Poking the Bear: Big Tech Gives Back
By: Lucas Dickey
Tags: Covid 19, Philanthropy, Altruism, Congress, Antitrust

tldr; preamble on the series: I’m a generalist and aspiring polymath. I like to think and write. I have ideas I’d like to explore. I will take counter positions and argumentative stances as intellectual exercises to stoke discourse & further thinking. I will use lots of flowery words to do so. I will try to be articulate, but know that I’m inherently verbose and meanderings. Sorry, not sorry.

If you want the original thinking behind this series, please give it a read here. It’s admittedly circular and very much about my “personal mental state, my self-identification, and my general process of thinking through things”, as a good friend, mentor & thought partner noted when providing some feedback on this piece in its earliest stages.

The Essay

I recently finished reading “The Curse of Bigness: Antitrust in the New Gilded Age”, Tim Wu’s argument for Neo-Brandeisian antitrust, and so my mind has been deeply entrenched in thinking about the era of consolidation that started at the tail of the 90s but in earnest in the Bush (W.) era, but didn’t slow down thereafter¹, but also the the fact that there are a number of investigations into and active suits against “Big Tech” from the likes of the SEC, to the DOJ, to the FTC, to various state AGs², not to mention the conclusions of the House Judiciary Subcommittee on Antitrust such as this quote, as the intro here excerpted by Vox:

“To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons”

Neo-Brandeisians are inspired by the thinking of SCOTUS justice Louis Brandeis, who inspired the original trustbuster, President Theodore Roosevelt. Theirs is a wider scope for concern than the Chicago School of antitrust and its Harvard incarnation. Harvard’s view ostensibly argues for “consumer welfare” but really tends to have a view that is very narrow and utterly lacking in nuance, interpreting “consumer welfare” for the most part on simple pricing ramifications. It seems to me that these academic exercises—driven by law schools, courts and those who facilitate public discourse professionally — are often overly focused on the interpretation of legislation¹⁰. This audience appears to be less concerned with discussion of the broader need of government antitrust authority and the means by which that authority might be executed.

(Image courtesy of Warren’s Senate website)

Neo-Brandeisians are more concerned with the “social welfare” ramifications, that are wider ranging and contemplate the ramifications of unelected powers having greater sway in a citizen’s/customer’s daily life than elected leaders in DC or state seats of government. This lens feels “right” to me, and I’m sure (as of the writing of this doc) that I’m in the camp in spirit, if not in all of the letter. (The timing of a rise in more “radical” progressive movements in the US—think Bernie, AOC and Elizabeth Warren—and the rise of affinity for Neo-Brandeisian thinking is no coincidence. The root interest of the highly overlapping circles tends to be the same.)

This academic reading and real-world antitrust fervor had me thinking of the last major trust buster case—Microsoft—and the Ayn Rand I was mainlining to my mind in high school at the time. Recall that Microsoft was sued in both the US and the EU for antitrust, with a settlement in the US and a judgment in Europe, for anticompetitive practices primarily concerned with using pricing power, software bundling (remember Windows Media Player and Internet Explorer). Though the outcome was argued to be a slap on the wrist by critics, it arguably did curb Microsoft’s behavior and to a certain extent the rest of Big Tech to follow, as noted by founder Bill Gates and current president (then chief counsel) Brad Smith alike. Also recall the motivation of the industrialist “protagonists” in Atlas Shrugged as succinctly captured in the words of Wikipedia (because I haven’t the energy to summarize Rand’s ~1200 page paper weight) here:

Railroad executive Dagny Taggart and her lover, steel magnate Hank Rearden, struggle against “looters” who want to exploit their productivity. Dagny and Hank discover that a mysterious figure called John Galt is persuading other business leaders to abandon their companies and disappear as a strike of productive individuals against the looters.

(Image courtesy of 20th Century Fox’s 2014 “Atlas Shrugged: Part I”)

Instead of suggesting that Dagny’s modern day incarnates take their toys and go home, I had this fun, alternative twist pop up in my head: what if instead of “stop[ing] the gears of the world” a la John Galt, the Big Tech poked the bear of antitrust animus a bit with a glut of good will and collective altruism (or, perhaps more likely, reciprocal altruism). In a short-term view this would be against their self-interest. But I’m arguing here the long-view that these “good will” acts would be mutually beneficial in the long run, or, to borrow a phrase from Jonathan Haidt, “against their self-interest for their self-interest”³.

Many of these acts I’m suggesting would be unilateral, sans any input or guidance from legislative or executive bodies alike. Some require a bit of cooperation, but I’ve intentionally biased ideas that need little direct cooperation for the sake of assumed “time to market”.

So, yes, they’d be playing the role of government with policy setting and execution (and honestly likely with the same amount of pork-belly and logrolling required here and there), but perhaps that’s the point? The democratic means of action has ground to a snails pace thanks to McConnellian momentum and rank tribalism, so why not lean into the “you’re too big!” antitrust accusation with philanthropic fervor?

It’s a bit like Big Tech (and other consolidators) smiling in the face of finger-wagging and haughty diatribes of Congress. Perhaps a bit petty, but penny-ante poking is what passes for politics and policy-making at present, no?

So, given an assumption that the “trusts” were to pursue a strategy of proxy government duties, what might be some interesting policies and applications of their resources they should consider? And why might a given path be interesting to the particular company? Well, let’s begin…

…oh, and one more thing, let’s time-bound this exercise to deliverables that can happen in the next 90 days. That should make things really interesting given the urgency of the pandemic, the current presidential transition roadmap, and the fact that, as of the writing of this post, emergency relief is about to expire and millions of Americans will be impacted by year’s end if a new package isn’t delivered soon.

Income, Jobs & Financial Security

The connection here for the Big Tech companies is pretty linear in my mind, but I’m also taking an intentionally simplistic approach to the economic ramifications here, i.e. if people don’t have money, they cannot buy stuff, and in particular they can’t buy stuff from Big Tech (or, for Facebook & Google, their buying can’t be stoked via dopamine-releasing ads served by Big Tech). And at a grander scale, citizens can’t consume all the other goods and services that stoke the economy at large.

Spousal PPP : The idea here is to borrow a page from the Paycheck Protection Program by offering supplementary income to the employment-age family members of Big Tech company employees. I noted “spousal”, but it could just as well be children of employees—think anyone that can be connected to the employee via their company benefits programs. If the check size was constrained to that which Congress offered, the per capita impact at many of these company’s would be relatively small. Let’s simplistically say, every single Facebook employees received an extra pre-tax distribution of $2,000 per month. Even if FB ran the program for four months that’d still only cost them ~$350MM and about 45,000 plus lives would be enriched at a level of abstraction that creates a concentric circle around FB’s direct employees.

: The idea here is to borrow a page from the Paycheck Protection Program by offering supplementary income to the employment-age family members of Big Tech company employees. I noted “spousal”, but it could just as well be children of employees—think anyone that can be connected to the employee via their company benefits programs. If the check size was constrained to that which Congress offered, the per capita impact at many of these company’s would be relatively small. Let’s simplistically say, every single Facebook employees received an extra pre-tax distribution of $2,000 per month. Even if FB ran the program for four months that’d still only cost them ~$350MM and about 45,000 plus lives would be enriched at a level of abstraction that creates a concentric circle around FB’s direct employees. Small Business “Partner” PPP : Extending the idea above further, the likes of FB and GOOG could led small businesses advertise on their platforms at zero cost (up to X, the particular number isn’t that interesting for this argument) and given that acquisition costs are a material variable cost for many business, large and small alike, this could be the difference between keeping doors open or shuttering them since this free ad activity could drive the lifesaving demand these businesses need. This short-term ad cost subsidy would also enable those same businesses to persist and pump dollars into the ad platforms for years to come (i.e. the reference to reciprocal altruism above). Amazon could do something very similar at a (smaller?) scale with vendor payment terms—moving away from whatever aggressive terms they’re using today and instead move to net zero to give the vendor cashflow favorability—or uniformly prioritizing third-party (3P) sellers over its own products; or more aggressively they could remove all listing/rev share costs for 3P sellers or eat the warehousing costs for those that leverage Fulfillment By Amazon.

: Extending the idea above further, the likes of FB and GOOG could led small businesses advertise on their platforms at zero cost (up to X, the particular number isn’t that interesting for this argument) and given that acquisition costs are a material variable cost for many business, large and small alike, this could be the difference between keeping doors open or shuttering them since this free ad activity could drive the lifesaving demand these businesses need. This short-term ad cost subsidy would also enable those same businesses to persist and pump dollars into the ad platforms for years to come (i.e. the reference to reciprocal altruism above). Amazon could do something very similar at a (smaller?) scale with vendor payment terms—moving away from whatever aggressive terms they’re using today and instead move to net zero to give the vendor cashflow favorability—or uniformly prioritizing third-party (3P) sellers over its own products; or more aggressively they could remove all listing/rev share costs for 3P sellers or eat the warehousing costs for those that leverage Fulfillment By Amazon. More jobs: Amazon’s already increased the size of its staff 50% over the last year, and the rest of Big Tech have generally thrived as well, but not quite at the Amazonian scale. That being said, all have the balance sheet to facilitate significantly more hiring that would likely help in their efforts to repudiate congressional claims that they’re not doing enough to manage misinformation: collectively hire at least a quarter million people to scrub Facebook’s social properties for mis/disinformation, or scour Amazon’s marketplace for illegal/misleading products. Or Google (well, any of them) could simply expand the number of humans facilitating Turk-like activities to fast-track training machine learning/artificial intelligence models. None of this is necessarily glamorous work, I’ll admit, but it does allow someone to (a) work safely indoors at home, (b) get internet & hardware in order to to perform the needs of the job (which in turn could also help with internet issues noted in the education section below), (c) a pathway into “white collar” office work for many who might not generally have that pipeline access, and could be extended to (d) full-time benefits that are also in dire need.

Education

This particular category is very much long-term oriented, but is wholly in-line with each company’s publicly espoused positions around equitable inclusion and equal access to resources.

Mifi/Wifi : College students are dropping out at alarming rates & students just aren’t enrolling at all due to inability to access online coursework and streamed lectures; and in a recent report on how K-12 students are doing with remote learning it was found that while scores were stable to down slightly, that 1 in 4 students weren’t included in the large scale study as they simply weren’t taking the MAP tests and these students are “more likely to be black and brown, more likely to be from high-poverty schools and more likely to have lower performance in the first place.” The researchers called out internet access as a key cause (along with the much more fundamental need, right down there at the bottom-most section of Maslow’s pyramid: food, which is required to not just sustain the body but nourish the brain in a way that’s requires to foster the creative, curiosity, recall necessary to thrive in school). Here I’d suggest that Amazon, Apple and Google provide the hardware and Verizon and AT&T provide the bandwidth (perhaps with backbone costs shared by Amazon, Google and Facebook, given the amount of traffic that probably shuffles across their private networks) such that all students in need receive the bandwidth required to adequately facilitate their learning. [In a parallel thought exercise vis-a-vis bandwidth deserts in low-income areas of Los Angeles, I will soon be advocating for Verizon and AT&T to pay for distribution of something like Big Belly’s smart trashcans that would host the telecom player’s small cell receivers and WiFi hotspot equipment.]

: College students are dropping out at alarming rates & students just aren’t enrolling at all due to inability to access online coursework and streamed lectures; and in a recent report on how K-12 students are doing with remote learning it was found that while scores were stable to down slightly, that 1 in 4 students weren’t included in the large scale study as they simply weren’t taking the MAP tests and these students are “more likely to be black and brown, more likely to be from high-poverty schools and more likely to have lower performance in the first place.” The researchers called out internet access as a key cause (along with the much more fundamental need, right down there at the bottom-most section of Maslow’s pyramid: food, which is required to not just sustain the body but nourish the brain in a way that’s requires to foster the creative, curiosity, recall necessary to thrive in school). Here I’d suggest that Amazon, Apple and Google provide the hardware and Verizon and AT&T provide the bandwidth (perhaps with backbone costs shared by Amazon, Google and Facebook, given the amount of traffic that probably shuffles across their private networks) such that all students in need receive the bandwidth required to adequately facilitate their learning. [In a parallel thought exercise vis-a-vis bandwidth deserts in low-income areas of Los Angeles, I will soon be advocating for Verizon and AT&T to pay for distribution of something like Big Belly’s smart trashcans that would host the telecom player’s small cell receivers and WiFi hotspot equipment.] Tablets & Laptops: Hand-in-hand with internet access is the interface to interact with teachers and classmates remotely, i.e. tablets and laptops. Pretty much all of these players have an inexpensive solution out of the box or offer refurb programs from which they could draw inventory to deploy. A number of companies have already done this, but the scale always seems much smaller than the moonshot-inclined vision these players apply to many of their for-profit initiatives. I applaud them on their efforts here, but let’s poke Betsy Devos hard here and increase donations on this front at least one order of magnitude. Shoot, you guys already collectively have some of the best distribution on the planet, so you’d be able to keep that cost low as well. And, since these are donations, no one is saying you can’t preload it with all of your commerce-driving instruments as well—and that likely wouldn’t be the case under a federally-funded initiative.

Hand-in-hand with internet access is the interface to interact with teachers and classmates remotely, i.e. tablets and laptops. Pretty much all of these players have an inexpensive solution out of the box or offer refurb programs from which they could draw inventory to deploy. A number of companies have already done this, but the scale always seems much smaller than the moonshot-inclined vision these players apply to many of their for-profit initiatives. I applaud them on their efforts here, but let’s poke Betsy Devos hard here and increase donations on this front at least one order of magnitude. Shoot, you guys already collectively have some of the best distribution on the planet, so you’d be able to keep that cost low as well. And, since these are donations, no one is saying you can’t preload it with all of your commerce-driving instruments as well—and that likely wouldn’t be the case under a federally-funded initiative. Breakfast & Lunch: As I noted in a previous bullet, simply being underfed is wreaking havoc on students’ ability to learn. This was the case pre-pandemic, but has only been exacerbated since, as many students that are unhoused, in foster programs, or whose parents simply can’t afford to feed them are often fed through in-school food programs. Efforts are being made to facilitate these efforts intra-Covid outside of the schools, but that still requires students (and their parents) to travel when they’re being asked to “stay in place”. In this case, I could see Big Tech partnering with Uber, Lyft, Postmates, and on and on…to pay for meals AND distribution to homes such that drivers receive income (!), students and their families stay safely at home, and those students receive the basest of necessities. An alternative implementation could be AWS, GCP and Azure waiving fees to those transportation companies in exchange for those delivery entities to procure the food themselves. All sorts of options for resource swaps here!

Healthcare & The Pandemic

One thing that all of these companies do really, really well: distribution, both of physical goods and information. Let’s put that distribution to good use.

Vaccine distribution : Jeff B and crew are already contemplating and enabling a Covid-free supply chain. And they have the operational means to make it happen. Take it a step further and procure and distribute vaccines to all of your Prime customers. That’s 126MM customers, at roughly $50 a pop, resulting in a price tag that’s 1/10th of Amazon’s current cash on hand, or just finance it by increasing your debt at a near-0% interest rate? Jeff loves thinking in 5 to 10 year increments. What’s more long-term than spending $6B now to preserve 100% of your customer base? The rest of the guys (and I’m saying guys here as, still, all of these companies are led by men) can pitch in on the vaccine procurement cost, too, since I’m sure virtually all Prime customers are using Google for Search or an Android device, or using FB/IG/WhatsApp/Messenger, or own an iPhone or Apple TV or Macbook, or an Xbox or playing Minecraft. Same same.

: Jeff B and crew are already contemplating and enabling a Covid-free supply chain. And they have the operational means to make it happen. Take it a step further and procure and distribute vaccines to all of your Prime customers. That’s 126MM customers, at roughly $50 a pop, resulting in a price tag that’s 1/10th of Amazon’s current cash on hand, or just finance it by increasing your debt at a near-0% interest rate? Jeff loves thinking in 5 to 10 year increments. What’s more long-term than spending $6B now to preserve 100% of your customer base? The rest of the guys (and I’m saying guys here as, still, all of these companies are led by men) can pitch in on the vaccine procurement cost, too, since I’m sure virtually all Prime customers are using Google for Search or an Android device, or using FB/IG/WhatsApp/Messenger, or own an iPhone or Apple TV or Macbook, or an Xbox or playing Minecraft. Same same. Masks via Amazon deliveries : I recall in the earlier days at Amazon they flirted much more with in-package inserts though I don’t seem to recall as much of that these days. I get it—it’s part of owning the brand experience and in turn the customer. Let’s create an exception here and insert masks into all of the packages! Amazon has the supply chain control to make sure that these are masks of the quality advocated by Fauci and crew and not a subpar N95 knock-off. If Target can sell these with their house brand at roughly $1.50 a piece and assuming a likely large margin, Amazon could likely manufacture/procure and distribute these for a negligible hit on their unit economics. Shoot—just throw the Amazon or Prime logo on there and call it advertising!

: I recall in the earlier days at Amazon they flirted much more with in-package inserts though I don’t seem to recall as much of that these days. I get it—it’s part of owning the brand experience and in turn the customer. Let’s create an exception here and insert masks into all of the packages! Amazon has the supply chain control to make sure that these are masks of the quality advocated by Fauci and crew and not a subpar N95 knock-off. If Target can sell these with their house brand at roughly $1.50 a piece and assuming a likely large margin, Amazon could likely manufacture/procure and distribute these for a negligible hit on their unit economics. Shoot—just throw the Amazon or Prime logo on there and call it advertising! Misinformation — Explicit control: I had this particular bullet in store for a while, then FB stole my thunder and started not just flagging Covid vaccine misinformation, but outright removing it. Go you. It shouldn’t take Congress to tell you to do this, and you shouldn’t have to hide behind Section 230 to do the right thing here. Just do it, as it will save lives. Simple as that. Same for Google in Search and other downstream applications like News. Apple and Google could simply put in place stringent rules in their developer terms of service that strictly prohibit Covid-related mis/disinformation and apps could be required to enforce that restriction. You’d be amazed how quickly the ship of mobile activity can be redirected when Apple and Google change their app dev TOS. Oh, and while we’re at it, why don’t FB and Google just run ads non-stop advocating for mask-wearing, hand-washing, and whatever other guidelines are passed down? That’s basically no real cost to them, as they can tweak the frequency with which they serve ads, and simply augment to include one extra PSA ad per session.

The ideas above are but a small subset of the multitude of ideas that I’m sure could be mustered by a dedicated effort from a much smarter pool of people (than me) at the Big Tech firms.

I’d love to see what this culture of moonshot advocates and 10x zealots could accomplish if given the green-light from Jeff B, Zuck, “Tim Apple”, and Mr. Pichai. What if Amazon’s customer centricity were unleashed as citizen centricity? Or equally interesting, what could The Internets come up with? Something tells me that Big Tech could move much faster than state and federal governments here—from conception to execution.

What would be a better example of the Business Round Table’s redefinition of the purpose of a corporation than all of this?! They could give themselves a big checkmark on their annual review of the following purposes to which they’ve committed themselves:

- Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect. - Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions. - Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.

Fun times, this thought exercise! Until next time!

Footnotes:

[1]—Examples from this era include consolidation in pharmaceuticals, beer (AB InBev), air travel (Delta, United, American), Bayer buying Monsanto, chemical manufacturers (Dow-DuPont merger, since dissolved), and telecommunications (AT&T and Verizon), cable (Comcast), just to name a few examples.

[10]—The three key antitrust laws, as identified by the US DOJ, are the Sherman Act, the Clayton Act, and the Federal Trade Commission Act.

[2] — I was going to cite an article or blog post for each of the various agency cases and investigations against/into Apple, Amazon, Facebook, Google and, less so, Microsoft, but decided it’d be easier just to say: Google “big tech investigations” as all the major pubs have coverage.

[3]-The GF has been reading Jonathan Haidt’s “The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom” out loud to me over the last few months. Fascinating read throughout.