Big technology companies are the new monopolies.
Apple corners the smartphone market;
Google has no rival in search or digital advertising;
Amazon dominates e-commerce;
Microsoft, operating systems and Meta have a privileged position in social networks with Facebook, Instagram and WhatsApp.
The United States Government considers that these companies have abused their dominant position illegally and has launched a fight against their monopolistic practices.
The battle is underway in the courts, but in the meantime, those giants, joined by Nvidia with its high-power microprocessors, have launched themselves to conquer the technology of the future (and something of the present): artificial intelligence .
The latest move by Joe Biden's Government has been the presentation, last Thursday, of a lawsuit from the Department of Justice in which it accuses Apple of illegally building a monopoly with the iPhone.
The filing of the lawsuit caused the company to lose about $110 billion in stock market value in a single day.
“The Department of Justice has an enduring legacy, taking on the biggest and toughest monopolies in history.
This includes landmark cases against Standard Oil, AT&T and Microsoft,” said Jonathan Kanter, the prosecutor responsible for the antitrust division, in announcing the lawsuit.
The monopolies of the digital age are, however, different from those of the industrial age, as Tom Wheeler, author of the book
Techlash, explains.
The word, literally “tech whiplash,” is a neologism that reflects the negative reaction to the growing power and influence of Big Tech.
Wheeler notes that antitrust laws “were based on industrial concepts.”
“The challenge of the Internet era is that many digital practices are difficult to classify according to standards based on industry assumptions.
For example, while industrial activity focuses on the product
per se
, digital activity focuses on the data created by the consumption of the product.
“A car manufacturer cannot give away vehicles, for example, but platforms like Facebook and Google can give away their services as the hook that allows them to collect users' private information, which they can then reuse to earn income,” he explains in his book.
These difficulties have not prevented Washington's offensive against technology companies.
The Administration attacks with two different organizations: the Department of Justice, with the attorney general, Merrick Garland, at the helm, and the Federal Trade Commission (FTC), directed by Lina Khan, scourge of technology, first as a theoretical and then after assume his position in 2021 at only 32 years old.
The Department of Justice has filed two major lawsuits against Google.
The first, launched during Donald Trump's presidency and taken to trial during Biden's, accuses the company of abusing its monopoly power in the search engine market, especially with contracts to ensure it is the default search engine. of Apple devices, including the iPhone.
The second, which continues to be processed, accuses the company of an illegal monopoly in the digital advertising market.
In it, he calls for the division of Google's advertising business through divestitures to encourage competition.
It is also the attorney general who has promoted the lawsuit against Apple filed on Thursday.
It accuses Apple of protecting its monopoly by putting walls in its ecosystem against super applications (such as WeChat, the gateway to various messaging services, e-commerce and payment methods, among others) and
cloud
streaming
applications, especially video games (which reduce the need for phones as powerful as iPhones).
He also claims that it prevents the iPhone and Apple Watch from being compatible with competing devices, causes messaging services to communicate poorly with Android phones, and hinders digital wallets that are alternatives to his own.
Apple is benefiting “not by improving its own products, but by making those of others worse,” Garland said on Thursday, who defended his offensive against big technology, even though it requires him to dedicate many resources.
“The Department of Justice doesn't have a different standard for the powerful compared to the powerful, it doesn't have a different standard for the rich compared to the poor.
We have a rule.
“We look at the facts, we look at the law and we make the appropriate decisions,” he said.
iPhone 15 devices at an event in Cupertino (California, USA). Loren Elliott (REUTERS)
For its part, Lina Khan's FTC sued Meta in 2021, accusing it of reducing competition with the purchase of Instagram and WhatsApp.
A first demand from Trump was rejected for lack of sufficient grounds, as it was not correctly argued.
The second, however, continues on its way and the FTC wants it to go to trial this year.
Khan made his name with an influential academic article, titled
The Amazon Antitrust Paradox
,
published by the Yale Law Review, where he was then studying law.
From theory to practice, the FTC sued Amazon last year, accusing it of engaging in monopolistic practices aimed at “inflating prices, degrading quality, and stealing innovation from consumers and businesses.”
Wheeler maintains that, beyond the difference between industrial and digital activities, antitrust actions have been decreasing in effectiveness over the last half century.
“Starting in the Reagan era, courts began to interpret antitrust laws in terms of their impact on consumers (primarily through price) rather than their impact on the competitive market.
As the market power of dominant digital companies grew, courts’ interpretations of the basic premises of antitrust laws narrowed,” she maintains.
The attorney general, however, is optimistic about the cases that depend on him: “The United States normally wins the cases it presents.
We bring cases because we believe the legal grounds justify them and because we believe we are likely to win them,” Garland said Thursday.
The companies deny that they have engaged in illegal practices.
The United States is not alone in the battle.
In fact, in many ways, it lags behind the European Union, which has imposed multibillion-dollar sanctions on Google, Apple and Meta and forced Amazon to change its business practices.
In addition, it has approved a demanding Digital Markets Law that imposes stricter obligations on large technology companies to prevent them from abusing their dominant position.
Artificial intelligence
Despite the offensive, big technology companies are already immersed in the race to dominate artificial intelligence.
And, to do this, as they did in the past, they continue to take out their checkbook to make acquisitions or reach agreements between giants.
Microsoft is a privileged partner of OpenAI.
In addition, it has signed Mustafa Suleyman, one of the founders of DeepMind, along with his team and Inflection technology without purchasing the company, in an obligation that some have seen designed in a way that avoids the scrutiny of competition authorities. .
For their part, Google and Amazon have invested in Anthropic, another of the leading firms in artificial intelligence.
And while the courts have yet to rule on the agreement between Apple and Google over searches on iPhones, both companies are negotiating an agreement for Apple devices to use Gemini, Google's artificial intelligence assistant.
“Competition not only protects today's markets and technologies, but also tomorrow's innovations,” prosecutor Kanter declared on Thursday.
“At the center of the digital Golden Age is the same question that arose in the industrial Golden Age: Will there be rules for the new economy, and who will make those rules, the people or the powerful?” reflects Wheeler.
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