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Big Government versus Big Tech: What Businesses Need to Know

July 20, 2021 | by Idx
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Big Government and Big Tech just cannot get along. Recently, both sides have taken shots at each other as their war intensifies. Click here to learn more.

Big Government and Big Tech just cannot get along. On July 16, President Joe Biden said Facebook is “killing people” through the spread of misinformation about the COVID-19 pandemic. On July 18, U.S. Senator Amy Klobuchar said that Big Tech social media companies “greatly contributed” to misinformation about the COVID-19 pandemic. She advocated for changing the liability standards for social media companies when it comes to spreading vaccine misinformation. After Facebook responded with a strong rebuke, President Biden backed away from his claim. But the war of words only underscores the growing conflict between governmental bodies and Big Tech companies. The dust-up over pandemic misinformation is also linked to an ongoing fight over how much power Big Tech wields in general – a fight that could lead to the breakup of Big Tech. In recent days, both sides have taken shots at each other as their war intensifies:  

  • On July 14, Facebook petitioned the Federal Trade Commission (FTC) to have FTC Chair Lina Khan recused from all decisions related to the company. Facebook’s action is similar to Amazon’s own motion that sought to recuse Khan from anti-trust investigations into the company. Both Amazon and Facebook believe that Khan’s past criticisms of Big Tech in academia show that she lacks impartiality. For both companies, the stakes are huge: at a minimum, scrutiny from regulators such as the FTC could delay or scuttle actions such as Amazon’s acquisition of MGM. The fight between Big Government and Big Tech could also lead to the breakup of Big Tech. 
     
  • On July 13, the French Competition Authority slapped Google with a €500 million ($589 million) fine from the French Competition Authority (FCA) for failing to comply with an April 2020 order to negotiate fairly with news publishers over the use of, and payment for, their articles and other content. Google needs to come up with proposals explaining how it will recompense companies for the use of their news or else face additional fines. 

  • On July 2, Spain’s Comision Nacional De Los Mercados Y La Competencia (CNMC) announced it is investigating Apple and Amazon for allegedly colluding against third-party sellers of personal devices. This is one of many actions taken by European countries against the Big Tech firms.  

  • On June 30, Amazon filed a motion that sought to recuse Federal Trade Commission (FTC) Chairwoman Lina Khan from anti-trust investigations into the company. Amazon says Khan’s past criticisms of the company’s power show that she lacks impartiality in the FTC’s ongoing anti-trust investigations about Amazon, including the FTC’s review of Amazon’s acquisition of MGM. The outcome of Amazon’s motion remains to be seen. 

  • On June 29, A U.S. federal judge dismissed anti-trust lawsuits against Facebook filed by the U.S. government and most states. U.S. District Judge James Boasberg said a lawsuit filed against Facebook by the Federal Trade Commission (FTC) was “legally insufficient” because it did not plead enough allegations to support monopolization claims against the world’s largest social media network. The judge also dismissed the case brought by 46 states because attorneys general acted too slowly to make their claims. This news was a PR victory for Facebook although the story is not over: the FTC has 30 days to file another lawsuit. 

  • On June 24, Google said that the company is delaying the launch of an ambitious initiative to block cookie tracking on Google Chrome. This was a victory for the United Kingdom’s Competition and Markets Authority (CMA), which has been investigating Google over anti-trust concerns. Google delayed its cookie-blocking plan to satisfy the requirements of the CMA. 

Who Exactly Is Big Tech, and What Are Big Tech and Big Government Fighting about? 

How you define Big Tech depends on which source you read, but it commonly refers to Alphabet (by extension, Google, which Alphabet owns), Amazon, Apple, Facebook, and Microsoft.  

The fight between Big Tech and Big government comes down to power who has it. We have seen various lawsuits and proposed legislation that indicate companies like Apple and the above have become so big and far-reaching that they hurt competitors and intrude on consumer privacy. However, Big Tech rebuts this notion and says Big Government is wielding its own power to stifle Big Tech innovation. 

Of course, the conflict is nuanced, and Big Tech have been known to fights amongst each other, especially over issues such as privacy. Facebook, for example, is upset over Apple’s efforts to make it harder for Facebook to track user behavior across the web. And Big Tech firms are reportedly annoyed that Microsoft has been flying under the radar screen while its rivals get hit with the brunt of governmental scrutiny.  

Why Are Big Tech and Big Government Fighting Now? 

The reasons are complicated and depend on what country you live in. In the United States, negative stories about Russian abuse of digital platforms such as Facebook and Google to influence the outcome of the 2016 Presidential election are often cited as a turning point in galvanizing bi-partisan action against Big Tech. A flurry of bad press over inappropriate usage of Facebook user data over the years also helped put Big Tech in an unfavorable spotlight. In addition, the spiraling stock valuations of Big Tech companies, especially during the pandemic, has thrown into sharp relief the enormous financial influence Big Tech wields. Legislators around the world have unleashed a slew of actions aimed at reigning in the power of Big Tech. 

Where Is the Big Government/Big Tech Fight Headed? 

No one can say for sure, but legislative actions in different countries could: 

  • Break up Big Tech companies. 

  • Reduce the scope of their power. For instance, as cited here, in the United States various pieces of legislation in progress could make it harder for companies to acquire other businesses or enter new lines of business. Governments in many other countries are keeping Big Tech busy with legislation.  

And that’s just the tip of the iceberg. 

What Should Businesses Do About the Big Tech War? 

  • Don’t overreact. If you rely on Big Tech platforms to connect with your audiences – whether through advertising, organic content, or both – stay the course. The most dramatic potential consequences of the Big Government/Big Tech war – say, a break-up of Big Tech companies – would take years to unfold. Don’t overreact by scaling back your presence based on what you read in the news. 

  • Do follow potential legislation, especially privacy legislation. Understanding how privacy legislation could affect how you use Big Tech platforms will allow you to make informed decisions. If you work with an agency partner to create content, paid or organic, work closely with them to understand how privacy laws affect you. 

Contact IDX 

With privacy laws constantly evolving, we urge businesses to manage privacy carefully. If you need a partner, contact us. Learn more about our technology solutions here.   

For More Insight:  

For more insight, here are some of our latest posts about consumer privacy: