In recent days, we have heard a lot about the government’s investigations into antitrust activities by the four behemoth tech companies: Amazon, Apple, Facebook and Google.
“Well, good,” a lot of us may be thinking, “it’s about time.”
A Consumer Reports study showed that 60% of Americans support more government regulation of the big four and other major technology companies. After all, these global businesses collect and use our personal data (though we don’t always know exactly which data and how they are using it), guide our purchases and provide the bulk of the information we use to make life decisions as trivial as which coat to wear on a winter day and as significant as whether to buy a particular home.
Those who are old enough will remember that in the 1980s, the government undertook similar antitrust efforts against AT&T – which then held a monopoly over all telephone service in the United States – that culminated in the breakup of its Bell Companies into separate, “Baby Bells.”
When the dust settled, which took several years, Americans ended up with overall cheaper telephone service from a number of competitive companies. It’s the primary reason that today we can choose from T-Mobile, Verizon, Sprint and yes, AT&T – as well as many smaller telecoms – which continually compete for our business through the prices and services they offer.
The attorneys general of 48 states including Colorado have joined the Federal Trade Commission in the big tech antitrust lawsuits filed last week, which came on the heels of a two-year bipartisan investigation by the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law, the biggest such investigation since the AT&T breakup.
U.S. Rep. Joe Neguse, D-Lafayette, is vice chairman of the subcommittee and recently spoke to the newspaper’s editorial board about the committee’s findings.
That investigation showed that the digital economy has become highly concentrated and prone to monopoly, to the detriment of the free marketplace.
“Dominant platforms exploit their gatekeeper power to dictate terms and extract concessions,” sums up the subcommittee report.
The report suggests that like the stereotypical Mafiosi of movies demanding extortion payments of small-business owners in exchange for protection, these enormous companies keep smaller businesses under their thumbs, stifling true competition and innovation.
Over the last decade, the big four have used mergers and acquisitions of hundreds of companies, particularly nascent competitors, to neutralize competition and concentrate their power.
Facebook monopolizes the social networking market. Its purchase of WhatsApp and Instagram and the integrating of those applications into its framework will be challenged by the lawsuits. (Opponents will question why the FTC approved the mergers; the simple answer is they couldn’t see the consequences because the digital landscape is still developing and different from every other marketplace.)
Google monopolizes online searches and search advertising, and has used anticompetitive contracts to increase its power, the investigation showed. Amazon likely controls 50% of the online market and “has monopoly power over small- and medium-sized businesses that do not have a viable alternative to Amazon for reaching online consumers.”
Likewise, Apple controls access to marketing through the more than 100 million iPhones and iPads used in the United States.
It’s essential that Americans understand and support the long process that will now unfold in order to make our technology companies operate more fairly, restoring a true free market in which entrepreneurs and innovation can flourish without restraint, and consumers have legitimate choices between tech services and products.
We need to restore competition in the digital economy, to strengthen antitrust laws and to revive antitrust enforcement. The remedies lie in all three branches of our government: the courts, Congress and the president.
We can and should keep ourselves informed about and support these initiatives.
Ultimately, the will of the people will be expressed through our elected and appointed officials.
We may not agree on much these days, but we can all affirm that as Americans, we value a free – and fair – marketplace.
