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Monopoly players. Image generated with Llama of Meta.
Authorities have bigtechs in the crosshairs for the risks of bad practices that affects consumers, competition and fiscal situation.

Playing Monopoly: what's wrong with the greatest techs?

Google, Apple, Facebook, Microsoft and now Nvidia are in the crosshairs of the authorities. What about them?

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A specter is haunting the world: the specter of monopoly and anti-competitive practices.

At least, this emerges from the investigations that several authorities have opened against the world's largest technology companies in Europe and the United States. In fact, some of these investigations have already resulted in sanctions against some of these companies.

The most recent chapter was opened on September 3rd, when Nvidia shares plummeted taking $290 billion in market cap. The main reason is that Bloomberg reported that “Nvidia Gets DOJ Subpoena in Escalating Antitrust Probe (3)”.

According to Bloomberg: “The US Justice Department sent subpoenas to Nvidia Corp. and other companies as it seeks evidence that the chipmaker violated antitrust laws, an escalation of its investigation into the dominant provider of AI processors. The DOJ, which had previously delivered questionnaires to companies, is now sending legally binding requests that oblige recipients to provide information, according to people familiar with the investigation. That takes the government a step closer to launching a formal complaint.”

It is not the first time that great tech firms have been involved in an investigation of this kind. Some weeks ago, Google was declared a monopoly by a judge of the U.S. District Court of Columbia. It was in the framework of a process initiated by the U.S. Department of Justice in 2020. Judge Amit P. Mehta found anti-competitive practices in the search engine market.

At the beginning of 2024, the European Union informed that it had opened investigations into Apple, Google, and Meta to establish the behavior of the tech in the frame of the more strict digital markets laws.

This research highlights the great challenges that humanity is facing as a result of technological dominance. Although digitization opens the door for more people to participate in the information circuit, the truth is that from the point of view of the platforms it seems that the industrial revolution 5.0 can only occur in terms of dominant position in each market.

This is the reason why the authorities have been aware of the moves of large multinationals that can not only affect the position of competition but also that of consumers and even the public finances of the countries.

For example, today is more common to talk about the digital tax: a tax that recognizes that many companies can carry out operations in a country, even acquiring significant economic presence, but without the need to pay taxes, since they do not have a physical presence. Many countries have already implemented this kind of tax, which is established through mandatory and automatic withholding taxes on electronic payments. Digitalization has presented us with many challenges that have to do not only with information consumption habits, but also with free competition in the markets where it is taking place. It is necessary to continue discussing this issue, because there is a lot at stake.

 

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