Railroaded: Should Big Tech be Regulated like 19th Century Railroads?

Justice Clarence Thomas is nobody’s fool.  From outlier, to insider, Justice Thomas has planted numerous seeds for significant jurisprudential change during his almost 30 years on the Supreme Court.  Justice Thomas dropped one such nugget while concurring in Biden v. Knight First Amend. Inst. at Columbia Univ., 141 S. Ct. 1220 (2021), which granted a writ of certiorarithat then directed the Second Circuit to dismiss the case as moot. The suit itself involved a case in which former President Trump blocked several users from interacting with his Twitter account.  Never content to be silent in a case raising issues of interest to him, Justice Thomas took the occasion to suggest that large technology companies should be considered “public utilities” and regulated under common law as “common carriers.”  As is also his wont, Thomas cited a recent law review article on the topic with the hope of injecting the issue into the blood stream of legal discussion, citing Adam Candeub, Bargaining for Free Speech: Common Carriage, Network Neutrality, and Section 230, 22 Yale J.L. & Tech. 391, 398–403 (2020).

Taking Justice Thomas up on this somewhat novel theory, the Ohio Attorney General just filed in the Common Pleas Court of Delaware County Ohio a Complaint in State of Ohio vs. Google LLC, seeking to have Google declared a public utility and common carrier under Ohio law and asking the court to prohibit Google from discriminating in how it uses its algorithms to feature its own content over other providers’ content when people do a “Google search.”  The Attorney General explicitly relied on Justice Thomas’ musings in Biden in deciding to bring this case.

How to regulate Big Tech is certainly a hot issue today.  Over the last few months, a bi-partisan group of legislators in the United States Congress introduced a flurry of amendments to the antitrust laws to better cover the competitive practices of Big Tech which do not fit easily under the current rubric for antitrust.  Similarly, President Biden recently named Lina M. Khan, who gained attention as a law student at Yale with her article arguing that government and courts should view Amazon and by analogy, Big Tech in a more aggressive fashion under the antitrust laws in her Amazon’s Antitrust Paradox, 16 Yale Law Review, No. 3 (January 2017), to be the Chair of the Federal Trade Commission.  Even more recently, Biden’s nomination of Jon Kantor as the new DOJ Antitrust Chief underscores this new focus on enforcement with a special interest in Big Tech.

Briefly, the concept of a “common carrier” was imported from English Common Law by American courts in the 19th century to regulate all types of “public conveyances,” particularly the new-fangled technology of that era, the railroads. The basic concept was that these “utilities” were central to the public interest.  They were difficult to replicate and compete with because of massive barriers to entry. Ordinary market competition could not protect the public interest.  Special types of common law rules were needed.  Chief among these ideas was that a common carrier had a duty to charge a “reasonable” rate, to provide reasonable service upon reasonable request, and to not discriminate.  Thus, it is understandable why regulators and courts today might look to these concepts in wrestling with the current group of business behemoths.  Unlike common carriers of the past, for big tech today there is no limitation of physical infrastructure that controls access to essential facilities—a major difference.

However, regulatory regimes take time to implement and may evolve. It should be noted that it took decades for the Interstate Commerce Commission, the first federal regulatory agency, to interpret and apply these common carrier concepts which were incorporated into the original Interstate Commerce Act in 1887.  More significantly, these regulatory concepts were radically redefined in the 1970s during the era of deregulation. Economics were brought to bear on both regulation and antitrust during this same time period. Many of these concepts came to mean something very different from what a cursory review would suggest to the non-technical observer. For example, the focus of common carrier regulation, like economic and antitrust rules, has shifted away from the impact on competitors and instead keys in on the impact on consumers. More importantly, the idea of “discrimination” has a very nuanced meaning under modern regulatory regimes.[NT1]   To make out a case of rate or service discrimination, a complainant must adduce relevant “comparitor” evidence, showing how the practice complained of applies to the more “favorable” practice its competitor enjoys—e.g., that the circumstances are the same by comparing the service, market, and type of competition. Indeed, it has become exceedingly difficult to make out such a claim.

Reactivating the idea of common carriage is an interesting and facially attractive idea in figuring out how to wrestle with the complex issue of regulation of Big Tech.  However, as a cautionary note, these concepts are not frozen in some amorphous time capsule from the late 19th and early 20th centuries.  The terms and principles as applied today by courts and agencies are loaded with particular types of economic analysis and raise complex legal problems. Thus, it is not a panacea: careful, nuanced national legislation is needed to meet the challenges of today’s large monopolies that is designed to fit the specific problems they raise.  See, e.g., Erika Douglas, Monopolization Remedies and Data Privacy, 24 Va. J.L. & Tech. 2 (2020) (arguing that past antitrust remedies can’t simply be applied to tech platforms of today, because the nature of the data at stake and the related law has changed, requiring new and careful consideration to ensure the remedies imposed will benefit consumers). The decline in general antitrust enforcement over the last 40 years, particularly in the area of the “essential facility” doctrine, has left the field ripe for novel efforts like Ohio and new efforts to bolster the existing antitrust laws to meet the challenges of today’s new commerce giants.

Jonathan M. Broder (LAW ’83) is a retired Vice President of Corporate Development and General Counsel for Conrail. He managed Conrail’s legal and corporate affairs, as well as its real estate and business development departments. Jon is currently a Temple 10-Q Editor and an Adjunct Professor at the Temple University Beasley School of Law.

 [NT1]In the most recent draft, this mentioned “modern telecommunication? regulatory regimes.” Is this sentence referencing regulatory regimes at large or telecom regimes?

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