US Anti-trust Order - Anti-competitive Practices in Big Tech

Why in news?

The U.S. President Joe Biden signed a new executive order aimed at cracking down on anti-competitive practices in Big Tech, labour and numerous other sectors.

What are the highlights?

• The U.S. anti-trust order is aimed at cracking the dominance of big tech firms.
• [Antitrust laws are made by governments to protect consumers from predatory business practices and ensure fair competition.]
• Its purpose is to foster competition across a number of sectors.
• The executive order includes 72 actions and suggestions involving multiple federal agencies.

• The line of actions proposed include a set of new rules to be issued by the FTC (Federal Trade Commission) on –
  1. data collection
  2. increased scrutiny of fresh mergers in the technology sector
  3. scrutiny of the anti-competitive moves in the internet marketplaces
• Other sectors under the scanner include travel, healthcare and agriculture.
• The order calls for changes to how tech mergers and other anti-competitive behaviour by big-tech is scrutinised.
• It also aims to bring down prices of goods and services that have risen over time.
• [The rise was a result of companies in various sectors gaining control of their respective segments.]

What is the need?

• A fair, open, and competitive marketplace has long been a cornerstone of the American economy.
• On the other hand, excessive market concentration threatens basic economic liberties and democratic accountability.
• It also affects the welfare of workers, farmers, small businesses, start-ups, and consumers.
• In this regard, President Joe Biden said “Capitalism without competition isn’t capitalism. It’s exploitation.”

• The problems in relation with the big tech firms that the order highlights include -
  1. collecting massive volumes of personal information
  2. acquiring new, unexperienced competitors
  3. holding a competitive advantage against small businesses
  4. corporate consolidation

• Companies that run “dominant online retail marketplaces” can see how sellers are doing on the platform.
• They can then use the data to launch their own competing products.
• A fact sheet released by the government lists out transgressions, without naming companies and entities.
• But apparently, the moves are aimed at firms such as the Amazon.
• Such online selling platform’s dual role has been a concern.
• This dual role enables a platform to exploit information collected on companies using its services to undermine them as competitors.

How is it in India?

• In India, there have been a number of antitrust cases against big-tech companies like Amazon and Google.
• They are being investigated by the Competition Commission of India.
• But none has had any significant impact on the behaviour of the companies’ operations so far.
• In 2018, the CCI fined Google Rs 136 crore for “search bias”.
• However, this fine was set aside by the National Company Law Appellate Tribunal (NCLAT) just months later.
• There is also the recent IT Intermediary Rules that impact social media companies like Facebook and Twitter.
• Another one is the imminent amendments to Consumer Protection (E-commerce) Rules.
• It increases compliance burden for Amazon and Walmart-owned Flipkart.
• The Indian antitrust regulator is also studying the dependence of consumers and enterprises on a few large digital platforms.
• A government-instituted review of the Competition Law has found the existent provisions “largely adequate and fit-for-purpose.”
• But it has recommended overarching amendments for additional enforcement mechanisms.
• This should work in the interest of speedier resolution of cases, which is particularly critical in the context of fast changing digital markets.

What impact will the U.S. move have?

• The developments signal a greater consensus on preventing accumulation of “too much power” with only a few companies.
• It also implies an affirmation in the U.S. of the recent anti-trust actions taken by the European Union, which has so far waged a lone battle against Big Tech.
• How the US manages to rein in big-tech firms through the executive order could set precedence for other antitrust regulators.

Source: The Indian Express