What does it really mean to break the Big Tech?

Last fall, the Federal Trade Commission and 48 state attorneys general filed a lawsuit against Facebook, accuses him of illegally maintaining a monopoly on the social media space “through years of anti-competitive behavior.” Soon after, the U.S. Department of Justice and 11 state attorneys general he filed a lawsuit against Google, accuses him of illegally maintaining a monopoly on search and search advertising markets. It’s Apple today locked in a civil lawsuit with game developer Epic Games, which calls into question Apple’s control of its App Store for antitrust reasons.

Last summer, the U.S. House Judiciary Committee completed a 19-month investigation into the alleged anti-competitive activity by the technology titans. As a result 450 page report the company described them as “the kind of monopoly we last saw in the time of oil barons and railway magnates” and recommended that the government take action against them.

It is easy, of course, to dismiss anything that comes out of Washington or Brussels as a political stance, but in this case it would be a mistake. President Joe Biden has named some of the sharpest and loudest critics of Big Tech — Professor Wu Wu of Columbia University, including the author of the book. The curse of excellence, and Lina Khan, who served as a special adviser to the Judiciary Commission during her investigation — she had important roles in her administration. Europe is putting in place tougher regulations to try to limit the power of Big Tech. And anti-monopoly action, at least in the tech industry, has become the rarest thing: the bilateral party in Congress.

Undoubtedly, the most important thing is that we are in the midst of a radical change in intellectual debate – one that has made it much easier to go after Big Tech. In many ways, it seems that we are going back to the twentieth century. In the twentieth century he defined the policy of large U.S. companies to an antitrust approach, one that is much more skeptical about size virtues and much more willing to be aggressive in maintaining companies. exercising monopoly power.

At the turn of the century laws against the fundamentals of America were written. 1890 Sherman Antitrust Act and Clayton Act of 1914 continue in the books today. They were written in a broad, profound (and ill-defined) language, aimed at the monopolists who engaged in what they called “trade restriction”. And, to a large extent, they came to dominate America’s industrial economy, through mergers and acquisitions, which fueled the desire to reduce huge confidence.

He was a great example Standard oilHe built an empire that gave him complete control over the U.S. oil business. But the antitrust law was not only used to block mergers. It was also used to stop a number of practices that were considered anti-competitive, including some that now seem routine, such as aggressive discounts or linking the purchase of one good to the purchase of another.

All of that changed with the Reagan administration in the 1980s. Instead of worrying about the impact of large companies on competitors or suppliers, regulators and courts began to focus almost entirely on what was called “consumer welfare”. If they could show that a merger or the practices of a company can lead to high prices, it would make sense to take a step back. If not, antitrust regulators generally took an intervention approach. That’s why Facebook’s Instagram and WhatsApp purchases, Amazon’s Zappos purchases, and Google’s DoubleClick, YouTube, Waze, and ITA’s purchases went smoothly through the regulatory approval process.

Already, however. Over the past four to five years, scholars, politicians, and advocates have begun to push for a new idea of ​​what an antitrust policy should be, arguing that we need to move away from this narrow view of consumer welfare — which has usually meant in practice. focus on prices – consider a wider range of harms that companies can inflict on market power: damage to suppliers, employees, competitors, customer opportunities, and even the political system. They have done so, not surprisingly, with the Big Four in mind.

But what would it be like to regain the power of Big Tech? Short answer: It depends a lot on what company you are looking for.

Goals

Although anti-monopoly advocates rhetorically claim Apple, Amazon, Google, and Facebook together, they create a memorable image of four giant “gatekeepers” who collectively control access to the digital economy, in reality four companies have different businesses and raise very different anti-monopoly questions. they will provide very different solutions against monopolies.

Take, to begin with, Apple. It is the most valuable company in the world, worth more than $ 2 trillion in this writing. It is also the most profitable company in the world. However, when it comes to debating monopoly and Big Tech, Apple often thinks about it. In Wu’s book, Apple makes almost no appearances, and in Senator Amy Klobuchar’s new book, Anti-monopoly, which is a striking call to rebuild and enforce an anti-monopolization policy, which Apple’s discussions seem to be wrong than fundamental in its thesis.

This may be largely due to the fact that Apple has become huge on its own, despite making numerous purchases, mainly due to its recent growth in the introduction of three of the most successful and profitable technology products in history. , and continues to convince customers to continue to innovate next-generation products. Even in this new world, it is not illegal to achieve tremendous success by building better proverb predators.

There is no doubt that Apple has antitrust issues, that all developers who make apps for the iPhone and iPad are based on their requirement to sell them in the App Store, and Apple charges a 30% fee. So it’s likely that Apple will allow developers to sell directly to consumers or allow independent app stores. However, it may charge a license fee for any application that wants to be on the iPhone. And most users would probably continue to use the App Store no matter what, just for the sake of custom and convenience.

So in the grand scheme of things, it seems, Apple shouldn’t have to worry so much about increasing anti-monopoly pressures.

Amazon’s situation is more difficult. It also promotes organic growth; while it has done its share of purchases, it has grown mainly on its own, driven by a constant desire to sell more, a large investment in infrastructure and a willingness to spend large sums of money to win and keep customers. The biggest antitrust issue, paradoxically, has to do with something he created himself: the Amazon Marketplace.