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Antitrust fever rises as Big Tech CEOs set to testify
By Rob Lever
Washington (AFP) July 27, 2020

Big Tech and antitrust: where things stand
Washington (AFP) July 27, 2020 - The four major tech firms whose chief executives are testifying at a congressional antitrust hearing face a variety of complaints about their dominance in the US and elsewhere.

Investigations are being led by antitrust enforcers at the Justice Department, Federal Trade Commission and by authorities in US states.

Here is a summary of the main issues:

- Google -

The largest unit of parent holding firm Alphabet, Google has been facing antitrust probes in Europe related to its shopping and advertising operations as well as how it manages Android, the dominant mobile operating system.

The focus of US state and federal investigations remains unclear, but some analysts believe it may be based on its dominance of online search -- of which it controls about 90 percent -- to the detriment of rival services, or digital advertising, a market it dominates along with Facebook.

At a Senate hearing earlier this year, online review site Yelp was among those complaining it was harmed by Google's practices of favoring its own services. Google has countered that it seeks to deliver the best results for consumers.

- Apple -

The complaints against Apple center on its App Store, for which it collects 30 percent of subscription fees for most third-party services.

Some developers say Apple takes a disproportionate share of the revenue and maintains rigid policies that may impact services competing with those of the iPhone maker.

Streaming music giant Spotify filed a complaint with EU authorities alleging Apple has been using its platform to unfairly promote its own Apple Music service.

Apple has argued its App Store delivers billions to independent developers, and that its practices are reasonable compared with other digital marketplaces.

- Amazon -

Amazon is the undisputed leader in online commerce, accounting for some 40 percent of US e-commerce sales, according to research firm eMarketer.

Aside from Amazon's size, its relationship with third-party sellers on its marketplace platform is likely to draw scrutiny.

At least one report suggests Amazon improperly used data from marketplace sellers to develop its own competing products -- a charge the company has denied.

Some critics of the company -- including Senator Elizabeth Warren during her presidential campaign -- argue that companies like Amazon and Apple should not be allowed to own the "platform" while competing with others in that space, but any such restriction would need legislation.

Amazon is also a leading cloud computing provider, in a market where it competes with Google, Microsoft and others. Its Amazon Web Services has been a key driver of revenue and profits even during periods when its online sales generated scant profits.

- Facebook -

Facebook is the leading social network, reaching close to three billion people worldwide with its core platform along with Instagram and messaging services WhatsApp and Messenger.

An estimated seven-in-ten US adults use Facebook and its reach allows it to play an outsized role in digital advertising and in delivering news and information.

While many of the complaints about Facebook are about how it handles content such as political misinformation and hate speech, some activists say Facebook was allowed to squelch competition by buying up smaller rivals, and that this could form the basis of an antitrust action.

A Federal Trade Commission review of acquisitions dating back to 2010 could potentially "unwind" some of the deals.

Antitrust fever hits a peak in Washington this week with lawmakers set to grill top executives of four of the biggest US technology firms in what promises to be a rare political spectacle for the digital era.

The showdown Wednesday in the House of Representatives comes amid rising concerns over Big Tech dominance, which has become even more pronounced during the coronavirus pandemic.

The unprecedented joint appearance in the House Judiciary Committee will include chief executives Tim Cook of Apple, Jeff Bezos of Amazon, Mark Zuckerberg of Facebook and Sundar Pichai of Google and its parent firm Alphabet. All will testify remotely.

The hearing is part of a probe into "online platforms and market power," taking place as US federal agencies and states conduct their own investigations.

"This is the Super Bowl of antitrust," said Avery Gardiner, an antitrust expert at the Center for Democracy & Technology.

She said the hearing offers a timely way to focus on key issues around competition and concentration of economic power.

"People are feeling frustrated with the way our society is organized, and antitrust is one tool to go after powerful companies," she said.

But current US antitrust laws make it difficult for enforcers to target companies simply for being large or dominant without showing harm to consumers or abuse of market power.

Because of that, "the real purpose of the hearing is theatrical, and tied to the politicians' electoral interests," said Christopher Sagers, a law professor specializing in antitrust at Cleveland State University.

Eric Goldman, director of the High-Tech Law Institute at Santa Clara University, said politicians see a benefit in attacking the tech firms and ironically, "they will be looking for that viral YouTube moment."

The hearing takes place against a backdrop of antitrust investigations that are underway involving the US Department of Justice, the Federal Trade Commission and nearly all state law enforcement agencies as well as authorities in Europe and elsewhere.

- Muddying the waters -

But the antitrust debate is being muddled by rising "techlash" over a range of issues from privacy to economic inequality.

Social media giants face attacks for allegedly using their dominance to stifle free speech due to a bias against conservatives, a claim made by President Donald Trump.

Other activists argue Facebook fails to curb hateful content promoting violence, including from Trump.

Any effort to use antitrust laws to enforce free speech would run into constitutional concerns, raising the specter of a "government censor," according to Sagers.

"My fear is that members of Congress will have a hard time sticking to antitrust and we'll hear a lof of questions about privacy, content moderation, worker conditions," said Gardiner.

"These are important issues, but they are not about antitrust."

Facebook could come under scrutiny for its acquisition of nascent rivals which critics say squelched competition and increased its dominance of social media, according to Sagers.

Smaller rivals have long complained about the difficulties of competing against the giants: Yelp argues that Google favors its own sites and demotes the rival review service; Spotify says Apple Music has an unfair advantage on the iPhone maker's platform.

- Slow wheels of change -

Experts say there are limited remedies under existing law and precedent to deal with tech platform dominance.

But any quick revision of antitrust law seems unlikely, given the muddled political picture and Congress' slowness.

Antitrust enforcers face a delicate task because "it is not illegal to be big," said Gardiner.

Investigators must identify "abuse of market power" which is difficult to define, she said.

Even then, it may be hard to craft a remedy in the public interest because of the benefits offered by the massive scale of the tech platforms.

"You don't want to have to check 11 different social media sites for pictures of your kids on Halloween," Gardiner said.

"There is a benefit to having more people on the platform."

Still, Gardiner sees a strong possibility of at least one antitrust lawsuit being filed this year, although "I don't expect a resolution for at least three years."

Some analysts say antitrust enforcement may not be best way to deal with the abuses of dominant firms in areas such as privacy, fairness and data protection.

"Antitrust cannot be the sole tool to address all the thorny issues that the platforms present," said Charlotte Slaiman of the consumer nonprofit group Public Knowledge.

"The best solution would be creating a new digital platform-focused agency to regulate the platforms. Because antitrust cannot do enough by itself to expand competition and innovation, such an agency is needed to rein in potential abuses by dominant platforms."


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