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◼ REMARKS
●China, theEU,andtheU.S.aim
toreinin thepowerofAlibaba,
Amazon,Google,andothergiants● ByShellyBanjo
A Global
Reckoning for
Big Tech
The U.S. and China don’t agree on much these days. Germany
and France share a border and a currency but are frequently
at odds. The U.K. and India like to march to their own drum.
But there’s one issue on which all these countries see eye to
eye: Technology companies are too big, too powerful, and
too profitable. And that power is only likely to intensify, leav-
ing governments with no choice but to confront it head-on
by taking the companies to court, passing new competition
laws, and perhaps even breaking up the tech giants.
China is the latest to implement an antitrust crackdown,
unveiling anti-monopoly rules last month that wiped $290 bil-
lion off the stock market valuation of China’s biggest com-
panies in two days. The draft rules followed the surprise
suspension of a $37 billion stock offering by billionaire Jack
Ma’s fintech powerhouse Ant Group Co., making clear that no
company can evade the government’s crosshairs. The moves
in China coincide with accelerating efforts in the U.S. and
Europe to rein in Amazon.com, Apple, Facebook, and Google.
“The bigger get bigger and bigger but without being
better,” says Andreas Schwab, a German member of the
European Parliament who championed a 2014 resolution to
break up Alphabet Inc.’s Google. “Growing economic power,
the growing influence on local markets all over the world, and
a growing concern of competitors and consumers altogether
has made it happen now.”
It’s no coincidence that the antitrust crusades have accel-
erated during the pandemic. A locked-down world has come
to rely on tech companies more than ever, with many rack-
ing up gains at the expense of smaller competitors. Chinese
food delivery giant Meituan was forced to apologize after
a restaurant association accused it of abusing its domi-
nance during the outbreak by requiring merchants to sign
exclusive agreements and charging restaurants commis-
sions as high as 26%. The French government postponed
Black Friday to Dec. 4 to placate shopkeepers who accusedAmazon.comInc.ofstealingtheirsalesduringthe
latestcoronavirus lockdown.
The pandemic has “put a big magnifying glass
on the competition issues that you all know already
existed,” U.S. Senator Amy Klobuchar (D-Minn.) told
a gathering of antitrust lawyers in November. “We
could emerge from this pandemic with markets that
are much more concentrated and less competitive.”
Inthisnewantitrustera,theoldfocusonusu-
riouspricingnolongerapplies,becauseseveral
ofthebiggesttechcompanieshaveestablished
trillion-dollar monopolies by charging consumers
next to nothing. Tech giants are increasingly assum-
ingpowerfulpositionsinbanking,finance,adver-
tising,retail,andothermarketsthatforcesmaller
businesses to rely on their platforms to reach cus-
tomers. Merchants both depend on and compete
with Amazon. Spotify and other apps appear in
Apple Inc.’s app store but also compete with its
music service. Google isn’t simply dominant in
search and advertising; it preserves its status as gate-
keeper to the internet by using exclusionary prac-
tices that crush competitors, the U.S. Department of
Justice alleged in a lawsuit in October. And in China,
Ant funds only 2% of the microloans it originates on
its platform, according to the company’s prospec-
tus. The remaining 98% is underwritten by banking
partners that want to leverage Ant’s massive reach.
“Atsomepointthesecompaniesgetsobigthat
evenif you’retheCommunistPartyyoustarttothink,
‘Who’sholdingthereinshere?’” says Sam Weinstein,
anantitrustprofessoratBenjaminN.CardozoSchool
ofLaw.Therecentgovernmentmovesare,hesays,
“aremindertothesecompanies,‘We’reholdingthe
reins.Youmaybeverybigandverypowerful,but
we’regoingtoremindyouwho’sboss.’”
For years, Europe alone confronted the power
of footloose digital giants that chose to squat where
local rules and taxes suited them. Governments
were alarmed that European companies were fail-
ing to match Silicon Valley’s innovations or to stop
Google and Facebook Inc. from vacuuming up per-
sonal data and, with that, advertising revenue. Led by
Margrethe Vestager, the European Union’s competition chief,
countries have sought to police the market and encourage
fair play. Vestager sniffed out sweetheart tax deals she said
unfairlybenefitedcompanieslikeAmazonandAppleand
nowspeaksoflevelingtheplayingfieldsoEuropeancom-
panies can compete with Silicon Valley and Beijing in the
emerging areas of artificial intelligence, cloud computing,
and 5G wireless technology.
In China the crackdown has been driven at least partly by
fear that the homegrown tech industry is becoming too power-
ful. The country has long championed Alibaba Group Holding
Ltd. and Tencent Holdings Ltd., but their hoards of data on the