In an interview with the Financial Times, the EU Commissioner for Competition Margrethe Vestager spoke of a “new phase” that has opened in the regulation of Big Tech by the European and US Antitrust authorities. Verstager referred to ever greater integration into regulatory activities on both sides of the Atlantic. This paradigm shift essentially implies a growing attention to mergers between companies and to the acquisitions, by the industry giants, of small and medium-sized companies, in order to avoid the formation of monopolies in the digital market.
As specified by the EU Commissioner for Competition, the synergy between the European Union and the United States has strengthened following the appointment of Lina Khan as head of the American Federal Trade Commission. In fact, even before her appointment to the FTC, Khan was known for her positions aimed at imposing greater control over the formation of digital monopolies, even at the cost of spinning off some large companies and forcing them to sell other companies previously acquired. In particular, already in 2016 Lina Khan had written an essay entitled “Amazon’s Antitrust Paradox”, which had triggered a debate on how to update antitrust regulations, adapting them to the digital economy.
In the essay, Khan argued that some platforms such as Amazon are in conflict of interest: on the one hand, in fact, they control the algorithms and infrastructures that determine the offer of products on digital markets, on the other they sell their own products on digital markets. platforms they control. In the words of Democratic Senator Elizabeth Warren, “you can’t be the referee and have a team playing at the same time.”
The “Khan doctrine” is extremely topical, if one thinks, for example, of the sanction of over one billion euros recently inflicted on Amazon by the Italian Competition Authority (AGCM). In fact, the Italian Antitrust ruling establishes that Amazon penalizes some independent retailers who do not use its logistics service. For this reason, the goods of these retailers would be less visible on the platform, with consequent and significant damage in terms of sales (as witnessed by an independent retailer to the weekly The Post International – TPI).
In short, Lina Khan’s theses are finding application in the judgments of the Antitrust authorities, and the turning point of her appointment as head of the Federal Trade Commission is perceptible both in Europe and in the United States, as highlighted by Margrethe Vestager. The Italian case, in fact, is far from isolated.
The Federal Trade Commission is making Meta feel breathless: an antitrust investigation was recently opened for the acquisition, by Mark Zuckerberg’s company, of the Supernatural virtual reality fitness app. It is one of the acquisitions planned by Meta to orient itself more and more in the direction of the metaverse. But the opening of the FTC investigation will, in fact, slow down the operation for at least a year.
Zuckerberg’s company recently also ended up in the crosshairs of the Competition and Markets Authority (CMA), or the UK Antitrust, which blocked the acquisition of Giphy, a platform for sharing gifs. The CMA’s argument on this point was very clear: through this operation, Meta would have caused serious damage to the competition between social platforms, since it would have in fact severely limited the possibility for other companies to use Giphy gifs. This would have further directed social traffic to Facebook and Instagram, to the detriment of competitors.
And again, the Federal Trade Commission still aims to block the acquisition, by the company Nvidia, of Arm, a company that among other things produces technologies for chips. The argument is always the same: with this merger, Nvidia would assume a dominant position in the market for technologies for the production of chips, effectively undermining the competition.
The change of pace of the regulatory authorities and European institutions is also witnessed by the Digital Markets Act (DMA) and the Digital Services Act (DSA), the two laws through which we want to try to curb the formation of monopolistic positions by acting ex ante: in fact, the sanctions of the Antitrust authorities are not enough, but we need a perimeter of defined rules that safeguard competition on digital markets and prevent operations capable of undermining it.
As reported by the Financial Times, the strategy pursued by the EU and the United States is not a little unnerving the Big Tech, and not just them. Sean Heather, vice president of the antitrust section of the US Chamber of Commerce, criticized this block of acquisitions, saying to the British newspaper: “Antitrust regulators should stay away from agreements that do not fall under their jurisdiction. The ‘divide and rule’ strategies between antitrust authorities to block mergers are tantamount to cartel behavior ”. In short, the accusation is that of behaving as monopolists in the legislative sphere, similarly to large companies whose excessive power one would like to limit.
We are therefore preparing for a long and tiring “position war” between the giants of the web and the US and EU institutions. But, with all evidence, this is a decisive phase. Years of deregulation of the digital market have in fact produced blocks of power that put at risk not only the markets, but the very functioning of political and democratic systems, as the many scandals concerning the manipulation of elections, disinformation, incitement (through the mechanisms dissemination of content on platforms) of ethnic and religious hatred (think of the case of Facebook and the Rohingya). Backing off in the face of Big Tech pressures, this time around, could prove to be a fatal sin.
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