Big Tech’s omnipresence is reflected throughout our everyday lives. Names like Microsoft, Netflix and Amazon have become customary for the products and services they offer. The Apple logo is ubiquitous everywhere from smart speakers to iPads, while “Google-ing” has become synonymous with online searches.
Such everyday euphemisms come from a tech sector dominated by a handful of powerful companies collectively known as “Big Tech.” However, their dominance might be at risk. Last month, the United States saw the beginning of two legal battles that could permanently reshape the tech landscape into one without Big Tech monopolies.
On September 12, a long-awaited trial began against Google in Washington District Court. Filed by the US Department of Justice (DOJ), it purported that Google had deliberately blocked smaller companies from competing in the search engine industry.
Two weeks later, on September 26, a joint suit was filed against Amazon by the Federal Trade Commission (FTC) – the US agency responsible for market fairness – and several state attorneys.
Both legal cases claim that the two key Silicon Valley companies – pillars of the US tech landscape – abused their power to maintain near-total control over the online shopping and search engine industries.
These two legal challenges are the largest against the American tech sector in the last 20 years, comparable only to the landmark case against Microsoft two decades ago. In 2001, Microsoft agreed with US regulators to allow users to download and operate non-Microsoft programs, like Java, on Windows PCs.
If either case is settled favourably for prosecutors, the victory could signal a weakening of Big Tech’s long growing power over the tech industry. Ultimately, they might herald the dismantlement of Silicon Valley’s griphold on the tech industry. Elettra Bietti, an associate professor at the Northeastern University School of Law, sees this as greater public inclination for “more proactive enforcement against Big Tech.”
The US government’s actions come at a time of unprecedented Big Tech influence over not only the tech sector, but the world economy as a whole. According to Investopedia, seven out of the ten largest companies in the world (by market cap) are American tech companies.
In turn, Big Tech companies have near-complete control of their respective industries. Amazon dominates American online retail with 37.8 per cent of total sales, while Google accounts for 83.5 per cent of the global search engine market.
Silicon Valley companies’ supremacy has created a perfect breeding ground for monopolistic practices. The DOJ alleges that Alphabet, which owns Google, spends billions every year on ensuring Google is the default search engine used by its business partners, such as in Apple devices. Such practices are exclusionary, and are aimed at preventing smaller search engines from gaining users, argues the DOJ.
Similarly, the FTC claimed that Amazon has used its “monopoly power to inflate prices, degrade quality, and stifle innovation for consumers and businesses.” In 2021, the Biden administration appointed Lina Khan, a prominent critic of Big Tech and particularly of Amazon, as the new chair of the FTC. While still a law student, Khan was notable for publishing an influential paper arguing Amazon’s pricing practices were anticompetitive, squeezing small businesses out of the online market by limiting their profitability.
The US government’s moves come late into a tech economy dominated by large corporations. Since the Microsoft case, little action has been taken against the takeover of fledgling tech sectors by established companies. Some have attributed this to the US government’s inability to adapt to the rapidly-evolving tech industry. Others have argued that the federal government’s policy of corporate deregulation, a philosophy passed down from the Reagan era, is the primary reason for the slew of big corporation takeovers, both in Silicon Valley and in other industries.
Globally, the US still remains behind many other countries in holding tech companies in check. Just this summer, the EU won $1.3 billion USD in compensation from Meta for transferring European user data to the US, in breach of EU data privacy laws. And in 2021, online retail giant Alibaba was fined a record $2.8 billion USD by Chinese regulators for abusing merchants with its monopoly powers.
Nonetheless, the current actions of the US government are likely to come as a relief to smaller companies and consumers alike. In the past, antitrust lawsuits put forward by private plaintiffs have often been rejected by federal judges. A notable example is Epic Games’ 2020 lawsuit against Apple’s 30 per cent commission on web store products, which was thrown out on the grounds of insufficient wrongdoing by Apple. For Eleanor Fox, a law professor at New York University, private suits are often viewed as petty by judges, and are not taken seriously.
Now that the US government is stepping up to confront the monopolised tech sector, it remains to be seen whether the hold tech monopolies have over our lives will be weakened or not. Only time will tell if the US will rein back the juggernaut of Big Tech.