A number of software companies are some of the most profitable businesses in the world. For example,
Amazon is the dominant market leader in
e-commerce with 50% of all online sales in the
United States going through the platform. Another highly-successful software company,
Apple shares a duopoly with
Alphabet in the field of
mobile operating systems: 27% of the market share belonging to Apple (
iOS) and 72% to Google (
Android). Alphabet, Facebook and Amazon have been referred to as the "Big Three" of
digital advertising. In most jurisdictions around the world, is an essential legal obligation for any software company to utilize their software monetization strategy in compliance with
antitrust laws. Unfortunately, the e-commerce is highly susceptible for antitrust violations that often have to do with improper software monetization. Some software companies systematically utilize
price fixing,
kickbacks,
dividing territories,
tying agreements and anticompetitive
product bundling (although, not all product bundling is anticompetitive),
refusal to deal and
exclusive dealing,
vertical restraints,
horizontal territorial allocation, and similar anticompetitive practices to limit competition and to increase the opportunity for monetization. In 2019 and 2020, the Big Tech industry become center of antitrust attention from the
United States Department of Justice and the United States
Federal Trade Commission that included requests to provide information about prior acquisitions and potentially anticompetitive practices. Some Democratic candidates running for president proposed plans to break up Big Tech companies and regulate them as
utilities. "The role of technology in the economy and in our lives grows more important every day," said FTC Chairman
Joseph Simons. "As I’ve noted in the past, it makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition." In June 2020, the
European Union opened two new antitrust investigations into practices by Apple. The first investigation focuses on issues including whether Apple is using its dominant position in the market to stifle competition using its Apple music and book streaming services. The second investigation focuses on
Apple Pay, which allows payment by Apple devices to brick and mortar vendors. Apple limits the ability of banks and other financial institutions to use the iPhones' near field radio frequency technology.
Fines are insufficient to deter anti-competitive practices by high tech giants, according to
European Commissioner for Competition Margrethe Vestager. Commissioner Vestager explained, "fines are not doing the trick. And fines are not enough because fines are a punishment for illegal behaviour in the past. What is also in our decision is that you have to change for the future. You have to stop what you're doing." Gig economy
online marketplaces like
Uber,
Lyft,
Handy,
Amazon Home Services,
DoorDash, and
Instacart have perfected a process where workers deal bilaterally with gigs whose employers have none of the standard obligations of employers, while the platform operates the entire labor market to its own benefit – what some antitrust experts call a "for-profit hiring hall." Gig workers, such as
Uber drivers are not employees, and hence
Uber setting the terms on which they transact with customers, including fixing the prices charged to customers, constitutes a violation of the ban on restraints of trade in the
Sherman Antitrust Act of 1890. In the United States, the issue of whether companies such as
Uber is a price-fixing conspiracy, and whether that
price fixing is horizontal has yet to be resolved at trial. In response to
price fixing allegations,
Uber publicly stated that: "we believe the law is on our side and that"s why in four years no anti-trust agency has raised this as an issue and there has been no similar litigation like it in the U.S." The spirit of the antitrust law is to protect consumers from the anticompetitive behavior of businesses that have either monopoly power in their market or companies that have banded together to exert cartel market behavior. Monopoly or cartel collusion creates market disadvantages for consumers. However, the antitrust law clearly distinguishes between purposeful monopolies and businesses that found themselves in a monopoly position purely as the result of business success. The purpose of the antitrust law is to stop businesses from deliberately creating monopoly power. Discussions of antitrust policy in software are often clouded by common myths about this widely misunderstood area of the law. For example, the United States federal
Sherman Antitrust Act of 1890 criminalizes monopolistic business practices, specifically agreements that restraint of trade or commerce. At the same time, the Sherman Act allows organic creation of legitimately successful businesses that gain honest profits from
consumers. The Act's main function is to preserve a competitive marketplace. The Big Tech companies are large and successful companies, but success alone is not reason enough for antitrust action. A legitimate breach of
antitrust law must be the cause of any action against a business. Antitrust law does not condemn a firm for developing a universally popular search engine, such as
Google, even if that success leads to market dominance. It's how a
monopoly is obtained or preserved that matters — not its mere existence. == See also ==