The well-known metaphor of the "white whale" is often used to describe the pursuit of something with little chance of success, akin to Captain Ahab's pursuit of Moby Dick. It's an obsession that dominates one's thoughts and actions. Lina Khan, the chairperson of the Federal Trade Commission (FTC), embodies this pursuit in her relentless focus on Amazon.
File photo, Lina Khan, speaks during a Senate Committee on Commerce, Science, and Transportation confirmation hearing on Capitol Hill in Washington. (Saul Loeb/Pool via AP) ASSOCIATED PRESS
On September 26, 2023, the FTC, along with the attorneys general of 17 states, finally filed a long-expected lawsuit against Amazon, alleging anti-competitive behavior in violation of federal antitrust laws. The lawsuit, filed in the Western District of Washington, primarily targets Amazon's Prime program, accusing the company of employing manipulative, coercive, or deceptive user interface designs to trick consumers into enrolling while making it difficult to cancel the subscription.
This landmark lawsuit is part of a series of actions taken by both the FTC and the Antitrust Division of the Department of Justice since the Biden Administration took office in 2021. President Joe Biden's appointments of Khan and Jonathan Kanter to head the Antitrust Division signaled a stronger federal stance on antitrust law enforcement. Both Khan and Kanter are considered antitrust hawks, advocating for significant reforms, particularly focused on Big Tech.
In essence, there are three primary antitrust concerns with Big Tech. First, these companies wield monopolistic powers to the detriment of consumers and suppliers. Meta, Google, and Amazon dominate their respective markets, making it almost impossible for meaningful competition to disrupt the market. Their sheer size and high entry costs deter competitors. By absorbing or eliminating competitors, Big Tech likely violates concepts of horizontal integration.
Second, these companies use their significant capital from dominating their original markets to enter new markets and move up the supply chain of existing markets. This is referred to as vertical integration in antitrust law. By controlling their suppliers and distributors, they can squeeze more from both while minimizing their own costs. Additionally, branching into new markets ties their existing power to new ones, amplifying their influence.
Finally, there's a significant concern about data privacy, likely the major driver behind bipartisan opposition to Big Tech. These companies collect, manipulate, and sell vast amounts of consumer data, using it to fuel their success. However, concerns about the collection, usage, and privacy of this data are rising, posing a complex challenge.
Too much power?
The five largest tech corporations—Microsoft, Apple, Amazon, Facebook (Meta), and Alphabet's Google—are accused of having excessive power and influence. Bipartisan support is growing to impose restraints on this power. However, the question of breaking them up is a major point of debate.
While curtailing Big Tech monopoly power is necessary, it should be done carefully and on a case-by-case basis. There's concern about innovation policy, great power competition, and national security. Rethinking how data is gathered and used by Big Tech companies, along with utilizing traditional antitrust tools to prevent anticompetitive behavior, could be alternative approaches.
The evolving landscape of antitrust actions and the need to balance innovation and competition call for a nuanced approach to address the challenges posed by Big Tech. It's a critical moment in history, requiring careful consideration of the most effective strategies to ensure fair competition and protect consumers' interests.
Source: by Anat Alon-Beck Contributor at Forbes