Justice Department Begins Review Of Whether Big Tech Is Too Powerful
STEVE INSKEEP, HOST:
There was a time when a lot of the U.S. economy revolved around the Big Three automakers. They dominated their industry. Their products revolutionized society, and they became the focus of constant debates about inequality and economic change and corporate power. Today, such debates center on the big four tech companies - Facebook, Amazon, Apple and Google. Congress has questioned their privacy protections and the spread of false information, and now the Justice Department says it is starting an antitrust investigation.
NPR's Aarti Shahani is here. Hi there, Aarti.
AARTI SHAHANI, BYLINE: Hi.
INSKEEP: So what is the Justice Department saying?
SHAHANI: Well, the DOJ didn't name names, but in its announcement, the agency says it's looking at market-leading online platforms that work in search, social media and some retail services online. So you get the gist.
SHAHANI: The key issue is whether these brands that we all know - they either make our smartphone or we have apps on our phone that - they're by them - whether they're stifling competition.
INSKEEP: Although it is fair to ask, how do you stifle competition when you're very often giving things away? These are often free platforms, free apps. You go to the Apple Store to shop for things, and you don't pay anything to do that.
SHAHANI: Right. So yeah, there's one school of thought that says, hey, if a product's free, that's fantastic. It can't be bad for you; you can't beat free. But that's coming under attack with this other school, that free isn't really free. In the case of Facebook or Google, the user who provides the data has been turned into the unwitting product. In the case of Amazon, small businesses that sell on the platform have to pay to play, advertise to be seen, and then their data gets turned into corporate intelligence for Amazon to drive them out of business. Apple may be giving its developers, who are the heart and soul of the app store, a raw deal.
So the Justice Department is going to look into whether small businesses, would-be startups and consumers are getting harmed and also how these companies got to be so big - were laws violated along the way?
INSKEEP: How did the companies respond?
SHAHANI: Well, in response to NPR's inquiry, Google pointed to its testimony in Congress last week. Google's head of economic policy made the case at a hearing that his company creates lots of opportunities for others. Its advertising tools have helped small businesses grow. Its employees have gone on to build more than 2,000 startups. In the case of Amazon and Apple, they didn't immediately respond to our request, but Apple has made the case that its app store is a safe and trusted place for customers and great for developers. Amazon CEO Jeff Bezos has pointed out that other businesses are selling more to customers on his site than Amazon is.
Facebook declined to comment, though they have said before they face vigorous competition from other platforms. I would note that, at two separate hearings also last week, one of Facebook leaders was making the case that regulators should let the company mint its own money. So while the government's worried about tech giants being too big, Facebook, in trying to create digital currency with a few partners, is trying to get way bigger.
INSKEEP: Yeah. And what about the other investigations of Facebook? Because there's more than one.
SHAHANI: That's right. The other one is about privacy, though, not antitrust. In the company's last investor call, Facebook disclosed that it plans to pay a multibillion-dollar fine to the Federal Trade Commission. And it looks like the FTC is going to hold CEO Mark Zuckerberg directly responsible for privacy in a kind of stunning way.
SHAHANI: That's according to a Wall Street Journal report. Zuckerberg, who is Harvard's most famous dropout, will have to start handing in homework to regulators, personally signing off on reports documenting that his company is finally playing by the rules. So, you know, that means the government would be inserting itself into Facebook's governance. We should have more details on that settlement shortly.
INSKEEP: Yeah, and not the company being held responsible, but the person. Wow.
SHAHANI: That (inaudible).
INSKEEP: Aarti, thanks so much.
SHAHANI: Thank you.
INSKEEP: NPR's Aarti Shahani. Transcript provided by NPR, Copyright NPR.