5 MINUTE READ | July 16, 2019
What Are The Big Tech Antitrust Congressional Hearings and Why Do They Matter?
Abby Long is the Senior Managing Editor at PMG.
As a part of an 18-month federal investigation, the Federal Trade Commission and the U.S Department of Justice have been looking into the biggest tech companies as they build a potential antitrust case(s); posing the question: Should the biggest tech platforms be broken up?
Image of Washington D.C.
It’s evident that, as economists put it, a ‘consumer change of consciousness’ has taken shape across American society over the past few months; allowing the questions posed by these investigations to be more than moot.
While these types of hearings have been going on for quite some time, including the infamous, “Senator, we run ads.” bit from Zuckerberg, this one is different. After months and months of investigations and hearings, the government is taking its time and exploring bipartisan research, critics, academics, and antitrust advocates, including Columbia University’s Tim Wu, who will be speaking at today’s antitrust hearing on antitrust, consumer welfare, and big tech. Similar to the Microsoft antitrust investigation, the government is in no rush, leaving us to sit back and simply wait for potentially industry-defining regulation to come tumbling down our way.
In the meantime, and in case you need a refresher (or forgot all the information from that one business law class you took in college), here’s what antitrust means and why it matters.
What Is Antitrust Law?
To keep it brief, antitrust laws promote “vigorous competition” and protect “consumers from anticompetitive mergers and business practices.”
By protecting the consumer, federal regulatory bodies like the FTC work to enforce antitrust laws to ensure the rules of the competitive marketplace aren’t being broken. Contrary to popular belief, antitrust laws are not established to ‘punish’ big companies for their commercial success. Instead, these laws are meant to protect consumer interests through, what I would call, ‘healthy’ competition.
In a free and open competitive market, competition benefits consumers. By trying to attract customers, businesses will naturally compete to offer lower prices and increase the quality of their goods and services.
With the media industry hearing far behind them, today’s antitrust house hearings (see the hearing notice here) is intended to examine “the impact of market power of online platforms on innovation and entrepreneurship,” exploring whether Amazon, Apple, Facebook, and Google are stifling innovation and competition with potential monopolistic practices.
Included in this hearing are representatives from the four biggest tech organizations:
Adam Cohen, Director of Economic Policy at Google
Nate Sutton, Associate General Counsel for Competition at Amazon
Kyle Andeer, VP of Corporate Law at Apple
Matt Perault, Head of Global Policy Development at Facebook
While these individuals are not as significant as the CEOs or EVPs making an appearance, this line up communicates clearly that tech organizations are taking this investigation very seriously; sending executives who know their platforms and antitrust law better than anyone.
Along with alterations to the platform’s advertising capabilities and advanced user privacy control features, I’ve begun to notice significant shifts in the messaging and brand positioning of big tech companies, which should all be on full display in today’s hearing. In no particular order, these four brands now strongly reinforce the brand and its product’s ability to be helpful, privacy-driven, always putting the customer first, and bringing the world closer together through community. Positive company visions that are much different than the complexity of antitrust and monopolies.
What’s most interesting to me is the underlying human-centric elements of each brand’s messaging that help each of these brands develop a more friendly, helpful, and kind brand voice that has already been put to use. As highlighted by The Hill, ahead of these hearings, the tech companies referenced previous mentions of their commitment to innovation, supporting people and physical forces (like brick-and-mortar retail), and on the subject of antitrust issues.
From The Hill:
“Apple stressed it has paid out $120 billion to developers since it launched the App Store, anticipating it will face criticism over how it runs the platform.
Amazon argued that it competes directly with a number of brick-and-mortar stores, pointing out it has “retail competitors that are larger than us in every country where we operate.” The company also sought to get ahead of arguments about its acquisition of Whole Foods by pointing out Amazon controls less than 4 percent of the grocery market. Amazon controls about 37.7 percent of online sales in general.
Google pointed to previous comments by its CEO Sundar Pichai, who said the company is not “surprised” by the antitrust scrutiny but warned against government action against big tech only “for the sake of regulating.”
Emily Birnbaum with The Hill
During the hearings, anticipate further reinforcement of the efforts outlined above. In fact, it’s best to think of today’s session as a part of the government’s information-gathering process as they hear from spokespeople about their company’s practices. With the August recess just weeks away, regulatory action is (more than likely) weeks, if not months, or even years away. But that doesn’t mean you shouldn’t tune in.
As an advertiser, it’s important to keep a watchful eye on the learnings from these congressional hearings, but even more important to track are the platform updates and advertising capabilities that are sure to change in the very near future.
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The tech companies will surely learn from Congress’s inquiries, so expect platforms to further shape advertising offerings to address these antitrust fault lines and, of course, meet ever-changing consumer demands as big tech practices glean a more significant national spotlight, higher operational standards, and thus face intensified regulatory scrutiny.
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