- On December 17, 38 US states and territories sued Google’s parent Alphabet for allegedly abusing market power in its search service.
- On December 16, the state of Texas and a group of state attorneys general sued Google for allegedly anticompetitive advertising practices.
- On December 9, 46 US states, plus Washington, DC and Guam filed a lawsuit accusing Facebook of anticompetitive behavior through its acquisition strategy.
There’s bipartisan support for these suits, Democrat and Republican authorities are parties
Fed government moved earlier
- In October Department of Justice sued Google, alleging illegal use of market power to hobble rivals.
- States that filed their lawsuit last Thursday have said they will seek to consolidate their complaint against Google with the Justice Department’s.
- U.S. Federal Trade Commission has also sued Facebook for similar reasons.
- States and FTC are asking Facebook be forced to sell WhatsApp and Instagram, saying this is part of “buy and bury” strategy against competitors
- EU planning laws — Digital Services Act (DSA) and Digital Markets Act (DMA) – that will affect these companies, and others.
- DSA asks tech companies to explain how their algorithms work, open up their advertising archives to regulators and researchers, and do more to tackle harmful content.
- DMA wants sharing of certain kinds of data with rivals and regulators; and outlaws favouring tech companies’ own services.
- Repeated breaches can invite huge fines and mandatory break-ups
- UK will have a new competition regime next year to prevent Google and Facebook using their dominance.
- The newly-created Digital Markets Unit may get powers to suspend, block and reverse decisions made by technology firms and to impose financial penalties for non-compliance.
- Govt also said new rules will help the news industry
- France’s finance ministry sent out notices on Nov 30 to big tech companies liable for its digital service tax to pay the levy as planned in December.
- Earlier this year, a French regulator told Google to negotiate with publishers over payment for news content, and the matter remains before courts.
- In November, Google said it had signed copyright agreements with six French newspapers and magazines.
- Canada plans to impose a tax on corporations providing digital services from 2022.
- Australia’s parliament on Dec. 9 introduced legislation that would make Facebook and Google pay for news through negotiated agreements with media outlets.
- If they cannot strike a deal, a government-appointed arbitrator will decide the rates for them, according to the proposal.
So, what may all this mean for tech giants?
- US lawsuits against promise to be the biggest antitrust cases in a generation, as big as the lawsuit against Microsoft filed in 1998. That lawsuit was credited with clearing the way for the explosive growth of the internet.
- But proving these claims in courts may not be easy. For example, in Facebook’s case, it has to be proved acquisitions broke anticompetitive rules at the time of buying.
- These are also very complicated matters. Google’s algorithms will be investigated for built-in bias. Its online ad auction platform, AdX, will be analysed to see whether its rules are definitely rigged.
- But these two companies face serious risks even if they aren’t broken up or don’t lose all cases.
- Both will likely spend years in legal battles across multiple courts.
- They may have to release of reams of documents, including potentially embarrassing emails, and chief executives will likely be grilled by prosecutors.
- And if these suits stop them both from making deals — such as pending purchase of FitBit (buyer Google) and Kustomer (buyer Facebook) – business costs will be greater.
- And remember the Microsoft example. It did bounce back after the antitrust case, but experts say that long scrutiny may have left it unprepared for the mobile internet age.
- Some pundits are wondering whether Google, Facebook may risk a similar outcome.