Why Are the Big Techs of Silicon Valley Accused of Anti-Competitive Behaviours?

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The big tech giants of the Silicon Valley are facing major challenges with relation to their monopolistic powers after being called down by the law makers. Various big companies, including: Google, Amazon, Apple, and Facebook through their online share of ad markets and accumulated data, are now are under scrutiny. 

Introduction

The said companies have been accused of causing in the US and elsewhere, an undertone of multiple unfair practices, such as indulging in anti-trust or anti-competitive actions by holding up the majority market shares throughout the years.
They are also accused of resisting their potential rivals by preventing them from making an effective feat in the said market. Owing to this disruptive growth, the control of these tech companies have been extended to influence and affect politics, governmental policy and personal choices of the individuals. This causes serious data privacy breaches.
Taking cognizance of such highly unfair practices, the United States Justice Department and the House Judiciary Committee, had later separately announced these anticompetitive investigations into these 4 big techs (Google, Amazon, Facebookand Apple). The intention was to conduct ”a top-to-bottom review of the market power held by giant tech platforms.”

Why do each of these tech platforms enhance antitrust behaviour?

Amazon

Amazon has been accused of causing major disturbances in its online selling platform by playing havoc with the smaller sellers and traditional sellers. Various jurisdictions have shown their disregard for Amazon due to its antitrust practices. The company has been questioned with relation to the promotion and favoring of its own self-branded products by undermining the sellers of products who are third parties. Through product search display ranks, data usage, advertising or network services, the third parties are compelled to hike Amazon’s own products increasing it’s advantages.  

Apple

This platform has been questioned in light of its App Store Policy, particularly, it’s ranking of the search results, in-app purchase revenue shares, and the non-presence of rival applications, by the U.S. congressional investigators in 2019. Applications such as Spotify, parental-control apps, and others have filed complaints due to the introduction of self created unfair service policies by Apple to regulate the market, causing such tech giants to restrict their apps.  

Facebook

The US FTC (Federal Trade Commission) had inquired into Facebook’s practice of buying companies that it felt were it’s rivals, to gain the dominant position in the market. Further, this acquisition obsession of Facebook has caused it to gain major control over the internet and specifically the social media. Onavo, a data analysis company was bought by Facebook to keep a check on its upcoming rivals helping it to maintain its market power. There have also been allegations that third party applications have also been reduced and cut by Facebook to maintain its market position.

Google

This giant has become a household name, causing it to become an epitome of world wide online searches of around 90%. The market regulators are aiming to scrutinise this search, as Google directs its users to its own platforms, such as Google Flights and Google Maps. Therefore, by controlling the searches, Google, has been accused of abusing its market dominant power causing a disruption to the market, especially for its rivals. In 2018, it was reported that the European Union fined Google for $5.1 billion.

What happened during the Congressional Hearings?

Amazon

Jeff Bezos described Amazon as one of the most popular consumer brands, where consumers can get their goods quickly and cheaply. However, the lawmakers think that it’s time to take a closer look at whether regulators, including the Justice Department and Federal Trade Commission, are enforcing existing laws effectively.

Apple

Tim Cook, CEO of Apple, received fewer questions than his counterparts. However, several lawmakers interrogated him with questions about the way the company handles its App Store — and the companies that have developed competing products or services that Apple also offers. Some lawmakers repeatedly raised the company’s policy to take up to a 30 percent commission on in-app sales and subscriptions, a fee that has chafed prominent companies including Spotify, who fear they have no choice but to surrender critical revenue to Apple.

The giant maintains the fee essentially funding the entire app ecosystem, and Cook at one point told the lawmakers that the company has not raised its rates since it opened the store in 2008.

Facebook

Mark Zuckerberg, the CEO of Facebook, maintained that Facebook had stood for free expression and speech against a rising tide of international censorship, pointing to new competitors, including TikTok. Upon thorough observation, the lawmakers, pointed towards all the four big techs saying that, “they’re engaged in a behavior that’s anti-competitive in nature. This favors their own products and services, which monetizes and weaponizes data, that compromises the privacy of their users and creates a competitive disadvantage for companies attempting to enter the marketplace.” Sensenbrenner Jr., the top Republican on the antitrust subcommittee, says he doesn’t think Congress needs to update its antitrust laws after more than year of investigation into the tech industry’s power.

Google

Some lawmakers specifically accused Google of weaponizing its popular search engine to put rivals at a disadvantage. David N. Cicilline, the chairman of the House Judiciary antitrust subcommittee, specifically charged Google, saying that it had, “stolen content to build their own business.” It was said so, by citing Google’s practice of culling and displaying information at the top of users’ search results.

Sundar Pichai, Google’s CEO, disputed the characterization that Google had stolen content and put rivals at a disadvantage. “Today, we support 1.4 million small businesses supporting over $385 billion in their core economic activity,” he said. “We see many businesses thrive, particularly even during the pandemic.”

Conclusion

This groundbreaking antitrust hearing, that came just months before the critical 2020 election, has delved into issues that could have a major impact on politicians’ chances of re-election, especially during a pandemic where more and more campaigning is occurring online. “Our founders would not bow before a king,” said Cicilline, “Nor should we bow before the emperors of the online economy.” These companies mainly stand to gain only more power as the world confronts the coronavirus pandemic. “Prior to the COVID-19 pandemic, these corporations already stood out as titans in our economy,” he said. “In the wake of COVID-19, however, they are likely to emerge stronger and more powerful than ever before.”


This Article is written by Dhwani Pandya and Vanshita Jain. They are fifth-year law students of Institute of Law, Nirma University. 


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