On Wednesday, July 29, the technology behemoths will face the biggest antitrust hearing in decades. CEOs of four significant companies—Facebook, Apple, Google, and Amazon—will defend their businesses facing lawmakers who try to restrict their influence and market power.
What is antitrust hearing?
Antitrust laws exist to preserve fair competition. They’re there to make sure one organization doesn’t have all the power or influence.
Charges: Amazon has been charged, for using data, it has collected by monitoring the third party sellers’ history, to make a competitive product under its brand name. It may also be questioned about Amazon Web Services, the immensely successful cloud unit it manages to support its e-commerce services.
Expected Response: Jeff Bezos is most likely to list a few key stats which point out that third-party sellers now outsell Amazon products on Amazon’s own platform. These stats will act as evidence of Amazon’s fair and impartial treatment of those third-party sellers.
Previous Response: Earlier in July 2019 hearing, Nate Sutton, associate general counsel to Amazon, told the House Judiciary Subcommittee that the company does not use data from third-party sellers to inform its own product creation. Obviously, this did not satisfy the lawmakers and demanded Bezos’s presence.
Expected Results: It is speculated that Amazon might part ways with AWS. AWS exists as its own fantastically profitable business. There’s no reason that it needs to be connected to Amazon the e-retailer.
Charges: The concerning factor for Google is that it is swallowing up too much of the market. In 2018, Google combined its DoubleClick ad server for publishers—where 90% of publishers list ad inventory- with Google Analytics 360 to make a more robust system called the Google Marketing Platform. Then it united Google Analytics 360 with its more general DoubleClick ad exchange to make Google Ad Manager. Google Ad Manager signifies the union of some of the best advertising tools in the industry. Critics dispute that the company tied its ad tech in a way that prioritizes its own products over rivals in the search result.
That makes it really difficult for ad tech companies that offer just one or two parts of the ad buying and selling process to keep up.
Expected Response: Google says online ad players don’t have to use its products. Plus, antitrust law is about consumer protection and it’s hard to see how Google’s online ad system harms consumers.
Expected Results: They might be asked to break the company which will beneficial for the public but challenging for marketers.
Charges: Apple is being accused of the stringent approval process for new third-party apps to register in the app store, including a 30% cut of sales, which they say is standard. Another issue is with the existing third-party apps, ecosystem malfunction when there exists an apple app to compete with. Like Spotify to Apple Music.
The committee will drill down on whether Apple is stifling competition and raising prices for consumers.
Expected Response: Apple says its fees are in line with other digital platforms.
Charges: Regulators are concerned that Facebook’s repeated acquire/copy approach is stifling competition and limiting consumer choice. Facebook acts upon the strategy as soon as the social apps grab attention in the social media space.
Expected Response: Facebook has portrayed itself as the American success story. It claims that the threat is Chinese companies that are gaining traction.