Big tech has been under assault by Europe’s regulators for years now, but until recently, not much has been happening in the US. But after a series of scandals, most notably Facebook’s privacy issues with Cambridge Analytica and a shift in the political climate, a US backlash is gaining momentum. Detractors on both sides of the political aisle claim big tech is hurting consumers, our democracy and our economy.
The biggest tech companies – namely Facebook, Amazon, Apple, and Google – are under investigation from multiple federal, state and congressional regulators.
Google faces four antitrust cases and is being accused of using its stranglehold on the internet search to the detriment of others. Facebook, which also owns some of the world’s largest messaging apps, also faces four antitrust cases (and five other cases for privacy practices). Amazon faces three antitrust cases, and questions center on whether the giant favors its own private label goods over those of third parties. And Apple faces three antitrust investigations that focus on whether its app store practices harm competitors.
Put simply, they are being accused of being too big and wielding too much power. The conversations being had about these antitrust investigations assume that, if the companies lose, they will be broken up. That’s highly unlikely, though.
First, historically, antitrust cases have been brought in situations where consumers are harmed due to a lack of competition, which usually took the form of a monopoly that charged excessively high prices. That’s not the case here. In fact, the opposite is true: services are continually expanding, and prices – if they aren’t already at zero – are decreasing. This would complicate any argument that consumers are being harmed, and antitrust laws are all about protecting harm to consumers.
Second, antitrust cases take a very long time to resolve and are difficult for regulators to win. Take the case against Microsoft. The FTC started its investigation in 1990, and the Justice Department started its own case in 1998, claiming that the bundling of its Internet Explorer browser with Windows created an unfair advantage over other browsers. Not until 2002 – 12 years later – was the case settled, on terms significantly diluted from what regulators were initially asking, even though when the case was brought, Microsoft owned about 90 percent of the PC market. These are lessons that regulators are not likely to have forgotten.
It’s also worth noting that “behavioral remedies” are increasingly out of fashion among regulators, meaning they’re more likely to seek civil damages or fines. And if big tech’s responses to Europe’s fines are any indication, fines levied here in the US will have little, if no impact.
All that is not to say the whole affair will be a walk in the park. To the contrary, responding to years-long investigations from multiple agencies will prove to be a big distraction, and one only needs to look at the depressed stock prices of companies under investigation to see how the markets feel about all the uncertainty.