No promise of a happy new year for Big Tech as EU and US lawmakers bear down – The Irish Times

Big Tech is stepping into a year where the only certainty is that there will be much unwelcome uncertainty. And with so many of the major technology platforms calling Ireland their European home, that could have implications for Ireland Inc.

If 2019 and 2020 were the years of uncomfortable political hearings, when founders and senior executives were summoned for questioning before the US Congress, the European Parliament and, at one point, the Dil then 2021 promises to be the altogether far more sobering and alarming year of the antitrust investigation.

The political grillings seen over the past 18 months, especially in the US, have set the stage for what is to come next. By last July when we reached that odd hearing featuring the virtual appearances of the chief executives of Apple, Facebook, Amazon and Google/Alphabet before the US House of Representatives antitrust subcommittee, politicians questions were making it clear that anything the chief executives said could and would be used against them and their companies.

Following a 16-month long investigation of which a number of those US hearings formed a part, the fat (449-page) congressional report that eventually appeared in October proved this was indeed the case. It referenced testimony and documents, such as internal chief executive emails, to back its conclusion that much stronger regulatory and antitrust action was needed.

As 2020 came to a close, no fewer than five antitrust investigations against large technology and social media platforms were officially underway in the US, at both federal and state level: three against Google, and two against Facebook. More could be on the horizon for 2021.

Of these, the headliner is the suit against Google by the US justice department. It marks the first significant use of antitrust law by the US since it took on Microsoft at the turn of the millennium.

Focused on Googles search engine dominance and the companys ability to use its powerful position to potentially sideline smaller competitors, the action wont be heard until 2023. But if the Microsoft case serves as an example of what to expect, well be hearing lots of ongoing detail in 2021 as the case is prepared, especially as one of the other cases against Google announced in December and brought by Texas and nine other states may be rolled into the federal case.

The US Federal Trade Commission (FTC), as well as a large coalition of US states, are bringing separate antitrust cases against Facebook, demanding it be required to sell off its major acquisitions, WhatsApp and Instagram.

State investigations arent any less powerful, or worrying for the platforms, than federal actions. Think in terms of the situation in the EU, where member countries as well as the EU itself can bring cases against companies. Individual EU states, such as France and Germany, have brought punishing actions against the platforms in the past.

If anything, a multitude of separate US state actions might be worse than a single federal action, resulting in a multitude of different regulations and a huge headache for any company.

But theres more. The US justice department is also investigating Apple (seemingly centred on its App Store), and is believed to also be investigating Amazon, as well as further aspects of Facebooks operations. It noted in 2019 that it was looking at search, social media, and some retail services online.

The FTC is also investigating Amazons relationship with small traders on its platform businesses with which it sometimes competes directly.

Given the strong bipartisan antipathy to the big platforms, whether social, retail or search, the incoming Biden administration and a Biden-appointed justice department is likely to maintain the same cool relationship with the platforms as the previous administration.

And that is likely to be the case even as some tech industry figures have surfaced as actual or potential appointees within the administration. So far, executives from companies including Amazon, Airbnb, Lyft, Uber and Salesforce are in.

And since mid-November, former Google chief and chairman Eric Schmidt has been rumoured as a possible choice for a Biden tech industry taskforce, but this has been met with much public opposition.

On the other hand, the incoming US president has appointed Pete Buttigieg, who he ran against for the democratic presidential nomination, as his transport secretary. When campaigning in California, Buttigieg supported taxi drivers opposing Uber and Lyft, and also supported greater rights for gig workers and criticised Google and Uber in his economic policy proposals during the 2019 campaign.

His perspective in the West Wing is likely to carry far stronger weight than anyone in a lower level administrative role, or a tech policy adviser.

While recent fines and penalties emerging from the EU have indicated it remains no great friend of the platforms either, these recent moves from the US especially on the antitrust front mark a significant contrast between the US and the EU.

For years, the European Union was viewed (rightly) as the far stronger regulatory environment, and also as the torch-bearer for antitrust activity, given US silence in an area that had once been a US legal hallmark, delivering some of the most important, US public-benefiting actions, divestments and restructurings throughout the 20th century.

For years, many felt the EU would be the most likely source of significant antitrust moves against the platforms and, in particular, the most likely to enact one of antitrust laws most dramatic punishments: splitting up the big platforms by requiring a divestment of past major acquisitions.

Not that the EU has led by example in this area. It has repeatedly mirrored the US and approved highly controversial acquisitions, such as Googles takeover of ad giant DoubleClick, and Facebooks moves for Instagram and WhatsApp.

Still, many felt that EU would consider taking such action. In a sea change, European Competition Commissioner Margrethe Vestager indicated that, in the wake of a special report she had commissioned, she did not consider breaking up the platforms to be the best resolution to ongoing problems. The turnabout came as a shock to campaigners against the platforms.

However, the EU, with Vestager reappointed to the same commission role, has continued to use other aspects of EU antitrust law against the platforms, issuing major fines against companies including Google and Facebook.

At the tail end of 2020, Vestager announced major antitrust charges against Amazon, alleging it misuses data it acquires from sellers on its platform. A decision is expected in 2021. Other EU tech-related investigations are ongoing.

In addition, two major pieces of EU legislation the Digital Markets Act and the Digital Services Act (DMA and DSA) were published as draft proposals in December. Together they would impose sweeping changes in the way the big platforms operate, designating the largest as gatekeeper companies with significant additional responsibilities and operating constraints.

The DMA has a firm antitrust focus, and could allow companies to be broken up. As happened with the General Data Protection Regulation (GDPR) during its long evolution, much lobbying and argument lies ahead for the two pieces of legislation in 2021.

And yet, even as the EU was rattling its collection of antitrust swords with the publication of these acts, it also approved Googles controversial acquisition of FitBit, giving the search giant a massive tranche of health data generated by FitBits wearable fitness devices.

Mixed signals, indeed.

Regardless, given the growing, antagonistic antitrust and regulatory focus in both the EU and the US, there is certainly no promise of a happy new year in 2021 for Big Tech.

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No promise of a happy new year for Big Tech as EU and US lawmakers bear down - The Irish Times