The scrutiny surrounding big tech companies have been a growing issue in 2019. Despite the coronavirus pandemic, these issues still remained at the forefront of regulators’ minds in 2020.
Several different agencies from around the world have been working on potential antitrust cases against some of the largest tech companies in the world, such as Google, Apple, Amazon, and Facebook.
Others, such as social media giant Twitter as well as Microsoft, are also getting their fair share of attention as well. The most recent news in this regard came from a House subcommittee that just concluded its 16- month antitrust probe against U.S. big tech firms.
The House subcommittee concluded its report by saying that Congress should seriously consider forcibly breaking up the largest tech companies right now. Specifically, the committee argued that the online platforms themselves should be separated from the other business units these companies are also involved with.
The report was issued on Tuesday, concluding a lengthy investigation that began back in 2019. While the House subcommittee was predominantly Democrat-held, Republicans issued their own statement that agrees with this assessment, calling for further antitrust actions to be taken against these companies. It’s one of the few issues that both parties agree with eachother on.
Although there are no immediate legislative changes that are on the horizon due to this report, the chance that new laws will be introduced sometime in the future – likely after the election – seems quite likely. The fact that both sides of the political aisle agree with this issue also suggests that no matter who wins the coming November election, big tech companies could end up facing major legal issues for themselves going forwards.
Of course, the major companies most affected by this report disputed through their own subsequent press releases later that day. “All large organizations attract the attention of regulators, and we welcome that scrutiny. But large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong,” wrote Amazon in a blog post on the topic. Google’s responded by claiming that “Americans simply don’t want Congress to break Google’s products or harm the free services they use every day.”
Most tech stocks ended the day down between 2-3% in response to the news. Although most of these companies have done extraordinarily well for themselves so far this year, many could also end up seeing major declines if serious antitrust, anti-big-tech legislation gets announced. As of right now, it wouldn’t be surprising if 2021 is the year where major tech antitrust laws get proposed and passed.
Google Company Profile
Alphabet is a holding company, with Google, the Internet media giant, as a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Google’s other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart homes products, which include Nest and Google Home, also contribute to other revenue. – Warrior Trading News
