House seriously considering bill to break up Big Tech companies
posted Saturday Jun 26, 2021 by Scott Ertz
The one topic that everyone seems to be able to agree on is the dangers presented by big tech. While everyone sees different potential hazards, the existence of hazards is seemingly universal. As such, it is a focus of the current Congress and the House Judiciary Committee. This week, the Committee approved a new bill that would likely break up the big tech companies like Amazon, Apple, and Google.
The bill is in direct response to lawsuits that have been filed against companies, such as Google. These suits have been around Google's tendency to promote its own products in services like search, even when another search result is a better match. This new legislation would prevent big tech companies from promoting their own products within their own ecosystems. For example, Google would not be able to hype up YouTube video results over Vimeo in search. Facebook would not be able to degrade posts that feature YouTube videos versus posts with native videos.
Conflict of Interest
In the legislation, a company is in violation if it "offers a product or service that the covered platform requires a business user to purchase or utilize as a condition for access to the covered platform, or as a condition for preferred status or placement of a business user's product or services on the covered platform."
The designation is a little vague, but could potentially cover a large surface area. The Federal Trade Commission would be responsible for determining when a platform falls under coverage, and whether or not a company has violated the rules. So, Google offering its own products within its own marketplace, such as Google Play, could potentially infringe the conflict of interest clause. Or, it could be a violation to pre-load their branded apps on Android devices.
Companies found to be in violation would have 2 years from the initial claim by the FTC to resolve the infringement, whether by selling off the division, spinning off the division, or shutting it down entirely. If they do not respond within the appropriate amount of time, they could be fined up to 15% of their annual revenue (not profit). If that isn't persuasive, I don't know what is.
Who is considered "Big Tech"
There are some competing definitions, and there are questions about whether or not Microsoft falls under those definitions. Many of the definitions require US-based monthly active users of at least 50 million and at least 100,000 US-based businesses using the platform, and market capitalization of at least $600 million. This could include services like Azure and Microsoft 365, and certainly covers Microsoft's now $2 trillion market cap.
Some lawmakers questions whether or not other definitions would exclude Microsoft and whether the legislation had been designed specifically to exclude the company, whose former CEO Bill Gates is friendly with lawmakers.
What comes next
While this has passed the House Judiciary Committee, a full vote on the House and Senate floors will be required before anything is official. Before that happens, amendments will be proposed and discussed, and several versions of the bill will be voted on. If the House and the Senate can agree on language, it will head to the President for a signature, and then the process of implementation begins.
