Taming the Digital Giants

Sept. 9 marked the launch of a U.S. antitrust investigation of Google, demonstrating that the American justice system has finally decided, in response to public pressure, to challenge the Google Apple Facebook Amazon monopolies.

Breaking up a monopoly is a long-winded battle. The U.S. government and justice system had to fight for almost three decades before the Supreme Court handed down a decision in 1911 requiring the dismantling of John D. Rockefeller’s Standard Oil Company.

The launch on Sept. 9 of an antitrust investigation of Google by the attorneys general from 48 states, the District of Columbia and Puerto Rico, is just the first step of a process that promises to be a drawn out, difficult one. Irrespective of the outcome, the bipartisan initiative shows that the mood toward the digital economy giants has changed for good on the other side of the Atlantic.

Three days earlier, a similar offensive was launched against Facebook. After several decades of laissez-faire policy, which enabled the United States to acquire global dominance over the internet— unrivaled except by China—the American justice system, in response to growing public pressure, has finally decided to challenge this monopoly, which is disrupting the proper functioning of the economy and democracy. “[W]e have seen evidence that Google’s business practices may have undermined consumer choice, stifled innovation, violated users’ privacy, and put Google in control of the flow and dissemination of online information,” said Ken Paxton, attorney general of Texas, who is in charge of the proceedings.

Europe, the First To React

The initiative is long overdue, but also essential. Together with Apple, Google powers virtually all mobile phones, dominates 90% of internet searches, and monopolizes, along with Facebook, two-thirds of online advertising.

Europe was the first to react, inflicting hefty fines and forcing these companies to change their practices, which in turn attracted harsh criticism from free market proponents.

In the absence of generating its own major players, Europe was accused of putting up regulatory hurdles to compensate for its lack of innovation. However, economic liberalism has never been about letting monopolies flourish. For a change, Europe was leading the way. The expansion of Margrethe Vestager’s scope of work, under the new European Commission, which will cover both competition and digital policy, shows that Brussels doesn’t intend to stop there.

Nevertheless, the fines and taxes will have a minimal impact on companies with overflowing coffers. In order to truly challenge these companies for using their dominant position to block entry into the digital ecosystem, it’s vital that U.S. authorities get involved.

For countries, what’s at stake is regaining their full sovereignty. For consumers, it’s about getting rid of the illusion that the internet is free, since monopolies will inevitably lead to higher prices for goods and services and trample on users’ privacy. For competitors, it’s about breaking down the cash cows these companies have built up, which allow them to have total power over those attempting to compete with them, thereby curbing innovation of any kind.

With the rollout of 5G, the new standard in mobile telecommunications, the internet is going to become even more indispensable in our daily lives, which means it’s never been more urgent to tame the web giants. Their omnipotence must be contained before it’s too late.