Quick summary:
The Trump administration is poised to loosen the reins on big tech companies. Meanwhile, the state of California is revisiting its policies that ensure fair competition. Today, we’re exploring how the potential reforms don’t have everyone sold — not even all small business owners — but still have a good chance at becoming law.
Hey, y’all,
Tech billionaires cozying up to President Donald Trump is nothing new, but their pledges of allegiance are hitting a new high note.
I mean, we all saw the inauguration, right? The three richest people in the world — and CEOs from half of the top 10 richest companies — appeared at Trump’s flank, ready and willing to benefit from his second term however possible.
And they may not have to wait long, as experts predict the Trump administration will follow a more lenient route than its predecessor when it comes to antitrust policy, Reuters reports.
For example, the outcome of several sizable monopoly lawsuits against Silicon Valley’s royalty, including Apple, Meta, and Alphabet (formerly Google), could be weakened by Trump’s influence on the Department of Justice and Federal Trade Commission. It’s also likely that certain merger guidelines, installed under Biden, will get dialed back. They are disliked by Wall Street but are praised on both sides of the aisle as a benefit to society, according to Reuters.
Given this loosening of federal oversight, the state of California is taking action. Many of these blue chip companies do business there, yet the state’s antitrust law has not been touched in over 100 years — until, maybe, now.
On January 23, the California Law Revision Commission voted in favor of recommending that the state modernize the legislation for the first time since 1907. The action moves the needle toward equipping the state with consumer protection abilities that are beyond federal control.
The impacts of measures like these on you and me would be noticeable. They can lower the prices of everyday goods, expand the amount of choice we have in stores, and safeguard workers at large companies. Those trying to succeed in big industries also get a better shot at success, and we can all breathe a bit easier knowing there’s at least one check on billionaire power.
That said, not everyone is in favor of reforms. Many are accustomed to the services big companies provide, from social media to search engines, and don’t want how they use them to change.
In California, the reforms would create a review process at the state level for potentially anti-competitive mergers, as well as allow state regulators to pursue dominant companies for monopolistic practices or abuses of market power, such as predatory pricing, according to the CLRC.
These functions are typically reserved for the federal government, Teri Olle, Director of Economic Security California Action, explained in a press release.
“As the world’s fifth-largest economy, California cannot rely solely on federal antitrust enforcement, which remains vulnerable to political shifts and judicial interpretations,” she said. “These proposed updates reflect California’s unique need.”
Granted, the CLRC is an independent commission that only makes recommendations to the state government, which can either accept or deny them. However, over 90% of its past recommendations have been turned into law, according to the American Economic Liberties Project.
Suffice to say, many consumer-minded policy-watchers are excited about the prospect of finally closing some of the nation’s gaps in antitrust law. The timing gets more fitting by the day, as Trump is practically inciting a bidding war between U.S. companies over purchasing TikTok, ABC7 reports.
Yet again, that’s not to say everyone is convinced it will be a good thing. The California Chamber of Commerce, for one, has pushed back against the idea of reforms, calling them unfounded and potentially harmful in the long run.
Some small business owners share this counterargument, citing the importance of the inexpensive digital tools many large companies like Meta and Google provide. Finding customers and facilitating services for many local businesses would look radically different today without the advertising, contact ability, and ratings these platforms offer to early-stage companies, Sacramento small business owner Angela Harris writes in CalMatters.
According to her guest commentary, Harris’s biggest concern is that new antitrust laws could get in the way of these tools’ simplicity and ease-of-use. A customer can search for a business on Google and also find navigation, reviews, and information on services all at the same time. What if new policies complicate that pipeline?
“Those kinds of changes would be disastrous for local businesses like mine that rely on existing low-cost digital services,” Harris said, urging the commission to consider the impacts of any reforms, per CalMatters.
It seems this leaves us at a bit of an impasse. Which is worse, letting the Musks and Zucks of the world consolidate as much power as they please, to the detriment of everyone else, or potentially ruining the parts of their platforms that small business owners find genuinely useful?
There may not be a 100% right answer, but perhaps it is another ‘lesser of two evils’ moment. California has a chance to fortify itself against some of the most powerful people and companies the world has ever seen — but can it do so without burning anyone along the way?
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