Skip to main content

The Big Tech antitrust hearing is today. Here’s why it matters

The CEOs of four of the biggest tech companies in the United States — Apple, Amazon, Facebook, and Google — will testify before Congress on Wednesday, which is investigating whether those companies are violating antitrust laws. It’s a dramatic escalation of the “techlash” that has been brewing the last few years, one that could lead to a massive shakeup of Big Tech. But what exactly is going on, and why should you watch?

What is antitrust?

Antitrust laws are how the United States regulates “the concentration of economic power,” as Cornell Law puts it. In the 19th century, numerous interstate industries were dominated by powerful monopolies (or “trusts” as they were called). These companies controlled so much of the markets for things like steel and oil that it was effectively impossible for competitors to challenge them, and they could dictate the market prices for products. That’s bad for small businesses and consumers.

Related Videos

The foundations of antitrust law in the U.S. are the Sherman Act of 1890 and the Clayton Act of 1914, which outlawed practices like price-fixing or mergers that remove competition from the markets.

Early in the 20th century, the government aggressively enforced antitrust regulations, but from the 1970s onward, economists, lawmakers, and the courts have been less enthusiastic about enforcement.

What’s behind this hearing?

Big Tech companies have grown vast and powerful over the last decade, and it seems as if lawmakers have only recently awoken to just how mighty they are. The House Judiciary Committee has launched an investigation of anticompetitive conduct in the tech space, and Wednesday’s hearing will be a chance for lawmakers to question the CEOs of these companies on their conduct. It’s the first time that all four of these executives will be testifying before Congress at the same time. Although it’s merely a hearing (the committee can’t break up Facebook at the end of it), information from this hearing it could swing the future of antitrust measures against these companies.

The CEOs, and why they’re under fire

Tim Cook, Apple

The big issue with Apple is its App Store. For app developers who want to reach iOS users, the App Store is the gateway, and Apple charges a hefty entry fee of 30% of revenue. On top of that, Apple releases its own apps that compete with independent sellers on its marketplace. Spotify, for example, has argued that Apple’s 30% fee forces Spotify to increase the price of its app above that of Apple Music. Apple gets to sell a product and while effectively dictating what its competitors can charge.

Amazon Founder and CEO Jeff Bezos
Eric Baradat / AFP / Getty Images

Jeff Bezos, Amazon

Amazon is one of the world’s largest online platforms for merchants, and it also sells its own products on that platform. An investigation by The Wall Street Journal found that Amazon employees “used data about independent sellers on the company’s platform to develop competing products,” despite the company’s policy against doing that.

The antitrust argument against Amazon is that it uses its platform to figure out what products are working for independent sellers, then uses that data to develop similar products and box out their smaller competitors.

Mark Zuckerberg
Chip Somodevilla / Getty Image

Mark Zuckerberg, Facebook

One major antitrust argument against Facebook is its habit of buying up competitors. According to The New York Times, that’s one angle the FTC is taking in its probe of the company: Facebook has bought more than 80 companies in 15 years, including Instagram, WhatsApp, and Giphy.

In gobbling up smaller social media platforms, Facebook ensures it has dominance over even users who don’t want to use Facebook. As Dina Srinivasan writes for Berkeley Business Law Journal, “Consumers effectively face a singular choice — use Facebook and submit to the quality and stipulations of Facebook’s product or forgo all use of the only social network used by most of their friends, family, and acquaintances.”

Facebook is also a dominating presence in advertising. Facebook and Google together control about 60% of the online ad market, according to Adweek. That duopoly effectively squeezes out the competition.

Google & Alphabet CEO Sundar Pichai
Josh Edelson/Getty Images

Sundar Pichai, Google

Like Apple, Google has its own app store where it is both a player and the party making the rules. According to a report by The Information, Google employees monitor data on the usage of third-party apps on Google devices, then use that data to design Google-owned competitors.

Google is also an advertising juggernaut that, along with Facebook, consumes most of the pie in the ad industry. Attorneys general across the U.S. have launched probes into Google’s ad business, with Texas Attorney General Ken Paxton saying that Google dominates “the buyer side, the seller side, the auction side, and the video side with YouTube.”

Editors' Recommendations

Supercomputers and spray foam: How tech can stunt forest fire season
forest fire season prevention

In the middle of the night last October, a suspected drunk 26-year-old rammed his Toyota Corolla into a power pole, shearing it in half. An off-duty California sheriff, who was driving on the same stretch of Orange County’s Santiago Canyon Road, saw the resulting fireball in his rearview mirror. By the time the sheriff made it to the wreck site with a fire extinguisher, the driver had already been helped out of the Toyota, but the car’s explosion had scorched the brush on the side of the road, and the embers were quickly climbing up the hill. If the fire jumped over the highway, more than 4,000 people would have to be evacuated and 1,500-plus homes would be in its path.

As with the Santiago Canyon incident, most wildfires start with human technology, like the heat from a car fire or the spark from an electrical wire. The 2018 Camp Fire -- the deadliest fire in California history, which took almost a year to completely contain -- was caused by a 100-year-old electrical transmission line. The 2018 Ferguson Fire, which burned in three different forests and caused over 118 million dollars in damage, began with a vehicle’s faulty catalytic converter.

Read more
Awesome Tech You Can’t Buy Yet: Ultrafast toothbrushes and a laptop/phone hybrid
awesome tech you cant buy yet screen shot 2020 04 03 at 4 13 08 pm

At any given moment, there are approximately a zillion different crowdfunding campaigns happening on the web. Take a stroll through Kickstarter or Indiegogo and you’ll find no shortage of weird, useless, and downright stupid projects out there -- alongside some real gems. We’ve cut through the fidget spinners and janky iPhone cases to round up the most unusual, ambitious, and exciting new crowdfunding projects out there this week. Keep in mind that any crowdfunding project -- even those with the best intentions -- can fail, so do your homework before cutting a check for the gadget of your dreams. 
April 5
Eyesy -- video synthesizer

When it comes to creating and mixing sounds, there are countless tools available to help you out. We’ve got musical instruments, MIDI controllers, synthesizers, loop pedals, drum pads, and all manner of digital audio workstations to help you mix it all together. But when it comes to visuals, there aren’t really a lot of tools available to artists. Eyesy aims to change that. It’s a video synthesizer that allows you to create reactive visuals that respond to music in real time.
Arebo -- whole body dryer

Read more
Minority Report for poachers: Can predictive algorithms prevent wildlife crime?
Animal skulls on shelf


When you think of wildlife trafficking, what springs to mind is likely elephant ivory and rhino tusks. But it also encompasses rosewood, lizards, and pangolins. Estimates for its worth range from $7 billion to $23 billion. With over 7,000 species involved in trafficking — ranging from plants to reptiles to mammals — in practically every country in the world, the problem is dizzying. That’s why Dr. Meredith Gore wants to stop poachers before they cut the tree or kill the animal.
A human problem
Beyond saving wildlife threatened with extinction, trafficking has an impact on humans as well. “I think that the coronavirus, the COVID-19 situation that’s happening right now is just really emblematic of kind of the worst-case scenario,” Gore, an associate professor in the Department of Fisheries and Wildlife at Michigan State University, told Digital Trends. She describes her science as conservation criminology.

Read more