18 Jun 2019

What the US Government is hoping to achieve with the Antitrust Probe

US Congress launches Big Tech Antitrust Probe

The federal government is warming up its antitrust enforcement machine and is likely to be in the first stages of a ‘top-to-bottom review of the market power’ and is pointing it at the giant tech platforms – Facebook, Amazon, Google and Apple.

The anti-trust probe has been initiated over economic and political concerns in the US that social media companies have grown far too big and that this has to be curbed. Googles rivals have long since lobbied US Antitrust enforcers to take action against them and so far, haven’t had the success such as the European Commission has. They have enforced changes to Google’s Business Model and levied huge fines against them for their anti-competitive behaviour.

Economically, by way of example, Facebook and Google now control between them nearly 60% of the internet digital ad revenue and Google also controls 95% of search engine activities (which they have been previously heftily fined for, for abusing its dominant position). 

This means that Google is able, through its search engines, to unfairly promote its other products, such as advertising revenue, flights booking, news, etc. So, say for example, you want to book a flight and tap the search into Google, a Google Flight Service comes up, which means that they dominate over smaller travel agents, so economically, the monopolies of this size create higher prices for consumers and suffocate investment and innovation. 

Politically, however, the democrats in the house of representatives believe that Google, Facebook and Twitter’s dominant positions might allow them to brainwash people. There are many that have still not come to terms with the presidential elections that were won by Donald Trump and believe that the big tech giants’ dominance and influence may have resulted in unfair interference in the US election. They are concerned that due to their monopolistic nature, internet companies are able to influence the minds and hearts of voters. 

What is the US Government hoping to achieve?

Ultimately, by launching an anti-trust probe, the US government is hoping to attain greater control over how the internet works by either regulating or threatening to regulate internet companies. Regulations means control, jobs, money and influence by the government. The Government wants to get into the internet and start policing it. One way of doing this is by putting a lot of pressure on internet companies. 

These are some of the wealthiest and most influential companies, will it set a precedence to protect the users or lead the way for other companies to act more responsibly?

Governments are always minded, ensuring that the people they govern never become more powerful than government itself. The bigger and more influential internet companies become, the more vital it is in the eyes of the US government to limit their growth and influence. There are many in the US government who believe that internet companies have already grown to monstrous sizes and that this has to be stopped at nearly any cost.

Consumer Benefits

It is a rule of thumb that where there is competition, consumers benefit. It means lower prices, greater opportunities for everyone and an increase in innovation. If people are only exposed to certain news and certain products, they will not benefit and once competition becomes difficult to control, prices are high and there aren’t alternatives for consumers.  A serious probe into anti-competitive practices may result in fines at astronomical levels, this will compensate for the relative low rate of taxes some of these companies pay.

It will also result in more choice, less dictation of views, opinions and products by the internet companies to the consumer and in more free choice.

Us Antitrust Probe

US Antitrust Probe

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