Amazon, Apple, Facebook and Google. They achieve success after success, also in the corona crisis. But for a number of years it has been gnawing at governments: are the companies not too powerful? And should something be done about it?
That question was answered with a resounding ‘yes’ by both EU authorities and US authorities this year. Their solution is still waiting. There are now new investigations and charges. That is the beginning of a new long process.
A multitude of things are examined: social networks (Facebook), search engines (Google), download store (Apple) and online sales (Amazon). Areas where the companies, according to the complainants, have become too powerful.
The growth of the tech companies, based on the stock market value:
Brussels has been targeting this group for some time. Since 2017, European Commissioner Margrethe Vestager has issued three fines to Google – together amounting to more than 8 billion euros – for abusing their dominant position. The search giant has appealed all fines.
Two studies into Apple were added early this summer, the most glaringly focused on Apple’s power over its download store. The commission has filed suit against Amazon and launched a second investigation. And now American affairs have also been added.
An autumn full of charges
That started in October with a critical report from Congress, which stated that the four tech companies are too powerful and something must be done about this. This was followed by three charges against Google, one of which concerns agreements with Apple in which, in exchange for billions of dollars, Google’s search engine is set as the default.
The case that probably most appeals to the imagination is aimed at Facebook. The company is accused of an illegal monopoly and should divest Instagram and WhatsApp, the prosecutors say.
In other words, here is a frontal attack from governments on the most powerful companies in the Western world. The effects of this are still unclear.
An image that reasonably summarizes 2020 in the tech field: the top executives of Apple, Amazon, Facebook and Google interviewed together via a video connection:
What has already been established is that these things can all take years. The substantive handling of the case between the judiciary and Google is now scheduled for the autumn of 2023. In Microsoft’s case, it took six years to resolve. At first there was talk of Microsoft being cut up, but it turned out to be a settlement.
The tech companies will have to pull out all the stops in the coming years to defend themselves. The interests are immense. For each of the companies, the consequences can affect (part of) their earnings model.
In the meantime, they will also lobby against new legislation that the European Commission is working on. The two proposals focus one on the responsibility of platforms towards content and the other on the market power they have built.
There is still a long way to go
Companies can probably live with that first package, Politico recently wrote, partly because the proposals do not go as far as previously feared. Most of the concerns – and therefore attention – goes to the second package. It has the potential to affect companies’ business models and limit their ability to grow further.
But here too, the road is still long. It is expected that it may take two or three years before the packages are properly accepted. At the same time: that is probably still faster than the legal procedures.
So don’t expect a result in 2021. It is the start of a major game of interest between companies and governments.