A series of harsh criticisms have been leveled against U.S. information technology giants. The top management of each company must take the criticisms seriously and continue to fulfill their accountability.
The U.S. House of Representatives summoned the chief executive officers of the IT firms known as GAFA (Google, Apple, Facebook and Amazon) and held a hearing as part of an investigation based on antitrust laws.
It is said to be the first time for the top executives of the four companies to testify before Congress all together. When grilled by lawmakers who asserted that their digital market dominance hampers competition, they claimed that their companies actually face fierce competition.
Responding to a criticism against Facebook that the company purchased image-sharing site Instagram in an attempt to neutralize a competitive threat, Facebook said that Instagram's success was the result of Facebook's investment in it.
Apple's behavior of collecting high fees for distributing smartphone apps against the backdrop of its dominance in the market was seen as problematic. In reply, Apple denied that it has a dominant share in any market.
Nevertheless, it is hard to say that their explanations have succeeded in dispelling the concerns of their clients and users.
The GAFA companies have a large market share in online shopping, search services and digital advertising, among others. The companies are making huge profits, but there are many opaque factors in their trading and earning structure.
They have spent a lot of money lobbying the U.S. government and Congress to realize policies in their favor.
Are usage fees and commissions collected from business partners appropriate? Is a fair competitive environment ensured? Thorough examination is necessary.
In response to the novel coronavirus pandemic, IT companies are further making their presence felt. They should be aware of their heavy responsibility and make efforts to reform.
The problem is that current antitrust laws cannot fully deal with the rapid pace of digitization.
In the past, U.S. authorities issued orders based on antitrust laws to split up major oil company Standard Oil and telecommunications company AT&T. This was because there was a fear that the prices would rise unfairly due to their market monopolies.
On the other hand, many of GAFA's services are provided free of charge, making it difficult to see the negative effects of oligopoly.
With the internet, it is possible to attract more users by collecting a large amount of customers' data and using it to deploy various services. Therefore, there tends to be a "winner-takes-all" situation.
The impact is not only on the United States but also on other parts of the world, including Japan. It is hoped that each country will speed up the establishment of a new rule to monitor the data oligopoly.
-- The original Japanese article appeared in The Yomiuri Shimbun on July 31, 2020.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
