Here’s Why the Government Is Applying an Antitrust Crackdown on Big Tech By Kayla Matthews

The U.S. government is placing pressure on the world’s leading tech companies as it cracks down on antitrust activity. Facebook, Google, Amazon and Apple have all come under scrutiny, affecting share prices as regulators seek out unlawful behaviour. As they proceed, some argue the government’s efforts are futile.

The companies that comprise “Big Tech” are not technically monopolies. Few would attach that term to Facebook, Google or even Amazon. Furthermore, any attempt to break up these companies or impose restrictions on their business models would require a significant amount of time and resources, according to experts.

Regardless, regulators are somewhat correct in their evaluation of the corporations as a collective whole. Though Facebook, Google, Amazon and Apple are not individual monopolies, they present strong evidence as Big Tech. Their size and influence have a substantial impact on the success of smaller companies.

For example, Google and Apple control more than 95% of all mobile spending by U.S. consumers. Google and Facebook command almost 60% of all digital advertising spending worldwide. Amazon has affected various industries including but not limited to booksellers, grocery stores and the postal service.

In short, the crackdown on anti-competitive behaviour is reasonable, to a certain extent. The excessive growth of Big Tech has made it difficult for other companies to compete in the space. As for a potential solution, the federal government has taken action to confront the growing problem.

Addressing the Issue of Antitrust Activity

The Justice Department has agreed to handle investigations related to Google and Apple, while the Federal Trade Commission has set its sights on Facebook and Amazon. These efforts may eventually result in the first overhaul of antitrust rules in many decades, affecting an industry which is relatively young.

Speculation over tech companies and antitrust behaviour isn’t new, of course, but the interest of government officials has brought the subject from the periphery of public discourse. The industry is now under intense scrutiny from President Trump, Congress, Democrats running for president and everyday consumers.

Given the current controversy surrounding Big Tech, investors haven’t been kind. Apple stocks fell by only 1%, but Google and Amazon took a far greater hit, and shares of Facebook dropped by more than 7%. Though this may seem inherently negative, government officials argue that the investigations are ultimately necessary.

Congressman David Cicilline spoke on the subject at a news conference, saying, “This is about how do we get competition back in this space.” As the chairman of the House Judiciary subcommittee on antitrust, Cicilline has an important role to play in the investigations. According to him, they’re “long overdue.”

As for the details of the investigations, the next 18 months will see a set of hearings, testimony from the executives of top companies and subpoenas for internal corporate documents. However, the federal government’s antitrust actions may prove ineffective in breaking up the companies that comprise Big Tech.

Challenges for the United States and the EU

Federal regulators who plan to prosecute Big Tech companies will need to redefine what constitutes a monopoly in the industry. Legal professionals are in general agreement that current efforts to address antitrust activities in tech are insufficient and even sloppy. The U.S. government has many critics in this regard.

“Antitrust is a slow, messy remedy … It can be a sledgehammer approach when what this situation requires is a scalpel,” said Adam Thierer, a senior research fellow with George Mason University’s Mercatus Center. He went on to ask, “How the heck would any of this apply to Facebook, Amazon or Apple?”

In truth, it’s difficult to hold these companies accountable for this type of activity. But the EU may provide insight for the U.S. government as it proceeds with investigations. Since 2017, EU antitrust regulators have fined Google a combined $9.5 billion. The European Commission hasn’t stopped there, however.

Facebook, Amazon and Apple also face investigations in Europe. The EU hasn’t attempted to break up these companies, rejecting the rhetoric of U.S. lawmakers. Instead, they’ve opted for fines and mandates they hope will influence the business practices of Big Tech and bring about gradual change.

Whether this approach will prove successful is still uncertain. While it seems far more realistic to address the problem with fines, $9.5 billion is a relatively meagre sum for a monolithic company like Google. Even if it represents the largest punishment the EU has ever issued, it still may be inadequate to bring real change.

Looking Ahead

As the federal government moves forward with its investigations into Facebook, Google, Amazon and Apple, the situation will grow increasingly complex. The legal manoeuvring, time and resources necessary to address this issue are considerable, and it’s clear there isn’t an easy solution.

Even so, regulators and lawmakers will continue to make progress, however slow. With their continued efforts — and the efforts of those in the EU — it’s possible to work past these initial difficulties and reduce instances of antitrust activity. Between now and then, the path is fraught with obstacles.

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