Big Tech regulation in 2022 focused on monopolies, M&As, and expansion
- EU Regulation
- December 29, 2022
- No Comment
The news: The US has fallen behind in ramping up tech regulations, likely because economic upheaval and the era of uncertainty forced the government to address more pressing matters. This didn’t stop Big Tech from expanding and acquiring even more dominance in an increasing number of areas.
2022 was a particularly challenging year for the world’s most valuable company due to increasing regulatory scrutiny of its closed ecosystem, its walled garden of apps and services, its App Store, and developer relations.
- Imminent regulation pushed Apple to adopt the right to repair and could open iPhone and iPad users to alternative app stores in the future as part of The Open App Markets Act, which bans companies from forcing developers to use their app store’s payment systems.
- A civic court in São Paulo, Brazil, issued Apple a $19 million fine for selling iPhones without chargers in October. Apple has also been criticized for removing headphone jacks, SIM card trays, and for refusing to switch iPhones to the USB-C standard.
- Potential regulation targeting app stores has moved Apple to consider opening up to alternative app stores next year in response to regulations from the EU’s Digital Markets Act (DMA), which calls for open competition on mobile platforms.
Google had its share of fines and callouts from regulators in 2022, most notably for how it runs its app store and for some of its location and ad-tracking policies.
- The UK’s Competition and Markets Authority (CMA) has long been investigating the mobile OS Apple and Google duopoly and its “vice-like grip,” resulting in a lack of customer choice and higher prices than a more competitive market could offer.
- The CMA is waiting for the government to pass legislation to give it the power to enforce more intervention, but there have been delays. UK Chancellor Jeremy Hunt said the government would be pushing this through as soon as possible.
- The European Union scored a major legal victory against Google in September by blocking the appeal of its $5.1 billion fine for abuses of Android’s dominant position.
- Google also lost a case in Australia and was made to pay a $60 million fine for misleading consumers about collecting location data.
Facebook’s pivot to VR did little to tamp down regulatory focus on Meta and its various social and chat platforms. Regulation and resulting fines intensified for Meta throughout the year.
- Ireland’s Data Protection Commission (DPC) handed Meta subsidiary Instagram a €405 million ($403 million) fine in September, per Insider. The DPC is the EU’s regulator in charge of Big Tech companies, many of which are headquartered in Ireland.
- Meta and its subsidiaries are starting to rack up DPC fines. The regulator also fined Meta €17 million in March for failing to protect user data from external breaches.
- The UK’s CMA forced Meta to sell animated gif search engine Giphy in October, concluding that the deal would give its properties, including Facebook, Instagram, and WhatsApp, an unfair advantage over social media competitors.
- The US Federal Trade Commission (FTC) moved to block Meta’s acquisition of rival VR fitness app Supernatural in August, citing Facebook’s “innovation by acquisition” strategy.
- Continued regulatory pushback forces Meta to innovate rather than acqui-hire talent and products.
The everything store got its share of attention from regulators, sometimes in tandem with other big tech companies, for possible price-fixing and market manipulation.
- The FTC started an antitrust investigation into Amazon’s $1.7 billion iRobot acquisition, citing iRobot’s Roomba robot vacuum could be used to give Amazon an anticompetitive leg up as a retail giant.
- A class-action lawsuit filed in November accused Apple and Amazon of colluding to “stifle competition” by eliminating 98% of third-party Apple resellers on Amazon Marketplace.
- Anticompetitive lawsuits and the resulting fines might spur other countries to heighten regulations to block collusion between Big Tech companies essentially competing with their resellers on popular ecommerce platforms.
Key takeaway: Technology companies will continue to be on the defensive since delayed mergers often mean the loss of business, slower integration between companies, and missed opportunities.
European regulators will continue to be aggressive in pursuing antitrust cases across the technology spectrum while other countries could be more selective of which companies to challenge.