It seems that one issue that society faces nowadays is the exten to which some of the mega business and specifically tech companies run our lives. With each passing day, they seem to control more of our lives as consumers, specifically in exactly how we use technology. To be sure, our nation has always stood for fair competition and an open and free marketplace. We have laws on the books that specifically regulate monopolistic actions, also known as anti-trust laws. Yet increasingly the courts have had to intervene and put the brakes on runaway control by the mega companies. Has the time come for society and governments to say enough?
Recently, Federal Judge Yvonne Gonzalez Rogers issued a permanent injunction in the Epic v. Apple case, putting new restrictions on Apple’s App Store rules and bringing months of bitter legal jousting to a conclusion. Under the new order, Apple is “permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.”
In short, the court told Apple that it must allow an app developer to sell its products beyond the Apple stores, which of course means that Apple would also not be able to control prices by requiring that payment be made on Apple and even for iOS apps, which is Apple’s own system. Seemingly, this was a big defeat for Apple, but Apple did not see it that way.
In fact, Apple did not view the court ruling as a defeat at all because it did not fault Apple for violating antitrust laws. Said Apple: “the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law.” The ruling is likely to have a significant impact outside of Apple. Google is already facing a similar lawsuit from Epic Games over its own efforts to maintain the Google Play Store as the central source of software on Android. The one thing these huge companies want to avoid is being accused of violating anti-trust laws, which is bad for their image and overall success.
The Epic v. Apple lawsuit comes as no surprise as Apple has faced a long litany of antitrust lawsuits. But the Supreme Court in a 5-4 decision essentially put the kibosh on all those app store lawsuits and sort of helped Apple explain itself. Justice Brett Kavanaugh wrote: “iPhone owners are not consumers at the bottom of a vertical distribution chain who are attempting to sue manufacturers at the top of the chain. There is no intermediary in the distribution chain between Apple and the consumer. The iPhone owners purchase apps directly from the retailer Apple, who is the alleged antitrust violator. The iPhone owners pay the alleged overcharge directly to Apple.” In other words, Kavanaugh is saying that if you buy Apple products you are agreeing that they can sell you some of their other products at their own terms.
While Apple is fighting against all those that are looking to break up the company’s monopoly, particularly on their apps, other giants like Amazon are facing their own music. For example, how liable is Amazon for the products bought on their platforms? Unlike Apple, Amazon does not sell its own products but rather is essentially a broker or intermediary which gave rise to the company’s argument that it should not be liable for a product that is defective or gone bad. Amazon is facing an avalanche of attempts including some by state legislatures that would make e-commerce companies liable for the products they sell even if the product is from a third-party. Currently, Amazon through the supplier offers a refund or replacement. But what happens if someone is physically injured as was the case with a laptop battery?
The business of selling other merchants’ goods is enormously lucrative for Amazon. In the last quarter, Amazon generated $18.2 billion of revenue from seller services such as fees and commissions, a figure that jumped 52 percent from the same period a year ago.
Listings of products federal agencies have deemed unsafe have led regulators and lawmakers to criticize the company for putting profits over safety. That’s because even when a shopper buys an item from a third party on Amazon’s platform, Amazon keeps a roughly 15 percent cut of the sale. And what of all the knockoffs that Amazon promotes and sells. Yet, Amazon is essentially saying “It’s not us; we’re just a pass-along for the goods the customer wants.”
Last July, Amazon notified third-party vendors that they will no longer be able to anonymously sell goods on its U.S. e-commerce site as of September 1st, a move that could also help curb sales of dangerous and counterfeit items that have plagued the site in recent years. This essentially ended the practice of hiding behind Amazon and selling just about anything.
Legislative houses on both the state and federal levels have been quite busy hammering away at the conduct of these mega companies. There were some high-profiled Congressional hearings at which the CEO’s of some of the top tech companies were dragged to Washington to testify or were quizzed via Zoom. Top Democratic congressional lawmakers had already issued a report with a warning to the likes of Amazon, Apple, Facebook, and Google accusing them of their anti-competitive behavior, and the need for an overhaul of US antitrust laws to allow for more competition in the US internet economy. “To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” the 400-plus page report’s introduction states.
There is a growing sense that society has lost its patience with these giants as they essentially flaunt their position of power to dictate to the consumer. They feel that the customer is so dependent on their products that they are free to orchestrate what and how the consumer purchases. Consumer advocates say that this arrogance extends to customer service. In the Congressional hearings, some of the exchanges were extremely contentious, which is a microcosm of the tension between the mega companies and society at large. Some feel that a day of reckoning may be closer than we think for the tech giants especially if more competition comes to the fore. For now, we’ll just keep wondering how much bigger will society allow these mega companies to get?