US lawmakers take on big tech’s dominance – The Average Joe
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    US lawmakers take on big tech’s dominance


    June 15, 2021

    Big tech companies are about to get another slap on the wrist — but this time, it might actually hurt them.

    On June 11, members of the US House introduced 5 bills in an effort to rein in the power of the largest tech companies — including Apple, Amazon, Google and Facebook.

    Tell us something new

    We’ve heard this story before. Big tech companies hold too much power, governments try to control their power, but politics gets in the way — and big tech continues their dominance. So what’s different this time?

    • Support from both Democrats and Republicans. Past bills failed to pass due to a lack of support from both parties.
    • While both parties agree change is necessary, they disagreed on how big tech should be regulated.
    • According to NYT, the new bills are the most aggressive on Silicon Valley tech giants to date.

    Big tech is getting hit on a global level and there’s one common concern — they’re too powerful. In 2021, we’ve seen lawsuits from Europe, social media regulations from India, and a near ban on Facebook/Google from Australia.

    Leveling the playing field

    Many of these big tech companies operate marketplaces while competing with their own customers.

    • Google displays its own products (i.e. Google Maps, Google Travel) alongside advertisers that pay Google to show up on search results.
    • Amazon sells its own products on its marketplace — while allegedly using data from third-party sellers to improve its own products.

    The proposed bills would prevent these practices, make it harder to acquire competitors and make it easier to move consumer data/profiles to competing platforms.

    Also, big tech companies could be forced to split up their business units but don’t expect changes any time soon:

    • Hurdles to go through: If the bills pass the House, the Senate has to vote on it.
    • Lack of support: It is unlikely all 5 bills will receive support and even if they’re passed, they might be watered down with renegotiations.

    Investors: big tech, big problems

    In the past year, the 4 big tech giants are up by an average of 48% — just slightly higher than the 44% average in the broad tech index — NASDAQ.

    • Business regulations have likely impacted returns and could continue to weigh on their stocks.
    • The potential impact depends on what bills actually pass the White House, if any.

    What’s the worst-case scenario for stocks? We can look to the 2001 antitrust case against Microsoft, forcing it to be less aggressive in its business practices — leaving Microsoft’s stock flat for the next decade.

    Also: 15 ways the new bill could make your lives harder — including prohibiting Amazon’s free shipping service.

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