The Tension Between Competition and Tech Are Gaining Global Attention
Antitrust concerns with big tech companies are gaining global attention. Antitrust laws protect consumers by promoting fair competition and preventing businesses from taking over or manipulating a market. In the digital world, companies can use the vast amount of data shared and leverage its value for competition purposes, which then raises concerns about antitrust violations. The U.S. Federal Trade Commission (FTC) and Department of Justice (DOJ) have been looking into big tech’s influence on competition for quite some time, particularly narrowing in on search engines, social media, and retail markets. Unsurprisingly, how these companies are treating consumer privacy through data collection and distribution is a huge focus. The FTC’s most recent probe reviewed acquisitions that several big tech giants made of smaller organizations in the last nine years.
Both U.S. agencies are reviewing the situation and seeking ways to change antitrust policies to regulate big tech more tightly. Potential changes could include increasing FTC regulations on mergers and price fixing. However, there is currently nothing concrete in the works and the DOJ seems to want to avoid any major renovation of antitrust laws. The only thing that is certain is that the FTC plans to issue new guidelines on digital platform enforcements and horizontal mergers.
What Actions Are Other Authorities Taking?
Since other countries across the globe have started to speak out more forcefully about antitrust issues in the technology industry, many countries plan to rework their anti-competition laws and policies to account for big tech’s dominant effect on data and the larger market. Some have even formally proposed changes. The primary areas of concerns that regulators are seeking to address is that tech giants will (1) gain so much power that they control big data, (2) implement anti-competition algorithms, and (3) restrict competitors through unfair terms and/or mergers. Below are a few examples of global reactions to the impending antitrust crisis in the tech industry.
The European Union
The EU has already used enforcement powers under the General Data Protection Regulation (GDPR) to police tech companies over consumer privacy issues. Now, the EU is taking swift action to combat competitive behavior. Germany has proposed amendments to the country’s antitrust laws that would more firmly regulate big tech and focus on any business practices that would give them control over a significant amount of data. For example, the new law could prohibit a company from blocking data access to a market competitor. They are awaiting approval and, if all goes well, hope to implement the amendments later this year. Other EU member countries are making similar moves.
Australia and China
Australia is creating a committee specifically designed to monitor and review advertising that big tech companies use that could be deemed anti-competitive behavior.
Additionally, China recently proposed changes to their Anti-Monopoly Law. These changes include increasing fines if companies act inappropriately during a merger or fail to implement binding anti-competitive agreements.
What to Expect In 2020 And Beyond
So, what does this all mean for big tech and antitrust issues? First, it is important to remember that matters like this can take time, even when it seems like a global crisis. History demonstrates that some countries move faster than others do when it comes to responding to regulatory issues and implementing new laws. For example, the U.S. has been contemplating a comprehensive federal privacy law for years and has yet to draft one. The DOJ has expressed this is still the way they wish to regulate big tech, so there will likely not be a big antitrust overhaul in the states like there will probably be in other countries. For now, the biggest change in the U.S. will be how the FTC investigates and levies penalties for violations.
Differing Laws and Policies
Regardless, the global uproar about big tech and antitrust violations will have both short-term and long-term effects. Similar to recent privacy upsets, the biggest issue will be that there is no global uniformity. Even though everyone wants to address the same behavior, each country’s legal system operates differently. They will have different laws or policies that regulate the same conduct yet vary in execution. The differences in policymaking are what makes global data regulation so tricky and keeps big tech on their toes. Also, the fear that lack of uniformity will allow tech giants to continue to get away with anti-competitive actions remains present. One additional worry is that companies may pull business from nations where they think antitrust regulation is too restricting.
The rise in big tech has also placed international data privacy in the realm of antitrust enforcement. There will be more overlap between privacy and antitrust than ever before. Privacy concerns will continue to intensify as the presence and growth of tech giants threaten market dominance. It is crucial for organizations to utilize providers that have sufficient privacy safeguards in place because of increased privacy regulations and the threat of data breaches, companies can use this to their advantage. For example, tech companies can cite consumer privacy protection as a reason not to share data with a competitor and, as a result, continue to gain advantage in the market.
In the modern era, almost everyone needs access to data and the latest technology for both business and personal reasons. Because of this, individuals may continue to use certain services even if privacy is compromised. When a provider dominates the market, it has the ability to skimp on privacy protections and users will have no comparable competitors available. All of this makes policing big tech extremely difficult, as regulators have to balance privacy and competition issues. Deciding which issue should have more weight seems like an impossible task.
Global antitrust policy changes will also affect many other markets, including the legal industry. Access to data is necessary for eDiscovery compliance. Law departments must ensure they utilize providers who have a global presence. Provide must have key capabilities like the capacity to collect data anywhere in the world and distinguish between several languages. However, there may be some roadblocks to international data collection as policies change. If companies pull their business from certain countries due to tighter regulations, it will be more difficult to collect data from that provider if it originated in that country prior to the change. An action like this invokes data preservation concerns and can greatly disrupt the litigation process.
Additionally, litigation and enforcement actions about data privacy may increase. If a company is not allowed to shield data from competitors because it would face antitrust violations, consumer privacy may be at risk and could then increase privacy actions or trigger a decline in business. On the other side, if a company cites consumer privacy as a reason not to disclose data to a competitor and that data becomes subject to litigation, this would interfere with collection. All of this shows that regulators will need to work towards finding a balance between privacy and antitrust issues if they want to regulate big tech successfully.
To learn more about 2020 ANTITRUST TRENDS: HIGH TECH & THE GLOBAL WAVE OF REGULATION, click the link below to view our on-demand webcast.
2020 ANTITRUST TRENDS