Big Tech found itself in the hot seat during the latest Democratic debate, as candidates took aim from all sides on issues like abuses of data privacy and the impact of automation on job losses. But while the candidates deserve credit for finally giving this important conversation more attention, they should be careful not to paint with a broad brush.
The markedly different responses among the major tech companies to mounting criticism shows that some, more than others, are willing to look inward and change. The very different ways Apple and Amazon responded to the same criticism is an important case in point.
Recent reports have found technology companies with retail platforms manipulate their search algorithms to more prominently feature their own products over those offered by other companies selling on the platform. Congress and the Federal Trade Commission are conducting investigations into whether or not companies like Amazon and Google have been utilizing their significant market power to stifle competition.
When a company operates as both producer and retailer, this problem might be reasonably expected. But a company’s reaction to criticism when this practice is called out says a lot about the integrity of its business model.
Apple, one of the big technology companies currently under scrutiny by Congress and the FTC, was caught engaging in this practice in their App Store. In response, it changed the App Store search algorithm to ensure that its own products were not being featured over those from third-party app developers. Though it required public scrutiny, Apple quickly took responsive action to ensure fair competition in the App Store.
Other tech companies involved in the Congressional antitrust probe have been criticized for this practice. These companies have not shown such willingness to correct course and end the practice of boosting their own private-label products over those sold by third-party sellers. Amazon and Google, for example, have routinely defied calls for transparency from consumers and third-party sellers about how, exactly, product order in search results is determined.
In the words of House Antitrust Subcommittee Chairman David N. Cicilline, “This is the kind of self-dealing that benefits powerful corporations, but harms competition, consumers, workers, and small business owners.”
These practices, which reportedly raised questions among Amazon’s own engineers and lawyers, put third-party sellers at an unfair competitive disadvantage. Amazon continues to be defiant in the face of calls for the company to take responsibility for protecting competition on its platform.
Similarly, Google has been the subject of criticism that its search algorithm prioritizes Google products and services over those from competitors. While the extent of this gatekeeping power may be unknown, the very lack of transparency raises significant questions about the dominance of Google and its gatekeeping power over competitors.
Businesses selling on Amazon’s platform in particular have repeatedly expressed concerns about the company’s use of their data, how that data informs Amazon’s merger and acquisition strategy and private-label product development, and how its search function is used to pick winners and losers.
While the potential manipulation of algorithms is just one aspect lawmakers and regulators are looking into, voluntarily ending this apparently anticompetitive practice would send an important message that Amazon and Google are willing to accept scrutiny and make changes that advance fair competition just as fellow technology companies like Apple have done.
If they are not willing to make those changes themselves, it may be time for policymakers to step in and ensure that all companies are playing by the same rules.
Robert B. Engel is the chief spokesperson for the Free & Fair Markets Initiative.
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