The hits just keep on coming for the beleaguered industry.
The hits just keep on coming for the beleaguered industry.
A s Big Tech’s power grew, pushback became inevitable. And in recent weeks, no fewer than five different assaults on the industry’s largest players have burst into the news cycle. Three different legal campaigns are underway, legislators are proposing changes that would make such suits easier in the future, and a Supreme Court justice thinks the judiciary has given tech companies more leeway than current law requires.
There are several philosophies as to how the government should treat these matters. Libertarians prefer a hands-off approach, relying on the market to discipline business. Populists left and right prefer more aggressive tactics, such as breaking up big companies so they don’t have the power to bully their competitors. Those in the middle, such as yours truly and some Republican politicians, balk at breakups but wouldn’t mind stronger rules to stop the worst anti-competitive practices.
There’s no telling where we’ll end up. But all five of these efforts, in one way or another, aim to knock tech giants off their pedestals.
1. The Justice Department and state attorneys general are prepping an antitrust campaign against Google.
This is the biggest threat of the five, and it mirrors other antitrust campaigns across the world. Basically, Google runs an entire ecosystem of different products, and it leads the market in several areas, including a whopping 90 percent share of the search-engine market. This gives it opportunities to leverage its power in ways that, depending on one’s perspective, are either highly consumer-friendly or highly questionable. State and federal officials are working together to bring the matter to court.
The actual lawsuits are still being finalized, with one expected to be filed this week, but as Bloomberg summarizes, the basic question is whether Google illegally “uses its dominance of online search, web browsers, and advertising technology to unfairly block out rivals, pressure businesses into buying more ads, and benefit the rest of its digital empire.” Officials could seek truly drastic remedies, including forcing Google to sell off the Chrome browser or parts of its advertising business.
This would take the company down a peg and help some competitors gain a foothold. It would also eliminate the efficiencies Google achieves by running all of these products in conjunction with each other — and represent an enormous display of raw power by the government.
2. House Democrats want stricter antitrust enforcement and new laws to make it happen.
An antitrust subcommittee in the House has released a roughly 450-page report on the issue. Contained therein is a comprehensive wish list for the new antitrust movement.
The report focuses on Google, Facebook, Amazon, and Apple, and it notes that these companies “have captured control over key channels of distribution and have come to function as gatekeepers.” The firms are said to “exploit their gatekeeper power to dictate terms and extract concessions that no one would reasonably consent to in a competitive market,” to “run the marketplace while also competing in it,” and to acquire upstart competitors to maintain their dominance.
The report’s list of proposals is long and aggressive: Its authors would stop dominant platforms from “operating in adjacent lines of business,” using their control of a platform to disadvantage competitors, or merging with or acquiring other businesses; beef up the Clayton and Sherman Acts to crack down on practices such as predatory pricing and vertical mergers; make it easier for private parties to challenge practices such as forced arbitration in court; and much more.
The subcommittee’s Republican minority drafted a briefer response as well — a reply that was incredibly cordial and agreed that the power of Big Tech is a problem, while calling some of the majority’s ideas “non-starters for conservatives” and advocating a gentler set of reforms (shifting some legal standards in antitrust and merger cases, reforming predatory-pricing rules, that kind of thing). This is hardly an area of sweeping bipartisan consensus, but many Republicans seem open to making life a little harder for Google et al.
So the tech giants face enemies left and right, which means that they should be worried no matter what happens on Election Day.
3. Clarence Thomas thinks many tech companies are overly shielded from liability.
Section 230 of the Communications Decency Act has become controversial over the past couple of years, being the subject of both a bill from Senator Josh Hawley and a proposal from Trump’s Justice Department. Now it’s drawn some scrutiny from Supreme Court justice Clarence Thomas as well. Thomas’s issue isn’t with the policy itself — that’s not his job as a judge — but with the way courts have interpreted it.
Section 230 basically says that when a user posts something illegal to, say, Facebook, Facebook itself can’t be held liable. It also gives companies like Facebook the right to remove or curate users’ posts in most situations without forfeiting their immunity.
This week, the Supreme Court declined to take a case involving Section 230. Thomas agreed with that decision, but he also penned about ten pages of text (starting halfway through this document) arguing that the Court should weigh in on Section 230 in the future. He provides a lengthy list of cases in which courts have interpreted Section 230 broadly, giving tech companies sweeping immunity in ways that arguably don’t jibe with the provision’s text. For example, courts have held that “§230 confers immunity even when a company distributes content that it knows is illegal” and given “Internet companies immunity for their own [not just others’] content.”
These issues are complicated, and how many other justices might agree with Thomas is a tough question. But he’s opened the door to a future Court’s narrowing this very tech-friendly provision of federal law.
4. Oracle says Google infringed its copyright.
The legal details of this case are brain-meltingly boring. But the gist is that Google “reimplemented” elements of the Java programming language for use in its Android operating system, and in so doing copied about 11,000 lines of code. Oracle, which owns Java, says this violates its copyright. Google says the type of code it copied — the “declaring code” of some “application programming interfaces” — isn’t copyrightable, and even if it is, the copying here falls under the “fair use” exception to copyright law. (For a good, detailed look at the key concepts here, see this post.)
The case is at the Supreme Court, and oral arguments didn’t go well for Google, for whom a loss could cost billions. Such a result would stand up for the principle that you can’t copy other people’s creations and use them to launch a competing product, though it would also cause some havoc in the tech world, where this specific type of copying is apparently pretty common.
5. Epic is fighting Apple’s fees for in-game purchases.
The video game Fortnite is all the rage with the kids these days, and one way to play it is on Apple mobile devices, which run on iOS, Apple’s own operating system. The rule on iOS is that when a game collects payments from users, Apple processes the payments and takes a 30 percent cut. Game-maker Epic brazenly defied that policy, rejiggering the Fortnite app so it could collect payments directly, and in response Apple removed Fornite from its App Store, the only source of apps on iOS.
Now Epic is suing on antitrust grounds, claiming Apple is abusing its monopoly over the iOS marketplace. Apple replies that iOS is no monopoly — Fortnite is available on a variety of different platforms, including Android devices, PCs, and traditional video-game consoles — and that there’s nothing illegal about setting its own rules on its own platform.
The case is headed for a bench trial next year, and thus far the judge does not seem too amused by Epic’s stunt. But regardless of the outcome, this is yet another high-profile attack on a huge tech company making tons of money.