Making a case against Big Tech
The federal government is coming after Big Tech. The Justice Department and the Federal Trade Commission have reportedly settled on a divide-and-conquer strategy for investigating the anticompetitive behaviors of Silicon Valley’s most important technology companies. The Justice Department will reportedly be investigating Google and Apple for antitrust violations, while the Federal Trade Commission will tackle the cases of Facebook and Amazon.
Meanwhile, the House Judiciary Committee announced on Monday that it would launch an expansive antitrust probe into “giant tech platforms.”
“This is the first time Congress has undertaken an investigation into this behavior,” the committee announced.
The committee’s effort is carefully bipartisan — which seems significant in today’s aggressively partisan Congress.
The House investigation will focus on three subjects: documenting competition problems in digital markets, examining anticompetitive conduct, and assessing whether current antitrust laws and competitive policies are capable of addressing contemporary digital issues.
Investigations from the Justice Department and the FTC could take years.
While congressional investigations often make for great headlines, they don’t often lead to significant changes. Many create no impact at all.
But the tech giants are reportedly taking the challenge seriously, alerting their lawyers and preparing their lobbying troops for battle in Washington.
They’re right to be concerned — and not just because their stocks were pummeled on Wall Street after the antitrust news broke.
Political and consumer pressure has been mounting on the federal government to take action against the technology companies for years. In Europe, authorities have created an entirely new digital regulatory system and issued billions of dollars in fines for Google and other companies.
While the business-friendly U.S. is unlikely to follow of the lead of the European Union, the federal government obviously feels it needs to do something. The question is, what? A big part of the reason why federal regulators have dragged their feet on pursuing big technology companies on antitrust matters is because, at least by traditional standards, the consumer isn’t harmed.
Google has a whopping 90% of the market share for search, but it offers the service to regular internet users for free. Your Facebook friends may be wringing their hands over invasions of their privacy on the platform, but at least Facebook isn’t charging them for the privilege.
Most antitrust law is based around harm done to consumers on price. That framework doesn’t work with an industry that operates by different rules.
To effectively unwind Big Tech’s bad practices, the federal government will need to first fix the shortcomings in antitrust law.
It’ll need to consider how monopoly effects lead to bad outcomes outside of price gouging — whether that’s Facebook-style political misinformation or the fact that Google’s ability to acquire so many companies has allowed it to achieve dominance in an ever-growing array of technology initiatives outside of search.
Rethinking these matters won’t be easy for lawmakers, but done right, they could create a new framework for the U.S. economy of this century — as opposed to the one of the past. The House Judiciary Committee should let the two federal agencies pursue the exciting investigations and focus its attention on updating antitrust law.
The result would be fewer headlines — but a better result for Americans.