix, whose business model has long been predicated on sky's-the-limit growth, is bleeding subscribers. CNN+, a massively expensive project from what was once a dominant force in TV news, is shutting down a month after its launch. Facebook is losing regular users and taking a huge financial hit because of changes in the mobile ad space. Google is no longer the world's most popular website.
If there is a single lesson to be learned here, it is that the marketplace for online communications, entertainment, and news media is never stable, and even the most powerful players can be dethroned.
All of these companies are still mighty. And yet they are all falling, or at least stumbling, in ways that the political class and its boosters assured us simply would not happen, because markets had become static, and competition was impossible. This notion—that the market has finally reached some sort of permanent equilibrium, in which certain companies will wield outsize influence over public life forever—has been used repeatedly to justify calls for regulatory interventions aimed at combating the power of big tech and media, on the premise that large corporations cannot be checked or dislodged by anything but government action. It's a denial of dynamism. And what the recent spate of news makes clear is that this notion is wrong.
In 2020, when Sen. Elizabeth Warren (D–Mass.) announced her plan to break up large tech companies and regulate them as utilities, she justified her proposal with a simple declaration of Big Tech's implacable power: "Today's big tech companies have too much power–too much power over our economy, our society and our democracy."
In 2018, Columbia law professor Tim Wu, who last year joined the Biden administration as an economic adviser, argued that Facebook, which rebranded as Meta, faces "no serious competition," and that the company had effectively become a monopoly. He argued in various forums that because of the company's monopolistic status, it should be forcibly broken up by federal overseers. By this logic, there was no other way to combat Facebook's market power. Only the federal government could serve as a check.
And yet, complaints about Facebook's market dominance have achieved bipartisan purchase. In October 2020, Sen. Josh Hawley (R–Mo.), one of the GOP's most ardent tech critics, argued that Facebook "is a lot like a supermarket … except there's only ONE supermarket in town, and they decide who can and can't shop. That's what we call a monopoly." (He said this on Twitter.)
Twitter itself has been subject to calls for regulation and even, from those with more fringe views, outright appropriation by the state with the underlying idea being that it should be understood either explicitly or implicitly as a kind of public utility for national discourse.
Some have even argued that Twitter's influence justifies ending or limiting Section 230 of the Communications Decency Act of 1996, which says that individuals and companies bear no legal liability for online speech posted by others. Over the last few years, congressional Republicans have attacked Twitter for its moderation decisions, in particular for those that restricted political speech, with former President Donald Trump demanding the end of Section 230—on Twitter, of course—and Sen. Ted Cruz (R–Texas) saying that social media moderation decisions "collectively pose the single biggest threat to free speech in America." Of the big players, Cruz said, "Twitter's conduct has by far been the most egregious."
Some of those content decisions were worth criticizing—but they weren't real threats to the constitutional protections for free speech. The belief that they were, however, was predicated not only on an exaggerated sense of Twitter's current significance, but an assumption that it would remain powerful and unchanged forever without some sort of state intervention. As with Facebook, the prevailing sense was that the government was the only actor powerful enough to force change.
Yet now Elon Musk has purchased Twitter, and may redirect it. Exactly how is unclear, but he's emphasized his desire for more openness and less capriciousness on moderation decisions, especially on matters of political speech. Musk's purchase appears to have been motivated at least in part by his desire to change the company's moderation practices. The point is not that Musk's version of Twitter will necessarily be good or bad or wonderful or irritating (likely it will be an imperfect mix), but that the market provided a vehicle for a substantial directional shift, without any direct involvement from the likes of Cruz.
These are recent examples, but this pattern has persisted for decades, at least. In the '00s, the Federal Communications Commission under George W. Bush tried to implement mandatory "cable a la carte," which would have forced cable TV providers to sell individual channels at a per-channel rate rather than the bundles and packages they offered. This was pitched as a change necessary to help beleaguered parents shield their kids from risqué shows; cable TV and the salacious programming it trafficked in was too powerful a force in American life. Most homes had it; it was inescapable. There was "too little competition." Government thus had a responsibility to step in.
A decade or so later, cable TV (and its sister technology, satellite TV) was fast becoming old news. Between 2015 and 2021, the percentage of Americans who admitted to watching TV as we used to know it fell from 76 percent to 56 percent, according to Pew Research Center. Even still, in 2021, congressional Democrats sent letters to cable providers expressing worries about "media disinformation" on conservative cable news networks.
What displaced cable? Streaming services like Netflix, which built an entertainment empire, and raised a fortune in funding, on promises of vast growth. Last week, however, the company announced that it had lost 200,000 subscribers, the first overall decline in a decade, and that it expected to lose about 2 million more in coming months. Among Netflix's difficulties: competition from other deep-pocketed tech and entertainment companies like Hulu, Apple TV+, and Disney+. And then there's CNN, a giant of the old world of cable which recently launched and then quickly shut down a streaming service of its own, after spending $300 million to develop it. Whoops!
Big doesn't mean permanent. Powerful doesn't mean monopolistic. The behemoths of media and tech can fail and falter. Competition is possible, even in capital-intensive industries. Directional change in a company's approach can and does happen without the intervention of federal minders.
None of the examples above are flukes or special cases, either. This is the nature of the market, which is always in flux, always evolving, even and perhaps especially when powerful players are involved. Today's big powerful companies could become tomorrow's also-rans, no government action required.