- Google, Apple, Facebook, and Amazon are being investigated over antitrust violations.
- Antitrust laws also referred to as competition laws, were designed and developed by the U.S. government to protect consumers from business malpractices.
- They ensure that fair competition exists in an open-market economy. These laws have evolved along with the market, vigilantly guarding against would-be monopolies and disruptions to the productive ebb and flow of competition.
- The goal of these laws is to provide an equal playing field for related businesses that function in a specific industry while preventing them from gaining too much power over their competition.
- Simply put, they stop businesses from playing a dirty game to make a profit. These are called antitrust laws.
- It means lawmakers are trying to figure out whether the companies have used anti-competitive business practices to stifle smaller competitors and maintain a monopoly of the markets. Antitrust laws have a century-old history in the US for keeping such mega-corporations across various sectors — oil, railroad, finance — from getting too big and powerful. But these laws aren’t yet well suited to apply to tech firms at the forefront of 21st-century innovation.
- The House Judiciary Committee’s investigating into the market power of Amazon’s, Apple, Facebook, and Google.
- It lasted for nearly six hours.
- Alternating Democrats and Republicans asked the CEOs of those companies a combined 217 questions.
- Questions were how Facebook intimidates smaller competitors.
- Amazon CEO Jeff Bezos, Google, and Alphabet CEO Sundar Pichai, Facebook CEO Mark Zuckerberg, and Apple CEO Tim Cook faced Congress’s questions in a hearing Wednesday.
- This investigation was about online market competition.
- The broader investigation could eventually result in legislation designed to keep tech companies from growing too large and powerful.
- Smaller competitors on the rise have testified in front of the House Judiciary subcommittee since June, alleging the big four’s use of anticompetitive business practices.
- This hearing is the first time the four CEOs will testify at the same congressional hearing. And it’s the first time Jeff Bezos, the richest person in the world — with a net worth of $171.6 billion — will testify before Congress.
- But most notably, this is one of the first steps toward laying the groundwork for antitrust regulation in the tech world.
- The hearing also comes as the industry continues to reel from the “Techlash” or widespread backlash against tech that especially picked up steam in 2018.
- Issues such as user data privacy, abuse of power, and the role these firms can play in influencing political outcomes have contributed to a growing animosity and weariness of big tech.
Who, exactly, will be testifying or giving their testimonials?
- Each company was probed for different policies and complaints.
- For example, lawmakers asked the ad and search market-related questions to Google.
- Apple is being investigated over claims that it gives its own apps special treatment over third parties in its App Store.
- Facebook is in the spotlight for its acquisitions in recent years of would-be competitors, namely WhatsApp, Instagram, and Giphy.
- Amazon will be investigated over whether it promoted its own brands ahead of third-party sellers.
- The House representatives involved in the antitrust investigation chose to question the four CEOs together.
It was better to ask four company CEO questions so that each of them is aware of what specific company is alleged for which policy breach.
Is this the first time this has happened?
- The four CEOs appearing together in an antitrust hearing? Yes.
- But this isn’t the first time an antitrust investigation has taken over the tech world. In the late ’90s, Microsoft was hit with an antitrust suit as the Seattle firm began gaining dominance in the internet market.
- A federal judge ruled that the company was indeed in violation, and Microsoft reached a settlement with the government in 2001
What’ll happen afterward?
- The hearing isn’t a trial with a verdict; instead, it’s for lawmakers to question the tech execs and gather evidence through their testimonies, informing the subcommittee’s ongoing investigation.
- But the broader investigation could eventually result in legislation designed to keep tech companies from growing too large and powerful.
How big these four tech companies in terms of market capitalization
- Amazon –
Market cap – 1.6 Trillion USD (Aug 5,2020)
Stock Price – $3198.59 (Aug 5,2020)
- Apple –
Market cap – 1.88 Trillion USD (Aug 5,2020)
Stock Price – $439.93 (Aug 5,2020)
- Alphabet Inc. (Google) –
Market cap – 1.001 Trillion USD(Aug 5,2020)
Stock Price – $1472.00 (Aug 5,2020)
Market cap – 709.36 Billion USD(Aug 5,2020)
Stock Price – $249.00 (Aug 5,2020)
Source – https://ycharts.com/