Wed. Dec 6th, 2023
    Big Tech Collusion: Unseen Consequences and Invisible Taxes

    Collusion among big corporations is not a new phenomenon. The recent court case between the US Department of Justice and Google has brought to light an interesting question: how much would it take for a company to stay in bed and do nothing at all? The trial revealed that Google pays Apple over $26 billion a year for default placement on Apple devices, ensuring its position as the default search engine. This has raised concerns about competition and the lack of incentives for Apple to develop its own search engine.

    But this case is just the tip of the iceberg. There are other ongoing investigations into suspected collusion among Big Tech companies. For example, the UK Competition and Markets Authority is looking into how Google and Facebook allegedly carved up the digital advertising market, resulting in higher costs for consumers. The lack of competition in this market is estimated to have cost the average household £200 in 2019, and the figure is likely even higher now.

    The consequences of this collusion are not always visible to consumers. For instance, have you ever wondered why Apple products are priced the same everywhere and why no retailer offers discounts to gain market share? A recent lawsuit alleges that Apple struck a deal with Amazon to remove merchants offering Apple products at a discount, helping to maintain high prices. While Amazon and Apple deny the claims, fines have been imposed by Italian authorities for anti-competitive practices related to Apple devices.

    These unseen consequences of collusion result in invisible taxes on consumers. We end up paying more for goods and services than we would in a truly competitive market. Moreover, the dominance of tech giants shapes our perception of the technology landscape. We may never know what products were never released because of the convenience of staying in bed all day for these companies.

    In the UK, there was an opportunity post-Brexit to adopt a liberal approach towards regulating tech and the economy. However, lobbying efforts by Big Tech have led to a watering down of powers to prevent anti-competitive practices. Regulators have chosen the easier path of inaction.

    It’s time for greater scrutiny of Big Tech and its collusion practices. Consumers deserve fair competition and lower prices, and innovation should not be stifled by the convenience of staying in bed.