Big Tech in Big Trouble?

Amazon, Apple, Facebook, and Google have too much power.

At least that is what authorities suspect.

All four are being investigated and could face an antitrust case. They could end up subject to more severe regulation, including the possibility of “structural separation.”

The Justice Department, the House Antitrust Subcommittee, and some state attorneys are investigating if big tech is hurting competition, suppressing innovation, and, as a consequence, harming consumers.

Last week, the House panel concluded its probe, after 16 months, and said the Big Four are monopolists. 

The committee wants Congress to change antitrust laws to force them to split off businesses or at least make it harder for them to buy smaller rivals.

In some cases, the main concern is that the company controls the businesses at the same time it competes with them.

For example, Google controls access to the advertisers that put ads on its platform, which represents about 90% of web searches. 

The company also runs the auction’s price process. Plus, it owns Android, the world’s largest mobile operating system; Gmail, a popular email service; the dominant video platform YouTube; and mapping services. 

They all provide Google with a tremendous amount of user data that can be applied for advertising strategies.

In Amazon’s case, the company is under fire over potential anti-competitive behavior in its online marketplace. 

Authorities suspect that the e-commerce giant uses the massive amount of data it collects from third-party sellers on its site to launch competing products with its brand, a practice in violation with its own policies.

In the social network world, authorities consider that Facebook has monopoly powers and uses it to maintain its leading position by acquiring, copying, and killing competitors.

Facebook owns Instagram and messaging app WhatsApp, for instance. Both were acquired.

Apple is under increased scrutiny in the last couple of years regarding its practices for its App Store. 

The company is facing multiple antitrust investigations worldwide because it doesn’t allow apps to be installed in its products, like iPhones and iPads, from outside the App Store.

It’s too early to know what it’s going to happen with these big techs.

At least so far, we don’t see any impact on their stocks.

This year, Alphabet, Google’s parent company, is up about 10%, Facebook 30%, Apple 50%, and Amazon 70%.

At the same time, inevitably, many don’t remember Microsoft’s case almost 30 years ago.

By that time, Microsoft was already one of the most successful tech companies in the world.

In 1992, the Federal Trade Commission started to investigate if the computer firm was abusing its monopoly on the PC operating system market.

There were complaints that it was making it difficult for consumers to install competing software on computers operated by Windows.

This was a typical situation, particularly with browsers since every Windows user had pre-installed the Internet Explorer.

Microsoft lost the first round of the case, and the judge ordered the company to split into two parts, creating two separate entities.

The Seattle-based company appealed and, in the end, reached an agreement with the Justice avoiding the division.

The price paid, though, was to share its computing interface with rivals.

Microsoft avoided the break-up, but its power was curbed, and its way of doing business was punished.

These changes opened room for new companies like Google to rise.

Without the antitrust case against Microsoft, maybe the now giant Google would not have competed with Microsoft’s Bing in the past.

Nowadays, some people argue that it’s time for the authorities to step in again to guarantee a fair race in tech and protect the newcomers.


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