President Joseph Biden, in a sweeping executive order today, is seeking to limit the power of big tech companies, including extra scrutiny of mergers and acquisitions to check their tendency toward monopolistic power.
The executive order covers 72 different actions, including a reinstatement of net neutrality, asking the Federal Trade Commission to challenge prior “bad acquisitions” and also to ban or limit non-compete agreements. The groundswell to force big tech breakups is gaining steam, but they are formidable foes, even with the federal government arrayed against them.
Many experts are questioning whether the Biden administration will be able to rein in big tech through executive action, vs. working with Congress on legislation or pursuing it through the courts via the Justice Department. The order does call on federal agencies and commissions to do much of the actual working out of the measures.
Biden’s executive order makes the case that big tech firms – though not singled out by name but generally understood to include Amazon, Google, Facebook and Apple – wield unchecked power to steamroll smaller competitors and misuse consumer’s personal information, according to CNBC.
Regulations called for in the order include increased scrutiny of tech mergers and taking action to prevent so-called “killer acquisitions” where a competitor is acquired to them out of the market.
At the end of June, a House committee in a bipartisan effort approved six antitrust reform measures aimed at limiting the power of big tech, CNBC reported. One, called the Ending Platform Monopolies Act, would prevent tech companies from owning a business that creates a conflict of interest, for instance by creating incentives that favor their own products over those of sellers using their platforms – a shot at Amazon and Apple.
That same bill, sponsored by Democratic Rep. Pramila Jayapal of Washington, calls for Amazon to divest its massive Fulfillment By Amazon unit, used by 80% of its third-party sellers. If enacted, it would prevent Amazon from attracting sellers to FBA by promising them preferential treatment on its marketplace.
In a related area, Amazon is calling for new FTC chair Lina Khan to be recused from investigations into its business dealings, saying she has a clear conflict of interest based on her very public calls to break up the tech giant, saying it’s guilty of antitrust violations.