/How a liberal think tank is driving Democrats on reining in tech

How a liberal think tank is driving Democrats on reining in tech

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The Open Markets Institute has a bitter history with Google, one of the companies it wants the government to target for a crackdown. | Drew Angerer/Getty Images

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The presidential race and rising anger at Silicon Valley’s power are giving new lift to the Open Markets Institute’s crusade against online monopolies.

A small liberal think tank has spent years urging Washington to crack down on the United States’ biggest tech companies — a lonely crusade that barely registered with the political establishment.

Now the Open Markets Institute has become one of the most influential drivers of Democratic politics in the fight to rein in Facebook, Amazon and Google, seeing its ideas embraced by Elizabeth Warren and forcing presidential candidates like Bernie Sanders, Cory Booker and Joe Biden to take a side.

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The idea that Silicon Valley companies are this generation’s monopolies? Open Markets has been banging that drum for a long time. The argument that the internet giants are a threat to American democracy? The group has been making that case way before it became mainstream.

Open Markets believes the major online companies need government intervention, including in some cases breaking them apart the way Standard Oil was split more than a century ago. And it’s seizing the political moment created by Donald Trump’s surprise 2016 election victory, which has put the tech industry on the defensive over everything from Russian disinformation to data privacy.

“When Trump won, it turned out that Google and Facebook were not magicians,” said Matt Stoller, an Open Markets fellow and former staffer on the Senate Budget Committee under ranking member Sanders (I-Vt.). “They were just marketers, and that was a massive hit to the prestige of ‘Big Tech.’”

The group had a messy split two years ago from its onetime parent organization, New America, after the two clashed over Open Markets’ praise for a $2.7 billion European antitrust fine against Google. Open Markets has also caught the ire of Facebook, which last year hired a public relations firm that targeted the group’s “George Soros connection” — a campaign that earned Facebook accusations of trafficking in anti-Semitic themes.

Despite its small size — 15 or so employees operating out of a shared WeWork space in downtown D.C. — Open Markets is exercising outsized influence these days, helping to shape Washington’s intensifying scrutiny of giant tech companies and their vast influence on American society. And the apex example of its influence is its relationship with Warren.

The ties to the Democratic Massachusetts senator go back to 2016, when Warren met with Open Markets’ executive director, Barry Lynn, to discuss her concerns about corporate concentration. Months later, she headlined an Open Markets-hosted event in the Capitol with a speech on “Reigniting Competition in the American Economy,” in which she called out Google, Apple and Amazon as platforms that can “become a tool to snuff out competition.”

This year, as a presidential candidate, Warren made breaking up big tech companies one of the central proposals of her campaign, saying the firms “have too much power — too much power over our economy, our society, and our democracy.”

Warren’s trust-busting plan has echoed through the Democratic primary, forcing her nearly two dozen rivals to either emulate it, offer their own versions or distance themselves from it.

Biden, the current Democratic frontrunner, said Warren makes “a very strong case” for breaking up tech giants, adding it’s “something we should take a really hard look at.” Sen. Kamala Harris (D-Calif.) staked out a similar position. Sanders backed the idea of breaking up Facebook, but has yet to weigh in on other tech companies. Meanwhile, Booker (D-N.J.), known for his close relationship with Silicon Valley, has adopted stronger language criticizing corporate consolidation but said Warren’s proposal smacks of Trump’s bombastic rhetoric.

“I don’t think that a president should be running around pointing at companies and saying break them up without any kind of process here,” Booker said. “It’s not me and my own personal opinion about going after folks. That sounds more like a Donald Trump thing to say, ‘I’m going to break up you guys.’”

Fans of Open Markets see its fingerprints on the emerging debate.

“Open Markets and the people around them were the first to name the monopoly problem, plant a flag, and consolidate attention around it,” said David Segal, executive director of digital rights group Demand Progress. Segal’s group and Open Markets lead the “Freedom from Facebook” coalition, which is pushing the Federal Trade Commission to force Facebook to spin off its WhatsApp, Instagram and Messenger businesses.

The group’s advocacy comes amid a broader swirl of events surrounding the tech industry, with antitrust enforcers at the Justice Department and FTC dividing up oversight of the major internet companies and the House Judiciary Committee launching its own investigation of tech firms. Democrats and Republicans have been hammering the companies over a range of issues over the past two years, from the way they handle disinformation and hate speech to data-privacy concerns to GOP complaints of anti-conservative bias.

Open Markets has its critics, among them pro-business organizations that say the group offers few fresh ideas and scorns honest debate. And its leaders have developed a reputation for pugnacious rhetoric, responding aggressively to legislative proposals, news coverage or analysis deemed insufficiently tough on the tech companies.

“OMI’s loudest voices are largely unencumbered by economic or legal education,” said Neil Chilson, chief technologist at the libertarian Charles Koch Institute. “So maybe they’ve raised the profile of the antitrust debate, but to my mind they aren’t doing much to help move that debate forward.”

Tim Wu, a Columbia Law School professor and Open Markets advisory board member, acknowledged the group’s combative nature, but credited it with expanding the idea of what’s considered reasonable for government to do in response to Silicon Valley’s power.

“They’re angry, but they also understand antitrust law,” he said.

Beyond Warren, the group has established a sprawling network of ideologically like-minded people in Washington and across the country.

Lina Khan, an Open Markets veteran, has drawn considerable attention as the author of an influential 2017 academic paper arguing that regulators are ignoring the threat posed by Amazon and should look past traditional price concerns when establishing if a company is a monopoly. Khan later went on to work for Democratic FTC commissioner Rohit Chopra, who has urged antitrust enforcers to issues penalties harsh enough to force both tech companies and their executives to change their ways.

Facebook co-founder Chris Hughes praised both Khan and Lynn, the Open Markets executive director, in his eye-catching New York Times op-ed in May calling for the breakup of Facebook. Hughes’s call-to-arms attracted enormous attention, given his role in starting Facebook with CEO Mark Zuckerberg in their Harvard dorm.

The group has also worked closely with Roger McNamee, an early adviser to Zuckerberg who has become an ardent critic of the company. McNamee credits Lynn with helping him to navigate Washington, including helping to get a magazine article published that would later become the basis for his best-selling book, “Zucked: Waking Up to the Facebook Catastrophe.” (McNamee now sits on the group’s advisory board.)

Open Markets’ reach has at times stretched beyond the confines of Washington and Silicon Valley.

Ron Kim, a Democratic member of the New York state Assembly, credits Open Markets with helping him articulate arguments against Amazon as he helped lead pushback against the company’s planned second-headquarters expansion into Queens’ Long Island City neighborhood. “I ended up learning and growing tremendously as a lawmaker, because they have been doing this a lot longer than I have,” Kim told POLITICO.

Amazon abandoned its New York City plans in February, saying that “a number of state and local politicians have made it clear that they oppose our presence and will not work with us.”

Open Markets has a bitter history with Google, one of the companies it wants the government to target for a crackdown.

The group’s 2017 split from New America followed an Open Markets news release congratulating European regulators’ decision to impose a $2.7 billion fine on Google. That was awkward because of New America’s close relationship with Google. The search giant is a key donor to the organization, and Eric Schmidt, then executive chairman of Google’s parent company Alphabet, had also served as chairman of New America’s board.

The New York Times later reported that Open Markets’ departure from New America came amid pressure from Google. At the time, New America CEO Anne-Marie Slaughter called that implication “absolutely false,” saying instead that Lynn had failed to live up to the organization’s expectations of “openness and institutional collegiality.”

Today, as a standalone group, Open Markets declines to disclose its donors, saying only that the roster does not include for-profit corporations. Asked to explain the lack of transparency, Stoller said “monopolies are vindictive.” Added Sarah Miller, the group’s deputy director and a former Hillary Clinton policy aide, “When you are going up against the world’s most powerful companies, it is probably not strategic to expose some of the people who want to fund that work.”

Open Markets says it focuses on teaching policymakers effective ways to talk about tech issues, through everything from one-on-one briefings to high-profile public events. But it also spends time trying to inject its views — often via Twitter — into Washington’s political bloodstream.

In April, after Facebook said it expects to shell out up to $5 billion for a settlement of the FTC’s privacy investigation, Open Markets went to work arguing that such a historic fine would be little more than a slap on the wrist for Facebook, which has a market capitalization of about half a trillion dollars. Stoller called it a “parking-ticket-level penalty for destroying democracy,” a statement that got an extra exposure when The New York Times made it a “Quotation of the Day.”

McNamee recalls that when he met with Lynn in 2017, “Barry said, ‘We’re going to bring antitrust back and we’re going to start with tech.’ I was flabbergasted.”

Fast forward to this month, when Speaker Nancy Pelosi, who represents San Francisco, tweeted a warning about the dangers to democracy posed by the concentration of power in the hands of the online platforms. Wrote Pelosi: “The era of self-regulation is over.”

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