This article is second in the series on Anti-trust. Access the first article here.
The stage is set. The battle lines have been drawn. The monopoly, of the various tech companies around the world, has reached a point, where people (and the governments) want them reigned in. The saturation point has inevitably arrived, where the outcry over privacy and competition-related issues have forced the concerned authorities to seriously consider breaking these companies up. However, the regulators seem divided on the said issue. In the recent years, several US regulators have taken an optimistic view of Big Tech’s relentless growth — seeing a world of improving smartphone quality, free online services, and cheap e-commerce as evidence that competitive markets are working as intended.
Just like AI and Machine Learning, and their vast set of features and capabilities at the forefront, the monopoly of these companies is beneficial for the public to a greater extent of their use case. However, that does not mean that there aren’t any problems. Similar to AI and Machine Learning, the tech monopoly brings with it, its own sets of troubles and problems, the only difference being, the problems, in this case, were promptly foreseeable, unlike in the case of AI and Machine Learning, which still remain widely nascent and unexplored fields.
The Antitrust laws have existed for nearly a whole century now, the problem being, their scope still is fairly narrow. The Antitrust laws fundamentally find their origin in the United States, during the late 19th century. Subsequently, the main laws governing antitrust policy in the United States are both, very old as well as broadly worded. The Clayton Antitrust Act, for example, is more than 100 years old and its predecessor the Sherman Act is even older. Both arose in an era when increasingly financial sophistication was allowing the creation of large industrial organizations However, contemporary antitrust law mostly concerns itself with high prices due to market monopoly. For instance, the Clayton Act simply bars one company from acquiring another, when “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly” and does not offer much in the way of further definition or elaboration of what that means.
However, the question then arises, how was Facebook able to acquire companies like Instagram and WhatsApp, since all these companies had previously been together competing in the social media space? Facebook has argued that these companies operate in different spaces and when it acquired these companies, they were fairly small (with it basing its arguments on the fact that Instagram at the time had only 30 million users). Subsequently, the USA is a capitalist market as such (though on paper, they preach democracy). The combined dynamics of the Big 5 and their influence on the US Congress and their contribution to the US economy have enabled such questionable deals to go through. Amazon has been involved in similar cases, but their deals have given rise to situations, as to what can be called as “anti-monopoly” policies, whereby the smaller companies coming together, to curb the monopoly of such a large company, have themselves been blamed for trying to raise prices (which was the case, when several book companies came together against Amazon’s e-book platform, which had drastically lower-priced e-books as compared to their hardbound counterparts, and the Justice Department filed an antitrust case against these companies, accusing them of trying to raise prices). So, it can be seen that antitrust hasn’t been working as it is supposed to be. A variety of factors have contributed to the same, as discussed above.