States to launch antitrust probe of Big Tech - Activate World

States to launch antitrust probe of Big Tech

At least 20 states are preparing a joint antitrust investigation of big technology companies and will add to the scrutiny of the federal investigation already underway. The new investigation involving state attorneys general is expected to be formally launched as soon as next month.  The regulators’ focus is likely to be on Google, Facebook, Amazon, and Apple. 

Lunchtime Conversations:

  • Why are states leading in the antitrust efforts? With state leadership, will a better antitrust investigation occur?
  • Google, Facebook, Amazon, and Apple have been allowed to self-regulate. What should have CEOs of these companies done differently to prevent this investigation?
  • What evolution of capitalism is necessary to ensure a more competitive marketplace?

Noteworthy:

  • A bipartisan probe could give the investigation broader leverage and help insulate GOP officials from questions over whether their actions are motivated by political concerns, such as how online platforms treat conservative speech.
  • Major antitrust investigations can take years, regardless of whether they result in legal action or not. And unlike the Microsoft case, which focused on a single company, the pursuit of today’s tech giants is more wide-ranging.
  • These firms have been allowed to regulate themselves with little oversight. According to Rep. David Cicilline, chairman of the House antitrust subcommittee, “As a result, the internet has become increasingly concentrated, less open, and growingly hostile to innovation and entrepreneurship.”

Storyline:

According to people familiar with the situation, the probe is likely to focus on whether these dominant technology platforms use their substantial marketplace positions to stifle competition. Each of the big four that regulators are focused on — Google, Facebook, Amazon, and Apple — operate in somewhat different markets, including internet search, online advertising, e-commerce, and social networks.

The specific number of states expected to join the investigation is unknown but as many as 20 or more could participate, according to one source. The bipartisan group of attorneys general will issue civilian subpoenas — known as civil investigative demands — to the companies.

A smaller group of the state representatives met last month in Washington with antitrust officials at the Justice Department, which has started a broad antitrust review of the technology industry. The Federal Trade Commission has already begun an antitrust investigation of Facebook and is reviewing the actions of other companies as well.

Lawmakers in Congress are active as well. An antitrust hearing last month included executives from Apple, Amazon, Facebook and Google.

The states can play a key role, working in tandem with federal regulators and Congress, in building evidence and public support for major investigations. That was the case in the landmark antitrust case against Microsoft, when 20 states joined the Justice Department in suing the software giant in 1998.

It’s unclear what action should be taken to curb the market power of the big tech. Proposals vary from breaking them up, as proposed by Senator Elizabeth Warren, to forcing them to share data to make it easier for rivals to compete.

Sources:  The New York TimesThe Wall Street Journal

Photo by Katie Moum on Unsplash