An Antitrust Wrap Up
We’ve been talking about antitrust all week, but what is it really?
Antitrust legislation facilitates economic growth and safeguards consumers by protecting against monopolistic practices. Regulations promote healthy competition. Laws can affect any industry and any business.
The government has tasked the Federal Trade Commission (FTC) and the Department of Justice (DOJ) with enforcing antitrust legislation.
A few landmark laws and cases:
- Sherman Act: Many consider this to be the most influential antitrust case. The Sherman Act, passed in 1890, prohibits monopolies and the restriction of trade across all industries. The Clayton Act, passed in 1914, covers more particular areas that the Sherman Act did not.
- Federal Trade Commission Act: The FTC Act was also passed in 1914 but dealt specifically with competitive practices and deceit.
- United States v. Microsoft Corporation: Microsoft was accused of adopting anti-competitive practices in 1998. A Federal judge found Microsoft guilty of violating the Sherman Act and ordered the company to split. Microsoft appealed the ruling and avoided breaking up but was ordered to share computing interfaces with competing companies.
Here we are today: governments throughout the world are strictly enforcing antitrust laws (much to the bane of Google, Apple, Facebook, and Amazon (GAFA)). French and Dutch governments have proclaimed their support of a sole European body that governs antitrust regulations. House Democrats in the US served Big Tech with a 449-page report filled with potential solutions to the GAFA-conomy. This leaves us with a million-dollar question: How should we regulate Big Tech?
Irene Ng, CEO of Dataswift and Professor at the University of Warwick, has an answer. Instead of breaking up Big Tech, we should focus on wealth redistribution and the creation of equal opportunities for all market players. This can be done by taking advantage of data portability, allowing data to become an asset class.
Throughout this antitrust discussion, we’ve focused extensively on the US and EU for good reason. The US has imposed $309 billion in antitrust fines during the last 25 years, and none of these went to tech giants. The EU has fined Big Tech, but these fines usually don’t total more than a few percent of their overall revenue.
Who will give antitrust the adequate attention that it deserves?
China has emerged as the next authority in antitrust regulation. Anti-Monopoly Law (AML) was proposed in 1988 but wasn’t passed and enforced until 2008. Despite the considerably lengthy approval process, China has already begun to investigate a few prominent antitrust cases. Sources say the country is even considering opening a case against Google. Considering that China is now the second largest data economy globally, their enforcement of antitrust regulation will only increase in importance.
As other world governments examine Big Tech and their likely antitrust violations, we can only hope that wealth redistribution will be recognized as a viable solution.