Making predictions about the tech industry is still risky, but this year seems different, at least in the sense that there are two safe bets. One is that the efforts to control the tech companies that began last year will intensify; the second is that we will be gradually filled with Facebook & Co. sanctimonious talk as they continue to escape democratic rein on their rampant influence. Alphabet, Google’s owner, faced significant antitrust litigation in the U.S. last year from 38 states as well as the Justice Department on the regulatory front. Preparations for a Digital Markets Unit with regulatory powers are underway on this side of the ocean, which would be able to conveniently sideline the complicated definitional issues of what constitutes a monopoly in the digital age.
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A new, two-pronged legal structure to curb digital control – the Digital Markets Act and the Digital Services Act – has been established by the European Union in Brussels. The Digital Markets Act seeks to curtail the tech industry’s anti-competitive activities (such as buying out potential rivals before they can expand) and provides infringers with penalties of 10% of global revenue. The Digital Services Act, on its part, would force social media sites to take greater responsibility for illicit material on their platforms, such as fraud, terrorist content, photos of violence, etc., for which they will face penalties of up to 6% of global revenue if they do not regulate the content sufficiently.
Thus, the U.S. and the U.K. Corporate conduct is the subject of the approach; the EU approach focuses on determining what is legally acceptable…. Many of these steps have been coming for a long time, and while it’s hard to predict exactly how they’re going to play out, the bottom line is that the tech industry is becoming a controlled industry.
The law-free period will come to an end. The selection of top workers in his administration by Joe Biden involves a depressing number of former employees of tech firms. The big question, though, is: when? Because of the scope of the problems and the inexhaustible legal budgets of the businesses concerned, antitrust lawsuits proceed at a glacial rate. In one of the major U.S. antitrust lawsuits against Google, the judge said he did not expect the case to go to trial until late 2023, at which point it could proceed for many years (like the Microsoft case in the 1990s). The issue here, as seasoned anti-monopoly activist Matt Stoller has pointed out, is that the longer monopoly activity persists, the more harm (e.g., to advertisers whose r r r r Last year, Google had sales of $170 billion and is rising at an estimated rate of 10-20% each year. The company will add another $100 billion to its sales by 2025 at a conservative estimate of 10 percent rise, while the case is still in court. Facebook, Stoller said, “is this year at $80 billion in revenue, but growing faster, so the increase in net revenue is about the same.”
In other words, if the allegations of the government are legitimate, then the lengthy procedure, though maybe necessary, enables these monopolists to steal an extra $100 billion each. The commitment with which the U.S. Department of Justice prosecutes its prosecutions is a key factor.
Democrats in Congress displayed an inspiring enthusiasm for battling tech monopolies in the run-up to the 2020 election, but Joe Biden’s preference for the top workers in his administration contains a depressing share of former officials of tech firms.
And during her tenure as California attorney general, his vice president-elect, Kamala Harris, regularly turned a blind eye to the anticompetitive acquisitions of the Silicon Valley giants.
Interestingly, Stoller indicates that a different strategy (inspired by the way trust busters handled things in the U.S. in the 1930s) may have a useful effect on corporate conduct from now on. Those hoping for antitrust zeal from the current U.S. administration may be disappointed.
Not only is monopolization unconstitutional, he stressed,