Targeting Tech: US Senate’s Big Tech Crackdown​


By Robyn Ma​

The Story

The US House Judiciary subcommittee recently published a report that found major tech giants enjoying vast monopoly power and engaging in anti-competitive practices (Politico). This led to several antitrust bills, some voted in on Thursday, seeking to rein in the power of tech giants.

The first bill would “make it unlawful for a platform with at least 50 million monthly active US users and a market cap over $600 billion to own or operate a business that presents a clear conflict of interest” (CNBC). This could target the likes of tech giants such as Amazon and Apple. Similarly, the second bill prevents large online platforms from using data to provide a leg-up to their own products over competitors using the same platform (Silicon).

In addition, the third bill could act as a deterrent for big tech companies looking to acquire rivals (Reuters). In merger cases, the burden of proof - demonstrating the target doesn’t compete with a product offered by the acquirer - will shift from the government to tech giants. The fourth bill would require that “dominant platforms maintain certain standards of data portability and interoperability” (CNBC). This means companies would have to make it easier for users to move their data, breaking down high barriers to entry and switching costs (Politico). Lastly, the fifth bill increases the fees paid by companies to the Federal Trade Commission for mergers.

What It Means For Businesses And Law Firms

These measures will have a severe impact on the tech giants. For instance, in theory, Amazon would have to spin-off its other businesses, including Amazon Web Services. A spokesperson for Representative Pramila Jayapal, the co-author of one of the bills, says these bills will prevent Amazon from exploiting and discriminating against third-party sellers on the platform, such as by controlling how they price their goods (CNN). Amazon has responded by saying this would “force it to stop supporting independent, third-party sellers, to the detriment of the economy”, as it would be more difficult for sellers to access Amazon’s customers (CNN).

Despite the bipartisan support, these bills do not go unopposed. Representative Ted Lieu of California has complained that this is the first time the committee is grappling with the “complex field of antitrust law as applied to the complicated area of computer technology” (Politico). Regardless, criticism against big tech is not limited to the US. Recently the G7 agreed to impose a minimum global corporate tax rate of 15% on tech giants, which it is hoped will help to prevent tax avoidance and the exploitation of tax havens (Reuters).

Amidst this complex regulatory landscape, law firms will have to stay up-to-date on legislative changes and advise tech clients on their compliance obligations. Should the bills be voted in, solicitors will need to work with clients to navigate new merger guidelines, and satisfy the burden of proof requirements.

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