The Case Against Big-Tech: Justice or Theatrics?
Amazon, Apple, Facebook and Google have emerged as the four unlikely horsemen of a world riddled with a pandemic. The proceedings involving the CEOs of the four companies, lead by the Antitrust Subcommittee of the House Judiciary (United States) has dominated much of the international news in these past weeks. Closer to home, Facebook was widely criticized for an insufficient response to regulating hate speech in India. The prevailing sentiment is that the influence of such companies in a wide range of markets must be regulated. However, there is little clarity on the court ruling, settlement or government legislation that could appropriately regulate such companies.
The consensus among many learned authors is that the failure to regulate Big Tech today is the result of historical reluctance to regulate such companies at crucial stages - for instance, during the acquisition of potential competitors (Facebook – Whatsapp and Instagram; Amazon – Ring; Google – Youtube). This is attributed to a weakening political will over the years. Tim Wu describes a “deep freeze” in the enforcement of antitrust law in the United States in recent years, which has allowed anti-competitive practices in various industries (such as pharmaceuticals, agriculture and beer manufacturing) to thrive.[1]
Other authors, such as Khan, contend that regulators have failed to adapt traditional definitions of competition laws to unique market strategies employed by Big Tech. This includes, for example, a narrow definition of “predatory pricing that failed to regulate Amazon’s pricing of e-books while introducing its publishing service.[2] Interviews given by some members present during the House Judiciary hearings suggest that regulators may since have developed a better understanding of the basic economics applicable to online marketplaces and services (to some extent).[3] Further, mistakes in enforcement do not prevent the law from taking necessary action (particularly during ongoing proceedings, such as the European Commission’s investigation into Google’s ongoing acquisition deal with FitBit).
The biggest challenge in effectively enforcing antitrust law is that regulators are often limited by a retrospective analysis. For the past two decades, many companies have enjoyed brief periods of the kind of internet market “dominance” that would concern regulators - including AOL, Microsoft Bing, Yahoo! and MySpace. It is only after the present Big Tech companies have emerged as major players that enhanced perspectives on anti-trust law have developed – for instance, the idea that anti-trust legislations must be adapted to target the true motivations of large tech companies offering free or “freemium” goods to consumers in order to consolidate their market power.[4]
The fact that regulatory authorities are so heavily dependant on retrospective insight is advantageous for Big Tech. Throughout the hearings of the House Judiciary, the CEOs of the four Big Tech companies maintained that the dominant status of their companies is not a deliberate campaign to seek power but the product of several accidents of the free market.[5] In other words, they maintain the claim that they have encouraged innovation and free enterprise among small technology players – and have not, willingly or knowingly, acted in violation of the letter or spirit of anti-trust laws.
In considering the data and privacy laws, Thierer presents a compelling argument to avoid treating technology companies as “natural monopolies” so that anti-trust laws can permit market-driven innovation.[6] Proceeding in the case against Big Tech would require US regulators to submit sophisticated analysis of how the present business models of Big Tech prevent further innovation. A case against Big Tech based on traditional grounds is equally challenging. Price manipulation is an obvious form of consumer harm that requires immediate regulatory response, but is nearly impossible to identify in an online platform where prices change far too frequently for the ordinary observer.[7] Merger reviews, or orders to break-up an organization (such as the historically ambitious At&T breakup) require an uncharacteristic boldness among current regulators.
There is little faith among seasoned observers that controversies such as the House Judiciary hearings will amount to anything more than theatrics. A global economy that has drastically shrunk during the COVID-19 pandemic is one among many reasons for regulators to develop holistic solutions to ensure widespread consumer welfare and innovation.
[1] Tim Wu, The Curse of Bigness, 117 (2018).
[2] Lina Khan, Amazon’s Antitrust Paradox, Yale Law Journal 126 (2017).
[3] Khari Johnson, Antitrust experts weigh in on breaking up Amazon, Apple, Facebook, and Google, Venture Beat (August 1, 2020), available at https://venturebeat.com/2020/08/01/antitrust-experts-weigh-in-on-breaking-up-amazon-apple-facebook-and-google/.
[4] Michal Gal and Daniel L.Rubenfeld, The Hidden Costs of Free Goods: Implications for Anti-Trust Enforcement, 80(401) Antitrust Law Journal (2016).
[5] Big Tech Anti-Trust Hearing Full Transcript July 29, Rev, available at https://www.rev.com/blog/transcripts/big-tech-antitrust-hearing-full-transcript-july-29.
[6] Adam D.Thierer, The Perils of Classifying Social Media Platforms as Public Utilities, 21(2) CommLaw Conspectus - Journal of Communications Law and Policy (2013).
[7] supra n 2.