While the Justice Department Considers Antitrust vs. Google, Bills Addressing Tech Competition Wait in Congress
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As our world has become more integrated and reliant on technology, a handful of multinational corporations have dominated much of the market. Companies such as Google, Apple, Facebook, Microsoft, and others are so large they have become synonymous with the internet itself. Due to their vast market power, political discourse around “Big Tech '' has fueled debates about culture war issues such as President Trump’s social media bans as well as possible antitrust action.
Indeed, the Justice Department (DoJ) has an active probe into Google. They are looking to determine whether or not Google has illegally hindered competition due to its bundling of services. Specifically, the DoJ is looking into Google Maps and the requirement it be bundled with services such as the Google Assistant in its Automotive Service Package.
Google stated that service integration provides users with an optimal experience. This, of course, makes sense as services developed by the same company can coordinate integration under the same umbrella as opposed to two separate companies coordinating efforts. However, as a requirement of service, developers cannot use a third-party map service if they use Google’s location search service.
Basically, if developers want to use a component of Google, they cannot use certain technologies produced by other companies. Some developers have expressed that these requirements have placed a burden on them as Google has prevented them from using competitor options which are sometimes less expensive.
In 1998, the DoJ sued Microsoft for forcing computer manufacturers to maintain Internet Explorer as the default computer browser. Microsoft was found to have illegally stamped out competitors and was ordered to be broken up into two companies in 2000. However, in 2001 an appeals court reversed that decision. Still, this case holds parallels to the current probe into google. Likewise, Google is currently being sued by the DoJ in an antitrust suit regarding Search and Search Advertising.
According to statcounter.com, Google holds more than 90% of the search engine market. Likewise, Microsoft operating systems are utilized for over 70% of desktop PCs. Apple and Samsung control 41% of the world smartphone market. Out of roughly 7.9 billion people on earth, almost 2 billion of them are daily users of Facebook.
This is all to say that these tech companies drive the market for which they operate. Solidifying their positions by bundling services or taking aggressive actions is something smaller competitors have noted. Companies such as Spotify, Match, and Yelp have supported legislation which is designed to limit the power of the largest tech companies.
One such act, the Open App Markets Act, looks to combat anti-competitive practices in app-stores. The act would require app marketplaces such as the Apple App-store to stop preferring its own apps, stop requiring developers to use Apple’s payment processing service, and more. In 2021, a lawsuit decision involving Epic Games, the producer of Fortnite, and Apple was handed down.
Epic Games sued Apple because Apple removed Fortnite from the app-store after Fortnite introduced a payment system that would circumvent Apple’s system. 30% of purchases made on Apple’s marketplace go to Apple as a fee while the other 70% go to the app creator. For this, Epic Games sued for anti-competitive practices but ultimately Apple won the litigation. Though yet to sue, Spotify, an Apple Music competitor, has a similar complaint. They likewise find issue with the 30% fee and have thus taken their payment system off mobile devices.
Regardless, all of these fights over “competition” have enormous financial implications. These tech companies make billions of dollars each year and they certainly want to maintain their margins. Stronger competition against them could mean less earnings but ultimately less power as well. That being said, more competition creates better prices and more choice for the consumer.
As stated earlier, there is legislation sitting in congress that aims to create more competition in the technology sector. Still, as these bills have just been introduced, they are nowhere close to becoming law. Unless Congress takes action to change the nature of tech, expect more Justice Department probing and civil lawsuits in the future. Congress can decide whether to continue the status quo or shake up the internet companies.