The US Congress has just created a history. It has testified the four big leaders of corporate family, including the richest man on this planet, Jeff Bezos. Of course, this hearing was a virtual one. Apart from Bezos, the other three bigwigs are Apple’s Tim Cook, Google’s Sundar Pichai and Facebook’s Mark Zuckerberg.
When the four big techies landed up in the Capitol Hill, the only question that arose in our mind is: Do all these big corporations use their power and reach to crush their rivals and take advantage of the situation? This overarching question has indeed bothered many in the corporate world, both businessmen and academics for decades since the sharp rise of tech and e-commerce giants such as Amazon.
This remarkable investigation process is carried out by the House Judiciary Committee’s antitrust panel. The main focus of investigation is the incredible rise in their power in comparison to other corporate houses. Precisely, it has been a year-long investigation that has covered 1.3 million documents, accompanied by hundreds of hours of hearings and of course, closed-door briefs. Their Congressional questioning session on July 29 has only marked the culmination of this entire saga of enquiry. On record, this has remained the biggest Congressional hearing of this kind since the questioning of Bill Gates of Microsoft in the year 1998.
These four companies literally shape how billions of people learn, communicate, work, shop and specially spend their daily life. Interestingly more and more Democrats and the Republicans have come together to take on the rising power of the Silicon Valley.
What can come in the future is that the investigations carried out by the regulators both in America and in Europe could initiate law suits and force break-ups of these giants. Many say that the decisions taken which are supposed to come in weeks may reshape the tech industry. It all depends how the statecraft takes on the economic powerhouse of the world.
All the big four were forced to defend their companies, practices and techniques of using their huge market power, to acquire or stamp out rivals, including the use of vast repository of data in front of the House Judiciary Committee. They also tried to downplay the size and power of their enterprises. However, majority of the Congressmen were left unimpressed by the very defensive arguments offered by the tech giants. David Cicilline, the chair of the Sub-committee, concluded that some of the tech companies need to be broken up and the rest need to be properly regulated.
When the question of regulation of the corporate, along with other business legislations, surfaces, the US Antitrust Laws have been able to maintain public trust. It is the set of the Antitrust Laws that solely protects the interests of the customers. These laws have a history of almost 130 years in the US. The first Antitrust Law was passed by the Congress in the year 1890, known as the Sherman Act. Its main aim was to build a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade”. But in 1914, during the course of the First World War, once again the American Federal Legislature passed two additional Antitrust Laws, namely: a) The Federal Trade Commission Act, and b) The Clayton Act. Interestingly, these are the three cardinal Antitrust Laws that are in existence across the country, albeit with some crucial revisions.
Now the point is what does these Antitrust Laws do? In general, they proscribe unlawful mergers and trade practices. But of course, it is the judiciary that is supreme in deciding which is unlawful, based on the evidences in each case. Since 1890, the courts around America have applied these laws in such a way that it suits the changing waves of time, starting from the good old days of street business to the all-encompassing age of digitisation. The American Federal Trade Commission (FTC) further makes the intention of the Antitrust Laws clear: “Yet for over 100 years, the Antitrust Laws have had the same basic objective: to protect the process of competition for the benefit of consumers, making sure there are strong incentives for businesses to operate efficiently, keep prices down and keep quality up”. After looking at this, there would be no iota of doubt that American businesses have to perform better and do good for the public. And they are in no way far away from the so-called “Public Square”, right under the gaze of the common man.
With these serious deliberations by the Congressmen, what America might need to check the abuse of power, position and influence by the giant enterprises? The moment now is for a clarion call to ensure that big businesses do not devour the small, medium and the emerging ones in the race to accumulating their wealth and power. But the business corporations in the US have generated more than enough power to influence public discourse in a span of more than two hundred years. Unlike many other democratic countries, these enterprises have responded to situations both individually and as a group much beyond their narrow economic interests. And at times, the trading community has resorted to the mechanism of corporate social responsibility to serve the common interests of public over the years. That is how especially the modern American business houses have earned public acceptance, support and more particularly, endorsement across the country. Further their ever-expanding role in public sphere has helped them to achieve social legitimacy since the nineteenth century. But in January 21, 2010, the US Federal Court handed down a historic judgment on the very nature of the legal personality of the modern corporation. In the case, the Citizens United vs Federal Election Commission, the court rejected the corporate campaign limits. This has overruled years of legal precedents maintaining rules to prevent the flow of corporate fund for political campaigns. The majority judgment in this case highlighted the argument that the right to free speech guaranteed by the Constitution extended to corporations as well as humans. Then onwards the business community has been armed with more opportunities to directly influence the power corridors of the country on an unlimited scale. Unfortunately, in 2011, the American people once again came out to the road to protest against the corporations under a post-globalised banner called “Occupy the Wall Street”. What the protesters stated was that they represent “Other 99 per cent” and the business is not alone in the shaping of this great land. This movement clearly highlighted the rising corporate power and especially alleged Wall Street influence on major policy making platforms in and around the federal and state governments across America. Besides, the protesters underlined the emerging income inequality and a host of social justice issues that particularly afflicted the common American people. However the naysayers debunked the movement as none other than an attack on capitalism. And more other such upheavals in the recent past have succinctly bring home the point that over the years the corporations have acquired unrivalled power in American society.
It’s the right moment to recall what John Kenneth Galbraith, a Canadian-American economist, a pioneer of the 20th century American liberalism, once echoed the need of the “Countervailing Power”. This is the power of the Government or other institutions in the society to offset corporate power and ensure that abuses are curbed, and the public is well served by corporations in each era. Therefore, the excesses brought by the Facebook, Amazon, Google and Apple, as per the investigations conducted by the Congress need to be countered seriously and gradually. This will surely bolster sustaining the faith of the populace on the modern corporations. And further, such measures would strengthen the long arm and influence of the business better in doing good for the society. Then automatically, people would realise that economic benefits heralded by corporations are truly substantial and are fairly distributed in the American society irrespective of any differences. Thus questioning the four big techies have once again send the signal that modern corporations may be mightier and richer, but their unfair practices can rightly be checked by the all-powerful Congress.
(The writer is an expert on international affairs)