Recent Lawsuits Against Google, Amazon, Apple and Facebook Could Potentially Break Up These Tech Giants
Recent lawsuits against Google, Amazon, Apple and Facebook make compelling cases accusing these technology giants of running monopolies.
Google, Apple, Amazon and Facebook are among the untouchable trillion-dollar companies that have shaped my generation. Their wide variety of services infiltrate our lives, allowing us, in an instant, to search information, share our lives, communicate, and buy. Billions of people across the globe use products from one or more of these companies, often failing to acknowledge the companies’ vast, exclusive power. But in recent months, we have started to see the drastic consequences of such immense technological control.
Technology companies’ growing powers have posed a concern that was even a key issue in the 2020 presidential elections. Now, a series of antitrust lawsuits has confronted the alleged monopolies. Monopolies have exclusive control over a product or service, preventing the competition that is essential to capitalism and leading to the passage of the Sherman Antitrust Act in 1890.
Accusations of monopolization have not been made since the 1998 case against Microsoft. This lawsuit argued that Microsoft’s inclusion of Internet Explorer in Windows was anti-competitive, yet the company’s breakup was avoided on appeal. The emerging series of lawsuits once again pose a similar threat to the companies’ unity. President Biden, Congress, and many states have made the regulation of Google, Apple, Amazon and Facebook a high priority.
For instance, there have been a total of four lawsuits instigated against Google in recent months. One of which — filed by the attorneys general of 35 states, the District of Columbia, Guam, and Puerto Rico — accused Google of maintaining this monopoly by making deals with companies such as Apple in order to make their search engine the default on as many web browsers as possible. They also argued that Google was limiting competitiveness with other search providers such as Yelp and TripAdvisor. The states requested that action be taken to regulate Google, including potentially breaking up the company.
The first lawsuit is set for September 12, 2023, so we may not see real action against Google for a few years. Google has denied being a monopol, and intends to fight the case. Adam Cohen, the director of Economic Policy at Google, claimed that the lawsuit “seeks to redesign search in ways that would deprive Americans of helpful information and hurt businesses’ ability to connect directly with customers.”
Furthermore, various companies have sued Apple for anti-competitive behavior. A few months ago, Epic Games, the company that runs Fortnite, accused Apple of monopolizing iPhone and iPad games by requiring all apps to be downloaded through Apple’s App Store. The suit claimed that Apple uses this monopoly to charge game developers overpriced fees. Apple counters that there are plenty of platforms people can use to download games, and that Epic can focus on attracting those customers if they are not satisfied with Apple’s terms of service.
Meanwhile, the Attorney General for the District of Columbia sued Amazon in May for unfairly crushing competition. Independent sellers on Amazon claim that the company punishes them for pricing their products for less on other sites. Essentially, these companies argue that Amazon determines how products are listed on sites all over the internet, thereby making the products more expensive in general.
Yet Amazon claims that sellers have free rein over pricing their products, neglecting to mention that Amazon holds the power to subtly make certain sellers on their site invisible to users. Moreover, it is believed that the price argument could actually bring down Amazon, since this control through raising prices was also how monopolies in the 1800s operated. In effect, although Amazon is a digital company, and current laws tend not to directly reflect businesses of the digital age, the antitrust laws could still apply to Amazon.
In addition to this series of events, two antitrust cases were recently made against Facebook, threatening to break up the company. These suits — one made by the Federal Trade Commission, and the other by 46 states, the District of Columbia, and Guam — argued that Facebook’s purchases of Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014 inhibited competition in the social media industry. They argued for severe penalties: that Facebook should let go of the two apps they bought and that new regulations should apply to the company’s future deals.
Nevertheless, this past June, Judge James E. Boasberg dismissed both lawsuits, deciding that the F.T.C. was unable to prove Facebook’s monopoly status. He also claimed that the states waited too long to make their case since it was centered around deals that were made 6 to 8 years ago.
The results of the Facebook case were a disappointment to the growing number of activists who want to see the break-up of major technology companies. It also reinforces the idea that these technology companies tend to have the advantage. Facebook’s suits were dismissed largely on the basis that the definition for social media was too vague. In addition the antitrust law, which is centered on consumer prices, does not apply because Facebook is free.
Many, including Senator Richard Blumenthal (D-CT), view this as proof that internet companies defy the conventional definitions used in laws. In response to the case, he stated: “The court rejected the F.T.C.’s case because it wasn’t clear under our current antitrust laws that Facebook has a monopoly in online networking — a flabbergasting assertion given Facebook’s firm grip over consumers, their data and the social media market.” Legislators in Congress believe that antitrust laws need to be updated for the age of the internet. They are currently trying to examine antitrust with the digital economy in mind, but there is no guarantee that Democrats and Republicans will agree on the specifics.
Despite this quick result in the Facebook case, there are still multiple lawsuits faced by major technology companies which do not yet have an outcome. They may take years to unfold. With the immense amount of influence these companies hold, taking them down could result in major changes in the digital realm as well as our daily lives. Does this cluster of lawsuits mean that large tech companies will soon experience the inevitable consequences of their overwhelming successes? Or will their advantage over vague antitrust laws lead them to avoid the threats they now face?
