October 28, 2020

House Antitrust Ruling Could Mean Major Changes for Social Media Platforms

Following an over year-long investigation, the House Antitrust Subcommittee has concluded that Amazon, Facebook, Apple, and Google are violating antitrust law. The subcommittee has ruled that all four of these big-name companies hold “monopoly power” over their respective industries and markets. This monopoly is a direct result of these companies buying out competing companies, and favoring their own products and services over the small businesses using their platforms. 

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In the 449-page long report submitted to Congress, the Subcommittee proposes a number of policy recommendations that, if passed, would drastically change how these four tech companies operate. Not only would this significantly impact the digital economy, but also change how consumers engage with these apps. 

Limit and/or reverse company mergers. 

One of the biggest potential changes to potentially come is the new acquisition rules. These regulations would limit major tech companies from purchasing platforms from adjacent lines of business. This will limit companies from entering into industries where they would immediately have a major advantage over smaller competing platforms. 

If one of these dominant tech companies does try to purchase another business, it will be presumed anticompetitive unless proven otherwise. This means the company must show proof that the merger is for the benefit of the general public, rather than for the benefit of the company itself. 

Not only will these regulations limit future acquisitions, but it also might result in retroactive structural changes. 

There is no denying that Facebook is one of the largest and most powerful social media platforms in the world, especially after acquiring Instagram, YouTube, and WhatsApp. With control of four leading apps, the Antitrust Subcommittee found that Facebook holds monopoly power in the social media sector. This finding could mean the potential separation of these four brand names, which might result in tremendous changes to the digital marketing world as we know it. 

Ensure equal opportunity. 

When tech giants hold monopoly power in their given market, they have the ability to manipulate the market for their own personal gain. 

When a new company comes along, these four companies have the ability to determine whether or not it is a threat to their business. If the business is identified as a potential threat, 

the tech company has two major options to choose from: acquire the company or copy their products and services. 

One of the biggest examples of this is Facebook with Snapchat and Instagram. After taking note of Instagram’s impressive rise in popularity, Facebook quickly bought the social media platform and turned it into an even bigger entity. When Facebook unsuccessfully tried to do the same with Snapchat, Facebook quickly integrated similar features that were once unique to Snapchat. Copying products and services allows tech companies to maintain their power and user loyalty – users are less likely to use various apps if all the services they need are available in one place. 

In response to this unfair behavior, the Antitrust Subcommittee has proposed new rules and regulations that would ensure equal opportunity for all businesses. These tech giants would no longer be able to influence which apps will be successful and which ones will fail. 

Not only will this benefit other small tech companies, it will also benefit small businesses using these platforms. As of now, Amazon, Facebook, Apple, and Google have the power to favor their own products and services. With new commercial nondiscrimination rules, these larger companies will be required to offer equal opportunity to companies selling products and services within their platforms. 

In order to be complicit with these new rules, the tech companies might have to offer even more tools and resources. This would prevent these tech companies from gaining an unfair advantage that allows them to outperform competitors and other businesses on their own platforms. 

Increase data portability. 

Whether you know it or not, social media platforms are constantly collecting personal data. Every click, share, like, and comment helps these platforms better understand the user, which in turn helps them create a more targeted user experience. Data portability allows users to effectively obtain this collected personal data and transfer it across different apps and services. 

As they exist today, Amazon, Facebook, Apple, Google, and all other online platforms are not required to make data portable. This presents both competing companies and users with problems when attempting to migrate data. By neglecting data portability, these large tech companies make it nearly impossible for other companies to provide a competitive user experience, which allows them to cement their status as the superior platform. 

If passed by Congress, this new policy will allow users to easily transfer personal data between apps and tools without penalty or cost. This will allow all platforms, big and small, the opportunity to provide a top-tier user experience. 

If you would like more information about the House Antitrust Subcommittee ruling or proposal, want to learn more about how the ruling could impact social media platforms, or other digital marketing services please contact Pink Dog Digital at (410) 696-3305, email us at info@pinkdogdigital.com, or visit us on the web at www.pinkdogdigital.com.

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