ANTITRUST AND BIG TECH: The three most likely outcomes of the regulatory clampdown on big tech and what it means for digital media

US lawmakers of all stripes are investigating big tech on antitrust grounds and trying to determine whether the companies' dominance should be reined in, and how best to do it. In particular, Facebook, Google, Apple, and Amazon are under the microscope. Fundamentally, the inquiries will attempt to determine whether big tech has reached its level of influence through anticompetitive practices, and whether such behaviors warrant punitive action, updated regulations, or both.

antitrust and big techBusiness Insider Intelligence

It remains unclear what the US antitrust probes will usher in for tech companies, but it seems likely that the consequences will be more significant than a one-time fine.Given the diversity of regulators invested in these probes - and calls to "break up big tech" from prominent figures like Democratic presidential candidate Sen. Elizabeth Warren and Facebook cofounder Chris Hughes - major changes could be on the way.

In Antitrust and Big Tech, Business Insider Intelligence examines how the antitrust investigations and potential outcomes could affect big tech. First we'll examine the companies facing heightened scrutiny, the cases laid out against them, and their responses to claims from government agencies that they're reducing competition. We'll then walk through three possible scenarios of the investigations ranging from conservative to extreme, the outcomes that would follow, and what those outcomes could mean for brands and consumers. In all, we aim to provide an initial look at what will inevitably be a lengthy road to antitrust enforcement against the tech industry.

The companies mentioned in this report are: Alibaba, Amazon, Apple, AT&T, Baidu, Bing, DoubleClick, eBay, Expedia, Facebook, Google, Instagram, ITA Software, Kayak, LinkedIn, Microsoft, Nest, Pinterest, Reddit, Snapchat, Spotify, Target, TikTok, Twitter, Vine, Walmart, Waze, WhatsApp, Whole Foods, Yahoo, YouTube, and Zappos.

Here are some of the key takeaways from the report:

  • The US' antitrust actions follow in the footsteps of recent measures the European Union has taken to punish tech giants for anticompetitive behaviors and reimagine regulation for the digital era.
  • For their part, tech companies have argued that their innovations benefit consumers, don't harm competition, and are good for society overall.
  • We see three ways antitrust action could shake out for the tech giants:
    • Lawmakers could opt to shore up mergers and acquisitions guidelines, but do little to unwind the existing power of tech giants. This relatively conservative scenario could prevent further consolidation in the industry, which would eventually give smaller entrants a better chance to develop into true competitors.
    • They could push to democratize access to tech giants' data. This scenario could see smaller competitors gain access to some of the tech giants' data, which could allow them to better develop their services and add users.
    • Regulators could break up big tech. Sixty-six percent of Independents, 63% of Democrats, and 60% of Republicans strongly or somewhat support splitting up big tech, per a recent YouGov and Data For Progress survey. Radical as it sounds, it might not shake up the user and brand experience as much as expected, as companies would likely still be able to engage in data partnerships to preserve interoperability.

In full, the report:

  • Explains the history of antitrust, the precedent it set, and what investigation and enforcement looks like today.
  • Breaks down what each of the big four tech companies is being investigated for, and their counterclaims.
  • Highlights key players on both sides of the political aisle, which regulatory agencies are involved, and what each of them is investigating.
  • Outlines three potential outcomes of the regulatory probes, and how those scenarios would play out for big tech, brands, and consumers, with particular emphasis on Google and Facebook.

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