The past couple of years have seen a resurgence of political interest in anti-trust policy, which is increasingly seen as a potential solution to America’s current dilemma of high corporate profits and slow economic growth. In his final year in office, Barack Obama’s Council of Economic Advisers published a report detailing declining competition in the American economy, Elizabeth Warren made a strident call for a new and more vigorous approach to antitrust, and Hillary Clinton essentially endorsed Warren’s ideas. This all culminated in a call for more vigorous antitrust enforcement — including a rethinking of some of the conceptual underpinnings of antitrust law over the past generation — as part of congressional Democrats’ proposed “Better Deal” 2018 campaign agenda.
And it’s fair to say that the primary intellectual mover behind all of this has been Barry Lynn, a longtime fellow at the New America Foundation who lead a small group there that called itself the Open Markets Initiative. Led them, that is, until today when Lynn and his entire program were pushed out — apparently under pressure from a major donor.
Lynn used to be primarily known as a critic of Walmart and of fragile global supply chains, but in recent years his work has focused more on the impact of large technology companies. In particular, he’s been an increasingly vocal skeptic of Google, and hailed the European Union’s decision to levy antitrust fines against the search giant.
At the same time, Google and its chair Eric Schmidt have long been major financial supporters of New America — a progressive think tank with programs on education and health policy, political reform, and various other topics. For a time — from the outside at least — this seemed like a testament to New America’s integrity and to the success of its relatively decentralized think tank model. One program at the think tank could criticize a major funder of other programs without creating too many problems.
The truth, according to Ken Vogel’s reporting for the New York Times, turns out to be the opposite. Google seems to have implicitly or explicitly used its financial clout to pressure New America to dissociate itself from Lynn, and now Lynn and his team are leaving New America and (apparently with some funding in hand) creating a new organization — Citizens Against Monopoly.
In this particular case, Google’s heavy-handed tactics seem more likely than not to backfire. But the case sheds light on the growing tendency of companies to use think tanks as essentially stealth lobbyists, and underscores the ways in which their priorities can shape the research agenda in Washington, even if it typically happens in more subtle ways.
What happened exactly?
The story, according to Lynn and his colleagues, is as follows:
- On June 27, the European Union issued its historic $2.7 billion antitrust fine against Google.
- The decision was not a surprise to people who follow these issues, so Lynn’s Open Markets initiative almost immediately posted a statement praising the decision and calling on American antitrust regulators to take similar action.
- The statement then swiftly disappeared from New America’s website and, according to Citizens against Monopoly, “within 48 hours Google representatives threaten to cut off all funding for New America, and New America leadership tells Open Markets to leave.”
Vogel’s reporting cites an email sent from New America President Anne-Marie Slaughter to Lynn in which she writes definitively that “the time has come for Open Markets and New America to part ways.”
Google has long been a friend to New America, and both the company and Eric Schmidt’s charitable foundation are listed as among New America’s top tier of donors. Under the circumstances, threats from Google — even implied threats — to cut funding could have been potentially devastating to New America’s work. Slaughter, in an email to Lynn, said as much, accusing him of “imperiling the institution as a whole.”
Google itself says they had nothing to do with these events and Slaughter in a statement characterizes the idea that Lynn was fired over his praise of the EU regulatory action as “absolutely false.” Instead, she says that “his repeated refusal to adhere to New America’s standards of openness and institutional collegiality meant that we could no longer work together as part of the same institution.” Slaughter said she had been working to arrange a mutually agreeable divorce, but New American and Lynn failed to reach an agreement.
Reading between the lines slightly, Slaughter’s story about “collegiality” and Lynn’s story that his work threatened his colleagues’ fundraising do not appear to genuinely differ in terms of the picture they paint. Ultimately, they’re both about Lynn imperiling New America’s access to Google’s financial support.
Google and New America: a long backstory
New America’s strategy and ideological positioning have shifted over time, but the think tank has always had a close relationship with Google. In its early days after its founding in 1999, it branded itself as an exemplar of “radical center” thinking that would avoid the stale clichés of left and right without devolving into a mushy middle. One early idea was that America should achieve universal health insurance via “a mandatory private health care system for all Americans” with subsidies “that ensure that the poorest and least healthy are fully covered.”
But this idea, which in some ways evolved into the key architectural element of the Affordable Care Act, rested alongside more right-wing ideas, like a program to privatize Social Security.
Over time, New America evolved in a more conventionally center-left direction and stopped talking about the “radical center,” but it always maintained some of the original legacy as oriented toward the “new economy.” That included early financial support from Google, and early programs on relatively under-the-radar issues like the allocation of broadband spectrum. New America eventually emerged as one of the most forceful voices in favor of “net neutrality” — a key progressive advocacy goal that also aligned with Google’s corporate objectives.
And, indeed, for years it was common to hear telecom industry lobbyists complain that it was inappropriate for journalists to take New America’s policy expertise on these subjects at face value — arguing that the think tank was basically just a cut-out for Google.
Telecom companies, too, have their own favorite think tanks. And for years Google’s regulatory agenda seemed aligned with the public interest in a relatively uncomplicated way. As a dominant web search and web advertising company, they benefitted financially from lots of people having affordable high-quality internet access, and thus supported approaches to spectrum and wireline internet regulation that were likely to produce a consumer-friendly outcome.
But as Google itself grew, it came to be the target of possible regulatory action rather than simply the beneficiary of a competitive market in allied industries.
Tech giants are now in the crosshairs
One can, of course, care passionately about competition policy and anti-trust without necessarily seeing Google in particular as a plausible target for regulatory action.
Lynn has worked at New America on economic concentration issues since 2002, and his Open Markets Initiative dates back to 2009. Schmidt first joined the Google board in 2000, and he and Google have financially supported New America throughout Lynn’s many years of working there — including eight years when Schmidt chaired the board and his family foundation donated to support Open Markets’ work on food policy.
Google has no particular reason to care about airline consolidation (an issue Open Markets has worked on) one way or another, Google promoted its viewpoints on spectrum policy and net neutrality as pro-competition, and indeed the Obama administration’s competition policy issue brief was paired with an FCC initiative to bring competition to the cable set-top box industry that Google favored. (It was killed early this year at the behest of cable companies after Republicans took over.)
But over time, the intellectual vanguard of antitrust activism came to increasingly target America’s high-tech giants. And of those giants, Google appears to be the one most at risk of real action.
Apple and Amazon are both enormous, and Amazon in particular has come in for a lot of criticism from Lynn’s team — especially from his colleague Lina Khan after its recent purchase of Whole Foods. But rationales for regulatory action against them are fairly exotic relative to the past several decades worth of antitrust law.
Google, by contrast, looks a lot like a modern-day version of Microsoft — a big company that leverages its dominance of one market to push its way into other markets. And while the wisdom of the federal government’s 1990s antitrust litigation against Microsoft continues to be debated, the fact that it happened firmly grounds the case for anti-Google action in relatively mainstream tradition.
Democrats are going to have a Google problem
All businesses lobby on behalf of their interests, and in recent years that lobbying has increasingly expanded to include more focus on things like think tanks and other aspects of the “deep” influence game.
Google has been especially an especially aggressive player at deep influence. The Wall Street journal reported in July, for example, that they’ve spent millions of dollars subsidizing academic research that backs Google policy positions, often mapping out the thesis to be proven and then shopping to find the scholar to do the work. Google’s money, not always disclosed, has backed donations to think tanks across the ideological spectrum as well as more prosaic forms of influence peddling like campaign contributions.
What makes Google somewhat unusual for such a big company is that it’s fairly closely aligned with the Democratic Party. Dozens of people moved from jobs at Google to jobs in the Obama administration, and vice versa, over its eight-year span. Schmidt was a major Hillary Clinton donor. More tellingly, Schmidt owns a company called Civis Analytics that does an enormous amount of behind-the-scenes data work for Democratic Party campaigns. This alignment grows out of both cultural affinity between Democrats and Google on social issues, and also years of regulatory struggle that often saw Google, Democrats, and consumer groups on one side pitted against telecommunications industry incumbents.
And for Democratic Party politicians and staffers, the idea of a big, rich, dynamic technology company that favored progressive views on social issues and wanted to put money behind pro-consumer regulatory efforts seemed almost too good to be true.
The specter raised by the European Union’s antitrust fine is that it is, in fact, too good to be true. And that Google, like any other giant company, is going to sometimes find itself in the regulatory crosshairs, throwing its weight around to try to get away with things that maybe shouldn’t be allowed. “Don’t be evil” was a nice idea while it lasted, but business is business and politics is politics — no exceptions.