Big Tech & Antitrust

The seemingly unstoppable expansion of Apple Inc., Alphabet Inc., Amazon.com Inc., and Facebook Inc. in the smartphone ecosystem, digital advertising, e-commerce, and social media could decelerate as the tech giants face scrutiny from the U.S. Congress, Department of Justice (DoJ), and Federal Trade Commission (FTC)--and that's naming only the domestic regulators.

The DoJ and FTC have favored self-regulation to avoid hindering innovation. And they haven't established a framework to regulate and provide ongoing monitoring of the rapidly changing technology industry. However, as the complaints from competitors and consumers have become more frequent, and as regulators themselves--as consumers--recognize the scale and power of these companies, they have mobilized. Regulators now have the difficult task of determining whether the rising concentration of market power in a handful of large tech participants acts in ways that are harmful to consumers and competitors, or, as large tech companies have asserted, promotes rapid innovation and job creation.

The U.S. Justice Department filed an antitrust lawsuit against Google on Oct. 20 alleging that the company unlawfully maintained monopolies in the general search, search advertising and general search text advertising markets through "anticompetitive and exclusionary practices.

European regulators' decision to bring antitrust charges against Amazon.com Inc. could be a harbinger of developments in the U.S., with regulatory uncertainty likely to extend well into 2021, legal and industry experts say.

In charges announced Nov. 10, the European Commission accused Amazon of violating EU antitrust rules by using data from third-party sellers on its platform to compete against them with its own retail business. The majority of sales on Amazon's site are sold by third-party merchants.

Amazon faces similar allegations in the U.S., where lawmakers have alleged that the company is undercutting small businesses by using data from third-party sellers to inform its own products.

China's antitrust probe into Alibaba Group Holding Ltd., the country's largest and most high-profile internet company, is more about sending a message to the tech industry than targeting the group and its founder Jack Ma, industry observers said.

Beijing's series of actions relating to Alibaba, which include an investigation into alleged forced exclusive deals with merchants and the blocking of its affiliate Ant Group Co. Ltd.'s IPO, is intended to show the country's thriving internet sector that no one is above state rules and that any violation will be dealt with swiftly and severely. Influential internet companies such as Tencent Holdings Ltd., Meituan and Pinduoduo Inc. may find themselves subject to similar levels of scrutiny in 2021, they said.