Both Google and Amazon’s practices are currently under scrutiny in America. Authorities in America and Europe seem to have finally found a way to regulate the power of Big Tech.
A small group of, mainly American tech companies hold too much power. These companies were a long time not inhibited by rules or legislation and could do whatever they wanted online. They more or less determined online legislation. To turn the tide, Europe is introducing the Digital Markets Act, which defines a set of rules specifically applicable to Big Tech.
Although Europe is known for taking a tougher stance on tech giants, such as with the General Data Protection Regulation, foreign authorities are also clamping down on the dominance of these tech giants. Google and Amazon are already under scrutiny in America.
Lawsuit against market dominance of Google Search
Google is embroiled until the end of November in a lawsuit filed by the U.S. Department of Justice (DoJ) because of Google Search’s unfairly retained market dominance. Kenneth Dintzer, attorney for the DoJ, presented evidence of this in 2022, upon which the Department filed an antitrust complaint against Google.
The formal trial began this month. Dintzer’s evidence, the annual payment of billions of dollars to Apple, Samsung and others to make Google Search the default search engine in devices from those manufacturers, came up immediately.
Also read: Google says it dominates Search because it’s the better product
An official lawsuit, however, brings more issues to the surface. That already took shape in the revelation of sneaky price manipulations made for Google Ads. This allowed the tech giant to optimize its sales, but according to the DoJ, it also allowed the search giant to maintain its market dominance.
Given that the trial will take 10 weeks, Google does not appear to have made a strong start. Perhaps they will come up with a strong answer in the coming weeks.
Lawsuit against pushing Prime subscriptions
At the same time, the U.S. Federal Trade Commission (FTC) started a lawsuit against Amazon. This authority is empowered with the control of competition law.
The FTC accuses Amazon of pushing the Prime loyalty program. The web store allegedly misleads customers to sign up for a subscription while making unsubscribing unnecessarily complicated. Moreover, there is evidence that the practices were known internally, but they never got any solution. An internally circulated newsletter states: “The problem of inadvertent Prime sign-ups is well documented.”
Several executives from the tech company reportedly blocked a fix because of the major impact it would have on revenue numbers. The FTC details in the complaint Prime subscriptions make up for $25 billion in revenue annually.
Big Tech needs to watch its step
Both lawsuits show that authorities are becoming a stricter arbiter for Big Tech. However, bundling and pushing subscriptions are not new activities for these companies. In fact, it has raised them if we follow the authorities’ reasoning.
However, the authorities lacked the knowledge of the IT world and the tools to curb such practices. They now seem to have found a way around that, with the Digital Markets Act in Europe, for example. So Big Tech will have to watch its step while it could go about its business unconstrained before.
2 days ago
