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The Beginning of the End for Big Tech’s Global Dominance?
In both the East and West where citizens increasingly value their privacy, regulators are clamping down on Big tech and e-commerce companies which have long exploited data they collected from users to further their dominance and curb competitors.
20 April, 2021

In the past decade, the world has witnessed the rapid rise of Big Tech and e-commerce giants, which have also become the winners during the pandemic with booming stock prices and growing revenues. However, the era of unchecked expansions might be at an end with competition watchdogs and legislators all over the world clamping down on the likes of Google, Facebook and Amazon in fear that they have become too powerful.

The European Union’s antitrust laws has long been praised as one of the most effective and comprehensive systems which protects consumer interests. Now, the EU is turning its eye towards Big Tech. For the first time ever, the EU is set to bring antitrust charges against Apple acting on a complaint brought two years ago by Spotify, which alleged Apple was taking a 30% cut of its subscription fees for featuring it in the App Store and denying it the right to tell its users that other ways of upgrading were available.  If the case is successful, it would seriously hinder the provision of Apple’s wide-ranging digital services, which is now its second biggest source of revenues after the IPhone. The EU’s move is echoed by the UK’s Competition and Markets Authority which announced an antitrust probe into whether Apple abuses its dominance on the App Store by imposing unfair terms on developers. Other Big names such as Google and Amazon are pursued by EU regulators for alleged abuse of dominant positions and data manipulation to gain an unfair competitive edge

The EU has also proposed the Digital Services Act and the Digital Markets Act, aiming specifically to curb the power of Big Tech companies. The proposed legislation would create a level playing field for digital services and encourage innovations by technology startups by introducing various new obligations for different service providers. Universal obligations include transparent reporting and introducing terms of service due account of fundamental rights. Although the two acts will not be enacted until at least spring 2022 and have been troubled with infighting between Member States, the EU and the UK appear to be determined to curb the influence of Big Tech and protect domestic rivals.

On the other side of the Atlantic, the US competition watchdogs are setting their sights towards Facebook. At the end of 2020, the US Federal Trade Commission (“FTC”) and 48 state attorney generals brought an antitrust claim against Facebook. The case which is predicted to be the largest legal battle against a US company in decades accused the social network of abusing its “dominance and monopoly power to crush smaller rivals, snuff out competition, all at the expense of everyday users.” The FTA singled out Facebook’s acquisition of Whatsapp and Instagram as acts to neutralize competition in the social media industry, and aims to force Facebook to sell WhatsApp and Instagram in order for them to compete against it. If the FTA succeeds, it will be the first time an antitrust lawsuit has succeeded in forcing the split of a major corporation since 1984 in the US. However, most antitrust lawyers have agreed that the case will take years to fully unfold while Geroge Hay, professor of law at Cornell University predicts that Facebook would drag out the case for years as it is not facing any potential fines or criminal sentencing. Nevertheless, the case still represents one of the most serious threats that Faceback has ever faced and signals that the US authorities are now actively dealing with tech dominance, despite most of the major players being american companies and hailed as national champions by some.

China has always sealed its huge domestic markets against western tech companies and e-commerce platforms, and instead has its own versions such as Alibaba, Tencent and Baidu. Benefitting from the lack of international competition, these companies now dominate the Chinese markets with Alibaba (an e-commerce giant similar to Amazon) recording 72 billion US dollar in revenue last year. However, the Chinese regulators are increasingly aware of the potential economic risks if these companies grow too powerful. For instance, China suspended Ant Group’s (an affiliate company to Alibaba) $37 billion IPO partly partly in fear that Ant’s online loan and payment platform services might threaten China’s economic stability and its plan to release the Digital Yuan (China’s currency). China’s determination to keep private Big Tech and E-commerce platforms under check is evident by their willingness to halt what would be the biggest IPO in history. The recent vow from Pony Ma (Tencent’s founder and China’s second richest man) that Tencent will be “as compliant as possible” after meeting with anti-monopoly regulators further illustrates that in China, no private company is allowed to dominate the market up to a point that the communist party would lose control of the economy.

In both the East and West where citizens increasingly value their privacy, regulators are clamping down on Big tech and e-commerce companies which have long exploited data they collected from users to further their dominance and curb competitors. With public sentiments increasingly against Big tech for their controversial measures taken for political advertisements and false information, tighter regulations and enforcement is predicted- similar to how the banking sector is now tightly regulated after the 2008 financial crisis.

3rd year Law student at KCL

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