Big Tech’s script has reached a big turning point

It’s easy to get lost in the serialized Big Tech drama, by which I mean the prevarications, the fines, the overarching wariness about the market power of a Google or a Facebook. It’s starting to feel like one of those Netflix series that should not have been extended for a third season. You know the feeling: You awake dazed in the wee hours, Cheezies dust in your hair, confused by characters you do not recognize and a storyline you can no longer follow.

Yet in the latest episode, a one-two punch of announcements that landed Friday and Monday from U.S. attorneys general, the Big Tech script is back on track as far as consumers are concerned, consumers being the protagonists in the tale. On Monday, Attorney General Ken Paxton of Texas took the lead role in announcing that a coalition of 48 states, plus Puerto Rico and D.C., will investigate Google’s control of online advertising and search traffic.

Last Friday, New York Attorney General Letitia James unveiled a multi-state investigation that will focus on Facebook’s dominance as a social media platform and whether that has, as the release stated, “endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising.”

And then this: when European Commission President-elect Ursula von der Leyen unveiled her cabinet of commissioners Tuesday (14 men and 13 women), she announced that Margrethe Vestager will not only be charged with leading a Europe “fit for a digital age,” but will stay on as commissioner for competition. That’s a blow to tech players bruised by Vestager’s hawk-like focus on anti-competitive behaviour.

Let’s recall the summer of 2018, when Vestager hit Google with a 4.34-billion-euro fine for forcing illegal restrictions on mobile. Google, or Alphabet Inc. if you prefer, cemented its dominance in three ways, Vestager found: by forcing preinstallation of Google search on Android, by paying manufacturers to ensure that only Google was pre-installed and by obstructing the development of competing platforms. That fine was still under appeal when the commissioner fined the company 1.49 billion euros for unfair practices that restricted fair competition in advertising.

And this: In a securities filing last Friday, Alphabet disclosed that it received an investigative demand from the U.S. Department of Justice “requesting information and documents relating to our prior antitrust investigations in the United States and elsewhere.” Similar demands will now be made by state attorneys general.

The central question that remains is this: When does dominance in the marketplace equal anti-competitive behaviour? I will not go on again about Standard Oil and Ida Tarbell because this is not history class.

In modern times, we consider general purpose search engines. Google has always argued that its “mission” is to “organize the world’s information and make it universally accessible and useful.” That, the company maintains, “has always been our North Star.”

Do you accept, as the company argues, that competition in this area remains robust due to such competitors as Bing (remember Bing?), Baidu (Chinese) and Naver (South Korean)?

In making the announcement on behalf of the group of 50 attorneys general, Ken Paxton stated the obvious: “When most Americans think of the internet, they no doubt think of Google. There is nothing wrong with a business becoming the biggest game in town if it does so through free market competition, but we have seen evidence that Google’s business practices may have undermined consumer choice, stifled innovation, violated users’ privacy and put Google in control of the flow and dissemination of online information.”

A smaller group had previously filed a comment with the U.S. Federal Trade Commission (FTC), which proves useful in trying to forecast where such investigations could lead. Increased data transparency is one obvious path to trying to ensure efficient and competitive markets. In the absence of data, as was noted at the time, the measurement of market power remains elusive. The approval process for green-lighting the acquisition of competitors also bears scrutiny. For potential new competitors, are the barriers to entry impossible to clear?

What’s important about the latest moves is that they are not only multi-state, but bipartisan.

On Thursday, the House antitrust subcommittee, chaired by Rep. David Cicilline, is scheduled to hold a hearing on the role of data and privacy in competition. Cicilline, a Democrat from Rhode Island, has been fierce in his criticism of the FTC for doing too little to protect consumers.

In his opening address in June, he noted that none of the 350 acquisitions made by Facebook and Google had been blocked by federal authorities on the watch for consolidation that negatively affects consumers.

There could be fireworks. Let’s hope so. In the writing of the script, it’s starting to feel as though we’ve reached a turning point, for the better.