After US Congress investigated the four largest american tech companies over 16 months in 2019-2020, its staff released a massive 449-page report in October, finding that Apple, Amazon, Facebook, and Google all enjoy unfettered monopoly power that should be reined in. So what will the US government do about it?
Concern about reining in Big Tech is not new, but it seems to have come to a head over the last year as the top six companies raked in the profits while many other businesses either declined or failed during the pandemic.
Lawmakers’ concerns about Big Tech’s growing power play are generally bipartisan. Recently, Minority House Leader Kevin McCarthy (R-CA) threatened regulatory retaliation against Facebook after the Facebook Oversight Board’s decision on May 5 to maintain the suspension of former President Trump from the platform for another to six months.
In March, President Biden nominated fierce antitrust enforcer Lina Khan to serve as the youngest-ever Federal Trade Commission (FTC) commissioner at age 32. Currently an associate law professor at Columbia University, she made waves in 2017 for her student law review article entitled “Amazon’s Antitrust Paradox.”
The premise of her paper? That the US is simply not equipped to deal with the power wielded by Big Tech companies like Amazon. She asserted that the Big Tech platforms can control “essential infrastructure” that competitors rely upon, which enables them to exploit information asymmetry to outcompete them.
This new kind of digital power—economic power, technological power, and political power—wielded through mastery and control over digital technology, is far more potent than the traditional commercial power large corporations have always had.
In her April confirmation hearing, Khan, who was a legal fellow for FTC Commissioner Rohit Chopra (D), expressed concern about large tech companies using dominance in one market as an unfair competitive advantage in others. Remarking that the Obama administration had “missed” enforcement opportunities, she said that the FTC would have to be “much more vigilant” in scrutinizing large acquisitions in digital markets, a major driver of growth in Big Tech.
The FTC regulates competition under two major antitrust statutes in the US, the Sherman Act (monopoly law) and the Clayton Act (merger law). They were enacted in 1890 and 1914, respectively, to preserve free and unfettered competition and protection from market power and anticompetitive practices.
But even with aggressive oversight by the FTC and Justice Department, legal enforcement cases can take years, and Big Tech companies can easily absorb huge fines.
And then there’s regulatory lag. Technology and the companies that wield it keep evolving much more rapidly than the law.
Nowhere is this more clear than in the area of banking and money transfer with the rapid rise of apps like Zelle, Cash App, and Venmo.
And just as tech gets more sophisticated, so do hackers and thieves, another troubling aspect of digital power.
The cyberattack on a major US oil pipeline May 7 by Russian hackers’ using ransomware is a frightening example of tech plus greed, plus a lack of consumer protections, that can have major impacts on economies and people’s lives. Gas pumps went dry as Americans up and down the east coast hoarded gasoline.
Former Department of Homeland Security head of cyber security Christopher Krebs testified before Congress on May 5: “To put it simply, we are on the cusp of a global digital pandemic driven by greed.”
While the US is only now trying to figure out how it wants to regulate Big Tech companies, foreign governments have already taken action, passing laws to tax Big Tech’s profits, hold up their acquisitions, designate them “monopolies,” and otherwise limit their powers.
With respect to consumer privacy, the European Union enacted its privacy law almost three years ago. The US doesn’t have one.
The EU recently introduced the Digital Markets Act (for antitrust protections), the Digital Services Act (for content moderation), and a sweeping proposal for governing artificial intelligence, all of which will impact US companies.
With Europe getting out ahead of the US, the CEOs of several of the Big Tech companies are voicing concern about a fragmented approach to tech policy around the world.
Even they are calling for the US to regulate. Facebook’s Nick Clegg said that “The EU and the US really need to try and get their act together.”
Google’s Karan Bhatia, head of global policy, lamented in a recent interview “the multiplication of divergent, often inconsistent national policies that makes it . . . very challenging to operate global platforms.”
According to the Brookings Institution, as long as federal policy remains rooted in the structures and assumptions of the 19th century’s industrial era, the US will not be able to address the consumer protections needed in the 21st century’s digital age.
Brookings is calling for the establishment of a new federal regulatory agency with a new digital governance mandate that complements those of the FTC and Justice. But it proposes that this new agency not reinvent the wheel, but apply “a pair of centuries-old common-law-derived principles” to focus on protection of consumers and promotion of competition in the services that are critical to people’s lives and livelihoods. The new “old” standard of care to hold such corporations should be “the duty to care and the duty to deal,” according to Brookings.
While there may be bipartisan consensus in the government that the power of big tech needs to be curbed, given the typical divide between Republicans and Democrats on more versus less government regulation, the big question is whether they will be able to agree on how to do it.
add your comment
Terms of publication : Not to offend the writer, people, sacred things, or attack religions or the divine self, and refrain from racist incitement and insults.