The Monopoly-Busting Case against Google, Amazon, Uber, and Facebook
There has been a lot of antitrust crusaders building major momentum in Washington, but so far, it’s still been theory and talk. The Verge reports that groups like Open Markets have made a strong case against big companies (especially the big tech companies) distorting the markets to drive out their competitors. They argue that a new standard for monopolies is needed, one that focuses more on skewed incentives produced by major companies – like Google or Facebook – and less on consumer harm.
Soon enough, these ideas will be put to test against one of these companies. For anti-monopolists, this would mean a chance to reshape the tech industry into something less destructive and more democratic. The question is which company makes the best target.
On that note, here’s a look at four of the biggest targets in the antitrust crusade movement.
GOOGLE: THE CONGLOMERATE
The best model for tech antitrust is the DOJ’s anti-bundling case in the 90’s against Microsoft. The Department of Justice argued that Microsoft was using its control over the PC market to force out competing browsers and operating systems.
The closest you’ll find to a contemporary equivalent is Google. Most days, Google or Alphabet (its parent company) is the most valuable company in the world by market cap. It has dozens of products supported by a comprehensive ad network. Google also has its committed and clear enemies with companies like Oracle, Yelp, Microsoft, and even the Motion Picture Association of America calling for the company’s power to be restricted.
AMAZON: THE PLATFORM
Amazon is another company that makes life hard for its competitors and considering they’re in competition with just about everyone, it makes for a lot of competitors. The most popular example is the company’s wholesale pillaging of Diapers.com in 2010. Amazon dropped their prices by as much as 30% and matched Diapers.com pricing move at every turn until the smaller company agreed to sell.
Recently, smaller retailers have stated that they’re being targeted and priced out by generics from Amazon Basics, which draws from Amazon’s wealth of data. Since Amazon has the money to out-discount any competition, there’s not a lot that can be done about it. This laser focus on consumer benefits – which usually translates to lower prices – has made Amazon a major player in every market it has entered.
UBER: THE PRICE-FIXER
Uber may not be as scary as it once was (during the Kalanick years), however, it is still the largest crowd-labor platform and an essential piece of transportation infrastructure in over 600 cities globally. There are several ways that Uber can subtly manipulate the market for its own benefit. The most popular method being surge pricing, which adds a multiplier whenever the supply of nearby drivers is running low. Uber has recently switched to upfront pricing, however, they still have near total control over the cost of a given ride as well as how much of that money makes it back to their drivers.
FACEBOOK: THE STARFISH
Some may consider Facebook the most urgent case. It is opaque, inescapable, and wield a lot of power over the fundamental functions of our society. Facebook’s power feels like an immediate threat more than any other tech giant, which makes it the most likely first target for a congressional action. Sen. Mark Warner (D-VA) has put down twenty different measures that’ll help rein in Facebook and the other tech giants. Some of these measures include GDPR-style data portability requirements to more carve-outs of Section 230.