US Congressional Antitrust Hearings Now and Then: The Differences and the Similarities
The Antitrust Landscape in the United States has observed major cases of big “trusts” making use of anti-competitive practices. The Clayton Act of 1914 and the Sherman Antitrust Act of 1890 are the predominant Legislations governing the Antitrust Landscape in the United States. Previously, the older Antitrust principles upheld the protection of the “independent proprietors”. Another factor through economic logic which has been taken into consideration is the “consumer welfare standard” which prioritizes the lowest prices for the benefit of the consumers.
However, it is very recently that the new age researchers and thinkers are calling for a revamped set of regulations for antitrust, that covers the newer developments in the innovation and digital markets for a better implementation of the antitrust policies. This article aims to shed light and analyze the two very significant antitrust congressional hearings: with Microsoft in the year 1998, and the hearing in 2020 which brought four executives of big tech before Congress, to highlight the major changes, key takeaways from the hearings, and observe the trends of big tech in the antitrust landscape. This will hence benefit in identifying the underlying issues with regard to the current antitrust policies, and the rapidly advancing technological sphere.
A brief insight into the two hearings: 1998 and 2020
It was in the year of 1998 when Microsoft was called upon to appear before Congress, with regard to the company’s dominance in the software market. With the 2020 antitrust hearings, the four big tech companies saw the light facing congress, it seems to draw parallels and it is only fair for the market to get glimpses of the landmark antitrust hearings held in 1998, concerning Microsoft. The big tech at the time was considered to be one of the most innovative and upcoming tech companies that introduced their own operating system Windows, which came with their own software Internet Explorer, which made the competition for the other software systems difficult.
The 2020 antitrust hearings saw the big four major tech companies: Apple, Alphabet (Google), Facebook, and Amazon, observing the different markets and analyzing the behavior of these entities and their position in the marketplace. Apple was questioned over removing their competitor’s apps from their Appstore. The allegations were such that the company removes their competitor’s apps from their own Appstore, and then launches a similar app in the market. As for Google, the CEO was inquired about the company’s advertising practices, with their access to consumer data, as well as access to the other companies’ data operating on their website. Amazon, on the other hand, came under fire for their third-party sellers and their online retail platform market. The allegation over Amazon was that their anti-competitive practices would remove third-party sellers from their website.
It can be observed that the landscape for antitrust regulation has evolved significantly. In contrast to the 1998 hearings, the 2020 hearings saw the big four tech giants being questioned for the investigation to have significantly changed, and so have the markets. Since 1998 when the company was only questioned with regard to the software markets, the 2020 hearings saw the social media market, and the advertising markets, along with issues such as data privacy, and access to consumer data with the companies. It is seemingly clear that the companies were posed with the question of ‘Data’. 'Data being the new currency is, and will be, a significant factor in the way of conducting business' remained an important aspect of the recent hearings due to the advancement in technology. The aspect of companies who possess a dominant position in the market and them having access to data of their competitors and consumer data poses as artillery to the latter who are at the receiving end when these dominant entities release the products identical to their competitor’s thereby affecting competition. Hence, access to data and data privacy remained an important point of questioning in comparison to the Microsoft hearings in 1998, which merely focused on an aspect of the company’s business practice in relation to their software market. It can only be observed how innovation has thrived and advanced with the current four major tech companies of Silicon Valley with their presence in varied markets.
The Subcommittee on Antitrust, Commercial Administrative Law of the Committee on the Judiciary released a 400-page report titled the ‘Investigation of the Competition in the Digital Markets’, after concluding a 16-month-long investigation with regard to the abuse of power by these entities and the need for the current regulations to be revamped for accommodating the current changes with the technology and observing the way of conducting businesses. The report meticulously contained instances of abuse of power by entities dominating the marketplace. The report recommends amending the current legislation and providing for the “breaking up” procedure for the companies easier, whilst making the acquisitions harder. It is an extremely significant aspect to note with regard to the changing landscape of the antitrust regime.
Even though antitrust regulation and the laws have been prevalent since the 1920s, the way that the technological landscape operates has changed significantly. With the rise in the technological sphere with support from the Government, there has been an increase and a rise in the start-up market promoting innovation. It is important to note here that due to the rise in innovation, there is an immense increase in the use of technology and its various facets. This underlines the need for regulations that are upgraded and formulated in line with technological developments.
It is, therefore, stated that with the regulations being updated and in consonance with the rapidly advancing technology, along with any acquisition in the future which can seemingly distort the competition in the market if monitored effectively, the implementation of the antitrust regime will become quite efficient. Moreover, the congressional hearings only serve as a deterrent for the other companies operating in the tech market, which will only make the marketplace healthy for small companies as well as allow innovation to thrive and grow in.