Will the U.S. Be Able to Break up Tech Giants?
By Space Coast Daily // August 12, 2019
Online retail giant, Amazon, recently branched out into the world of specialist beauty products leading the tech giant’s shares to increase. But should the tech giants such as Amazon, Google, and Facebook be worried about their profits, shares, and future?
The US Department of Justice recently announced that it will be investigating tech giants, following concerns and scrutiny that the companies are not following the rules.
This announcement comes as it is expected that the Federal Trade Commission will fine Facebook $5 billion for privacy violations. Whilst in Europe, the European Commission fined Google more than £7 billion, during 3 different antitrust investigations.
Did you know that collectively the tech giants (Apple, Amazon, Facebook, Alphabet, and Microsoft) have a revenue of over $800 billion?
The US Department of Justice
The US Department of Justice (DoJ) is thought to have more political influence compared to the Federal Trade Commission. However, the DoJ has not detailed which digital platforms it will be reviewing.
It has only revealed that it was seeking to address widespread concerns revolving around social media, search engines, and online retail services. Specifically, the DoJ will be looking into whether the actions of the tech giants have harmed consumers.
The DoJ is thought to be taking concerns such as the tech giants more seriously due to fear of falling behind on regulations. The body counterparts in Europe have pursued firms, whereas in the US, the DoJ has done nothing to support and address the concerns of the consumers.
Some people believe that the DoJ will look at whether the firms hold too much consumer data.
Similar investigations have been focusing on the consumer’s privacy, however the DoJ might spend their time looking into whether the tech giants are using customer details to eliminate their competition.
What is the Problem and What Can DoJ Do?
Jack Simmons, a spokesperson from the technology department of THEGOODESTATE, said, “some of the biggest concerns in the US, the UK, and worldwide, is that these tech firms are have too much data, market, and power, and that they aren’t paying enough tax on their profits. New laws need to be put in place so that the tech giants don’t squish other businesses and don’t ruin the broader economy.”
A review conducted by the British government found that global tech giants don’t face enough competition.
The report was led by Harvard University professor, Jason Furman (who was a chief economic adviser to former US President Barack Obama), and it concluded that existing rules are outdated and need to be beefed up.
Effectively the DoJ could break up the firms. Facebook co-founder, Chris Hughes, has even expressed that the firm shouldn’t be as big as it is. Chris stated that WhatsApp and Instagram, which are both owned by Facebook, should be made into separate companies.
Breaking up the tech giants has also got the support of US lawmakers. US Democratic presidential hopeful Elizabeth Warren has said that she would consider dismantling the tech giants should she get the top job.
However, courts in the US find it hard to justify splitting up large companies because of US competition law. A judge can ensure large firms are broken up if there is evidence of the bad behaviour, but a lot of the time the companies merely promise to fix their behaviour and move on.
Many people are hoping that the tech giants are broken up. But only time will tell what the outcome of the DoJ investigation will bring.
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