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Whats at stake for Big Tech if antitrust laws are passed?

  • 22 Jun 2022

Lobbyists and Big Tech leaders descend on Washington D.C. ahead of major anti-trust bipartisan legislation that could strip some of the largest technology companies in the world of uncompetitive advantages.

An exterior view of the US Capitol taken in Washington, US on August 8, 2021. ( Reuters Archive )

US lawmakers are making a final push to pass key antitrust legislation that is expected to shake up the tech industry and reduce stagnation in technology markets.

This follows a 450-page Congressional antitrust report which found that Apple, Alphabet (Google’s parent company) Amazon, and Facebook regularly carry out anti-competitive behaviour to maintain highly lucrative industry control. 

The American Innovation and Choice Online Act, proposed by US Senator Amy Klobuchar, is the latest and largest legal initiative to increase oversight of Big Tech business practices, after winning bipartisan approval from a Senate Judicial Committee earlier this year.

The landmark legislation would prohibit Amazon and other major technology companies from prioritising their own products at the expense of competing goods and services on their platforms. The bill, currently in the US Senate, has received broad bipartisan support.

Big Tech pushes back

Apple, who’s CEO once described privacy as a human right, yet still faces close scrutiny for stopping short of removing privacy violators from its platforms.

Google, which infamously removed “Don’t be evil’ from their code of conduct in 2018, now prioritises holding on to users, with one study finding that at least 65 percent of all searches do not leave the Google ecosystem.

The same congressional antitrust report describes 65 to 70 per cent of US online purchases going through Amazon.

Amazon also faces criticism for pointing users to branded products that have been described as ‘cheaper knockoffs’ of smaller business products, that are consequently pushed out of the market. In cases where another competitor is listed, they usually make use of Amazon’s shipping services.  

For Google, a ban on self-preferencing would prevent the prioritisation of its own products in search engines, including Google Maps. This could also mean the end of prioritising YouTube  search engine results over other sites, or even Google restaurant reviews. 

For Apple, this would prevent it from preloading its own apps on new phones. Apple also prevents users from downloading apps outside of it’s App Store, and also claims a 30 percent commission on app sales and in-app purchases, netting it billions annually.   

Lobbying goes into high-gear

United in concern over the bill’s alleged threat to core features of their services, 2022 has seen considerable amounts spent on reducing support for the bill. 

Three months into 2022, Apple had already spent $2.5 million on lobbying, a new quarterly record for the technology company. The same period saw Meta spend $5.4 million on lobbying, with $5.3 million spent by Amazon and $3.5 millon by Google, respectively.

Major Big Tech leaders including Google CEO Sundar Pichai and Amazon CEO Andy Jassy have also reached out to Washington in a bid to influence lawmakers who will decide the future of Big Tech. Major industry groups have also spent millions on advertisements opposing the bill. 

Google’s Pichai is expected to meet Senators next week to discuss the anti-trust bill, while Amazon’s Jassy reached out to Democrat Senate Majority Leader Chuck Shumer as well. The meeting could see discussions of a related bipartisan bid for new digital privacy legislation.

Apple CEO Tim Cook also met several Democratic and Republican senators in Washington D.C. on June 9 to express Apple’s stance against the bills. A day later, he wrote a letter urging the advancement of stronger federal privacy legislation which has yet to be debated on the Senate floor. 

Though still in its early stages, the bill would give consumers more control over how their data is used, and would minimise the collection of user data by companies. 

Big Tech warning 

In an open letter published by Amazon on June 1, the e-commerce giant called on US senators to reconsider the legislation, warning that the bill only targeted technology companies without oversight into traditional large retailers who allso practice ‘self-preferencing’ of in-house products over competitors.

If the bill is passed, Amazon claims it would face billions of dollars in fines, and “substantially degrade the value and quality of Prime,” its paid subscription service which includes rapid delivery and content streaming. 

Stacy Mitchell, anti-monopoly advocate and co-head of the Institute for Local Self-Reliance claims that the bill will not hinder user experiences, and would in fact put limits on Big Tech’s anti-competitive business practices. 

In a lengthy series of tweets, Mitchell argues that Amazon would be forced into fair competition over package delivery, instead of forcing sellers to use Amazon delivery systems to gain access to Prime subscribers.

Steep climb

Despite momentum behind the bill, it nonetheless faces a difficult road to ratification amid concerns by a Senate Democrat faction that it could erode their small majority ahead of looming midterm elections, according to Politico. 

Hesitant lawmakers worry the bill could be too controversial for an election year, drawing time and energy that could allegedly be better spent on core voter concerns. 

The bill is nonetheless picking up traction, with one advocacy group, Fight for the Future, organising nearly 26,000 emails from small and medium-sized businesses to lawmakers as well as at least 3,900 calls.

While the bill has received widespread public support, its outcome is by no means certain. With a congressional recess set for August, and midterm elections soon to follow some worry that the bill could lose vital momentum.

Made more tenuous with a 50-50 split in the Senate, Democrats or Republicans only need one seat to gain control of the floor, leaving room for major midterm-driven changes to Washington’s legislative landscape, and possibly the latest antitrust bill’s future.

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