Big Tech is behaving badly. And I'm not talking about Facebook handing over your personal data to the highest bidder or Amazon playing puppeteer in its HQ2 charade. Big Tech is violating the Sherman Act of 1890.
If you think an antitrust law passed over a century ago couldn't possibly address the problems of the digital era, you're wrong. Much like our Constitution, the Sherman Act was written broadly enough to handle whatever the future might hold.
The Sherman Act was created to combat juggernauts that ruled entire industries like oil and railroads. It was made precisely for the highly concentrated power we see today in Big Tech. When passing the law, Senator John Sherman declared, "If we would not submit to an emperor, we should not submit to an autocrat of trade..."
House Democrats and President Trump are signaling that antitrust action is on the table as they seek to limit the expanding influence of large technology companies.
The incoming Democratic majority indicated support for strong enforcement of antitrust law in a pair of hearings this week, just weeks after Trump said his administration is “looking at” Facebook, Google and Amazon for antitrust violations. Lawmakers are upping the pressure as the Federal Trade Commission holds a series of hearings to determine whether competition and consumer protection laws need to be modernized to address the unique power now wielded by the tech industry. (Amazon founder and chief executive Jeffrey P. Bezos owns The Washington Post.)
Rep. David N. Cicilline (D-R.I.), the incoming chair of the House Judiciary Antitrust subcommittee, said during this week’s Google hearing that he’s ready to work with the FTC to develop legislation cracking down on large technology companies that could use their massive platforms to discriminate against their business rivals.At a time when the European Union has been far more aggressive in its antitrust action against American technology companies than U.S. regulators, Cicilline’s line of questioning indicated he wants the United States to take on more of these cases.
Amazon — a $1 trillion company so multifaceted and bizarre that it challenges the definition of the word “company” — did many things this year that a lot of people cared about. It conducted a year-long “search” for an American city in which to build a large office. It pitched its facial recognition software to Immigration and Customs Enforcement and sold it to several other law enforcement agencies, despite the fact that it’s reportedly not very good.
It raised its minimum hourly wage to $15 after extreme political pressure. It made headway on previous, vaguer attempts to squash Etsy and eBay. It eliminated order minimums for free shipping around the holiday shopping season. It acquired a pharmaceutical company.
It also did many things people probably didn’t have time to think about, and which I only know of because I am subscribed to the Amazon news update email list.
As of publishing time for this piece, Amazon has sent out more than 200 press releases in 2018, and I have read or skimmed nearly all of them, excluding only things that seemed like an obvious waste of my time.
Google organizes nearly every aspect of my life. I've outsourced my memory to Google Search. Why remember things, when technology can sift and surface nuggets of information at precisely the right moment? Gmail helps me manage the unending stream of email messages and notifications. Google Calendar prepares me for every meeting, and Google Maps gets me to those meetings on time.
But I'm concerned about how the tech giant's broad reach and technological capability impacts my life. I'm also concerned about my reliance on the company's tools and services. Google's is so effective — and pervasive — that disconnecting from the company's services is a daunting process. I know, because last week I tried to quit Google entirely.
The Wall Street Journal
Amazon has trained people to buy everything from major appliances to daily staples online. Now it is having second thoughts about some of those sales because they don’t make money—and is pushing big brands to change how they use its site.
Inside Amazon, the items are known as CRaP, short for “Can’t Realize a Profit.” Think bottled beverages or snack foods. The products tend to be priced at $15 or less, are sold directly by Amazon, and are heavy or bulky and therefore costly to ship—characteristics that make for thin or nonexistent margins.
Now, as Amazon focuses more on its bottom line in addition to its rapid growth, it is increasingly taking aim at CRaP products, according to major brand executives and people familiar with the company’s thinking. In recent months, it has been eliminating unprofitable items and pressing manufacturers to change their packaging to better sell online, according to brands that sell on Amazon and consultants who work with them.
When it takes control on Thursday, the new House Democratic majority plans on serious oversight of corporate monopolies and the lax enforcement from federal antitrust agencies. It will target tech giants like Google and Facebook and health insurers Aetna, Cigna, Humana and Anthem while making sure Federal Trade Commission regulators are doing their job.
The Dems’ new push will focus on three areas: consolidation of health care markets driving up prices for consumers, the monopolization of big tech platforms and anti-competitive labor abuses like non-compete agreements and wage fixing. Hearings on these issues could even result in the first major rewrite of antitrust law since the 1950s
The Wall Street Journal
Standard Oil Co. and American Telephone and Telegraph Co. were the technological titans of their day, commanding more than 80% of their markets.
Today’s tech giants are just as dominant: In the U.S., Alphabet Inc.’s Google drives 89% of internet search; 95% of young adults on the internet use a Facebook Inc. product; and Amazon.com Inc. now accounts for 75% of electronic book sales. Those firms that aren’t monopolists are duopolists: Google and Facebook absorbed 63% of online ad spending last year; Google and Apple Inc. provide 99% of mobile phone operating systems; while Apple and Microsoft Corp. supply 95% of desktop operating systems.
The Washington Post
Gary Reback is a Silicon Valley antitrust lawyer at Carr & Ferrell LLP. He represents one of the companies that filed a formal complaint against Google in the European Commission.
After an extensive investigation, the European Union found last week that Google has, for many years, violated European antitrust law by rigging its general search results to favor its own comparison shopping service over rivals. But a recent Post editorial faults the E.U. for imposing a $2.7 billion fine on the company.
The Seattle Times
Amazon.com, America’s fifth-largest company by market value, is still growing like an adolescent and planting flags in new markets. That is prompting some policymakers and legal experts to ask: How big is too big?
It’s a key issue for an economy being rapidly reshaped by e-commerce, a sector where Amazon and the merchants operating on its platform account for up to a third of all U.S. sales, according to some estimates.
It’s also critical for Seattle, a city that has hitched its wagon to the e-commerce titan, and that once saw another local champion, Microsoft, mired in a lengthy antitrust battle. That fight, over Microsoft keeping a rival internet browser off PCs running Windows, almost led to the split-up of the Redmond software giant.
Amazon, a thorn in the side of retailers including Walmart and Target, is facing increased competition on all fronts from rivals seeking to chip away at its lead. But the Seattle-based giant may be moving even faster. One telling example: its first fulfillment center inside New York City.
The 855,000-square-foot facility that Amazon opened in September inside a logistics park on New York’s Staten Island not only is 20% smaller than its traditional fulfillment centers but also represents one of 26 “robotic buildings” that Amazon has globally, mostly in the U.S., out of its more than 175 fulfillment centers worldwide. (Amazon began deploying robots at fulfillment centers in late 2013 after its $775 million purchase of the Kiva Systems robotic company in 2012.)
The Washington Post
GOOGLE CHIEF executive Sundar Pichai’s appearance before Congress on Tuesday augured an era of increased scrutiny for technology companies. The hearing was also a swan song for a Republican majority that has chosen to prioritize political posturing over more pressing issues about how powerful firms manage consumer data, and how they wield their influence in the world.
Members of the conservative majority on the House Judiciary Committee spent much of their time hammering Mr. Pichai with baseless accusations that Google rigs its search results to censor conservative content. Black-box algorithms will inevitably prioritize some content over other content, and to the extent companies can be transparent about how their systems work, they should be. But a single-minded and mindless focus on a nonexistent left-wing conspiracy within Google has had the paradoxical effect of discouraging companies from properly policing their platforms, as they hesitate to remove content that should be removed for fear of unfounded criticism. In a visit to The Post after his hearing, Mr. Pichai said the moderation of misinformation and domestic extremism on YouTube is an area where Google could improve. He also cautioned, fairly, that such actions must be weighed against the importance of free speech.
The Bloomberg Quint
After several high-profile investigations into U.S.-based tech companies that resulted in large fines but little meaningful change in the firms’ practices, the European Union’s antitrust authorities are being asked to open a wide-ranging inquiry into the digital advertising market. It’s long overdue.
The request comes from Brave Software Inc., the company founded by Brendan Eich, one of the original creators of the Firefox browser. Brave also makes a browser, but with a competitive edge: it’s good at blocking ads and the trackers that help companies collect users’ personal data. In a letter, Brave asked Margrethe Vestager, the European commissioner in charge of competition, to begin a “sector inquiry” into online advertising. Brave is urging regulators to look into two aspects of the business: how the biggest players collect data that isn’t specifically for advertising purposes, but then use the information to target ads, making it difficult for others (such as publishers) to compete for ad budgets; and how publishers are forced to sell their ad inventory through a small number of dominant channels that turn the inventory into a commodity and keep most of the revenue.