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Technical Excellence and Scale - EFF

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In America, we hope that businesses will grow by inventing amazing things that people love – rather than through deep-pocketed catch-and-kill programs in which every competitor is bought and tamed before it can grow to become a threat. We want vibrant, competitive, innovative markets where companies vie to create the best products. Growth solely through merger-and-acquisition helps create a world in which new firms compete to be bought up and absorbed into the dominant players, and customers who grow dissatisfied with a product or service and switch to a "rival" find that they're still patronizing the same company—just another division.

To put it bluntly: we want companies that are good at making things as well as buying things.

This isn't the whole story, though.

Small companies with successful products can become victims of their own success. As they are overwhelmed by eager new customers, they are strained beyond their technical and financial limits – for example, they may be unable to buy server hardware fast enough, and unable to lash that hardware together in efficient ways that let them scale up to meet demand.

When we look at the once small, once beloved companies that are now mere divisions of large, widely mistrusted ones—Instagram and Facebook; YouTube and Google; Skype and Microsoft; DarkSkies and Apple—we can't help but notice that they are running at unimaginable scale, and moreover, they're running incredibly well.

These services were once plagued with outages, buffering delays, overcapacity errors, slowdowns, and a host of other evils of scale. Today, they run so well that outages are newsworthy events.

There's a reason for that: big tech companies are really good at being big. Whatever you think of Amazon, you can't dispute that it gets a lot of parcels from A to B with remarkably few bobbles. Google's search results arrive in milliseconds, Instagram photos load as fast as you can scroll them, and even Skype is far more reliable than in the pre-Microsoft days. These services have far more users than they ever did as independents, and yet, they are performing better than they did in those early days.

Can we really say that this is merely "buying things" and not also "making things?" Isn't this innovation? Isn't this technical accomplishment? It is. Does that mean big = innovative? It does not.

Operationalizing, scaling and maintaining services with millions (or billions!) of users is incredibly hard and requires real technical excellence. It's one thing to "move fast and break things," but mature products that people rely on need maintenance from people whose motto is "work deliberately and fix things." Monopolists that have found themselves in antitrust's crosshairs were accused of a long list of sins, but they are rarely accused of technical incompetence.

Rail barons moved a lot of freight. Standard Oil pumped a lot of crude. Alcoa refined a lot of aluminum. A&P sold a lot of groceries. The studio system made a lot of movies and got them onto a lot of screens. AT&T successfully connected a lot of phone calls.

When you're a monopolist, being good at bigness comes with the territory. If being good at scale was a defense against antitrust claims, virtually every monopolist would be off the hook.

Over the past three decades, U.S. antitrust law has adopted a narrow focus on "consumer harm" (effectively, "Did this company raise prices in the short term after buying its competitor?"). Today, lawmakers, regulators, and scholars are revisiting antitrust and asking whether it's time to bring back our stronger trustbusting traditions.

Tech is ripe for antitrust disruption: as an industry, its focus has shifted from growth through innovation to growth through acquisition (albeit while innovating on product deployment at scale). Regulators can and should subject tech's mergers and acquisitions to skeptical scrutiny, and revisiting the mergers that created a Web of five giant sites, filled with screenshots of text from the other four.

This is bound to rouse defenses of Big Tech that are based on excellence in bigness, and the corollary, that without Big Tech, the YouTubes, Skypes and Instagrams of the world would be doomed to endless brownouts, Fail Whales and buffering errors.

The rejoinder is obvious, and comes from tech giants themselves: inevitably, the keystones of their technical excellence at scale come from . . . acquisitions. Tech companies buy hardware startups. Cluster managements startups. Cloud startups. Customer service startups.

The companies that might otherwise be offering scalable computing, storage, and management tools to startups that are drowning in their own success are, often as not, already part of the tech giants.

Growing gracefully is hard, but it's not impossible. A vibrant, competitive market in growth support systems is the scaffolding we need to support the innovators who do manage to delight and surprise so many customers that they grow so fast that they are in danger of toppling.

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Technical Excellence and Scale - EFF
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