President Joe Biden has signed an executive order aimed at cracking down on big tech firms and promoting competition.
The move points to Mr Biden’s desire for tougher scrutiny of Big Tech, which the administration has accused of “undermining competition”.
“Capitalism without competition isn’t capitalism. It’s exploitation,” Mr Biden said at Friday’s signing event.
The order includes 72 actions and recommendations involving ten agencies.
It suggests that problems have arisen because of large tech firms collecting too much personal information, buying up potential competitors and competing unfairly with small businesses.
Several recommendations it sets out include:
- Greater scrutiny of mergers in the tech sector
- New rules to be set out by the Federal Trade Commission (FTC) on data collection
- Barring unfair methods of competition on internet marketplaces.
The Biden administration is also targeting a number of other sectors with the order.
It encourages other government agencies to take action to improve competition across healthcare, travel and agriculture.
Once fully implemented, it would allow hearing aids to be sold over the counter, for example, as well as the ban of early exit fees from internet contracts. It also intends to make it easier for consumers to claim refunds from airlines.
“For decades, corporate consolidation has been accelerating,” the fact sheet released by the White House says, describing the order as “a whole-of-government effort to promote competition in the American economy”.
Mr Biden said that the order seeks to limit the use of “non-compete agreements” as a condition of getting a job, which he claimed can make it harder for people to change jobs and therefore limits wages.
The executive order alone, however, does not mean these recommendations will come into force immediately.
The government agencies responsible will need to implement the changes, while some elements could be subject to court challenges.
Biden is on the warpath – and he has Big Tech in his sights.
For Biden, there’s no better example of broken competition than in Silicon Valley.
The “fact sheet” accompanying the executive order doesn’t name companies by name – but it’s clear which firms he’s talking about.
Big Tech has long been accused of making “killer acquisitions”, essentially buying up the competition.
It’s something the president wants to cut down on – expect greater scrutiny of mergers going forward.
The fact sheet also talks about other criticisms of Big Tech.
It describes how companies that run dominant online retail marketplaces can see how small businesses’ products sell and then use the data to launch their own competing products.
It’s pretty clear Biden is talking about Amazon here – an accusation the company has always denied.
These executive orders, though, lack teeth. They aren’t going to suddenly usher in a new competition regime.
But it’s the clearest direction of travel we’ve seen yet from the president. Biden thinks Big Tech is too big, and he wants to do something about it.
The US Chamber of Commerce criticised the order, saying it was “built on the flawed belief that our economy is over-concentrated, stagnant and fails to generate private investment needed to spur innovation”.
Neil Bradley, the Chamber’s executive vice president and chief policy officer, said: “Our economy needs both large and small businesses to thrive – not centralised government dictates.
“In many industries, size and scale are important not only to compete, but also to justify massive levels of investment,” he added.
It comes weeks after the House Judiciary Committee also voted to approve a series anti-trust bills, which could eventually become law and force big tech firms to transform or even break up their businesses.
Some tech firms have also been hit with various lawsuits claiming they have violated competition law and allege anti-competitive behaviour. (BBC)
•PHOTO: Joe Biden
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