An investigation by the House Judiciary Committee, with hearings already underway, is the latest development in the antitrust oversight inquiry of the tech sector. Primarily focused on the big four, Amazon, Apple, Facebook and Google, the potential probe could get unwieldy given all the areas these companies encompass and it has already been divided among agencies. From The New York Times: “After a spate of unusual negotiations, the Justice Department has agreed to handle potential antitrust investigations related to Apple and Google, while the Federal Trade Commission (FTC) will take on Facebook and Amazon.”
Meanwhile, lawmakers have begun assessing if the tech giants’ business practices are anti-competitive or harmful to consumers. The House findings could possibly lead to an overhaul of antitrust regulations, written long before a Google search was even possible, and may inform how and when regulators go forward with formal investigations.
What Is Currently Happening With The Big Tech Antitrust Inquiry?
The Justice Department and the FTC have declined to comment on any aspect of the inquiry. And, although, no formal investigations by regulators appear to have been launched, the Times notes that “the recent negotiations [by the Justice Department and FTC] show that both agencies were keen on looking into the companies, and that they had probably received complaints from rivals and others.”
The first hearing by the House Judiciary Commission, “Online Platforms and Market Power, Part 1: The Free and Diverse Press,” was held on June 11th and focused on the impact of the big four on local news outlets and how the dominance of big tech affects the way news is distributed on a larger scale. It is estimated that Google and Facebook accounted for 85% of digital ad spending in 2018, creating a challenging environment for newspapers and magazines that also need ad dollars to survive. (Facebook and Google have both launched initiatives to try and offer support to local news.)
What Will The Big Tech House Judiciary Investigations Find?
Maybe nothing. The House investigation will take approximately 18-months to complete and may conclude with recommendations for regulators to proceed with a formal investigation. This recommendation could lead to overhauled antitrust laws, possible divesting of businesses within the tech monoliths (Facebook spinning off Instagram for instance), or it may find no evidence of wrongdoing or nothing sufficient to proceed further.
In the 1970s, antitrust regulations evolved, essentially allowing businesses to grow (somewhat) unchecked by government regulations if consumers aren’t being hurt financially. Even before they existed, big tech unwittingly became the beneficiary of this de facto interpretation. Amazon, Apple, Facebook and Google offer mostly free or discounted products and services used by consumers every second of every day, making it very difficult to argue that the big four are harming consumers financially.
Of course, this narrow definition of antitrust could also be the argument for changing archaic laws. When small businesses feel forced to use the product and platforms that may be hurting them, while potentially losing their businesses because of monolithic competition, regulators may argue that antitrust laws need to be broader.
“Federal enforcers have a lot of catching up to do,” said Sarah Miller, Deputy Director of the Open Markets Institute, a nonprofit critical of big tech.
What Does The Investigation Mean For Digital Marketers Moving Forward?
For the moment, nothing, because nothing has changed and it’s not likely anything will for many years. Assuming regulators proceed with a full-scale investigation after the House hearings, it could take many years to come to a conclusion about any violations of the current narrow antitrust laws or what the punitive recommendations will be. In the case of antitrust violations against Google in Europe, after a 10-year investigation regulators fined Google $9.3 billion for various violations in the online advertising market. Google is appealing, but it’s a drop in the bucket for the $280-billion-dollar company.
According to the Times, wholesale changes from the antitrust investigations are unlikely given the “multiple fronts” the tech giants control. (Another factor is the influential legal and lobbying power of Amazon, Apple, Facebook and Google which could keep any cases from even going to court.) However, incremental changes may be possible, and a long, expensive, high-profile investigation of anti-competitive business practices could deter future questionable behavior.
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