And Australia – where regulators already followed their European counterparts by forcing social media companies to pay publishers when their content appears on those platforms – officials are also considering similar changes to create tailored rules for tech giants after the country’s competition regulator admitted their current powers are not have kept up with the industry.
“Google has used its data and acquisitions to dominate the adtech market,” Rod Rims, the former head of Australia’s Competition and Consumer Protection Agency, told POLITICO. “The many acquisitions that companies like Google and Facebook have made beg the question: do you need additional hurdles when you’re so dominant?”
The tech giants have simply grown too fast over the past two decades for antitrust laws to keep up. And while the US is now retrospectively trying to keep them in check, regulators can now do so in advance.
To the world of antitrust officials, this shift — known as in advance Rule-making or efforts to stop potentially anti-competitive behavior before it gets out of control – is a realization that the current enforcement system is too slow, too complex and too cumbersome to prevent companies from taking over smaller competitors or squeezing out new markets, before policy makers can react time.
In Europe, for example, the European Commission has already fined Google around €10 billion over three separate allegations of antitrust abuse dating back a decade. However, these investigations related to the company’s respective Android mobile software, search products, and online advertising services took years to give the company time to establish overwhelming dominance.
Alphabet — Google’s parent company, which denies any wrongdoing in its global antitrust cases, including the recent Washington indictments — also appealed Brussels’ decisions, delaying those judgments for years.
That’s why European politicians have shifted gears to create a new competition rulebook aimed at containing problems before they even arise.
The goal: to create rules more akin to ongoing oversight within the financial services industry that can locate potential abuses before lengthy investigations are required. For international agencies, it’s less about dawn crackdowns and glitzy press conferences and more about day-to-day government surveillance to take the sting out of Big Tech’s dominance.
This is how it will work. Within the EU, a small number of (almost exclusively American) companies are defined as so-called gatekeepers or companies that occupy a disproportionately dominant position in markets such as search, online advertising or mobile app stores. These tech giants then have to abide by stricter rules than smaller competitors, including bans on so-called self-preference, or favoring their own products and services over those of others.
That means Apple will likely have to allow people to download apps from competing online stores. Alphabet will almost certainly be forced to open up its online advertising — and the lucrative data that underlies it — to outsiders. And Meta must allow other messaging services to connect directly to WhatsApp and Facebook Messenger.
“Large gatekeeper platforms have prevented businesses and consumers from reaping the benefits of competitive digital markets,” said Margrethe Vestager, Europe’s competition czar. said when announcing the changes last year. “What we want is simple: fair markets, also digitally.”
US politicians are aware that they stand behind their international counterparts.
Stalled bipartisan legislation known as the American Innovation and Choice Online Act, backed by the likes of Sen. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa), would similarly prohibit much of Big Tech’s alleged anti-competitive conduct. These include preventing these companies from favoring their own services over those of competitors, as well as banning current restrictions on how smaller competitors use the dominant services to target potential customers.
But even before Republicans regained control of the House last month, the new US antitrust proposals had met with industry-led efforts claiming they would harm innovation, limit consumer choice and undermine national security. Now, U.S. enforcers like Jonathan Kanter, head of the Justice Department’s antitrust division, are expected to have to work with the powers they already have — rather than relying on enhanced rules fit for the digital world.
“We’re going to have to work with the rules that we have,” a Capitol Hill employee told POLITICO on condition of anonymity because he wasn’t authorized to speak publicly.
Still, the new cartel powers being dreamed up in Brussels, London and Canberra are not the bull’s-eye that many officials in those countries are hoping for. And while some in the US would welcome such tailored enforcement regimes, US judges would almost certainly rule them out because current domestic law makes it illegal to treat some companies differently than others.
In the UK, for example, regulators are planning to create bespoke competition rules for certain tech giants – of so-called strategic market importance, under forthcoming UK legislation, which may be published as early as the week of February 13.
This follows repeated evidence from UK authorities that companies like Apple, Alphabet and Meta have disproportionate power in the local market in everything from advertising to app stores to social media. The companies reject any allegation that they have abused their dominant position.
British officials believe that regulating Amazon and its e-commerce empire will require different rules than overseeing Apple and its increasingly digital empire. This requires individual antitrust guardrails for each company or an individual playbook to keep a close eye on each company’s expansion.
For Brussels, whose enforcers still have a slew of old cartel cases against Silicon Valley’s biggest names (Meta, Apple and Alphabet deny any wrongdoing), the shift from lengthy investigations to more hands-on day-to-day surveillance is also still a work in progress.
European officials are currently deciding which tech giants will be named as so-called gatekeepers. EU lawyers and their corporate counterparts are haggling over whether to include a company’s entire operations or just certain services, such as an app store or social network, under the new rules, according to four people with direct knowledge of the matter on condition of anonymity to discuss internal discussions.
“It’s going to take time to dissuade people that it’s just an investigation,” said one of the EU officials, who spoke to POLITICO on condition of anonymity. “We are in a new era. We have to take care of it.”
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