For the first time in decades, the U.S. and E.U. are going on the offense against allegedly monopolistic behavior by some of the largest technology companies in the world, including Google, Apple, Amazon, Microsoft, and Meta.
U.S. Legal Moves Against Google
In May, the Department of Justice argued in court that Google represents an illegal monopoly, commanding too much control over the online search market. Google’s worth is estimated at $2 trillion dollars, and its success is largely related to its control over the online search space.
Broader Targets
After federal regulators have been relatively hands off the innovative technology industry for nearly two decades, they are beginning to crack down on all of the most recognizable brands, including Google, Apple, Amazon, Microsoft, and Meta.
EU’s Investigation into Google
Corresponding bodies in Europe are also attempting to reign in the power and accumulation of ownership of the technology behemoths. Specifically, the European Commission is considering whether Google violates the Digital Markets Act which is a new law aimed at preventing one company from amassing monopolistic control over an aspect of the online marketplace.
Legal Challenges and Industry Impact
A change in the power dynamic can be seen in the current political-technology landscape as regulators work to gain an upper hand after the internet and online world developed relatively free of intervention for more than a decade.
Power Dynamic and Interdependence of Government and Technology
Governments are reliant on technologies provided by these firms across all areas from defense to medical records administration. At the same time, governments also see national security vulnerabilities with regard to the potential reach and access to information seen in current legal battles with TikTok, for example.
Challenges in Regulatory Speed and Effectiveness
In the EU, competition chief Margrethe Vestager stated concern that regulators are always a few steps behind the quickly innovating technology industries and may not be able to move quickly or decisively enough to reshape the technology landscape that grants outsized powers to few firms.
Differing Approaches in the U.S. and EU
The approaches to breaking up monopolies in the technology industry vary greatly between Europe and the United States, causing the companies under scrutiny to work twice as hard to defend themselves from two different angles.
Differences Between US and EU Regulatory Frameworks
In the U.S., each antitrust and monopoly case must originate individually from lawsuits against the firms. In the EU, the sweeping new digital antitrust law has ushered in review of several large companies under investigation.
Industry Response to Regulatory Pressures
The large firms are feeling the heat and responding with frustration. The technology companies are critical of having to negotiate and accommodate opposing regulatory frameworks within the Western world.
Specific Antitrust Actions in the EU
The new EU law from the past few years, the Digital Markets Act, aims to break up monopolistic behaviors through measures ranging from imposing fines on the more minor end to dismantling companies on a larger scale for companies that violate the law more than three times over a given period of time. The law targets companies that have more than 45 million European users.
The law has been in effect since March, and Google, Apple, and Meta are already under investigation for violations.
Adaptations and Compliance
Out of necessity and to avoid consequences of the law, technology companies have begun adapting to the new EU framework. Some company changes have been criticized as being superficial, meant only to comply with the letter of the law, rather than representing real change that will invite competition.
Risks and Innovations
One of the reasons US and European regulators have been relatively hands off the technology space in recent decades was in a conscious attempt to not hinder innovation. Increased interventions at this point may still slow down innovation.
Overregulation Could Slow Down Technology Rollout and Adoption
One example of potential downside to increased regulation is that Meta had to delay the release of new products in the EU to ensure compliance. This could happen at a large scale, decreasing the incentive for companies to innovate and to push out new technology products for users in the rapidity users currently expect.
U.S. Focus on Individual Lawsuits
In a framework contrasting with the EU, in the U.S, there is no new sweeping and broad technology antitrust legislation, and regulators rely on the legal process to determine whether or not individual companies in individual instances violate existing antitrust statutes. It would be potentially possible, after a lengthy legal battle including the ability to appeal outcomes, for a court to break up a company like Google or Meta.
Transatlantic Cooperation and Challenges
Although the regulatory frameworks in the EU and the U.S. differ significantly, there is consensus between the two that there needs to be a better way to assess and address the largest technology firms control over an outsized share of the competition. Regulators from the two entities are currently communicating and collaborating to find ways to best address the issues both bodies face.
Long-term Implications for the Tech Industry
The free ride for technology companies appears to be over, as regulators on both sides of the Atlantic attempt to regain reasonable control over the monopolistic practices evident in the largest technology companies today.
