It would be premature to call time on big tech, but some of the most powerful companies in the world are coming under intense regulatory scrutiny. The US Department of Justice is currently weighing a potential break up of Alphabet, the parent company of Google. This follows a landmark court case in August when a US judge found that Google was an effective monopoly that had breached antitrust laws.
The Department of Justice’s case against Google is potentially one of the most consequential in American corporate history, although there are likely to be many appeals before an outcome is reached. Indeed, it is worth noting that a US court ordered the break up of Microsoft in 2000, but the decision was overturned later on appeal.
Over the past decade, the EU has imposed fines of €8.25 billion on Google because of alleged breaches of antitrust law. Some of these fines have been overturned on appeal and some cases are ongoing. The rationale for the antitrust cases are claims that Google has abused its dominant market position to undermine competitors unfairly.
If it is the case that Google is found to be a monopoly, then the courts could seek to break it up. And Google’s $2 billion market capitalisation should not shield it from laws that are frequently used against companies with much less heft.
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Monopolies are not good for any economy. They stifle competition and innovation, which harms consumers and smaller businesses. There is no suggestion that the cases against Google are politically motivated, but governments may finally be waking up to the impact big tech firms are having on the political process. Elon Musk’s stewardship of X is the most obvious case in point.
If the direction of travel is to bring big tech to heel, there are potentially enormous consequences for Ireland. Google is a big employer and taxpayer, as are other tech giants which could be in the firing line. It is another area of exposure for Ireland, with the public finances so heavily reliant on a few big US companies.