Tech's New Monopolies

Technology superstars Facebook, Google, Amazon and Apple are in the crosshairs of U.S. and European Union regulators who are zeroing in on the downside of their dominance. Their unquestionable size and power and (in the case of all but Apple) aggressive buyouts of would-be rivals are facing broader scrutiny from antitrust enforcers. Reigning over markets including internet search, digital advertising, online commerce and mobile apps, they’ve become some of the most valuable companies in the world in part by exploiting so-called network effects — as they get bigger, they become ever more enticing to users.

For more than a decade, the EU has been the most aggressive jurisdiction in regulating Big Tech, fining Google more than $9 billion in three separate cases for using its dominance to disadvantage potential rivals. The EU has a lower bar for what constitutes harmful conduct by a monopoly and, in contrast to the U.S., its competition commissioner can move to block a merger without seeking a judge’s approval. In mid-2019, U.S. antitrust regulators at the Justice Department and the Federal Trade Commission began ramping up their oversight, and they were joined by the attorneys general of 48 states plus the District of Columbia and Puerto Rico, who opened an investigation into Google’s advertising practices. In some quarters, there’s talk of going beyond probes and fines to rewrite the rulebook or even break up the tech firms. A panel appointed by the U.K. government envisions a new regulator that could force tech companies to share data on customers with smaller competitors. U.S. Senator Elizabeth Warren, campaigning for the Democratic Party’s 2020 presidential nomination, called for unwinding mergers such as Amazon’s purchase of grocer Whole Foods, Google’s deal for ad network DoubleClick and Facebook’s acquisitions of photo-sharing site Instagram and messaging service WhatsApp. Warren would also make companies choose between operating platforms and offering products on them. This would force Amazon, for example, to decide whether to keep its online marketplace or its private label, AmazonBasics.