By Cath Dibble, Senior Delivery Consultant
Members of the US House of Representatives have recently introduced five new bills which are being seen to be directed specifically at Big Tech, the collective name for the world’s largest and most powerful tech companies.
The largely unregulated tech sector has previously had the flexibility to acquire businesses to drive inorganic growth without major hurdles; think Facebook acquiring WhatsApp and Instagram for example. Big Tech’s competitive strategies have also been under debate as there is evidence companies have been found to routinely manipulate their own- and third-party seller data to promote proprietary products and services over that of their commercial partners.
The Democratic antitrust committee in the US House of Representatives have announced the new bills based on their self-authored report from last year that openly accused Amazon, Facebook, Google and Apple of abusing their power. That report eventually led to several hearings, one notably featuring all four Big Tech CEOs in a publicity frenzy.
If the bills do become law, amongst other stipulations, companies would be stopped from using their own platforms to promote their own products preferentially, be prevented from acquiring competitors to gain market share, would prevent cross platform pollination of products and services, and increase the cost significantly for tech mergers to be carried out.
The legislation is ambitious so perhaps we will see a more balanced approach where companies aren’t permitted to give their own products and services preferential promotion through platforms. Much of the commentary coming out of the US says there is little chance of any laws being passed as these businesses are simply too important to the economy.
Lina Khan, an academic who has historically supported antitrust laws, emerged last week as the next head of the Federal Trade Commission. If the laws aren’t passed in Congress, then another route to advancing change might be Khan’s FTC taking on Big Tech independently. Khan’s previous work sets her out squarely as an advocate for change in terms of competition law, but she has also indicated in the past she sees a benefit to working through regulation rather than law. Nonetheless, her appointment must surely be causing concern amongst large tech firms.
As Neil Bradley of the US Chamber of Commerce commented “Bills that target specific companies, instead of focusing on business practices, are simply bad policy and are fundamentally unfair and could be ruled unconstitutional.”