Big Tech had a big year in more ways than one, paving the way for what could be a consequential 2021 for the world’s largest technology companies. Or so antitrust advocates hope.
In a year when quarantines and stay-at-home advisories kept people at home — and on the internet — lawmakers and regulators across the political spectrum woke up to the extent of technology’s impact on the public, with seemingly renewed resolve to tame the sector’s excesses.
The “era of self-regulation is over, and congressional action is required,” said Rep. David Cicilline, D-R.I., at a New York Times event in December.
Cicilline is the chairman of the House antitrust subcommittee that wrote a 449-page report released in October that characterized Amazon, Apple, Facebook and Google as companies that were once “scrappy, underdog start-ups that challenged the status quo,” but have now become outsized monopolies, akin to the “oil barons and railroad tycoons” of yesteryear.
In the past couple of months, Google and Facebook have been slapped with lawsuits from dozens of states, with the Department of Justice going after Google and the Federal Trade Commission zeroing in on Facebook over antitrust or predatory behavior. Officials have also been looking into Apple and Amazon, whose respective App Store and e-commerce marketplace have drawn other litigation and inquiries in the U.S. and abroad, especially Europe.
It’s part of a heightening swirl of scrutiny leveled at tech giants over a range of issues, from anticompetitive moves against emerging rivals to questionable policies around data privacy and disinformation. Nor is it restricted to only the U.S. tech titans — the Chinese government also has gone after its largest tech companies in recent months, particularly Alibaba, which may have as much to do with politics and centralized control as it does with consumer protection. Late last month the government fined leading tech companies, including Alibaba and JD.com, for allegedly misreporting prices and false promotions.
Underneath it all, the underlying concern is the same — that tech companies have grown too powerful and are wont to abuse their market positions.
One reason platforms have grown to such gargantuan proportions is because of protections such as Section 230 of the U.S. Communications Decency Act, which legally shields them from liability over the content posted by users.
While various politicians believe Section 230 should be revised, there’s no consensus on what changes need to be made. Senate Majority Leader Mitch McConnell introduced a late-breaking “poison pill” tying a much-needed $2,000 stimulus package — demanded by both President Trump and House Democrats — to a blunt repeal of the law, for which the President has also repeatedly called.
This roller-coaster ride will continue into 2021, but whether it slows or ramps up under a new administration is an open question.
The administration of Joe Biden and Kamala Harris sits atop a Democratic Party keen on reining in Big Tech, but the president-elect and vice president-elect have been historically friendly to the sector. Their campaign raised massive funds in Silicon Valley and their transition teams include several members from tech’s ranks.
There are high stakes on what happens next. Chase White, an analyst at Height Capital Markets, believes “Biden will largely let the DOJ and FTC take the reins on Big Tech antitrust enforcement,” he said in a note. The DOJ and FTC will likely rely more on court decisions than consent decrees, he contended, which — depending on how they rule — risks setting legal precedent in favor of tech companies.
That would “make pursuing other cases tougher going forward and embolden the companies,” he added.
As for data privacy and misinformation, or Section 230, both sides of the aisle want to see change, but can’t agree on what that should look like.
All of these matters strike at the heart of how online platforms operate, which has far-reaching implications. But for retail specifically, the data privacy question may have the most direct and immediate impact.
“From a technology perspective, there’s always questions about data protection and privacy and what the big technology providers are doing, as they’re creating new customer experiences and new forms for people to interact with,” said Carrie Tharp, vice president of retail and consumer for Google’s cloud division.
She knows that scrutiny over how companies handle privacy and data isn’t going away, but perceptions may hinge more and more on transparency and what consumers are willing to tolerate for the sake of convenience.
“For me, I really see technology companies like Google stepping up and saying, ‘We want that to be in the hands of the end user, of the end customer’.…As we talk about some of these customer experiences we have today, that’s providing value to you as a person, are you willing to share that information?” Tharp continued.
“I think we’re going to continue to see this evolution of people wanting to have understanding and transparency of all this cool technology, and the technology companies rising to that occasion,” she said.
The notion that Big Tech will step up in this and other ways is an optimistic point of view, and one that officials like Cicilline clearly don’t share.
Meanwhile, according to recent reports, companies like Google, Amazon, Facebook and Microsoft seem to be hedging their bets by working to seed candidates in a variety of agencies — including the U.S. Commerce Department, Office of the United States Trade Representative, the Office of Information & Regulatory Affairs, the State Department and the Department of Defense.
Their success is being determined in real time right now, and it will become even clearer in the weeks and months ahead.