Iranian Oil ,Gas and Petrochemical Products Exporters' Union

What a Big Tech Breakup Could Mean for You

What a Big Tech Breakup Could Mean for You
Amazon Every one of the House’s proposed bills seems applicable to Amazon in one way or another, but foremost among them is the Ending Platform Monopolies Act, which would allow the FTC to break up tech giants if it decides the giants’ products and services could compete with those sold by other companies on the giants’ platforms. If that seems to encompass many things these platforms do that we take for granted—from offering pre-installed apps on the iPhone to offering house brands like Kindle and Amazon Basics on Amazon.com—that’s because the language of the bill really is broad. Past ideas from antitrust specialists for breaking up Amazon have included splitting it into at least four different companies by separating the pillars of its dominance: the core retail operation, its marketplace where third parties can sell, its hugely profitable cloud-services division, and its fulfillment and logistics operations. Even if a split were limited to spinning off its marketplace, the change could be noticeable for consumers. Amazon said last month that the bills might lead to it removing outside sellers—which account for a majority of the items sold on its platform. It would be as if Amazon were broken into a retail division that functions like Walmart—with its house brands and the items from other companies that it sells directly—and a separate marketplace like eBay. It’s difficult to assess the potential impact of such a breakup and foolhardy to profess certainty about it—America has seen little like it since the breakup of Ma Bell. Amazon says it would mean the end of things like free shipping, but the company’s own programs to allow outside vendors to accomplish the exact same Prime free delivery service, without the aid of Amazon’s logistics operations, suggest the company could find a way to maintain its operations regardless. Apple Another proposed bill, the American Choice and Innovation Online Act, has a similar goal. It is intended to keep companies that own big, market-dominating platAs momentum builds to curtail the power of Big Tech, lawmakers, Beltway pundits and the companies themselves are all competing to explain to the public what it might mean to us, the everyday consumers of goods and services from those in the crosshairs. Will my iPhone really become less secure, as Apple has claimed? Would the selection we’ve grown accustomed to on Amazon shrink, as the company has intimated? Would Facebook being forced to sell off Instagram and WhatsApp break those services, as Facebook would have us believe? And would the quality of Google search be degraded by its inability to feature its own services, such as Google Maps and YouTube videos, in results? Or, as the companies’ critics would have it, will life be better for users, competitors and society if all those things come to pass? Those questions gained new significance last month when the House Judiciary Committee, with bipartisan support, approved a half-dozen bills that signaled fresh willingness to break up the Faaam, as I like to call the tech-titan quintet. (Microsoft, so far, has largely avoided the crosshairs.) Given the torturous process of federal lawmaking, the chances of these bills becoming law in their present form aren’t high, and any movement could be slow. Congress is preoccupied with other battles at the moment. The companies, their lobbyists, and allies are already pushing back forcefully against this legislation, and against the new head of the Federal Trade Commission, Lina Khan, who has criticized tech giants. A federal judge’s decision this past week dismissing antitrust lawsuits against Facebook for being “legally insufficient” suggests that implementing stricter rules won’t be easy. But the chances are clearly rising that something like the provisions in these bills could become the rules by which Big Tech must abide—through an act of Congress, laws at the state level, court battles, a new crop of regulators like Ms. Khan or bipartisan political will to move against tech. Mr. Bezos plans to spend time on climate-focused efforts; last year he created a $10 billion Bezos Earth Fund. Jeff Bezos’ Post-CEO Checklist sor, Amazon Web Services Chief Executive Andy Jassy. Mr. Bezos, the world’s richest person, has been gradually moving to an expansive post-CEO life that aside from space exploration includes a climate-focused philanthropy and an embrace of celebrity, complete with public appearances with actors and moguls, multimillion-dollar homes, globe-trotting on private jets and a soon-to-becompleted superyacht. The 57-year-old Amazon founder has prepared closely for his departure and is handing the company’s top post to one of his most trusted advisers in Mr. Jassy, even as he has signaled to investors that he intends to remain involved. Mr. Bezos has said in his role as chairman he will focus on new initiatives and innovations, including on projects to make Amazon’s warehouses safer for workers. “You don’t want an organization to incur a knowledge gap,” said Colin Bryar, who served as an early technical adviser to Mr. Bezos. Mr. Bezos, he said, has noted that executive transitions should be “boring.” Amazon declined to make Mr. Bezos available for an interview. These days, one of the best ways to know what Mr. Bezos is up to, or his whereabouts, is his Instagram account. One of his latest posts shows him embracing movie star Dwayne “The Rock” Johnson while teasing a partnership between Amazon Studios and Mr. Johnson’s Seven Bucks Productions company. Several recent posts have been about a newer interest—fighting climate change. Mr. Bezos last year announced the creation of the $10 billion Bezos Earth Fund, one of the Continued from page B1 SIUNG TJIA/WSJ; TED S. WARREN/ASSOCIATED PRESS (BEZOS) forms from giving their own services and wares sold on such platforms an artificial boost against competitors. That could put a target on Apple’s App Store, through which Apple controls 100% of the market for apps for the iPhone. It’s a lucrative market. One expert witness for Epic Games, Apple’s opponent in a recent court case, estimated the App Store’s operating margins have been as high as 80%. Apple disputes that its margins on its own app store are that high, but has declined to offer its own figure. Apple’s mobile operating system is used on six of every 10 mobile devices in the U.S. In a letter to Congress and a paper on security, Apple has framed attacks on its monopoly on distribution of apps on these devices as attacks on its ability to keep them secure. The potential impact could be broader—both for Apple and its customers, by prying apart the hugely profitable “walled garden” of hardware, software and services that make its products relatively seamless for users but also constrains their choices. New rules and regulators could compel Apple to break up that system, by divesting its own App store or letting users load apps from anyplace they like. That could mean easier access for iPhone users to other companies’ products— as well as the freedom to expose themselves to threats of ransomware or digital identity theft. Facebook The Platform Competition and Opportunity Act, a third bill, is designed to more or less ban what has been a signature move for Facebook: acquiring a competitor before it can become a threat. The FTC lawsuit against Facebook that was among those dismissed this week accused the company of anticompetitive practices in its acquisition of WhatsApp and Instagram. If the new legislation were to pass, it could make it much easier for the FTC to win such a case. Facebook has said this would make it harder for people to, for example, cross-post between Instagram and Facebook. On the other hand, Facebook’s comprehensive dossier on all of us, which it sells to advertisers—albeit in increasingly anonymized form—would be much harder for the company to build. A Facebook spokesman called these bills “a poison pill for America’s tech industry at a time our economy can least afford it.” Alphabet (Google) Google’s search empire—it controls 92% of the global search market—would also be affected by the American Choice and Innovation Online Act. The company says that not being able to preference its own services would mean they would no longer appear atop its search results. In the short term, not seeing Google Maps results on your search results could be disruptive for users, but there are plenty of competitors that would be eager to occupy the same slot. “We are not opposed to antitrust scrutiny or updated regulations on specific issues,” says Mark Isakowitz, vice president of government affairs at Google. “But American consumers and small businesses would be shocked at how these bills would break many of their favorite services.” It’s clear that any actions against Big Tech will take a long time yet to impact consumers. The federal government’s case against Microsoft, for example, spanned three presidential administrations, from 1991 to 2001. By the end, the government settled rather than continuing to pursue a breakup of the company. Even if such changes are far off, users might need to prepare themselves for changes to these services. Those changes could lead to more competition, and ultimately innovation. But while we’re waiting for Amazon’s disrupter to get us toilet paper from, say, a network of drones that deliver in 30 minutes instead of a day, we might also have to accept the way that topdown efforts to encourage competition can affect conveniences we’ve come to take for granted
Jul 5, 2021 10:22

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