From antitrust lawsuits to a potential privacy law and restrictions on protecting free speech, Silicon Valley will face calls for increased regulation next year.
Lawmakers on Capitol Hill want to curb the rampant power of big tech.
For more than a decade, lawmakers and regulators have ignored Silicon Valley. But all of that is likely to change for big tech companies like Amazon, Apple, Google, Facebook and Twitter as the people in charge in Washington seek to rein in their power and influence.
Politicians and senior officials on both sides of the aisle are increasingly concerned about the power these companies wield – how it can harm consumers by allowing firms to stifle competition from smaller players, use personal data for profit, and distort what is shared in the media and consumed online.
Some on Capitol Hill are calling for a full-scale reset. In October, the House Judiciary Committee released a scathing 449-page report that concluded that Amazon, Apple, Facebook and Google had become centers of monopoly.
“Companies that were once ragtag failed startups that challenged the status quo have turned into monopolies that we last saw in the era of oil barons and railroad tycoons,” the report says.
Many Democrats in Congress support legislation to break up technology monopolies. And in the past two months, Google and Facebook have been sued from dozens of states across the country. Meanwhile, President Donald Trump’s Justice Department is pursuing Google, and the Republican-led Federal Trade Commission has filed a lawsuit against Facebook.
President-elect Joe Biden is gearing up to take office in January, and as the new Congress gets underway, the days of rampant power of big tech seem numbered.
“Everyone agrees that there is a serious problem that needs to be addressed,” Rep. David Chichillin, a Rhode Island Democrat and chairman of the House Antitrust Committee (who wrote the October report), told the New York Times earlier in the debate. “The era of self-regulation is over, and Congressional action is needed,” he said.
Major challenges Big Tech will face in the coming year: the antitrust goals set by some of the world’s largest tech companies are getting bigger. Google and Facebook are already facing numerous lawsuits from federal and state law enforcement agencies, as well as regulators.
And it will be even worse. Here’s a rundown:
In October, the Justice Department filed a lawsuit alleging that Google used anti-competitive tactics to preserve its search engine business. On December 17, 38 states filed an antitrust lawsuit against the company, accusing it of illegally monopolizing digital advertising and engaging Facebook to rig advertising auctions. These states also allege that Google manipulated digital advertising markets in violation of antitrust laws. Another group of state attorneys general, led by Colorado, is also expected to file an antitrust case against Google.
The social media giant is facing legal action from the Federal Trade Commission and a coalition of more than 40 states and territories. The lawsuit accuses the company of illegally suppressing innovation and competition by buying and suppressing small startups. Instagram Facebook’s acquisition of WhatsApp and Instagram is being challenged by the lawsuit, which calls for Facebook to stop acquiring WhatsApp and Instagram.
So far, neither Apple nor Amazon are suing either the U.S. government or the states, but the trial Chamber report also singled them out for their behavior. The report accuses Amazon of having monopoly power over third-party sellers on its site. And it accuses Apple of monopolizing its App Store.
While the lawsuits are being litigated, there is a growing desire among lawmakers on both sides to pass antitrust legislation that could go far beyond the technology industry and affect all concentrated industries.
Who owns your personal data, and how should companies protect the information they collect about you? This is a big question that many people hope Congress will answer in 2021.
In December, there were signs that Democrats and Republicans on the Senate Commerce Committee were beginning to find common ground for legislation. Earlier this month, the committee held a hearing that included testimony from a bipartisan group of former FTC commissioners, including three former chairmen. Major differences between Democrats and Republicans over the proposed law remain, but it seems that the federal privacy law is likely to be one of the top items on the agenda of the next Congress.
The FTC is also putting some pressure on companies, asking several, including Amazon, Facebook, Google, Twitter and ByteDance, owner of TikTok, for information on how they collect and use their users ‘ personal information. The FTC also wants to know how these companies sell this information to advertisers and how this practice affects children and teens.
“These digital products may have been launched for the simple purpose of bringing people together or fostering creativity,” FTC commissioners Rohit Chopra, Rebecca Kelly Slaughter and Kristin Wilson wrote in a statement confirming the requests. “But over the past decades, the industry model has shifted from supporting user actions to monetizing them.”
The statement said: “Never before has there been an industry capable of tracking and monetizing so much of our personal lives. Social media and video streaming companies are now following users everywhere through apps on their ever-present mobile devices. This ongoing access allows these companies to track where users go, the people they interact with, and what they do.”
According to members of the Commission, the fact that these companies are doing with data, “remains worryingly opaque”.