Home Uncategorized Facebook’s court victory could end up creating problems for tech giants

Facebook’s court victory could end up creating problems for tech giants

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The “Law to End Platform Monopolies” would make it illegal for a dominant platform (Amazon or Apple being the most obvious) to create its own products or services to compete with competitors who use its platforms. Amazon, for example, has private label products that compete with third parties within the Amazon Marketplace.

Another proposed bill would give consumers greater control over the use and portability of their data.

The fate of the banknotes is uncertain. While both Democrats and Republicans are committed to cracking down on big tech, it is for very different reasons.

China’s crackdown on its big tech companies appears to be driven in part by the desire to avoid the threat of its rapidly increasing power and influence for the absolute dominance of the Communist Party in everything important that happens inside China, but also by concerns about its impact on financial and data stability. privacy. Credit:AP

Democrats see the dominance of big tech in conventional competition policy terms: companies are too big and use their market power to engage in anti-competitive behavior, while Republicans want to punish big social media companies for their alleged censorship of conservative discourse.

However, while the eventual action might not meet the ambitions of the Democrats, there is a bipartisan will in the US to do something about dominance of the platform business despite tech companies and California lawmakers. , arguing that dividing them would harm consumers. and small businesses by driving up prices and reducing access to the scale and reach of the platforms.

There is a similar, even more aggressive push in Europe and even China to stymie tech companies and respond to the potential for harm to local competitors.

Last month, Google paid around $ 270 million ($ 360 million) in fines and agreed to change some business practices after French competition regulators accused it of abusing its market dominance to harm publishers. news and other online ad vendors.

None of the questions are straightforward or have easy answers, but the actions of lawmakers around the world suggest that, at the very least, they believe that big tech companies, if left unchecked, will do net harm to consumers and economies. And therefore they are moving inexorably towards imposing some restrictions and new rules on them.

That agreement highlighted one of the central issues raised by the coexistence on platforms such as Google and Amazon of their proprietary services with those of the competition.

Amazon has been accused of using the data it gets from its marketplace to launch competing products that undermine successful merchants and drive them out of business or allow Amazon to buy them cheaply. Google has been accused of using its data, algorithms and platform to give preferential treatment to its own services.

Germany last month began investigating Apple for anti-competitive practices after opening similar investigations at Amazon, Facebook and Google. Apple’s investigation focuses on whether Apple’s ecosystem, its “walled garden,” adversely affects third parties.

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The European Union and the United Kingdom have launched similar investigations into all Big Tech, and the EU is particularly aggressive in proposing stricter and more intrusive rules to discipline the behavior of companies.

China’s crackdown on its big tech companies appears to be driven in part by the desire to avoid the threat of its rapidly increasing power and influence for the absolute dominance of the Communist Party in everything important that happens inside China, but also by concerns about its impact on financial and data stability. privacy.

His latest intervention, for example, a cybersecurity review by national ridesharing giant Didi Global, was, according to the China Cyberspace Administration, to prevent data security risks, safeguard national security and protect the public interest.

However, whether in the US, Europe or China, the common concern is the sheer power of big tech companies, their relationship with consumers and the treatment of consumer data, their impacts on competitors and business models that raise growth over earnings and, therefore, confer significant competitive advantages over traditional competitors.

Facebook's victory in court could create problems for the tech giants.

Facebook’s victory in court could create problems for the tech giants.Credit:AP

Those models, the seemingly free ride for consumers, the network effects that the domain confers, and their purchases of emerging threats to their domain before those potential competitors are large enough to result in a “substantial decrease in competition” and Triggering antitrust violations (Google’s takeover of YouTube and Facebook’s takeover of Instagram and WhatsApp are good examples) represent a difficult and highly complex set of challenges for legislators without the unlimited capacity to act that Chinese authorities have .

However, beyond the limitations in their ability to act, there are the more important questions about whether they should intervene.

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Does the benefit to the consumer outweigh the harm to competitors and potential competitors?

Does the dominance of big technologies increase or frustrate innovation?

Would regulating big technologies, dividing companies and preventing them from making acquisitions, lead to higher prices for consumers and reduced access to consumers for competitors, particularly small companies?

Would it slow the pace of the positive, albeit disruptive, change necessary to maximize the potential of 21st century technologies and economies?

None of the questions are straightforward or have easy answers, but the actions of lawmakers around the world suggest that, at the very least, they believe that big tech companies, if left unchecked, will do net harm to consumers and economies. And therefore they are moving inexorably towards imposing some restrictions and new rules on them.

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