Wednesday, July 29, 2020

Breaking the Trust

America’s Congress has an opportunity, a real chance, to cross-examine the powerful men in charge of the tech giants such as Google, Amazon and Facebook and Apple. But whatever happens on Wednesday, this won't be end of the story. The Senate Judiciary Committee's anti-trust panel said it would hold a hearing in September to discuss Google's dominance in online advertising.
 These corporations apply shrewd and ruthless Copy/Acquire/Kill strategies. Copy others' ideas, buy a company that threatens you - and even potentially kill it off.
Their practices has been difficult to police. Traditionally, anti-competition, anti-trust law has been focused on consumer pricing. In a typical monopoly or cartel, there's a simple test. Are consumers paying more because of a lack of competition?
The US "trusts" of the early 20th Century were found to be driving up prices. Companies like Standard Oil and railway companies used their dominant position to harm consumer’ interests.
That's much harder to prove with hi-tech companies.
For example Facebook, Instagram and WhatsApp are free. Amazon often drives down prices to beat competition. Google's search engine is free. YouTube - owned by Google - is free. And apps on iPhones can often be downloaded for free.
Critics say that these companies hurt consumers in a more subtle way, killing off smaller companies and strangling other businesses. The charge is that they are in fact damaging the economy. That's what legislators are looking to examine.
The corporate bosses have already lost one battle before the hearing even begins. They wanted to be grilled one by one. But that's not going to happen. They'll be questioned together and the hearing will - perhaps aptly - be virtual.
"We want to leave as little room as possible for them to hide behind each other," Sarah Miller, from the American Economics Liberties Project, told me last week.
With companies like TikTok and Huawei attracting the ire of the Trump administration, one defence will go something like: "Break us up, over-regulate us, and you give Chinese tech companies more power."

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