For americas big technology companies, 2020 has been the best and worst of times. the coronavirus pandemic has played to their strengths, as millions have relied on them for online shopping, entertainment and business and social contact. their ability to prosper through lockdown has propelled their market values to new highs. but this year may also go down as the moment when momentum towards us legislative action to curb their power became unstoppable.
This weeks landmark, 449-page report from the house antitrust subcommittee into amazon, apple, google and facebook is uncompromising. all four, it alleges, wield monopoly or substantial power, and have abused it. since each serves as a gatekeeper over a particular distribution channel, they can pick winners and losers throughout the economy. they can charge excessive fees, impose onerous contract terms, and hoard data. the big four have gone from scrappy, underdog start-ups, the report says, to the kinds of monopolies we last saw in the era of oil barons and railroad tycoons.
The reports impact is diluted by the refusal of republican subcommittee members to sign on to it as a whole. they issued a separate 28-page response that backed strong antitrust enforcement but stopped short of the reports toughest recommendations.
Still, the findings provide a detailed road map and trove of evidence that a joe biden presidency might seize on, and which could potentially be used by a new congress to support legislative moves. they could also bolster existing regulatory actions. the justice department is expected to file a new lawsuit within weeks focusing on googles dominance in search the biggest since the microsoft case in the late 1990s. amazon, apple and facebook are already the subject of antitrust probes by federal regulators and state attorneys-general.
Lawmakers and regulators must tread a fine line. while this has come at a price, the report notes the big four have delivered clear benefits to society. surveys show consumers fret about data privacy and, indeed, about whether the tech giants are too powerful but enjoy the innovations, free-to-use services and often lower prices they provide.
The best way to police them is to reinvent an us antitrust model still based on the concept of consumer harm, or whether prices are being driven up. the focus should be broadened to the impact of corporate power on market structure, competition, innovation, and quality. regulators also need adequate resources.
Far deeper scrutiny of tech acquisitions is also required, to ensure they are not aimed at neutralising or killing off competitive threats. since 1998, the report notes, the four groups have purchased more than 500 companies between them. antitrust agencies did not block a single one.
Reviewing whether some of those acquisitions should be unwound has merit notably facebooks 2012 purchase of instagram. it is less clear, however, whether outright break-ups or the structural separations the report suggests between companies dominant platforms and other business lines are, for now, the right path.
The us and the eu could also benefit from closer co-ordination. though not always a perfect model, brussels has blazed a trail in tech regulation, and is now preparing in its digital services act to force big tech companies to share their vast data reservoirs with smaller rivals. depending on what happens in next months elections, washington may yet start closing the gap much more quickly.