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Up to 20 States to Begin Antitrust Investigations into Big Tech

Devin Pickell
Devin Pickell  |  August 23, 2019

No other industry today has seen such rapid growth quite like the tech industry.

Many of today’s groundbreaking innovations in artificial intelligence, machine learning, advanced analytics, and other key technologies can be chalked up to the tech industry.

However, these innovations do come with skepticism. This is partially due to the growth of tech outpacing the federal government’s ability to analyze the market and regulate accordingly, but also because of the recent scandals involving big tech (Facebook, Google, and Amazon). We’ll discuss these scandals later.

As a result, big tech is set to come under microscopic focus from the Department of Justice (DOJ) and state attorneys from up to 20 states, according to a report from The Wall Street Journal.

The focus? Antitrust enforcement.

Big tech and antitrust laws

For those unfamiliar with antitrust laws, they are regulations that monitor the distribution of economic power in today’s business landscape. Antitrust laws exist to stimulate healthy competition across all industries and reduce predatory acts designed to monopolize power.

When it comes to big tech, the DOJ is looking to analyze how Facebook, Google, and Amazon scaled so rapidly in such a short timespan. A bipartisan group of attorneys from up to 20 states would also like to assess whether big tech is using its dominant market position to stifle competition.

Owning their respective markets is a common theme amongst big tech companies. For example, in 2016, Amazon accounted for 37 percent of the entire U.S. e-commerce market share – that number is expected to reach 50 percent by 2022. Google dominates the global search engine market share, with more than 90 percent of all searches going through the tech giant.

Criticisms of big tech also stem from concerns related to how consumer data is being used. In July 2019, representatives from each company were called in to testify before Congress to discuss the uses of data:

  • Facebook – Questioned about its vulnerabilities and protection of profile data. This came off a $5 billion fine issued by the Federal Trade Commission (FTC) for violating terms of its consent agreement.
  • Google – Questioned about its ad placements and potential manipulation of search results. This came off Republican criticisms that Google was suppressing conservative viewpoints on its search engine.
  • Amazon – Questioned about its data collection methods and private labeling practices. This refers to selling existing products on Amazon but under your own brand name.

Big tech’s rebuttal

Despite the criticisms, big tech feels it has had a more positive impact on society than a negative one. This is mostly based on a recent Zogby poll cited by NetChoice.

Here are some key takeaways from the poll, based on the feedback of 1,200 respondents from the U.S.

  • 58 percent of respondents said online platforms helped them discover a small business they had not previously known.
  • 72 percent of respondents said online platforms helped them to better engage with their communities.
  • 77 percent of respondents said the ability to place digital ads on online platforms is beneficial to small businesses.

Domination of market share and consumer data in exchange for personalized ads, increased exposure of small businesses, increased connectivity, and better community engagement? This has been the ongoing debate.

What’s next for big tech?

More thorough research and questioning will determine whether or not big tech has become too “big.” Apple’s CEO Tim Cook and Facebook’s founder Mark Zuckerberg have already publicly agreed that some sort of regulation seems appropriate. Exactly how much regulation is still undecided.

If the big tech antitrust situation has taught us anything, it’s that no matter how big or small your organization, business ethics should always be considered – especially when dealing with sensitive consumer data.

Read more below to learn why conducting ethical business can actually be extremely beneficial in the long run.

Learn more: The Guide to Business Ethics →

Devin Pickell
Author

Devin Pickell

Devin is a Content Marketing Specialist at G2 Crowd writing about data, analytics, and digital marketing. Prior to G2, he helped scale early-stage startups out of Chicago's booming tech scene. Outside of work, he enjoys watching his beloved Cubs, playing baseball, and gaming. (he/him/his)