Monthly Archives: January 2021

Adam Smiths free-market economy pivots around minimal government intervention so that markets can self-regulate and operate optimally. Unfortunately, in many cases, such environments allow the rise of monopolies through organic or inorganic growth. While true monopolies are rare in a free market economy, lack of government intervention often allows the rise of a single large player with many minor players with limited competitive ability. In these situations, the large firm is considered to have monopoly power.

Interestingly, the genesis of competition / antitrust laws came as a response to the rise of firms with monopoly power in the 1880s and 1890s in America. With the principle, if we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessaries of life, the Sherman Antitrust Act of 1890 (Sherman Act) came into force to break the dominance of various trusts (i.e., large integrated manufacturing conglomerates which often enjoyed monopoly power).

After protracted litigation, the US government in 1911 carved its first major trust, the Standard Oil Company (SOC) into 34 smaller companies. For background, after its incorporation in the 1860s, SOC began operations by selling oil at very cheap rates compared to its competitors. Parallelly, SOC engaged in strong business integration through steady organic growth and inorganic acquisitions. Soon after, SOC started raising oil prices significantly, and by the 1890s, if customers refused to pay the exorbitant prices, they would be rendered unable to procure oil. As such, the breaking up of SOC gradually improved the competitive character of the oil market and came as a respite to its consumers.

Another major divestment under the Sherman Act was of the American Telephone & Telegraph (AT&T) in 1984 which was broken up to form many baby bell companies. It is believed that while the breakup temporarily caused a reduction in service quality and increase in prices, the market ultimately settled through natural maturation.

Over the course of the century, many other trusts with monopoly power namely, the American Tobacco Company, Northern Securities (railroad company), National Packing Company (beef-packing company), etc., were divested to protect the competitive integrity of relevant markets. However, thanks to legislative evolution, governmental authorities in the recent past have had very few reasons to cause the divestment of firms with monopoly power (outside of a merger control context).

That said, while the jury is still out on this, the long-standing intervention-free position maybe in for a change. It is a popular belief that the exponential rise of big techs like Apple, Google, Amazon, Facebook, etc. mimics the dominance enjoyed by trusts in the first half of the last century as discussed above. Over the years, many of these firms are believed to have systematically engaged in predatory conduct to drive out competition by way of killer acquisitions and anti-competitive practices for protecting their monopoly-like power in the relevant markets. For the uninitiated, killer acquisitions are competitor buy-outs with a view to shut it down than to compete.

The first response to this rise of big tech came in 2001 when the then US government advocated the breakup of Microsoft. While Microsofts monopoly power was acknowledged, it escaped such fate for several reasons including political motivations.

However, the embers have been fanned once again with growing consensus that big tech now wields overwhelming power and influence resulting in tangible harm to competitors and consumers alike, and therefore needs curtailment. Although antitrust agencies world-wide are contemplating measures to reign Big Tech, the US appears to be leading this endeavour with the Congress seeking sweeping remedies to restrain further threat to competitors, consumers, and democracy itself. For instance, Facebook and Google are already facing heat in multiple states with many parallel investigations concerning their predatory market behavior and acquisitions. Many prosecutors have already called for breaking off Instagram and WhatsApp from Facebook with restrictions on their future deals. The US Department of Justice has also accused few Big Tech companies of illegally protecting their monopoly power in their markets. While it is unclear where the water will flow from here, given the convergence of political will and public sentiment against big tech, it is not out of place to expect a repetition of the SOC or the AT&T breakup.

Further, the impact of the wests events in India cannot be downplayed. Given the globalised era and the Competition Commission of Indias (CCI) penchant to mirror US and the EU antitrust authorities, the probability that the CCI may initiate investigations to assess the dominance of individual big tech firms in India and assess the requirement for a breakup cannot be ruled out. The CCI is already seized with investigations against some big tech firms and the expansion of on-going investigations to include others would not be far-fetched.

Further, the thus far dormant Section 28 of the Competition Act, 2002 (Act) which empowers the CCI to divide a dominant firm to ensure that such firm does not abuse its dominant position may finally be invoked. Interestingly, the scheme of the said section does not require the CCI to make an actual finding of abuse to direct a firms division. Mere apprehension of abuse by a dominant firm is sufficient to trigger the operation of this provision. It is intriguing that the Act itself does not provide any guidance for determining justifiable triggers to develop an apprehension of abuse vis--vis a dominant firm. This lack of guidance severely expands the scope of this provision and strengthens the CCIs power.

All in all, in view of the fast-paced and global development on this front, the recent surge of investigations by the CCI against big tech like Google and Amazon can act as a stimulus that the CCI needs to test the waters within the realm of its powers under Section 28 of the Act. That said, in the absence of defining contours of the scope and application of Section 28 of the Act, its true effectiveness as well as constitutional validity cannot be truly gauged at this early stage. Nonetheless, it goes without doubt that we are sailing in novel waters, and the alarm bells tolled in the US can very well bring about a watershed moment even in the Indian competition law landscape

The content of this document do not necessarily reflect the views / position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at [emailprotected]

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Breaking Trusts: Is Big Tech in Big Trouble? - Lexology

If President-elect Joe Biden bats the thorny question of tech taxes down the road the way Democratic predecessor Barack Obama did, investors will pay the price.

U.S. tech giants are already handing over so-called digital-service taxes to the French government. Unless the incoming administration restarts global efforts to reform corporate-tax rules, the likes of Alphabet, Apple and Facebook will soon face myriad such levies around the globe. On Thursday, the U.S. trade representative said it would delay retaliatory action against France promised by President Trump, essentially leaving the problem for Mr. Biden.

U.S. backing is crucial for a deal. The Organization for Economic Cooperation and Development started working in 2013 to update industrial-era corporate tax rules for online companies and crack down on what many countries see as aggressive tax avoidance. But the project was soon shelved because of a lack of support from then-President Obama.

Mr. Biden wont necessarily hold the same view of global tax reform he did back then. A lot has changed politically and economically. The incoming administration has also talked of taking a much stronger stance on the regulation and antitrust treatment of big tech companies.

With a technical solution in sight, a deal could be done this year if the U.S. wants it. Mr. Trumps 2017 tax overhaul changed the rules at home, renewing the U.S. Treasurys interest in global reform. That revived the OECD project, which made rapid progress until last summer. It stalled after Washington appeared to get cold feet.

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Joe Bidens Big Decision on Tech Taxes - The Wall Street Journal

So, this is what a latter-day insurrection looks like: the crowd waving their mobile phones. Mirror are smashed, boots are stamped on Nancy Pelosis desk. Among the protests stalk those with the darkest of fantasies, zip ties ready to kidnap their despised liberal enemies. Five people lost their lives and although this is bad enough already, the casualties would have been even higher if the protesters had broken in before the had a chance to politicians flee.

From the point of view of the institutions, the far right were an embarrassment and inconvenience. Trump has lost the election; Biden will replace him. Yet politics is about more than who occupies the White House: it is also about the rise and fall of social movements and the values which underpin then. Before Wednesdays event, the popularity of the Proud Boys and other right-wing extremist groups was already growing, which was confirmed by the broad approval of their actions at the Capitol. They returned home with the applause of tens of millions of right-wing voters ringing in their ears. One in five voters supported their action, including 45 percent of Republicans.

The fallout of Wednesdays events will continue to echo for months, perhaps years to come. For all their seeming partisan difference, the center-left and center-right of US politics have a shared response for dealing with the crisis: it is to demand a greater number of cops and the removal of the social media accounts of the worst perpetrators. But neither strategy is in the interests of the majority of Americans or in particular of the US left.

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The extraordinary thing about the protest is that they did so much with so few people. Barely 15,000 people answered Trumps call to join him in Washington DC to protest the outcome of the elections. The crowd was so small that in order to make the march on the Capitol seem the mass event its believers needed to be, they had to post recycled images of older, better-attended, anti-Trump protests.

Those who had taken to the streets against Trump and against the racism of the US state responded with images of their own, showing militarized lines of police that confronted Black Lives Matter crowds last summer. We remembered the sadism of the state when Black people marched, the way that even water bottles were broken. We saw how few bodies were placed in the way of Trumps march.

Some, but only some, of this will be remembered on the center-right and center-left. There, the message will be a special kind of Never again. Never let a crowd form. Never authorize a demonstration. Never let a march take place without the National Guard being primed to stop it. The revenge for Wednesdays demonstration will be felt in calls to increase police budgets and in demands for the violent suppression of protest. And its victims will not be the new fascists.

Friends tell me that there must have been some secret command from well-placed Trump allies, to make sure that his protest went on without being stopped. But life is rarely that convenient. The reason the police take sides with the fascists is ideology. The belief-system of American liberalism in both its Democrat and its non-Trump Republican form, accepts Trumps claim that the far left are violent, secretive and likely to destroy property.

The police take a cue from that politics. They recognize that the fascists share with them certain core politics a belief in the nation and in private property rights they see anti-fascists as instigators and as challengers to their monopoly use of force, and never see far-right street movements in the same negative light

Between the start of 1994 and summer last year, white supremacists and other right-wing extremists in the US carried out attacks that left 329 people dead. In the same period, a single attack staged by an anti-fascist resulted in one killing (the anti-fascist perpetrator). You would have thought with a death toll so one-sided, the state would have to take sides against hate. But in the mindset of US centrism, the Proud Boys and like-minded extremist groups are almost invisible, their right-wing politics inexplicable. Both the far left and far right require suppression in their view. And if the clubs are going to fall hardest on left-wing backs, then is that not a price worth paying?

For two years, the social media companies have been slowly deplatforming the worst of the far-right offenders both in Britain and the US. In 2019 and 2020, the Daily Shoah podcast, was taken down from iTunes, Twitter and Facebook. Much the same happened to the Daily Stormer website. Former Breitbart journalist Milo Yiannopoulos was relegated from Twitter to Gab, complaining that I cant post without being called a pedo [sic] kike infiltrator half a dozen times I cant make a career out of a handful of people like that. I cant put food on the table this way. In the UK, Britain First (once the second most popular political page on UK Facebook) was relegated to the much smaller world of Telegram.

Last summer, when tens of millions of people took to the streets in support of Black Lives Matter, YouTube banned former Klan leader David Duke, alt-right leader Richard Spencer and so-called race realist Stefan Molyneux. Reddit deleted more than 2,000 subreddits including r/The_Donald. Two months ago, Steve Bannon was banned from Twitter.

This week, after Donald Trump repeated his praise of the people who had marched for him, Twitter finally took down his account, leading to howls of protest from right-wingers and claims that the most sacred value in US society, the First Amendment, was being contravened.

This is a tougher political question for the left than whether we want there to be more policing. For, after all, the removal of right-wing websites makes life harder for our opponents. In the short-term, it carries seemingly no risks for us.

But if Trump is now a hate-monger, he was no less of one in October last year when he used Twitter to demand what became the extra-judicial killing of Michael Reinoehl. He was no better last spring when he first began calling the people onto the streets who became this Wednesdays crowd. He was no different when he separated immigrant children from their parents, or when he promised to lock up Hillary Clinton. He has been the same for years, and for most of this time his presence has been of immense value to Twitter.

Between joining Twitter in 2009 and summer 2017, Trump posted more than 30,000 times acquiring 36 million followers. Every time he posted, and newspapers or television companies reported his latest outrage, he drove people onto the site to read him. From the perspective of the owners of the platform, he was devoting an incredible amount of time to boosting its profile. In 2017, one financial analyst, James Cakmak, estimated that if Donald Trump had to leave Twitter the companys value would fall by $2 billion. Between then and Friday, when his account was taken down, the number of his followers on that site had nearly tripled.

The strategy of deplatforming carries all sorts of concealed risks for the far left. On occasion, we have seen marginal individuals with modest public platforms use the fact that they were banned from social media as a way to invoke the morality of self-defense and build up a huge new audience, greater than anything they had had before.

The left and the right are never simply fascist or anti-fascist but combine multiple other causes. When they ban right-wing figures from social media, the companies look to the left next, search for sites they could punish in order to prove that they are above politics. Last year, that meant taking down such anti-fascist sites as Its Going Down, CrimethInc and Enough is Enough.

Five or ten years ago, you would often find leftist critiques of the tech giants for their social policies and, above all, for the way in which they had opted themselves out of the tax system. That criticism is still made, however it has become more muted just when it needed to become more urgent. Last year, the wealth of Facebooks Mark Zuckerberg passed $100 billion, making him the worlds fourth richest person.

The amount of time which the average American online has increased from less than two to more than seven hours a day in the last decade. The top five wealthiest companies in the US by market capitalization are all part of the digital-industrial complex: Microsoft, Apple, Amazon, Google and Facebook. At the same time, American schools and hospitals and libraries have been steadily defunded and spending on the sorts of infrastructure you need to keep an economy functional (roads, water, electricity) has been cut substantially over the past decades.

The wealth of the major companies has been achieved, in other words, at public expense. People are poorer, their lives diminished and they are in greater debt because of a series of behaviors at the heart of which is the diminishing willingness of the rich to pay tax, with the owners of the social media platforms being the ideal poster boys for this type of behavior.

We cannot be at ease with an anti-fascist strategy of deplatforming which give Mark Zuckerberg or Jack Dorsey the power to decide what kinds of opinions are worthy of being heard and which deserve to be silenced.

In the face of a growing far-right, these are going to be the issues which dominate the next four years: whether to depend on the state and social media platforms to take on Trumps supporters, or whether anti-fascists need to build our own strength.

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More Cops and Big Tech-Led Deplatforming Won't Help Us Defeat the Far Right - Truthout

Public debate now takes place largely on the Internet. The same rules of the game must apply there as in the public space. Awakened unelected Big Tech companies are not allowed to set the rules of debate, Forum for Democracy said in response to disgusting dictatorial actions by tech giants that silenced Trump and many of his allies last night . FVD wants to ban censorship of non-criminal statements. In addition, the party will go to Telegram, which FVD hopes is an alternative possibility of communication with supporters.

The Forum for Democracy is currently the only Dutch party to condemn Donald Trumps Twitter ban (and the Facebook and Instagram bans), and is one hundred percent committed to free speech. In the so-called free Netherlands, one would expect all parties to share this opinion, but nothing could be further from the truth. Hes probably staying with one or two clubs. Others will find this censorship fan-tas-tic, and will want to apply it in their own country as soon as possible.

Samuel Jong, FVD employee and parliamentary candidate, adds that the FVD also wants to give alternative platforms free space. This way the Internet remains free and open!

FVD also sees where it is going: It starts with bans on Trump and the people who support him in America, but ultimately the entire right-wing movement throughout the Western world will have to believe it. Anything and everyone who does not wake up will be silenced in the near future. Political parties will be banned from social media, non-politically correct websites will be rejected everywhere (from social media to search engines).

Because FVD understands this, the party is trying to find or develop alternatives at lightning speed. The way its done now is through Telegram:

Of course, I joined the channel. Very practical, because they have already started to communicate. And this without the interference of Big Tech.

Do yourself a favor and stop using major social media like Twitter, Instagram, Facebook, WhatsApp. Switch to alternatives like Parler, Telegram, and Signal today. And as with search engines, DuckDuckGo is also a great alternative Home Page.

After all, YouTube is of course no better. Steve Bannons WarRoom, for example, was scrapped last night (further proof that these actions were being coordinated by Big Tech). Two good alternatives are Banned Video in To scold.

Of course, at De Daily Standaard we will also work with these alternatives. You will hear more about this later.

For now: know that the digital battle that people like me have been warning about for years has officially started tonight. Big Tech now wants to permanently restrict our freedom of expression. Where you can legally defend yourself with a dictatorial government, you dont have that option when it comes to Big Tech. If they shut you up, its over, over and over again.

In the saddle its gonna be a bumpy ride. We will not only win this battle. Its going to get a lot worse including with entire websites down and / or no longer being found on search engines. we duty do something and find yourself other ways. But: dont give up! If we do not let ourselves be silenced, we will win in the end and we will simply reclaim our rights.

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Unelected awakened Big Tech companies! We must have alternatives! - The Daily Standard - DodoFinance

Sinan Aral, MIT David Austin Professor of Mgmt. and The Hype Machine Author, joined Yahoo FInance Live to break down how the pro-Trump riots in Washinton DC are impacting the economy and what they mean for big tech.

SEANA SMITH: We want to turn and look at the role of big tech in all of this. And for that, we want to bring in Sinan Aral-- he is the author of "The Hype Machine"-- on how this really could impact some of those big tech giants that we've talked about, like Facebook and Twitter here.

And Sinan, when you take a look at the role that big tech has played-- at least today, they have been flagging tweets. They have been fighting those that they say could incite violence. But from your perspective, what do you think the role of big tech has been and should be in this type of situation? And it looks like you might be muted. Just unmute.

SINAN ARAL: Rather than just focus on superficial social media tweets or posts, I think it's worthwhile to think about the underlying information ecosystem that is contributing to coordinating and enabling this kind of activity. So people who study the riot process, people who understand deeply the concept of protest and the concept of violence erupting from riots and protests, understand that this does not happen without information. Information is necessary to motivate. Information is necessary to coordinate.

Social proof that you see others in your community saying they will or are actually in the capital doing, what you are thinking about doing, that others are supportive of what you're thinking about doing, all of this type of information is essential to this kind of outcome. And what we've seen, whether it's in the plot to kidnap the governor of Michigan and different types of Boogaloo Bois arrests and violence, in what we're seeing in the capital today, in even the Pizzagate scandal, where the person who was believing in those conspiracy theories about the pizza parlor, who shot up the pizza parlor, information is absolutely essential to all of these dot coms--

Story continues

ADAM SHAPIRO: Sinan.

SINAN ARAL: Yes.

ADAM SHAPIRO: It's Adam. It's good to see you. We only have about two minutes. So what do we do? The Biden administration, as well as Republicans, want to repeal Section 230. And I know we only have two minutes. Is that enough? Is that what you do?

SINAN ARAL: No, repealing Section 230 will either cause social media to become a swamp if the social media companies decide not to moderate anything, or it will completely curtail speech if they decide to moderate everything. The protection from civil liability allows them to make educated choices about moderation, which is a much better middle ground. We can reform Section 230, but we can't repeal it. Otherwise, large parts of the internet will be destroyed for the free internet.

What I'm really concerned about, Adam, is, what's going to happen next? What's going to happen tonight? What's going to happen in the next two weeks before the inauguration? And what is the information role in what happens tonight and the next two weeks? What's Facebook's role in stopping the coordination, the motivation, and the social proof? What's Twitter's role? How can we subvert sort of the information motivation and mobilization of this kind of violence?

SEANA SMITH: Sinan, real quick, we only have about a minute here. But just your biggest concern here between now and tomorrow morning. I know you were saying that the role of information and what that plays and what these big tech giants need to do, but what's your biggest concern right at this point?

SINAN ARAL: My biggest concern is that social media platforms, through private messaging, through public messaging, through shows of public support, will be used to motivate, coordinate, and mobilize further violence. And I think that there are ways that the platforms can curtail this.

And I think that they have a responsibility to make sure that any information that is advocating violence, supporting violence, advocating the violent overthrow of the government, and so on, be stemmed. This is a content moderation decision. It is a flash point in actual physical violence. Someone was shot on the Capitol today. And I think they have a responsibility to play a role here.

ADAM SHAPIRO: Sinan Aral is author of "The Hype Machine." We appreciate you joining us here on Yahoo Finance Live.

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Analyzing the 'information role' big tech has in the coordination, motivation of riots: MIT Professor - Yahoo Tech