An act presented to the house on Friday could make big tech companies pay out massive settlements if investigators discover antitrust behavior in their business practices. Termed the “Monopolization Deterrence Act,” the legislation gives power to the Department of Justice as well as the Federal Trade Commission to leverage civil penalties on companies that break antitrust laws within the country, allowing for fines of up to 15% of the company’s total US revenue or 30% of the business’ revenue in affected locations.
The intention is to introduce deterrents that even massive companies would see as impacting on their business profits and bottom line. Previous settlements for lawsuits against large tech companies, while impressive sounding from a numbers perspective, seem to have made no impact on the companies’ practices. Recent announcements by tech giants have made the government take notice of the amount of sway these companies hold over the local populace and how that may impact the national economy if they remain unmonitored.
Harsher Fines in the Wake of Cambridge Analytica Scandal
Just last month, the government levied a fine of $5 billion on Facebook for its part in the Cambridge Analytica scandal, which saw as much as 87 million users’ data exploited for questionable purposes. The impact on the company’s revenue was negligible, and the fine did not seem to serve as a deterrent nor as a warning for the company to improve its security practices. Facebook, in particular, has a history of being lax with user data.
The bill may be a direct response to how the FTC handled the situation. By offering the national watchdog groups more of a bite when it comes to their findings, it is expected that tech companies will begin to fall in line. While the consideration of privacy and antitrust are two distinct and separate issues, the bill intends to offer agencies that deal with these issues precedence from where they can build. The investigation into the big data companies that dominate the electronic landscape in the US is ongoing, and if the legislation is passed before a ruling is issued, big tech companies could find themselves paying far more than they expect for breaches of the law.