Tech's Antitrust Problem

and a love of all things tech. And in the last few years, there have been an increasing number of discussions around the world really regarding the reach and practices of certain big tech companies, you know, the ones like Google and Facebook and Amazon Apple, And this has been leading to allegations that companies like these are using their

size and influence to suppress competition from others. And anti competitiveness is a big no no, particularly for large companies, and it puts these companies in danger of being deemed a monopoly, which is an even bigger no no. So Google and Facebook have been on alert for a few years now, but more so and increasingly so in recent years.

And today I thought I would talk about antitrust issues, explain where those ideas kind of come from, talk a bit about an earlier case involving Microsoft from a couple of decades ago, and then chat a bit about the current situation. So this episode is less about the actual technology and more about how corporations can dominate an industry. So thoroughly that they become the center of scrutiny. So to start off, let's learn about monopolies and antitrust laws.

And I'll warn you learning about antitrust laws on its own is not enough, because interpretations of the law have shifted over the more than a century since they were first drafted in the United States. The courts might interpret laws one way in one generation and a very different way later on, which makes this a lot less straightforward

of a topic than technology tends to be. Before I dive in too far into this whole thing, I have to give a shout out to Laura Phillips Sawyer, who wrote a great paper titled US Antitrust Policy in Historical Perspective for the Harvard Business School. The paper is available to read for free online and it goes into great detail about how antitrust legislation and its enforcement have evolved

in the United States over the years. I highly recommend it, and most of what I have to say in this section of the episode is kind of a high level overview of what Sawyer has to say. Our story begins in the United States in the latter half of the nineteenth century. Throughout the eighteen hundreds. Certain industries in the US came to be dominated by a small handful of increasingly large businesses. Some of these businesses banded to other

with one another, combining their interests into a single entity. Now, these entities were called trusts. The idea is that multiple property owners create a trust in an effort to build a unified management structure. The owners appoint one or more trustees to serve as a manager of the owner's interests, and each owner retains shares in the trust. From a structural standpoint, a trust could either be a single unified company, or it could be set up as a conglomeration of

multiple firms or even a cartel. Now, on the face of it, there's not a lot here that immediately jumps out as being an enormous problem. Just at at casual glance, we're talking mainly about the organizational and leadership structure of a business. But some particularly enterprising business owners were forming trusts in an effort to dominate an industry and fix prices without fear of any competition. Because they were already so big they could out compete everyone else. They could

suppress competition. There will be no external forces in the market to affect the business owner's decisions, and so they could practice predatory and unethical price fixing strategies with impunity. Now, to use a simple analogy, let's say you grow up in a small town and it has a single candy shop in the entire town. There's no other place in town that sells candy. The next closest candy store is a hundred miles away. So if you want candy, you

got one place you can go to. The candy shop owner, let's call him slug Worth, realizes that he has a monopoly on candies in this town, and so he marks up the price of every candy to five times what it would normally cost in a competitive market. But there's no alternative for you in this small town. You either pay five times what you should pay if you were

somewhere else, or you just go without. That would stink. Now, candy is arguably anyway a frivolous and an important concern, But in the late eighteen hundreds, the United States was seeing industries that were far more critical consolidate under this trust strategy. And just to be clear, concerned about anti competitive business practices dates back much further, but the late eighteen hundreds is where it became a crisis, and there

were many contributing factors that made this possible. For one thing, the United States was enjoying the benefits of the Industrial Revolution, which had taken place earlier that century. Transportation and communication networks were connecting the various parts of the country together.

In addition, in the eighteen seventies, the United States went through an economic recession on the market side, with a deflationary spiral that lowered demand and thus lowered prices, and this forced several smaller companies in various industries out of business. They couldn't cover operating expenses and stay viable. Arguably, forming trusts was a necessity in that kind of economy, as

individually companies were finding it difficult to stay afloat. Banding together increasing the scale and scope of the business was a potential solution to this problem. For American consumers, things weren't nearly so bleak because wages were on the rise, prices were low, and there was an abundance of goods on the market. There was a general feeling that big business could be a potential problem down the road, but there was a lot of disagreement regarding how to protect

citizens and politics from that outcome. One particularly important industry in the United States at this time and still to this day, was oil. John D. Rockefeller founded the Standard Oil Company in the eighteen seventies and his business was, to put it lightly, phenomenally successful, and in eight two, an attorney for the company named SCT Dodd created a trust of oil refiners. The goal was to set prices and to control supply and at the same time find

ways around pesky tax laws and regulations. Other trusts and other industries started to follow suit, and the United States saw a trend of large companies consolidating economic power. Now, generally speaking, this can be a bad thing. Consolidating economic power means that more of that economic power goes to a smaller number of entities, and it leaves many others without very much power. And companies do not tend to be the most egalitarian with their profits or their power.

A company's purpose ultimately is to make money for the company's owners, whether it's a private company or a publicly traded one. On top of that, the consolidated hour would mean that these companies would be able to push around smaller companies, forcing them to either follow suit or go out of business. For example, Standard Oil might tie up enough oil refiners with exclusive agreements that would leave smaller

oil companies no oil refiner companies to work with. They wouldn't have anyone that they could partner with because they were all tied up with this much bigger company. That

would be an anti competitive practice. There was also a very real fear, and as it turns out, a justified fear, that wealthy companies would start to pour some of that wealth into influencing politics in an effort to make things even more beneficial to the company and its shareholders, often at the expense of others, like I don't know, the average taxpayer. The sense was these companies would dedicate resources to fight back politically against various restraints and regulations that

were meant to protect fair or trade practices. Some states began to pass antitrust laws in an effort to reverse or at the very least slow this trend, calling for the need to support competition, which would prevent any one company from controlling the price and supply of critical commodities like oil or steel. But these were local responses. As I mentioned, the United States had recently transformed as railroads

crossed the country and telegraph lines crossed state lines. Business was not confined to within a state's borders, and so responses to this threat needed to go beyond the state level. This led to the Sherman Antitrust Act of eighteen ninety. The United States federal government passed the Act in an effort to put some restrictions on trusts. The Department of Justice could pursue litigation against companies that were practicing anti

competitive strategies or attempting to monopolize markets. The Sherman Act also allowed for private litigation cases and civil lawsuits against these companies. As it would turn out, the Act didn't quite go far enough and mostly restated common law and became more of a mild inconvenience to many of the trusts.

The US government would go on to pass multiple amendments to that law to make it more effective and robust, and the US government would also recognize that needed an agency with more authority to oversee trade within the country, and the Federal Trade Commission, or FTC, would be formed

in nineteen fourteen. The US government would add more laws to deal with trade issues like anti competitiveness and monopolies, and on more than one occasion, the U. S Government has forced certain companies to break apart in two separate entities.

There are numerous examples, but a really big one in the tech sector was A T and T, which in the nineteen eighties was forced to spin off its local telephone service companies into seven Baby Bells, so called baby Bells, since A T and T was also known as mob Bell Bell because of Alexander Graham Bell, who was often credited with inventing the telephone, though that story itself is

complicated and off topic. By the way, most of those companies that were split off would over time, through mergers and acquisitions, come back together with A T and T, So I'm not I'm not really sure what good it did in the long run. By the nineteen seventies, the

interpretation of antitrust law had changed. Like I said earlier, the courts have taken a different approach to interpreting what antitrust law is over the various generations, and part of the reason for this is that the original laws were fairly vague and thus open to multiple interpretations. For many years, the main focus on antitrust law was that large companies could practice anti competitive behaviors that could hurt smaller businesses,

and that's a bad thing. That's something that we should prevent. So think of a company like Walmart or more recently Amazon. A company like that with enough scale and resources could come into a region and offer up goods at a lower cost to the consumer than smaller businesses in the area which don't have the deep pockets of the bigger corporation. The big companies might even sell certain products at cost, or even below cost, at a loss in an effort

to get people into stores. The really big companies can afford to do this, and the goal is to get more folks into these big stores to not just buy the mark down goods, but other stuff as well. And a consequence of this is that the big companies are luring customers away from smaller independent businesses that can't compete on this level. And if the big companies can wait it out long enough, those smaller businesses are likely to

fold entirely. And thus we can see the main street of some small towns like the one I grew up in North Georgia become ghost towns as the local businesses shut down. But if the focus was on anti competitiveness.

How the heck did we change from that? What happened well in the nineteen seventies the courts began to shift the interpretation away from this anti competitive nature that can hurt smaller businesses and more toward what affects the consumer benefit, what what is best for the consumer, rather than what's

fair for small businesses. The general feeling was that the US government shouldn't be so interventionist with business in general, and this philosophy had a strong link to the University of Chicago, so economics experts call it the Chicago School

of antitrust policy. Now I'm not saying that this is better or worse, but it is different from a consumer perspective, though Walmart or Amazon model doesn't, at least initially seem bad because as a consumer, you can get the goods you want at a lower price than elsewhere, so in other words, you save money, which means you can actually buy more stuff. So from the consumer standpoint, things seem pretty okay. But in the long run this can be

a very dangerous game to play. If enough smaller businesses go put than Amazon or Walmart or whatever becomes the only source for goods like our candy store example, and then there's nothing really stopping those companies from hiking up prices. After all, it's not like you can head over to the mom and pop store that went out of business

ten years ago. That's long gone. With this new focus on consumer benefit rather than market competition, we saw companies like Walmart really take advantage of the political and legal climate of the times. They flourished in the nineteen eighties. We also saw a new era of mergers and acquisitions and hostile takeovers, and golly, I do not miss those days at all, But antitrust laws and sentiment still existed. You couldn't go too far with this stuff, or else

you would get called out for it. After all, the breakup of a T and T was a rare example of the courts going after a corporation like that. That happened in the nineteen eighties kind of at the height of this Chicago school of thought. The Chicago School dominated antitrust policy thinking until around nineteen when economists began to

suggest that maybe it wasn't on track. The rather reckless mergers and acquisitions of the nineteen eighties, some of which had pretty awful consequences further down the road forced people to think about things another way and acknowledge that the Chicago School of thought didn't take certain variables into account and perhaps put too much faith on market based solutions, two problems that might require more government intervention. See from

the Chicago School. The idea is that the market itself will sort everything out if you leave it alone enough. It's a very kind of loss, a fair approach, but these economists were saying, you know, that didn't take into accounts stuff that really also are factors here that mean

that the market can't you know, account for them. And there are still proponents of the Chicago school out there, and even in this climate, we haven't seen the more robust interpretation of antitrust laws that were present decades ago. Even as more people are are kind of rejecting or at least partially rejecting, the Chicago School, there's the potential for a more progressive movement to take the stay age,

but that's still in the very early days. And as I record this, the United States is going through an election process that will largely determine how likely that will be. And that sets the stage for our next section, where I'll talk about a specific case, the United States versus Microsoft, but before we get to that, let's take a quick break.

In the nineteen seventies, Bill Gates and Paul Allen, two old friends, started up a company called Microsoft, named after micro computers and software, and originally the two would develop and sell versions of the programming language Basic for different computer platforms, so you can think of it as different flavors of Basic. In nineteen eighty, IBM hired Microsoft to develop an operating system for what was to become the IBM PC, the person Old computer, and Microsoft went and

acquired software from a different company. They took that software, they changed it around a little bit, and they named it MS DOSS. Now the story behind that is pretty fascinating in its own right, and it gets really cutthroat right off the bat, but it's outside the realm of this episode. One thing IBM did not demand from Microsoft was exclusive rights to the operating system that they developed, so Microsoft would actually go on to make versions of

MS doss for other computer manufacturers. And since IBM was relying heavily on off the shelf components for its PCs, it meant that any other company could potentially make a machine that works in pretty much the same way as the official IBM PC, and moreover, they could license an operating system from Microsoft that would allow these other machines that were built by other companies to run the same

software that was developed for IBM PCs. This was a move that would make the Microsoft founders insanely wealthy, pushing the company on the path to operating system domination, and ultimately it would also spell doom for IBMS consumer products division many years later. Microsoft would then later develop an operating system with a graphic user interface or g u I or gooey. This was, of course, the Windows operating

system that you know still dominates today. It took a couple of versions for Windows to really catch on, but Windows over time would become the main operating system on personal computers. There were alternatives. Apple was running a totally different operating system for Mac computers, for example, and other operating systems would emerge that allowed for alternatives to Windows. But it would be disingenuous to say that Windows was

anything other than the dominant os on the market. It absolutely really was, at least for business and personal computers. So if you get into things like servers, well, that's a different story. But for like personal computers and for the stuff you would find in offices, Windows was the dominant os. Now that position meant that software developers were far more likely to focus on building out software for

Windows based machines. After all, if the vast majority of computer users are relying on Windows as their operating system, it makes sense to focus development efforts where the market is. You go to where your customers are. You could create software for other operating systems, but you would do that knowing that there are fewer users that are relying on alternatives to Windows, which means your potential consumer base is already much smaller than it would be if you had

developed for Windows. You could argue, and I think you could do so pretty persuasively, that the space was largely anti competitive even early on, though some platforms like the Mac had a decent amount of developer support behind them. But keep in mind we're talking about the nineteen eighties and early nineties here. This is before Apple had its renaissance.

In nineteen nine, a lawyer for the FTC named Norris Washington had attended a computer trade show called Comdex, where IBM and Microsoft announced a collaboration that raised his eyebrows. The announcement sounded like it was treading a little too close to collusion in an effort to control the PC and operating system market. It wasn't until nineteen ninety that the FTC would begin its official probe into the matter, because the U S Department of Justice was initially reluctant

to authorize an investigation. At this stage, the matter revolved around OS two, which belongs in the Doss family of operating systems. However, in the gap between the announced meant that IBM and Microsoft were going to work together and the actual investigation, there had been something of a falling out between Microsoft and IBM, and Microsoft was looking to push its Windows operating system over OS two, which means that it was no longer really interested in this approach

with IBM. But by that time other third parties were coming forward to complain about Microsoft to the government. They were saying that Microsoft was making changes to its operating system that would make third party software incompatible with computers that were running that operating system, among other charges. The FTC was in a political deadlock over the matter, and there was a great deal of pressure from the Department of Justice to go very narrow and focused and small

with the probe. The thought being that the US software industry was a really important one to the United States, and so you know, maybe we could, you know, just not break up Microsoft for some little anti competitive monopolistic behaviors. You know, what's a little what's a little illegal behavior among friends, I guess. In the end, the FTC and Microsoft would come to an agreement in which the company would sign a consent decree that was intended to limit

how Microsoft might lockout competition from the PC market. But later on Bill Gates himself would claim that the consent decree amounted to nothing at all, so it might as well have been political theater. One important part of this decree was that Microsoft agreed that it would not integrate

other Microsoft products into Windows as a tie in. So, in other words, Microsoft shouldn't tie you know, like productivity software like the Office Suite directly to Windows, because that would be unfair to companies that are developing third party productivity software as competition. The company would be allowed to create new features in Windows, that's okay, to make Windows more feature rich, but things that were products that were meant to be, you know, a separate thing in addition

to Windows that was supposed to be separate. By the time we get to the early and mid nineteen nineties, a new complication emerged the Worldwide Web and the Internet in general. But the web is really where our story coalesces, is the point I'm making here. Now we all know that to access the web you need an Internet browser. You know, a program that interprets your commands, It fetches pages from servers, it displays those pages in a way

that you can navigate and understand. And here's where things really escalated. So an early popular web browser, the dominant one was Netscape Navigator. It debuted in and quickly became the most popular web browsing platform. It held about seventy five percent of the market before the end of the year. Now keep in mind this is in the very early days of the web, when awareness of the web even being a thing was largely contained to stuff like college

campuses and research centers. One thing that Netscape aimed to do with the Navigator browser was to create a standardized browsing experience across all operating system platforms, meaning that at least in theory, no matter what type of computer or what type of operating system you were, depending upon your experience on Netscape should be the same from computer to computer, and anyone who has used the quote unquote same software on different operating systems knows how unusual that can be.

You know, just finding options can be a totally different experience from one to the other. Perhaps Microsoft was worried that more software developers would follow netscapes lead. And if the same program works same way across every operating system on every computer, it levels the playing field and other operating system developers could potentially gain some ground on the

monolithic Microsoft. If Microsoft Windows is not providing a superior experience because the software just works better on it, well that could be a problem. So the company had its own strategy. In Microsoft unveiled Internet Explorer, a competing Internet browser. The original Internet Explorer was built on code developed by an Internet software company called Spyglass, which in turn based

their code off of NCSA's Mosaic Browser. In fact, there were two flavors of this originally, one that was essentially Mosaic code and another that was just heavily influenced by Mosaic Code. And the deal with Spyglass was that Microsoft would pay a recurring licensing fee too Eyeglass for use of the software, plus a share of any revenues that

sales would generate from this browser. But then Microsoft did something sneaky, deaky and seriously, if you look at the history of Microsoft's deals with other software companies, this next bit is not going to come as a surprise to you at all. Microsoft would end up bundling Internet Explorer with Windows for free. At least arguably it was for free because the company wasn't making revenue directly off Internet Explorer,

it wasn't selling Internet Explorer to users. That would mean Microsoft would only owe Spyglass that licensing fee because there were no revenues to share at all. They didn't have to give any profits from Windows because that was an Internet Explorer. Yeah, that's kind of unethical, I would argue, or at least it was kind of low handed. The idea of I'll give you a share of everything I sell,

and then you don't sell it. You just package it with something else that you happen to be selling, and then you make the argument, oh no, that didn't generate revenue, that was just part of something bigger that did generate revenue. Meanwhile, by making Internet Explore a part of the Windows bundle, the company was getting a browser in front of users before they could even consider if they wanted something else, and that Escape saw this as a threat. Pretty much

right away. The company was selling its browser, and now here comes the company behind the dominant operating system on the market, offering up its own browser for free and bundled with the operating system. Beyond that, the company strong armed PC manufacturing companies into an agreement. The manufacturers who wanted to load Windows onto the machines they were producing and then selling to consumers would have to agree to have Internet Explorer bundled on those machines. So let's say

you're in charge of a company that makes computers. We're gonna call it Dull Dull computers. So you run Dull computers and you build out a range of PCs both for enterprise customers and end users like you and me, and you want to license Windows to load onto the

machines you're building, because that's a selling factor. Right It's the dominant operating system on the market, and most end users wouldn't be familiar with other operating systems, and even fewer of those people would understand how to install their own operating system onto a machine. But if you do enter into that licensing agreement with Microsoft, you also have to pre install Internet Explorer on those machines. It's part

of the deal. The U. S Department of Justice took issue with this, and the antitrust attention against Microsoft hit a new peak. Bill Gates would argue in the trial in video depositions that Internet Explorer was not its own product, it was just a feature of Windows, which again, according to the consent decree was tots oki doki. That was fine as long as it was a feature of Windows, then that that was allowable. What was not allowed is to bundle a product with Windows. But the Department of

Justice said, no, wait a minute. You also offer Internet Explorer for Mac computers, for the Mac operating system, and Microsoft does not have anything to do with the Mac operating system. That means the Internet Explorer has to be a product. It's not a feature because you sell it for the Mac, and that means that it should be separate from Windows. It should not be bundled with it.

The antitrust trial stretched on for many, many months, with more than seventy days of testimony, the judge presiding over the case found Microsoft guilty of anti competitive behaviors and attempting to gain a monopolistic hold on the OS market and the browser market, and initially the judge ordered Microsoft to split into two companies nicknamed baby Bills after Bill Gates and a little throwback to the baby bells of

a T and T that decision. The judge's decision got overturned by an appeals court, and ultimately Microsoft would settle with the Department of Justice out of court, and the whole story is a total chaotic mess. The Department of Justice's case against Microsoft had a lot of problems, some of which seemed to indicate that the government had a

distinct lack of understanding when it comes to software. But Microsoft also had some really awful mistakes and just bad decisions during that trial as well, including a moment where they presented a videotape as evidence to show how easy it was to uninstall Internet Explorer, and later it was discovered and proven that that videotape had been edited. Not great, nobody came out of this looking particularly rosie, but in the end, Microsoft was not forced to break up into

different companies. The trial did force Microsoft to back off a little bit from its practices Netscape Navigator, which was not a plaintiff in this case. Although executives from Netscape would be subpoena to speak during the trial, they would see their market share continued to decline until the company just pulled the plug on the browser in two thousand eight. As for Internet Explorer, it would be the dominant browser until late when Mozilla Firefox overtook Internet Explorer as the

dominant browser on the market. Two interesting things about this One is that Microsoft had gone back to bundling Internet Explorer with Windows at that point, but also the company had ended support for Internet Explorer on platforms like the Mac operating system, so they were once again arguing that Internet Explorer was really a feature of Windows and was tightly integrate it into Windows and wasn't its own separate program. And the second interesting thing is that Mozilla Firefox was

a spiritual successor to Netscape Navigator. Netscape had created the Mozilla Foundation just before Netscape itself got acquired by a O L. And in case you're wondering, according to stat Counter, Internet Explorer now makes up about one point five percent of the global browser market share, not a huge surprise. Obviously, Microsoft no longer supports Internet Explorer. The newer Microsoft Browser Edge has just two point eight five percent market share.

At the other end of the spectrum is Google Chrome, which accounts for more than sixty six percent of the market share. Now, granted, this is across all platforms, and back in the two thousand's we were only talking about computers, mainly desktops and a few laptops. But to a you also have to include smartphones and tablets in there, and that's really where Google is running away with things in the smartphone category. And that brings us up to our next section, where we'll take a look at some of

the current issues around antitrust concerns with big tech. But first let's take another quick break. Okay, Now we're up to the most recent antitrust report in the United States, which focuses on Amazon, Apple, Facebook, and Google. Now, as I'm sure has become obvious during the course of this episode, it is impossible to separate these issues from politics in general. The report is the product of the Democratic members of

the House Judiciary Subcommittee on Antitrust. The investigation leading up to The report lasted more than a year. During the investigation, there were seven Congressional hearings, and the full report is about four hundred fifty pages long. Yikes. Now, I'm going to be straight with you, guys, I did not read the whole report, which is incidentally available online in its entirety.

If you want to read it, go to Judiciary dot House, dot gov, slash uploaded files, slash Competition, Underscore in Underscore Digital, Underscore Markets dot pdf, just in case you find yourself with some time on your hands and an itch to learn more about this sort of thing. Thankfully, the report opens with the chairs forward, followed by executive Summary and findings, and that gives us a lot to talk about just

right there without having to read the full report. The full report does have more information on how the committee came to its conclusions, and so the whole report is important. It's just exhaustive and exhaust staying as well, the report opens, as I said, with the chairs forward, and that includes some you know, semi harsh words for the CEOs of the four companies that are involved, stating that the answers that the leaders gave to Congress were frequently evasive, or

non responsive. The chair also states that the four companies have become quote a gatekeeper over a key channel of distribution. By controlling access to markets, these giants can pick winners and losers throughout our economy end quote. So, like the antitrust cases of old, the chair asserts that these companies have made it a practice to consolidate power, both in

the market and beyond. The chair goes on to state, quote, they not only wield tremendous power, but they also abuse it by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people and businesses that rely

on them. End quote. It goes on to state that the companies use their vast influence to maintain a market advantage over other companies, suppressing competition, either through buying out competitors or copying what those competitors are doing in an

effort to undermine them. Facebook leaps to mind when I hear this, because the company had done things like they acquired Instagram because Instagram was doing better in the photo sharing space than Facebook was, And they've also spent a lot of time recently copying other platforms like Snapchat and TikTok,

largely through their Instagram division. Moving on to the findings of the report itself, it states that the combined value of the four companies is more than five trillion dollars, which goes beyond a princely some it moves into like Grand puba territory. The conclusions found that these companies represented a monopoly in several markets, including social networking, online advertising,

and online search. The finding state that, quote, in interviews with subcommittee staff, numerous businesses described how dominant platforms exploit their gatekeeping power to dictate terms and extract concessions that no one would reasonably consent to in a competitive market. End quote. It goes on to say, the various market players state they are dependent on these larger companies, and as a consequence, they have no recourse but to agree

to those concessions. So, in other words, if you don't play by these companies rules, you don't get to play at all. The subcommittee also lays some blame at the feet of the Federal Trade Commission, stating that the FTC declined to investigate most of the acquisitions that these companies had pursued over the years, pointing out that Facebook acquired dozens of companies, nearly one hundred of them, but the FTC only chose to invest eight one of those, and

that was Instagram. In the subcommittee concludes that the FTC essentially turned a blind eye towards mergers and acquisitions that have since, at least by the Subcommittee's estimation, proven to

have reduced competition in the market. This, the Subcommittee says, has reduced consumer choice, it's hurt innovation and entrepreneurship, as good ideas can be smothered if they're not coming from within one of these four companies, and has caused greater harm by extension by reducing americans privacy and also hurting the free press. Uh. Those shots seemed fired primarily at Facebook, though I'm sure Google takes some heat for that as well.

The report lays out a fairly extensive argument against each company, providing evidence supporting the allegations. It also goes on to explain the consequences of the anti competitive and monopolistic strategies that are playing out in the real world, from shutting down potential competitors to impacting the democratic process itself. But I feel like most of us have at least a

grasp on this stuff already. I think it's pretty obvious that Facebook dominates social networking, and even more obvious that Google has the lockdown on search. And we know about the ways that companies like Facebook and Google make money through ads, which is then boosted because the companies have vast amount of information about us, you know, the consumers who are using these products. Turns out we are the product, We're the ones being bought and sold, and we know

about Amazon and Apple on top of that. So the question remains, what, if anything, is there to be done about it here in the United States. The subcommittee concluded that a multi pronged approach is needed to address the problems that were uncovered in the investigation. One of those starts with the role of Congress when it comes to

providing oversight into antitrust matters. The subcommittee concluded that there is a need to examine antitrust laws to make sure they're working properly and that they're being enforced, and in cases where the law isn't doing enough, that Congress drafts new amendments or even new laws to fix this. To that end, the subcommittee identified various reforms for consideration, including

several intended to restore competition in the digital economy. Among those, the Subcommittee suggests reforms that would prevent companies from operating within adjacent lines of business. So, in other words, if a company is focused on a specific business within the digital economy, then the company would not be allowed to make moves to expand into related but distinct minds of business.

Another reform suggestion is that Congress should create restrictions to eliminate the ability of a digital platform to us self preferential approaches. So, in other words, a company shouldn't be allowed to design a platform that then gives advantages to that company's designed programs and disadvantages to programs that are made by third parties. So the Microsoft Windows example from earlier in this episode falls into this kind of category.

Microsoft was giving preferential treatment to Internet Explorer at the expense of competitors like Netscape. You could argue that you could look at Apple and say, all right, as Apple giving preferential treatment to Apple developed apps and giving and gate keeping other companies that are attempting to make competitive apps. And you can make a decent argument about that, especially since Apple is so very careful about which apps are

allowed into the app store. The subcommittee also suggested that platforms format data in such a way that the data becomes easily portable. So, in other words, the data should be platform agnostic. Now why would this matter, Well, one of the big challenges that we see with these these consolidated tech companies is that a lot of us as users have a ton of stuff stored within these various

companies platforms. So, for example, I've got thousands of photos and posts up on Facebook that creates a sort of anchor to me for Facebook, Like I am stuck there. It would not be easy for me to port that stuff over to some other platform, even if there were a platform out there that I felt was up to the task of doing that. Making data portable would at least, in theory, make it easier for users to move their stuff from one platform to another if they really wanted to.

And this isn't really important, but I actually recently deactivated my Facebook account. I've been conflicted about even being on the platform for a few years now, but I stuck with it because that's where all my friends and family had a presence. But I kind of reached a point

where that just isn't enough, however, that's really tangential. Other proposed reforms include more scrutiny for future mergers and acquisitions, reaffirming the practice of safe harbor, which tells us that a platform should not be held accountable for stuff that other people have put up on that platform. If I were to build a box on the street corner for people to stand on, I would not be held responsible if someone stood on there and said truly terrible things.

I just made the box. I didn't make the person say the terrible things. That's safe harbor kind of, and also placing more restrictions on using corporate power to coerce companies into unfavorable business concessions because of a dominant market position. The report also calls for strengthening of antitrust laws in the United States, as well as a call for antitrust enforcement in general, not just that we have the laws,

but we actually enforce them. After all, if you have a law but you never enforce it, then it doesn't really mean anything. It's just words on a page. The report itself will not have any direct impact on those companies. It does not carry with it any actions or punishments beyond recommending that Congress take further steps that would allow

the government to intervene with companies like these. Those interventions could potentially include really big actions, like an attempt to break up those companies into smaller entities that focus on specific lines of business, but that's something that will have to wait for further action in the future. In the meantime, the report is really just a call for more action, not an action unto itself. Now, that's just a quick glipse into the situation with antitrust legislation and technology in

the United States. Where the story goes next will depend heavily on who is a charge of the government in the future months and years. As I record this, we don't know for sure who that's gonna be. And of course, this episode focused solely on the United States. There are other parts of the world, such as in Europe, where fights like these have been going on for many years, frequently resulting in large fines being placed against these companies

and other penalties. Will we see the monumental companies and technology gets split up into smaller components. Will those components just coalesce again in the future, much like a T and T did over time, or will we see a completely different tactic that leaves companies intact but places finds and other penalties on them should they be found to engage in anti competitive practices, or maybe nothing happens at all. All of those are possibilities, and then there are others

on top of that. I don't have the answers to these questions. I'm not entirely certain anyone in government does either, but we'll have to wait and see. In the meantime, If you have any questions or suggestions for topics I should cover here on this show, reach out to me on Twitter. The handle is text stuff h s W. I'll talk to you again really soon. Y. Text Stuff

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