Washington: The United States federal government is on the precipice of scrutinising the world’s biggest tech companies, leaving them potentially vulnerable to new rules and federal lawsuits as politicians hail this moment as a “tipping point” that will usher in a new era of reining in Big Tech.
The issue at stake is: Have these companies — Amazon, Google, Facebook and Apple — been indulging in anti-competitive behaviour and hurting consumers as a consequence?
After years of a hands-off approach, this is potentially the beginning of the first overhaul of anti-trust rules in decades, and an effort to keep up with an industry that did not exist when US antitrust laws were written.
House Judiciary Committee aides said the investigation will kick off on June 11.
The question of whether tech companies violate antitrust laws has long been the subject of academic debates and industry griping.
The Justice Department is set to look into Google and Apple Inc, while the Federal Trade Commission (FTC) will probe Facebook Inc. and Amazon.com Inc., according to sources.
The scrutiny from Washington could lead to years of headaches for these companies, raising the prospect of lawsuits to break up companies, hefty fines or new laws limiting their reach.
What are the main concerns?
Take Google. It has a large or majority market share in several important industries including online advertising, internet browsers, mobile operating systems and email.
Google sells much of the online space available to advertisers, such as search ads and spots that play before YouTube videos. It also controls the system that many advertisers use to place and track ads on non-Google websites.
Google’s influence over the digital advertising market and its role as an intermediary between advertisers and publishers is a top complaint of media companies. The general refrain of media companies is that Google uses its market power in the digital advertising technology to benefit its own businesses and harm competition.
Apple, the smartphone giant, has largely managed to stay above the fray as rivals like Facebook and Google took a political beating in recent years. But it seems it is also no longer immune to “techlash”.
Concerns that Apple is stifling competition are mounting. Some have challenged the way Apple runs its App Store — because critics say the 30 per cent cut Apple collects is unreasonably high and hurts developers. The scrutiny isn’t limited to the US — Spotify, the Swedish media services provider, has brought forward a complaint to the European Commission claiming Apple is using its status as “a player and referee to deliberately disadvantage other app developers”.
What are the tech giants saying?
The companies have separately argued that they have not violated antitrust laws.
Google and Facebook say that their services are free and do not harm competitors and that consumers can turn to alternative search and social networking apps.
Amazon has said it has a large share of online commerce, but only a small fraction of the overall retail market. And Apple argues that the majority of apps in its store are free and that the company rejects only apps that violate its policies on hate speech and pornography, for instance, or try to take too much data from users.
And what are they doing about this?
Faced with the growing possibility of antitrust actions and legislation to curb their power, Google, Amazon, Facebook and Apple are amassing an army of lobbyists as they prepare for what could be an epic fight.
As the public and political discontent with their size, power, handling of user data and role in elections rises, the four companies have intensified their efforts to lure lobbyists with strong connections to the White House, the regulatory agencies, and Republicans and Democrats in [US] Congress.
It is hard to avoid the increasing prominence of the companies in Washington, say many analysts. The Big Four finance some of the most influential think tanks from across the political spectrum, sometimes making it difficult for critical voices to win funding.
Google and Facebook have provided funding to hundreds of influential US trade groups and think tanks across the ideological spectrum, including the US Chamber of Commerce, the American Conservative Union, the Brookings Institution and the Center for American Progress.
The four companies spent a combined $55 million (Dh202.29 million) on lobbying last year, doubling their combined spending of $27.4 million in 2016, and some are spending at a higher rate so far this year, according to the Center for Responsive Politics. That puts them on a par with long-established lobbying powerhouses in the US like the defence, automobile and banking industries.
Last month, the industry lobbying group, the Internet Association, which represents Amazon, Facebook and Google, awarded its Internet Freedom Award to Ivanka Trump, US President Donald Trump’s daughter and White House senior adviser. “They are no longer upstarts dipping a toe in lobbying,” said Sheila Krumholz, the executive director of the Center for Responsive Politics. “They have both feet in.”
“Big tech plays a huge role in our economy and our world. As tech has expanded its market share, more and more questions have arisen about whether the market remains competitive.”
Representative Doug Collins, Republican-Georgia, a ranking member of the US House Judiciary Committee
“The very same agencies and legislators now screaming for blood have for decades ignored any sensible regulation of Silicon Valley, afraid of killing the golden geeks. They remind me of a legal-pad-carrying Avengers team that’s going to take a lot of what’s good about tech down with what’s bad.”
Kara Swisher, Silicon Valley journalist and co-founder of the tech news publication Recode
“As much as I want to see some regulation of tech, I dread what it’s going to look like. The problem with so much regulation is that it comes in late, it comes in hard, and it often looks more backward rather than forward.”
Jessica Powell, Google’s former communications lead, on social media
“There are legitimate antitrust issues with all of the big tech companies, but we have to be careful to not allow those investigations to serve as political tools.”
Alex Stamos, Facebook’s former chief security officer