Big change for big tech
Enemies mount for four giants
They are the world’s wealthiest companies, hugely profitable and wielding enormous power over the lives of billions of people.
For years, the giants of Silicon Valley have sprung up like mushrooms — more or less unimpeded and operating in a near regulatory vacuum.
While critics worry about a lack of up- to- date laws or guardrails designed to check their growth, for their shareholders and as an experiment in the raw power of American enterprise and innovation, it has been a remarkable performance.
Put together, Google, Apple, Amazon and Facebook now have a market value of more than $ 5 trillion — more than double the combined market capitalization of the entire FTSE 100. Only one of these companies is more than 26 years old.
Yet amid growing concerns about their impact on competition and on the rest of society, how long can this meteoric rise continue? Not long, warned a group of American lawmakers who fired a shot across the bows of the industry on Tuesday.
Following a 16- month investigation, the House of Representatives’ antitrust subcommittee in effect called time on the era of Big Tech, declaring that the industry had become simply, well, too big, and it recommended a series of breakups to curb its power.
A withering 449- page report blasted the companies for abusing their dominance in order to smother competition, crush innovation, extract unfair fees and bend smaller businesses to their will.
“To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” it said.
The report, which used the word “monopoly” more than 100 times, proposed that large tech platforms such as Apple should be blocked from entering “adjacent lines of business” and from giving preference to their own products.
For Tim Cook, Mark Zuckerberg, Jeff Bezos and others, this is fighting talk, of course — the kind of language that will have them anxiously Zooming America’s most expensive lawyers and sweating over the fear their empires could be smashed apart.
The reality may be less dramatic. For starters, there is only a slim chance that these new proposals — which include calls to restructure companies, reform antitrust laws and strengthen the agencies that enforce them — will be passed in anything resembling their current form.
Barring a clean sweep by the Democrats of both houses of Congress and the presidency, the Democrat-dominated committee that drafted them will struggle to secure consensus or win sufficient support from across the aisle to pass them into law.
In fact, the partisan fightback has already begun with one prominent Republican, representative Jim Jordan of Ohio, skewering the report’s “radical” proposals.
If he stays in power, President Donald Trump, of course, has shown little desire to take the fight to Big Tech over antitrust.
Then, of course, there is the inevitable fightback from the tech industry itself, which is gearing up for the mother of all charm offensives.
Its aim? To persuade politicians and the general public that the proposals go too far and should be watered down — or scrapped. The howls of protest began within minutes of the report’s publication and could go on for years.
There is another wild card: the complex relationship between the tech industry and the Democratic Party.
While Democrats such as Elizabeth Warren have led the charge against the excesses of Big Tech, California is to the Democrats what Texas is to the Republicans.
As well as being the most populous blue state, it is a colossal source of power and funding — much of which comes directly from Silicon Valley.
In the event of a Joe Biden presidency, that relationship is certain to shape how new regulations are framed and in all likelihood will end in their dilution.
Amazon, Google and Microsoft have been among the top five contributors to Biden’s candidate campaign committee, while the appointment of Kamala Harris, a former California attorney general, as his vice presidential nominee was widely viewed as a victory for Silicon Valley.
Although he has been modestly critical at times, Biden himself seems reluctant to place the fight against the tech industry at the heart of his campaign.
Having said all of that, the technology industry would be foolish to be complacent about its prospects.
The industry is now being targeted in so many different ways and from so many angles, it seems hard to imagine that the rules that govern it are not about to change.
America’s Federal Trade Commission is gearing up for possible antitrust lawsuits against Facebook and Google.
Trump is waging a separate campaign to strip social media giants of their rights under Section 230, a law that provides immunity for website publishers from thirdparty content.
Across the Atlantic in Europe, Margrethe Vestager, the EU’S top antitrust regulator, is hunting for new ways to take on the industry and has shown no sign of backing down in her campaign.
One way or another, there is no doubt that big change is on the way for Big Tech.