The United States Finally Takes on Big Tech

Posted on June 4, 2019 by Paul Thurrott in Amazon, Apple, Cloud, Social, Google, Mobile, Music + Videos with 36 Comments

Image credit: Paul Thurrott

No, it’s not just Google. Amazon, Apple, and Facebook are also under scrutiny by the U.S. government now, and each could face sweeping antitrust charges.

It’s about time.

The U.S. House of Representatives informed Amazon, Apple, Facebook, and Google that it is investigating antitrust violation by each company. And if that wrongdoing is found—which it will be— it will instruct the Department of Justice (DOJ) and Federal Trade Commission (FTC) to launch formal antitrust investigations that will lead to fines and behavioral remedies. The DOJ will examine Apple and Google, while the FTC will tackle Amazon and Facebook.

At issue is a growing concern, suddenly explosive, that these corporations are abusing their market power, spreading disinformation, violating user privacy, and more. And this has support on both sides of the aisle, with various politicians from both major parties making Big Tech reform a major part of their platforms.

“This is about how do we get competition back in this space,” said Rhode Island representative David Cicilline, the chairman of the House Judiciary’s subcommittee on antitrust. He says he will subpoena executives and documentation from each firm and plans to record testimonies and hold hearings for each.

“As tech has expanded its market share, more and more questions have arisen about whether the market remains competitive,” Georgia representative Doug Collins agreed. Collins is a Republican, while Cicilline is a Democrat.

Formal antitrust action could take years, but as we’ve already seen, even the threat of federal oversight has already had an impact. On Monday, Apple quietly reversed its market abusing banning of third-party digital wellness apps on iOS after being informed of the House’s plans. And none of these companies wants to be brought down like Microsoft was by its antitrust issues of the early 2000s. Microsoft’s hobbling by antitrust regulators in the U.S. and EU is what led to the rise of Amazon, Apple, Facebook, and Google in the first place.

And the EU is already racing ahead to curb these giants, too. Google has been found guilty of violating EU antitrust laws three times already and has weathered massive fines and behavioral remedies. And Apple is now under investigation for abusing its App Store monopoly there as well.

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Comments (36)

36 responses to “The United States Finally Takes on Big Tech”

  1. Ron Diaz

    I would argue it was Microsoft’s own incompetence that led to the rise of Amazon, Apple, Facebook and Google.

    • toph36

      In reply to Hypnotoad: And yet Microsoft has risen above them all and now has a market cap of $95B more than #2 Amazon.

    • skane2600

      In reply to Hypnotoad:

      While I wouldn't lay all problems Microsoft has (which isn't all that many anyway) to antitrust, it's a bit silly to say anything about Microsoft lead to the rise of Amazon. Or did I miss the era where Microsoft was a major retailer selling literally everything from soup to nuts?

      • Greg Green

        In reply to skane2600:

        Amazon started out as just a book store. They then earned their way into other markets.

        MS started at one point owned 90% of the internet access devices, then earned their way to less than half that.

  2. BlackForestHam

    Microsoft’s hobbling by antitrust regulators in the U.S. and EU is what led to the rise of Amazon, Apple, Facebook, and Google in the first place.

    LOL. You live in a fantasy world, Paulie.

  3. DaveHelps

    I look forward to buying a new device in 2029 and being presented with a CREEPY TRACKING PROVIDER CHOICE SCREEN ?

  4. A_lurker

    Facebook and Twitter are in the dog house because of their censorship antics and unwillingness to be consistent to all. Both are also getting attention for mangling user information. Google's primary problem is mangling users' information. One of the underlying factors to this mangling is the belief in 'targeted ads' are somehow more effective, something that seems dubious. In the phone market, Android is freeish to the OEMs so there is a great deal of difficulty for someone to provide another OS. The issue with Android is what must be preinstalled for Google to make money. Apple is catching flack for how the app store is managed. I would rate the seriousness as Facebook/Twitter, then Google, and finally Apple here.

    Amazon is primarily a retailer and one needs to step back and look at the entire retail sector. In the US retail space is badly overbuilt and many retailers are horribly mismanaged. The mismanagement problem is not caused by Amazon and these companies will eventually fold. Amazon may be pushing a few of the worst out a little faster accidentally but that is about it. Much the same was said about Walmart years ago.

  5. Pbike908

    I would be more interested in figuring out a way to TAX these knuckleheads. First off, all of them extort cities and states for tax breaks for data centers, offices, etc. Next, there is no serious mechanism to tax stock options.

    Furthermore, any place any of these folks have large offices, everyday folks can no longer afford housing in those areas. How about these knuckleheads do something to help their communities do something for everyday folks that keep the lights running and pick up the garbage other than pontificate on TV and contribute to political campaigns?

    • skane2600

      In reply to Pbike908:

      I'm in favor of greater corporate taxes regardless of the industry involved, but tax breaks offered by cities and states are a self-inflicted problem. The practice goes back at least to the times when cities offered sweetheart deals to sports franchises long before tech was dominant.

  6. nobody9

    The US DOJ antitrust is not the EU, thankfully, and this article wrongfully links antitrust rules with privacy legislation that largely doesn't exist yet. Thus, there is little chance of the US DOJ assigning any meaningful antitrust charges against Google, who doesn't use exclusive agreements to exclude/subsume its competition, like Apple, Facebook, and Microsoft/Intel have. The only possibilities for antritrust against Google is a weak argument that Google is somehow monopolizing/manipulating the US phone-market (e.g. buying and selling-off any Motorola divisions that it isn't using for it's Pixel devices), and to an even weaker extent the search market (i.e. a dead horse already).

    However, there are clear cases to made for 1) Apple monopolizing the Thunderbolt/USB-C audio and GPU markets, 2) Facebook monopolizing and destabilizing the non-Apple secure-texting market, and 3) Microsoft/Intel for monopolizing/manipulating the Gamer-PC market.

  7. Stooks

    If any GDRP type laws come out of this, it will hurt Google/Facebook the most. Not good for either since they hardly make any real products or at least make real money off of those real products.

  8. yaddamaster

    I'm dubious as to whether any government imposed remedy will work. There are effectively two search providers: google and microsoft. Two phone OS providers: apple and google. There are two social media providers: Facebook and Twitter. There are two streaming media providers: Netflix and Amazon. There are still a TON of companies competing with Amazon in the online store category but obviously Amazon is dominant. (yes, there are exceptions and nuances to what I've listed above)

    How do we get a third phone OS? Is there really space in the market? Or is it just about forcing a more open platform on each? What are the remedies for search - force Microsoft and Google to divest other properties?

    In the social media space how about just forcing social media companies to allow aggregators? I'm sick of FB and their properties, have zero desire to go back to Twitter but all my friends, family, and acquaintances are on Facebook which makes it tough to leave. But if I had a tool which allowed me to aggregate all or any social media feeds and post to the ones i want.......I could seemlessly move between them all. Of course - that would hinder said companies monetization schemes.

    Color me dubious.

    I'm much more concerned about the government imposing fairness on speech on social media. Just let people say whatever they want to say. I'll block people I don't want to see or just ignore them. I'm not remotely worried about fake news from either side.

    • Greg Green

      In reply to yaddamaster:

      The government does need to step in re the last paragraph. The big tech companies are treated as carriers and with the vast amount of editing and censoring they do they need to be reclassified as publishers, with all the legal responsibilities that entails.

    • lvthunder

      In reply to yaddamaster:

      As to your last paragraph that's not what's happening though. These companies are going after people. NBC and Vox asked Google (YouTube) to go after Steven Crowder this weekend. Google says they will investigate yet when conservatives ask them to go after a liberal nothing happens.

  9. red.radar

    In the last 3-5 years, the Tech sector has stagnated. We have just been making incremental improvements. The long term effects are going to be a benefit to everyone who works in these sectors.

    This topic will make some very interesting reading in the next couple of years.

  10. djross95

    Be careful what you wish for, Paul. While I share your concern about what Big Tech has been doing, the cure might be worse than the disease. Listening to our clueless politicians talk about tech makes me realize that the vast majority of them know very little about it. I can just imagine the schemes they'll come up with to "make things right".

    • jbinaz

      In reply to djross95:

      "The most terrifying words in the English language are: I'm from the government and I'm here to help." - Ronald Reagan

      I'm not saying that looking into it is bad, but I fear it will result in terrible decisions to "fix" things.

  11. PeterC

    This is good. We will all benefit in some fashion and any change is better than the status quo. Well done the US, just make sure the process instigates fundamental and real change, and isnt just loud words that mean nothing in practise.

  12. MikeGalos

    It's a start.

  13. Hifihedgehog

    Apple is evil. You should be able to easily procure and use a third party app over a first party one and you should also be able to make that third party one the default for a given protocol or file type in the operating system's settings. What Apple has been squeaking by with iOS for now a decade plus would have been straightway penalized if Microsoft had done it with Windows. The fact that you still cannot select a default web browser or mail client in iOS flies in the face of decades of judicial precedent which have been served to Microsoft and others. I, for one, hope that immediate action is finally taken against Apple's draconian, despotic policies.

    • toph36

      In reply to Hifihedgehog: If this results in being able to install launchers and changing default apps on iOS, I would buy an iPhone. Until then, I will stick with Android.

      • Stooks

        In reply to toph36:

        I am making the move later this year from a iPhone X probably to a S10 or S10 plus.

        I have a launch day iPhone X, that will be two years old in October? I have grown to pretty much hate FaceID or FaceID only. I hate the lack of an Audio Jack and the dongles. I hate the fact that I can't make a different browser or maps app the default app.

        I wont miss the dark mode or updated reminders app in iOS 13!

    • Thomas Parkison

      In reply to Hifihedgehog:

      It's abundantly clear you're not the audience that Apple iOS is going after. For your average user Apple iOS works and works quite well, they don't care about the complex stuff like you do because for them all that matters is if it works.

      Yes, I'm an Apple iPhone user and I love the simplicity of the platform. It works quite well on a mobile device. For more complex stuff I use Windows on my fully tricked out Intel Core i7 8700K desktop.

    • lvthunder

      In reply to Hifihedgehog:

      iOS is not a monopoly so they can do what they want with it. If you don't like it get an Android phone. You have a choice.

  14. donaldhall3

    I am always amazed that how every few years we decide that some company or a group of companies are inherently bad and need to be stopped. We look at the world as it is at the moment and think it's always been this way. 11 years ago Blackberry dominated the enterprise mobile space and looked unstoppable. Then came Apple and later Google with better solutions and people moved to them and Blackberry is now just a distant memory. I can remember reading a lot of Forrester and Gartner reports on why Myspace was unstoppable. And then FB came out with something better and everyone moved. WalMart and big box retailers dominated and then came along Amazon and online shopping and now we're talking about the retail apocalypse.

    My point is that all these unstoppable companies were stopped by smaller and faster innovative companies and this will happen to FANG as well. Don't wan an iphone? Buy a Samsung. Don't want to use Google Maps? Use Apple Maps. Consumers have LOTS of choices.

    Let's step back and ask ourselves what would all of these services cost if these companies had to change their business models and charge for their products? Do we want to create an internet of have and have nots? We live in a world where anyone with an internet connection can access an amazing set of tools for free regardless of their status.

    So I disagree with Paul and I don't see the harm. Each of these 'monopolies' is actively competing against each other and we all have benefited with a wealth of innovation and free services.

  15. Patrick3D

    Strange that they would include Facebook but not Twitter, which has arguably been worse at violating American's rights.