For Big Tech, is the latest salvo on government regulation — this time in the U.S. — mere saber rattling or an executive order with teeth?
As reported on Friday (July 9), U.S. President Biden is widely expected to sign an executive order that will give various federal agencies the leeway and authority to curb consolidation and the ways in which data are collected and utilized across a number of industries, including Big Tech.
The executive order also includes a number of provisions that directly single out companies including Google, Apple, Amazon and others, per reports in The New York Times.
As for the powers that are being extended to the agencies, the Federal Trade Commission (FTC) will be able to craft new rules that limit how some of those firms handle data at the consumer level.
Biden’s order seems to be a more direct approach to putting guardrails around larger tech firms, in comparison to a number of (similar) measures are moving through various stages of progression in the halls of Congress.
In one example, the U.S.. House’s Judiciary Committee panel has put forth proposed legislation that would, among other things, increase the budget of the FTC, and would give states more power over deciding which courts would be the venues in which to try tech antitrust cases.
And, as chronicled in this space last month, other legislation is advancing that would curb the market dominance of Big Tech.
Drilling down more fully into the initiatives in the Biden executive order Friday, a “fact sheet” on the order said that “for decades, corporate consolidation has been accelerating. In over 75% of U.S. industries, a smaller number of large companies now control more of the business than they did twenty years ago. This is true across healthcare, financial services, agriculture and more.”
Tech gets special mention as the order claims that it tackles three areas in which technology firms are “undermining competition and reducing innovation.”
Focusing On The Tech Platforms
And against that backdrop, the largest tech platforms have acquired hundreds of companies — including what the documents terms are alleged “killer acquisitions” that are “meant to shut down a potential competitive threat. Too often, federal agencies have not blocked, conditioned, or, in some cases, meaningfully examined these acquisitions.”
Thus the new policy is to examine mergers with greater scrutiny — especially those done by dominant platforms. The scrutiny will winnow down to the practices of serial mergers, data accumulation and competition through “free” products.
“Big Tech platforms [are] gathering too much personal information,” the document continues. “Many of the large platforms’ business models have depended on the accumulation of extraordinarily amounts of sensitive personal information and related data.”
Thus the FTC is encouraged to establish rules on surveillance and data accumulation — and bar unfair methods of competition on online marketplaces.
Now, these are rather general statements and assignments of duties. But they dovetail with the slew of antitrust bills that have been leveled at Big Tech in the past several months, and the lawsuits that have been accumulating as well.
And as reported this month, the FTC voted to rescind a 2015 policy statement that hampered its ability to file antitrust lawsuits, effectively lowering the bar for such actions.
But as far as the direct curbs are concerned, the administration, we contend, is simply asking for more investigations, with the eventual ripple effects to come sometime later on the horizon.
Interestingly, the sweeping order signed by Biden also includes some mention of the financial services industry and oversight in that realm.
The White House document notes that, amid increasing bank consolidation — with disproportionate impact on communities of color and rural areas — the administration has encouraged DOJ and the agencies responsible for banking (the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency) to “update guidelines on banking mergers to provide more robust scrutiny.”
And in a direct nod to data collection, the administration is prodding the Consumer Financial Protection Bureau (CFPB) to issue rules “allowing customers to download their banking data and take it with them” because it remains hard for individuals switch providers as they cannot easily take their data to a new bank.
“That increases the cost of the new bank extending [consumers] credit,” the White House said.
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