Liquidation of the tech giants?. In the current geopolitical environment… | by Arslan Mirza | Medium
In today’s geopolitical environment, there are few areas on which world leaders can agree. But restricting the tech giants is becoming one of the few ideas anyone can support. From the European Union to the United States, authorities are turning to antitrust laws to promote fairer and more competitive economies. In the year ahead, we may see a stronger push for new market-state deals — an effort that is at the heart of antitrust law, with tech giants the primary target. .
A common concern driving this development is that the tech giants have become too big. For years, tech giants have battled claims that they promote their products in the online marketplaces they operate; abused access to consumer data to gain competitive advantage and acquired companies that threatened to undermine their market position by making acquisitions to impede competition. These practices leave little choice for consumers, who now rely on the products and services of a handful of companies.
The EU has long been a leader in addressing these issues, using its antitrust laws to redistribute market power and improve consumer welfare. Over the past decade, he has successfully completed three antitrust investigations against Google alone, with fines approaching $10 billion. The European Commission is currently investigating Google’s advertising technology and data collection practices, Apple’s app store and mobile payment system, Facebook’s data collection and digital advertising models, and Amazon’s operations in its marketplace. EU regulators want to do more.
In 2020, the European Commission introduced the Digital Markets Act, which aims to give it new powers to regulate tech giants and the like”porter” companies that connect businesses to end users. Digital marketplace law stems from the recognition that existing antitrust measures have not made digital markets more competitive. It allows the EU to outright ban a range of digital access control practices, such as self-preference or the use of concurrent data. The law could be passed in 2022 when it will have a global impact. Large multinational companies often extend EU rules to their global operations through a phenomenon known as the “Brussels effect”. Tech companies are preparing for a shock.
Until recently, the United States was on the fence about the European Union’s enforcement of antitrust laws against American tech giants. Technoliberals blame EU actions on jealousy-driven European protectionism, but US lawmakers and law enforcement are now waking up to industry excesses, increasingly wondering if unchecked markets are producing desirable results.
The U.S. House of Representatives has repeatedly subpoenaed tech giant executives for hearings into their anticompetitive practices. In 2020, the House Antitrust, Commercial, and Administrative Law Subcommittee released a major report on competition in digital markets, calling for a revival of U.S. antitrust law. The Justice Department and the Federal Trade Commission have also taken action, with the Justice Department challenging Google’s monopoly practices and the FTC suing Facebook for acting as an illegal monopoly. US President Joe Biden has strongly supported the policy change, appointing industry critics known for their steadfast stances on antitrust issues to senior administrative positions. In July 2021, the Biden administration issued an ambitious executive order on “promoting competition in the American economy,” confirming its commitment to cracking down on monopolistic practices in the internet platform industry.
What happens next in the EU is easier to predict than in the US. The European Commission will be free to carry out several antitrust investigations following the possible adoption of the Digital Markets Act in 2022 (if the CJEU does not encounter a major setback, the European Court of Justice is expected to issue Google’s appeal against the European Commission within the next year.).
The big unknown is how well US regulators can convince US courts to engage in the antitrust revolution. The past year has shown that conservative-leaning US courts will not be easily persuaded that Facebook and Apple are monopolies. It remains to be seen whether a deeply divided US Congress can capitalize on shared grievances against the tech giants to pass meaningful legislation.
Despite some uncertainty, it is clear that the new regulatory blitz reflects an emerging international consensus. Besides the EU, the US, Australia, India, Japan, Russia, South Korea and the UK are all cracking down on the tech industry.