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Europe to break up big tech if U.S. can’t

Following antitrust investigations from the U.S. Government into online giants Amazon, Facebook, Google and Apple back in July 2020, the EU has now threatened to break up Silicon Valley’s big tech companies if the US can’t.

The argument revolves around monopoly and antitrust laws, put in place to stop companies from engaging in anti competitive behaviour. Whilst the U.S has been conducting investigations this December in an aim to break up Facebook and bringing seemingly incriminating emails sent from its founder to light, the EU has since released two major new drafts of regulations for tech companies. 

The two documents are the Digital Markets Act and a Digital Services Act which seek to hold companies accountable for both unfair competition and the regulation of illegal behaviour on their platforms. The documents come from the EU centre of Brussels and are the first significant revamp of policy from the EU in twenty years. Both proposals for the new acts will first need to be voted on by the Council of Ministers and European Parliament before being able to be made into law. There is, however, no timetable as of yet to when this might occur. 

The proposals include big fines for big tech companies seeking to eat up market competition. Companies will be liable for up to 10% of their worldwide revenue for acts of deliberate anti-competition, while fines for up to 6% of global revenue will be put in place for companies that fail to regulate their platforms for illegal behaviour. 

If the new laws were to come into place they would indicate one of the biggest and most significant shifts in worldwide policy making, as EU law would greatly impact US companies’ working practices. The EU laws are noted to be some of the most strict and stringent big tech companies would have to comply with.

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US government investigating how 9 social media companies collect and use data

The Federal Trade Commission, which enforces US antitrust and consumer protection laws, has issued orders to nine social media companies demanding information about how and for what purposes they collect and store user data. The FTC is also wants to know about the companies’ advertising and user engagement practices, specifically as they relate to child and adolescent users.

The list of targeted companies is a rogues gallery of digital malefactors: Amazon, ByteDance (owner of TikTok), Discord, Facebook, Reddit, Snap, Twitter, WhatsApp, and YouTube. They have 45 days to respond to the order. I’m not sure, but I don’t believe that any of them have 1300 numbers.

On its webpage, the FTC writes that the objective is to gain a fuller understanding of:

  • how social media and video streaming services collect, use, track, estimate, or derive personal and demographic information;
  • how they determine which ads and other content are shown to consumers;
  • whether they apply algorithms or data analytics to personal information;
  • how they measure, promote, and research user engagement; and
  • how their practices affect children and teens.

“The FTC wants to understand how business models influence what Americans hear and see, with whom they talk, and what information they share,” explained the FTC in a press statement. “And the FTC wants to better understand the financial incentives of social media and video streaming services.”

As CNBC reports, there’s a clause in the FTC Act that enables the FTC to conduct wide-reaching probes that are separate from law enforcement. These are known as “6(b) studies.” The FTC carried one out earlier this year in which it reviewed various takeovers by some of the major US monopolies, namely, Alphabet (Google), Amazon, Apple, Facebook and Microsoft.

Of course, Bill Gates’ Microsoft was the subject of a major antitrust lawsuit in 2001. In that case, Microsoft was confirmed as a corporate outlaw operating in violation of the Sherman Antitrust Act of 1890. Now Facebook finds itself faced with a similar lawsuit filed just this month by the FTC along with 48 attorneys general. In that suit, Facebook is alleged to have taken over Instagram and WhatsApp after determining that, if left alone, they could pose a threat to Facebook’s hegemony.

Thus, Facebook is accused of unlawfully crushing competition and subsequently harming consumers by limiting their range of options, particularly with regard to privacy. Facebook plans to use the fact that the FTC approved its takeovers of Instagram and WhatsApp as the main pillar of its defense.