There have been plenty of whispers in the back alleys of Silicon Valley of the antitrust boogeyman and now the nightmares are turning into reality.
Speaking at an industry conference in Israel, Assistant Attorney General Makan Delrahim outlined his views on competitiveness in the technology industry. Those who were anticipating an antitrust battle in the US can feel suitably vindicated, as Delrahim effectively confirms he has Google and Apple firmly in the crosshairs.
“The digital economy is a fact of life, but it is not all things to all people,” said Delrahim. “There has been robust public discussion about whether the broader economy, undoubtedly transformed by digital technologies, is working well for everyone.”
Although this is not necessarily shocking news, it is a nuanced confirmation of the up-coming assault against big tech.
Last week, the US took the first tentative steps towards addressing the influence of technology on today’s society. The House Antitrust Subcommittee announced the launch of a bipartisan investigation into competition in digital markets, potentially offering a threat to solid foundation of the technology giants. Diluting the dominance of big tech is going to be a very difficult task, but it does appear the groundwork is being laid.
In this speech, Delrahim is effectively outlining the Department of Justice’s plan, as well as the justification for tackling big tech.
“Where there are credible concerns that a transaction or business practice is anticompetitive, timely and effective antitrust enforcement is imperative,” said Delrahim.
“…After all, the government’s successful antitrust case against Microsoft arguably paved the way for companies like Google, Yahoo, and Apple to enter the market with their own desktop and mobile products.”
Microsoft’s dominance of the technology world in the 90s should not be underplayed and perhaps can be very accurately likened to Google’s influence today. Although the US Government was not successful in breaking-up Microsoft as an organization, it did manage to dilute its power and broaden the spread of wealth. When a company starts to dictate play in the way Microsoft did, the US Government starts to get a bit twitchy.
This is the issue which the likes of Google, Amazon and Apple are facing today. Such is the success of the business, through the creation of best-in-class products and strategic acquisitions to stutter the progress of competitors, the fortunes of the technology industry are incredibly concentrated. This is what Delrahim and his colleagues want to address.
Specifics are often lost in such conference speeches, but an interesting point raised by Delrahim focused on “network effects”. In short, an organization has such control over the supporting ecosystem competition is suffocated before it has any genuine chance to be competitive. Perhaps this is done through acquiring nascent competitors or manipulating the ecosystem.
Although there have been some hints of strategy from Delrahim, the specifics are still evading the industry. That said, it is becoming increasingly clear that the US Government wants to dilute the power and influence of big tech.