There is such a thing as excessive market power, and it’s held by a handful of tech giants that hold a dangerous monopoly of data, the most powerful weapon in any arsenal.
Now, the European Commission is reportedly gathering names and honing new rules and regulations as it attempts to increase its own powers to counter this monopoly.
According to the FInancial Times, the list will include as many as 20 companies, with Facebook, Google (whose parent is Alphabet), and Apple likely topping it. If the European regulators succeed in boosting their own power, those on the list may find themselves subject to stringent new rules designed to rebalance data control and spread the wealth.
Fines aren’t enough, and they happen after the fact. Instead, the EU is hoping to change things before they go that far. And if big tech doesn’t play along, the EU could potentially break it up and force companies to sell units to ensure competitiveness, FT reported.
Who ends up on the target list depends on market share of revenues and number of users.
Google is certain to be at the top of the list, which is targeting the “gatekeepers” who can keep competitors off their platforms or make it impossible for them to compete.
In 2018, the European Commission slapped a record antitrust fine on Google for $5.1 billion as punishment for abusing Android’s dominant position in the smartphone market. Google appealed. But there’s no arguing its dominance. Facebook, too.
In July this year, a landmark European Court of Justice dealt a blow to a Facebook mechanism for outsourcing data processing from the EU to the U.S. That ruling left the door open for EU regulators to throw up roadblocks if they think European data is going to unsafe locations.
Related: Global Tech Stocks On Edge Over Trump TikTok Ban
That, in turn, sparked rumors--later denied in September--that Facebook could close its digital doors to Europeans.
Both Google and Apple charge other mobile apps a 30% commission for all sales that go through the Apple App Store or the Google Play store. That leaves very little margin for competing apps to make any money at all.
Apple has now temporarily suspended those commissions only for “live experiences”, such as cooking classes, through the end of the year because of coronavirus. It’s not enough to get Apple off the hook for this, especially in Europe.
Amazon is another likely contender for the EU hitlist.
The Financial Times report on EU plans to tackle big tech coincides with a report issued by Democratic lawmakers in the U.S. this week, which likewise argues that the four biggest tech companies have amassed far too much power.
The 400-page report was released last week by the House Judiciary Subcommittee on Antitrust following a 16-month investigation into potential abuse of power by these corporate giants.
By Michael Kern for Safehaven.com
More Top Reads From Safehaven.com:
