According to the U.S. federal and state governments, Big Tech is behaving badly—or, in some cases, monopolizing.
Scrutiny from the attorneys general, along with the Department of Justice and the Federal Trade Commission, regarding matters such as privacy, monopolistic practices or social harms is not new. Over the years, tech titans have incurred costly fines in the millions, sometimes even billions.
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But punitive measures hardly seem to have slowed his roll. The heavy fines were just the cost of doing business.
Today, the stakes are higher. Efforts to rein in big tech companies are targeting core parts of the business – which, according to a new round of earnings, are sending back gargantuan revenues.
Just ask Google, which could face bankruptcy, or TikTok, which is fighting a possible US ban in January if it doesn’t find a new owner.
Tighter scrutiny and bolder efforts to hold companies accountable make it crunch time for Big Tech — and perhaps others who depend on them, including e-commerce, fashion and just about everyone else.
But how that will play out now is anyone’s guess.
Timing could be important in a presidential election year, when Big Tech’s influence has been overwhelming in the race for viral moments, fundraisers and more. Meanwhile, the fate of FTC Chairwoman Lina Khan — President Joe Biden’s pick who has been aggressive in cracking down on big tech companies and also in the $8.5 billion Tapestry Inc. deal — appears to be in limbo. to buy Capri Holdings – undecided.
So far, situations in the middle of the technology storm could lead to material changes in the way fashion reaches consumers, conducts business and powers its e-commerce.
This is how the lawsuits stand now.
In August, a federal court ruling cast Google as a “monopoly” that acted illegally to preserve its advantage in online search. Now, according to an October court filing, the DOJ is considering “structural remedies.”
Google is an online search monopoly, according to US District Court Judge Amit Mehta of the District of Columbia, who ruled against the tech giant in August. (Pictured: The world’s largest Monopoly board at the Sydney Exhibition Center in May 2005.)
This could include spinning off Chrome, Android and Google Play, or banning the company from entering paid deals to pre-install its web browser and search engine on mobile devices. A huge buzz tipped, with the internet freaking out over the prospect of a Google breakup.
The company called it “overreach”. But the DOJ isn’t done yet. The second case brought by the department and eight states is targeting the company’s advertising technology, and the results are still pending.
The trial began in the US District Court for the Eastern District of Virginia in September. Allegations are rife that Google sought to control the online ad market by buying competitors and bullying publishers and advertisers into using the company’s ad platform.
It’s unclear whether the proposed breakup of Google’s technology divisions could extend to its advertising infrastructure as well. But it’s a situation that would have a material and direct impact on the brands and marketers that fuel the company’s growing $66 billion advertising business.
The basis of the FTC’s 2020 lawsuit against Meta was that the company’s acquisitions of Instagram in 2012 and WhatsApp in 2014, back when it was still part of Facebook, amounted to a monopoly that left consumers with few other options.
Tech acquisitions are a way of life in Silicon Valley, so the case has far-reaching implications. But four years later, the argument has still not been tried, and the cycle of public attention has ebbed and flowed, with various starts and stops.
The District Court of the District of Columbia in the US dismissed the first suit in June 2021. The FTC accused the social media company of controlling the market, but did not properly define the market. In a refiling, the Commission argued that since 2011, Meta has had a “dominant share of the relevant market for US personal social networking services.”
The momentum then seemed to pick up, and Meta filed an unsuccessful motion to dismiss.
In February 2024, the FTC pushed for a trial by the end of the year. Two months later, as Meta filed to dismiss the case again, his lawyers doubted that “a case of this size and complexity” could move to trial by then.
Whenever it happens, the trial will not end with a slap on the wrist for Meta if the government prevails. And if regulators succeed, it would set a precedent for the tech sector, potentially destabilizing two key avenues for brands, and reshaping the creator economy amid a booming social commerce market expected to grow to $8.9 trillion on it, according to Technavio, over the next one. four years.
After former President Donald Trump’s administration first targeted the platform, the Biden administration put its name to a bill in April demanding that TikTok separate from ByteDance, its Beijing-based owner. Now, the fate of the app could not be so certain.
With two months to go, the deadline for the Chinese parent company to divest the business due to national security concerns is fast approaching.
Spurred by an outcry from fans and creators complaining about TikTok’s ban, the business sued the government in May, calling the legislative action unconstitutional, as “one designated speech platform is subject to a permanent national ban, and a ban on all Americans. from participating in a unique online community of more than a billion people worldwide.”
Since then, both presidential campaigns have dominated the scene, hoping to reach young voters and infuse their candidates with relevance and cachet. More than 8 million young Americans are eligible to vote for the first time in 2024, and that’s just a fraction of the roughly 41 million total Gen Z voters this year.
Trump reversed course, promising to “save” the app.
Whether it can be saved, only January knows. But TikTok, along with its partners and the huge crowd of 150 million US users, could be positioned as a leading social fashion platform and a new e-commerce giant in its own right.
The only certainty is that these ups and downs don’t seem to be hammering ByteDance co-founder Zhang Yiming — whose $49.3 billion fortune put him atop the Hurun China 2024 Rich List.
Amazon topped third-quarter forecasts across its core business lines.
In Amazon’s case, the latest jab in the government’s antitrust crusade landed in the US District Court for the Western District of Washington in September. That’s when the FTC and 17 states sued the e-tailer, alleging unfair practices towards sellers in the market, while pushing its own services.
The government argued those actions, which included preventing Amazon merchants from selling the same products through other sites, “artificially” raised prices and harmed consumers.
Amazon has denied the allegations, claiming it offers low prices and does not bully sellers. He also countered, saying the situation shows a “fundamental misunderstanding of retail”.
Then the company issued what could be a thinly veiled threat: If the lawsuit doesn’t go away on Amazon, it would force the company to “engage in practices that harm consumers and the many businesses that sell in our shop” – in essence, a reflection of the very reality that the FTC and state claims are already happening.
The case is scheduled to go to trial in October 2025.
Whatever the outcome, the decision is likely to shape not only Amazon’s retail business and its sellers, but the way major markets operate overall.
Washington is indeed all over Silicon Valley.
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