Lawmakers are gearing up Antitrust laws that may affect how big tech stocks conducts their businesses

On Wednesday, lawmakers in Congress met with the CEOs of giant tech companies, Amazon (AMZN), Apple (APPL), Facebook (FB), and Google (GOOGL).

The hearing was concerning antitrust issues that involve each of these companies and how they compete with each other. The purpose of Congress’ investigation was to ascertain whether or not the companies have abused their dominance and power in the online marketplace.

Wednesday’s antitrust hearing was the biggest since 1998 when Microsoft’s Bill Gates went to Washington.

The hearing which started an hour late was held virtually, using Cisco’s WebEx conferencing platform. All four CEOs had faced the congress before but this time was different from what the CEOs had faced in the past. The hearing was a culmination of a 13-month investigation done by the House antitrust subcommittee and all four CEOs testified alongside each other.

US Rep. and chairman of the antitrust subcommittee David Cicilline, in his opening statement, raised concerns about Big Tech being able to consolidate power beyond what it currently has, especially during the coronavirus pandemic, as smaller businesses have been struggling to keep up. Cicilline emphasized the need to challenge monopoly power so that it doesn’t wipe away other businesses.

“Our founders would not bow before a king, nor should we bow before the emperors of an online economy,” Cicilline said.

Rep. Jim Jordan, a Republican of Ohio also raised concerns about Big Tech their anti-conservative bias platforms, including Twitter after one of President Trump’s speech was censored. “I’ll just cut to the chase,” Jordan said. “Big Tech is out to get conservatives.”

The hearing stirred up different perspectives from members of the Congress, as Republicans rose concerns about online censorship, and Democrats complained about budding monopolistic practices. Although, some members established a fact by saying big and successful companies aren’t always bad.

Both David Cecilline and Republican Ken Buck of Colorado, rose an allegation against Google of forcefully taking content from smaller companies such as Genius and Yelp. Cecilline raised concerns about Google threatening to delist Yelp, when it raised concerns. “The choice Google gave Yelp was let us steal your content or effectively disappear from the web site, isn’t that anti-competitive?” he asked.

In his defense, Sundar Pichai only said: “When I run the company, I’m really focused on giving users what they want. We conduct ourselves to the highest standard. Happy to engage, understand the specifics, and answer your questions further.”

All four tech giants were under scrutiny for different reasons: Amazon, for its use of seller data; Apple, for its use of app store policies; Facebook, over its acquisition strategy and its dominance in online advertising; and Google, over its practices in search and advertising.

The hearing was supposed to feature the four CEOs argue and testify how their platforms have contributed to society over the last years. They were expected to state all benefits their tech companies provide to the US government and its citizens, and refer to China as a competitive threat. In Zuckerberg’s copy of the testimony, CNN highlighted that the Facebook founder will focus his arguments on the fact that Facebook has attained success “the American way: we started with nothing and provided better products that people find valuable.” He also wrote that Facebook’s vision for the internet was clear, unlike China which is “focused on very different ideas.”

In their response and defense, all four CEOs had similar things to say. They all mentioned that their companies also faced many competitors, and they create jobs for Americans; and also, benefit small businesses and consumers.

Jeff Bezos, the founder of Amazon and richest man on the planet, spoke in defense of massive companies. He said they are uniquely able to do big and complex tasks. “I don’t care how good an entrepreneur you are. You’re not going to build an all-fiber Boeing 787 in your garage.”

Mark Zuckerberg of Facebook also wrote in his testimony that it would only be a matter of time before another service will become popular. “I’ve long believed that the nature of our industry is that someday a product will replace Facebook. I want us to be the ones to build it, because if we don’t someone else will.”

Part of lawmakers’ concerns over the four tech companies is that these companies have become so powerful that they can claim monopoly, stifle competition, and prevent innovation by either acquiring rivals or stealing their content. The committee is currently gearing up new antitrust regulations for Big Tech that will curb any traces of market monopoly.

President Trump also supports the decisions of the committee, as he repeatedly claims that Silicon Valley stifles conservative voices. He said in a tweet that he would personally take actions to curb Big Tech’s power if Congress failed to do it.

“If Congress doesn’t bring fairness to Big Tech, which they should have done years ago. I will do it myself with Executive Orders,” Trump tweeted.

Understanding antitrust laws

Every thriving economy ensures that it creates and maintains a healthy competitive market place for all businesses. Laws are put in place to regulate how companies operate their businesses and protect the interest of consumers. The aim of such laws is to provide an equal market place for all businesses in their respective industries while preventing bigger businesses from getting too much power and dominance over their competition. In other words, these laws prevent certain businesses from playing dirt; they are called antitrust laws.

Antitrust laws are also referred to as competition laws, they are statutes developed by US lawmakers to protect consumers from toxic business practices. These laws also ensure a free and fair competitive market environment for all businesses. Over the years, antitrust laws have evolved with the market and they now include protecting consumers and businesses against potential monopolies, and potential disruptions to the productive flow of competition. Antitrust laws are also applied to market allocation, price-fixing, and bid-rigging.