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The tech giants under pressure - are being investigated in the US


Several of the major US tech giants are being investigated by US authorities for misusing their strong positions in the market in various ways. But whether consumers have suffered injury can be difficult to prove. This is what Johanna Cervenka writes in her analysis.

After the 2016 election in the United States and information about the election impact through social media, the wind started blowing around several large American tech giants. The Cambridge Analytica scandal and disclosures about how personal information is used didn't get any better. The tech giants are now hired from both European and American. Several state and federal government investigations are already underway against Facebook and whether they are abusing their incredibly strong market position. Google, Facebook, Amazon and Apple have also been investigated by the US Department of Justice in July in a separate competition investigation.

Can be cut up

Anti-trust legislation in the United States is a type of competition law that should prevent a company from abusing its dominant position in a particular industry. And that a few companies have total dominance in e-commerce and the online advertising market in the USA is clear.

Amazon controls nearly half of the e-commerce market in the country and Google and Facebook together have 60 percent of the Internet advertising market in the US. By means of anti-trust legislation, companies can be prevented from merging, large companies may be forced to split up their operations in different companies or the companies may be fined.

Acquisitions are reviewed

Gone is the time when big aggressive acquisitions in the tech sector were admired. So far, it is mainly Facebook's aggressive buying strategy that is now visible in the seams. Facebook has made 92 acquisitions since 2007, according to researcher Tim Wu at Columbia University in New York.

According to the New York Times, Facebook ignored the acquisition of Houseparty, a video-based social network, because they did not want to attract federal government attention.

Google is accused of abusing its position

The anti-trust investigations can also hit the very core of many of the big tech companies' revenue models - the collection and use of user data for ad optimization. Google's search engine technology makes Google one of the world's most valuable companies.

Google controls both the technology used to buy ads online - and the Android system on many of the world's smartphones. In its search service, Google now solves close to all queries itself - instead of forwarding the applicant to another site or service, online commerce analyst Rand Fishkin states. As a result, many of Google's competitors in news, travel sites and e-commerce, among others, are unhappy and claim that Google is abusing its market position.

The e-commerce giant Amazon is also investigating how they use the data they collect and whether they favor their own brands and offers to customers over others. Similarly, app companies are unhappy with how Apple handles its App Store and it is being investigated whether they are trying to get customers to buy their own products over others.

Can take years to investigate

The various investigations can last for many years. Facebook was fined $ 5 billion by the Federal Trade Commission, a US federal trade authority in July. In Europe, Google went on big fines that they appealed. They have previously managed to convince the regulator, the FTC, 2012 and 2013 to avoid fines by changing certain business practices.

The companies' main argument against the various investigations is largely that their actions are only about ensuring high quality and safety in their products. In addition, they believe that they are heavily employed by competition both in the domestic market in the US and from China.

The crack question is whether they can show that consumers have suffered financial damage from the tech giants' business and data management. Because many of the services are free or low priced, it can be difficult.

Source: svt

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