US Lawmakers Take Aim at Big Tech While Europe Takes Action

At a time when bipartisanship in Congress seems about as likely as a recurrence of the woolly mammoth, a host of measures aimed at curbing the power of big tech companies has received support from lawmakers on both sides of the aisle. At issue are antitrust practices from companies such as Amazon, Google, Apple, and Facebook.

In the middle of October, Sen. Amy Klobuchar put forth legislation that would block online platforms owned by Big Tech companies from promoting their products over third-party vendors. Similarly, a group of democrats in the House of Representatives announced plans for a bill that would strip away some liability protections for tech platforms, an issue highlighted by the previous week’s Facebook whistleblower hearings.

U.S. Congress’ Latest Round Against Big Tech

This isn’t the first time that Congress has tried to tame the influence of the technology behemoths. In October of 2020, almost a year to the day of Sen. Klobuchar’s announcement, Democratic lawmakers issued proposals that would make it harder for the likes of Facebook, Amazon, and Google to acquire other businesses. They also want new rules to make the playing field more competitive.

Byproduct of a 15-Month Investigation into Tech Companies’ Market Dominance

The byproduct of a 15-month investigation into antitrust issues, the goal of these bills is to reduce big tech’s control of digital markets. Furthermore, the legislation may change how anti-competitive measures are enforced, whether technology companies have the right to promote their products on their platforms, and if they are allowed to acquire or merge competing companies. These bills were brought up again last June in another round of discussions among the House Judiciary Committee.

As expected, big tech companies responded in kind. Their lobbyists protested that these bills could weaken American’s tech sector and place it at a distinct disadvantage to Chinese competitors. They also claimed that they would curtail the companies’ ability to provide free products to consumers. This response, however, shouldn’t really surprise anyone in light of Washington’s decades-long policy of coddling these companies with little to no oversight. Nevertheless, recent scrutiny over hot button issues like fair competition, hate speech, and consumer privacy have made it much more difficult for lawmakers to continue to look away.

U.S. Lawmakers Try to Keep Up with European Regulators

The most recent round of legislation represents an attempt by U.S. lawmakers to hold big tech companies to the kind of standards that the European Union has enforced for years now.

One of the big takeaways from this latest attempt to corral the tech giants’ influence is that the U.S. has mostly stumbled while Europe has forged on ahead. For instance, the European Union has already drafted both the Digital Markets Act and the Digital Services Act. The former aims to reduce anti-competitive practices while the latter would regulate online content. The EU hoped to have the rules in place by spring of 2022, although it appears that target may be delayed somewhat.

An End to Self-Preferencing

One of the main goals of rules proposals on both sides of the Atlantic is to end the tech companies’ practice of self-preferencing. This occurs when app search results on platforms like Amazon, the Apple App Store, Google Play, and the company’s search engine display their products more prominently than ones from other companies. In effect, these companies are gaming the system in a way that their algorithms prevent others from doing so. For instance, Google’s algorithm is constantly tweaked to ensure that their organic search engine results favor valuable content. They want the search engine optimization process to reward those who serve up relevant content to users instead of those who use black hat tactics to inflate their rankings. However, these companies have no problem skewing the system for their own benefit.

Not the First Time Around for Europe and Big Tech

The legislation from Europe, however, is just the latest in a slew of attempts to check the power of Big Tech platforms. In fact, the EU has levied fines against Google totaling nearly $10 billion in addition to at least four cases pending against Apple.

This past September the UK joined the fray with the Age Appropriate Design Code, also referred to as the Children’s Code, which mandates that companies that target consumers under the age of 18 comply with a set of 15 standards. Indeed, the EU has set an example by levying fines and charges against Big Tech while its U.S. counterparts are still arguing over proposed regulations.

U.S. Data Protection Lags Behind Europe

One of the reasons why these companies enjoy such overreach is that Congress has failed to implement a comprehensive data-protection law like the EU’s General Data Protection Regulation. The GDPR comprises a set of regulations designed to allow users control of their personal data collected by companies.

Congress, for its part, hasn’t really updated some of the protections it put in place more than twenty years ago like the Children’s Online Privacy Protection Act, or COPPA. Passed back in 1998, the bill no longer reflects many of the dangers young people face from social media platforms.

Consequently, Sen. Edward Markey, who penned the original COPPA, has introduced legislation that would preclude online businesses from gathering personal information from anyone between 13 and 15 years of age without the user’s consent. It would also mandate an “Eraser Button” in which companies would give users the chance to get rid of a child or teen’s personal information. Lastly, it would institute a “Digital Marketing Bill or Rights for Minors” that would place limits on the amount of personal information companies could collect from teenagers.

Unfortunately, we find ourselves in a situation in which many states have filed numerous antitrust charges against tech titans like Facebook and Google without ever making it to trial. In fact, most of these cases are probably years away from any kind of a decision.

EU Continues to Hold Big Tech Accountable

As recently as the beginning of October, four search engines including DuckDuckGo enjoined the EU to hold Google’s Alphabet unit accountable, charging that they yet to see meaningful enforcement of a three-year-old antitrust ruling against Google. Back in 2018, the European Commission fined Google $5 billion for using Android to maintain its stronghold within the search engine space. In addition to its record-setting fine, the Commission also said that Google had to provide a more level playing field for its competitors.

Europe Goes After Facebook While U.S. Holds Hearings

Facebook isn’t safe either as another proposal from the European Commission, expected in November, would compel both Facebook and Google to hand over data regarding political ads. The idea is to forestall abuse of social media from political parties and the subsequent manipulation of voters via targeting. Much of the impetus for such proposals stems from the Cambridge Analytica scandal in 2018. Regardless, Europe’s willingness to spring to action to monitor social media stands in marked contrast to the United States, whose lawmakers publicly chastise Facebook executives at high-profile hearings without enacting laws to make them accountable.

Microsoft Also Feels the Heat in Europe

Although it remains one of the largest and most well-known tech companies, Microsoft has skated by without much scrutiny in the U.S. In Europe, however, EU officials are investigating a complaint from Slack Technologies, now a division of Salesforce.com, into whether the Microsoft Teams app integrated with Office results in an unfair competitive advantage. Regulators began by asking this question of Microsoft’s competitors. Nevertheless, back on our shores, Microsoft has yet to feel the brunt of the current antitrust backlash.

EU Makes Move to Regulate Artificial Intelligence

While the 27-member EU bloc may share a cultural inclination to safeguard personal data and to want to know how it’s used, they aren’t resting on their laurels when it comes to Big Tech. In fact, a survey from December 2019 showed that approximately three-quarters of European citizens wanted to know how their data is utilized by social media platforms when they access other websites. To get ahead of the curve, the EU has started working on plans for regulating artificial intelligence. As machine learning becomes more integrated into social media platforms, the EU has realized that this technology demands much more oversight.

When will the U.S. Catch Up?

At the end of the day, U.S. lawmakers and regulators remain constrained by outdated laws which make it increasingly difficult to prosecute large technology companies. Amazingly, their frustration is echoed by many of these same companies. Indeed, many Big Tech executives complain of having trouble conforming to rules that don’t really exist.

While the EU has taken a more aggressive stance towards tech regulation, the U.S. relies on a mishmash of state laws that make it confusing for both companies and consumers. Even Facebook bemoaned a lack of guidance from the federal government. In response to last week’s whistleblower hearings in the Senate, Facebook said that the problems with its treatment of kids are due to a lack of “standard rules for the internet.” The company added that the burden is on Congress to act since it’s been a quarter of a century since internet rules have been updated.

Ex-Facebook employee Frances Haugen’s recent bombshell testimony in front of Congress makes clear that bipartisan consensus on how our country should regulate internet content cannot come soon enough.