By Nikhila Natarajan
The siege is on. For Big Tech companies, 2020 will go down as the year when they finally came into the crosshairs of US regulation. By December, a wave of antitrust actions hit Google and Facebook, headlined by startling claims informed by a trove of internal ‘hot docs’ after months of investigation against the once seemingly untouchable tech behemoths.
2020 was the first time when Mark Zuckerberg of Facebook, Jeff Bezos of Amazon, Google’s Sundar Pichai and Apple’s Tim Cook testified as a group to the Congress. And then, they testified some more, in smaller cohorts, in a year when their services wove tightly into the social fabric of a world that retreated from public spaces.
Taken together, Congressional hearings, lawsuits and the combative mood all around signal a new era of heightened regulation in the US which has lagged way behind Europe in drafting privacy regulations. Lawmakers on all sides are pushing for tougher oversight, arguing that Big Tech’s market power is out of control, it endangers consumer privacy, and misinformation is flourishing because of legal shields that these companies enjoy.
Washington is expected to make progress on four themes in the coming years, writes Dipayan Ghosh, who co-directs the Digital Platforms and Democracy initiative at Harvard Kennedy School. In a Harvard Business Review article, Ghosh lists data privacy, algorithmic transparency, antitrust policies and content moderation and liability as the areas where action will rev up in a Biden-Harris administration.
Starting October, US regulators filed landmark antitrust lawsuits against Google and Facebook in their most sweeping attempt to protect competition since a groundbreaking case against Microsoft more than 20 years ago.
Google is facing off against three US antitrust lawsuits – the first one came in October, and two in December; each focusing on different angles and filed by different groups of states and regulators.
The earliest case, running into 64 pages, opens with these lines, which are at the heart of all three cases: “For many years, Google has used anti competitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising — the cornerstones of its empire.”
On December 9, the Federal Trade Commission and 48 states and districts sued Facebook in two separate lawsuits, accusing it of abusing its market power to “neutralize” competition and going into “destroy mode” against smaller players.
The lawsuits against Facebook are seeking action that could include a spinoff of Facebook-owned Instagram and WhatsApp services.
The FTC complaint alleges that Facebook has engaged in a “systematic strategy”, including its 2012 acquisition of then rival Instagram, its 2014 acquisition of WhatsApp, and strong armed software developers into anticompetitive conditions “to eliminate threats to its monopoly.”
In parallel, other inquiries are ongoing and more lawsuits are on the way. The Justice Department is investigating Apple, the Federal Trade Commission has gotten after Amazon. Central to all of the investigations is a single theme: Big Tech’s monopoly power.
In Facebook’s early stages, public attention centered on the platform’s ability to scale and deliver shareholder delight and touch off viral trends. More recently, especially since the Cambridge Analytica scandal rocked the US, the focus has turned to Facebook’s uninhibited data collection, behavioral targeting, its acquisition of startups and the wildfire-like spread of misinformation, conspiracy theories and violent (often live streamed) content on its platform.
America’s moves against Big Tech come two years after European lawmakers hardcoded new privacy regulations in 2018, in a quintessentially European approach to tech. For Big Tech policy obsessors, it’s not a question of whether Big Tech will be held accountable in the US but when.
For their part, Google, Facebook, Amazon and Apple are trying to direct the conversation in ways that they continue winning in the market. For US lawmakers, there are now plenty of learnings from the other side of the pond. They know, for instance, that Google and Facebook can easily afford EU style fines. They have also learnt that antitrust investigations are painfully slow moving and give companies plenty of room to dig their way out.
US District Judge Amit Mehta has already announced that it will take at least until 2023 before a trial begins in the Justice Department’s antitrust lawsuit against Google. Judge Mehta set a tentative trial date of Sept. 12, 2023, based on a lengthy schedule laid out by both sides.
Also notably, the Federal Trade Commission fined Facebook a record $5 billion in 2019 after the Cambridge Analytica scandal, in which the firm reportedly accessed the data of 87 million Facebook users without authorization. This was the largest fine the agency had ever slapped on a tech company but it did little to dent Facebook’s business.
Pundits tracking these developments generally agree that breaking up Big Tech isn’t likely to fix the problem either.
Sinan Aral, director of MIT’s Initiative on the Digital Economy and author of “The Hype Machine” writes in his book that breaking up Facebook is “like putting a Band-Aid on a tumor.” Aral argues that “network effects inherent in social media will simply tip the next Facebook-like company into dominance. Making data and social graphs portable akin to practices in the telecoms industry and forward looking merger oversight “offers a more comprehensive, long term solution,” according to Aral.
The rebalancing of power between Silicon Valley, the government and the individual will happen when three pieces – “comprehensive privacy reform, instituting transparency into the collection and use of personal information and a robust new competition policy regime – come together as national policy, writes Dipayan Ghosh in his 2020 book “Terms of Disservice”.
“This year has been historic for the trajectory of the internet industry. A concerted global regulatory approach is taking clear shape as officials the world over have sought to clamp down on exploitative data use, anticompetitive behavior, and lax content moderation in the dominant digital platforms,” Ghosh told IANS.
“We are likely to only see more fireworks to follow in 2021,” Ghosh added.
–IANS
