MONOPOLIES ARE GOOD—so long as they can be challenged, however remote the possibility. That belief has long held sway at the University of Chicago, a bastion of free-market thinking, which helped make the word “antitrust” lose most of its meaning in America, not least with respect to technology. “Punishing Google for being a successful competitor would stifle innovation and dynamic competition,” concluded the late Robert Bork, long the Chicago school’s leading antitrust expert, in a paper published in 2012 (commissioned by Google, which needed ammunition to defend itself in an antitrust investigation at the time).

Now this monopoly of thought is itself being disrupted from within. In April, for the second time in as many years, Booth, the university’s business school, invited leading antitrust thinkers to discuss monopolies, this time in tech. And many came, from representatives of the old Chicago school, such as Dennis Carlton, to tech’s most ardent foes, such as Barry Lynn and Matt Stoller of the Open Markets Institute, a think-tank. Ideas about what should be done were disparate, including such proposals as creating property rights for data and treating social media as a public-health problem because of their addictive qualities. In his winding-up speech Luigi Zingales, one of the organisers, proposed the creation of an interdisciplinary committee for internet-platform regulation. If it is ever convened, what should it focus on?

Information technology comes in cycles, each giving rise to a new computing platform. In the current cycle, the key component—or the next platform—is data. Facebook may have started as a social network, Google as a search engine and Microsoft as a maker of operating systems and other software. But today they all deal in data, not least to target advertisements. And now the firms are quickly becoming fully fledged data distilleries: they suck up as much digital information as they can, crunch it in vast data centres and turn it into artificial-intelligence services. At the three firms’ annual developer conferences in early May, AI was everywhere. New services unveiled included one by Microsoft to interpret people’s offline movements and one by Google which is able to call hair salons and other local businesses to make appointments.

Philosopher’s stone.2

The strange thing about data is that they are an inexhaustible resource: the more you have, the more you get. More information lets firms develop better services, which attracts more users, which in turn generate more data. Having a lot of data helps those firms expand into new areas, as Facebook is now trying to do with online dating. Online platforms can use their wealth of data to spot potential rivals early and take pre-emptive action or buy them up. So big piles of data can become a barrier to competitors entering the market, says Maurice Stucke of the University of Tennessee.

That said, there are other ways of looking at data. Geoffrey Manne of Northwestern University argues that, unlike physical resources, they are not rivalrous, meaning they can be collected and used by different parties without causing a clash of interests. It is not the data that are valuable, he says, but the services powered by them. Some firms are just better at developing new offerings than others.

Still, assuming, as many economists in the field now do, that data matter quite a bit, what can regulators do to limit their power? Broadly, possible actions fall into two buckets, one more Hamiltonian, the other more Jeffersonian, to stick with the labels of Frank Pasquale of the University of Maryland mentioned earlier in this report.

Of the two, the first is the more straightforward. When Facebook took over WhatsApp, a popular messaging service, for about $23bn in 2014, the deal barely raised any eyebrows in antitrust quarters. Today the acquisition would probably be blocked, because it has since become clear that Facebook was taking over a serious rival. And despite promises to the contrary, the social network proceeded to merge some of the two firms’ data, which last year earned it a fine of €110m ($122m at the time) from European Commission regulators.

Turning back the clock

As well as blocking new mergers, this approach could involve unwinding some that have already happened. One proposal tabled in Chicago was to require Facebook to spin off WhatsApp and Instagram, another popular social-media app which it took over in 2012. Whether it makes sense to split up the firms’ core business is a different question; equipped with the same data set, one of the successor generation would probably end up dominant again after a few years.

A related idea being considered is to block big online firms from offering certain services on top of their platforms because they might favour them over rival offerings. Such a conflict of interest was at the core of an antitrust case in Brussels in which Google was accused of having discriminated against competing comparison-shopping services and fined €2.4bn. Amazon, too, often competes with merchants that use its online marketplace. To avoid such conflicts, limitations have been imposed in other industries, such as railways and banking, points out Lina Khan of the Open Markets Institute. Why, she argues, should this not be possible for platforms?

The second, Jeffersonian bucket is variously labelled “data sharing”, “data portability” and, in geekish, “regulation by API” (application programming interface). The champions of data monopolies accept that they will be hard to avoid and even harder to take apart, so they want incumbents to be required to give startups access to some of their data and thus create more competition.

Some of the proposed measures already exist. Both Facebook and Google allow users to export many of the data they hold on them. Europe’s new privacy law, the General Data Protection Regulation, now mandates “data portability” (as well as a “right to be forgotten”, which requires firms to delete personal data if a user asks). But so far not many are clicking the download button, mainly because of the dearth of services that allow such data to be uploaded.

This is why some want to push this approach further. Mr Zingales and Guy Rolnik, another organiser of the Chicago conference, have suggested that dominant social networks should be required to allow access to their social graphs, the network of connections between friends, to make things easier for competitors. In the early days of social media this sort of data-sharing was possible. Instagram, for instance, asked new users to import a list of their Twitter followers.

Viktor Mayer-Schönberger of Oxford University would like to introduce a “progressive data-sharing mandate”. If a company’s market share reaches a certain threshold of, say, 10%, it would have to start sharing some of its “feedback data” (information collected from people using AI services). When the market share increases, so would the sharing requirement. “When feedback data from large players is available to smaller competitors, then innovation…is not concentrated at the top,” he argues in “Reinventing Capitalism in the Age of Big Data”, a new book co-written with Thomas Ramge, a journalist.

Albert Wenger of Union Square Ventures, a venture-capital firm, calls for a “right to an API key”. This would not just give users real-time access to their data but allow them to plug into the inner workings of a service. A good example is Twitter in its early days: people had the choice of different applications that linked into the microblogging service.

All these suggestions raise two big questions. One is whether any of them are workable. The measures in the first option seem feasible, although merger controls can be sidestepped. The proposals under the second approach could stymie innovation. As for the third, what type of data should be shared, and in which format? And how can the tension between data-sharing and privacy be resolved? Much will depend on how regulators interpret the GDPR, but the legislation does not seem to condone the idea of exporting your social graph because it includes personal information on your friends.

The other big question is whether any of these ideas can be made to fit with existing antitrust law. Critics of the tech titans have not spent much time thinking about that, says Carl Shapiro of the University of California, Berkeley. Before regulators can limit data power, for instance, they have to show that it has been abused, which will be tricky. So far only one big data-related antitrust investigation has been launched, by Germany’s Federal Cartel Office. In December it found that Facebook had abused its dominant position by getting users to agree to let the firm collect personal data from other websites.

Many participants at the Chicago conference called for a big trial that could put the spotlight on firms’ practices, as the Microsoft case did in the 2000s. In Europe this is a distinct possibility. Data “can foreclose the market—they can give the parties that have them immense business opportunities that are not available to others,” said Margrethe Vestager, the EU’s competition commissioner, in a recent interview. In April she announced an investigation into Apple’s proposed acquisition of Shazam, a popular smartphone app that identifies songs. This would give the iPhone-maker access to data that could help it poach customers from rivals such as Spotify.

But in America a major case seems unlikely to be brought, even if the Democrats regain power in Washington, DC. The recent techlash notwithstanding, the online giants still have many left-leaning friends, and have contributed to Democratic campaigns. So in the absence of any quick technical or regulatory fixes to the internet’s centralisation, what can be done?