David Seligman
One of the greatest threats to our freedoms today are the fine print that big tech companies and powerful monopolies that control markets impose on contractors, consumers and workers. For these companies, contracts are not about free and fair trade; they are about strengthening their control over people and communities, excluding competitors and further controlling markets.
We often think of antitrust law as applying to mergers and collusion between competitors. Collusion often takes the form of so-called “horizontal restraints” – horizontal because they involve agreements between horizontal competitors. But antitrust law isn’t just about collusion. It’s also about “vertical restraints” – the coercion and abuse of power – that dominant companies impose on weaker contractors, consumers, and workers. As the executive director of an organization that fights abuses of corporate power, I believe it’s essential that regulators like the Federal Trade Commission and Colorado Attorney General Phil Weiser continue to take bold steps to address the vertical restraints that monopolies like Microsoft, Amazon, and others exploit to exert more control over their markets.
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We face vertical constraints all the time, including every time we turn on our computers. Currently, the European Union is investigating Microsoft for requiring businesses and individuals who buy Microsoft’s Office 365 to also sign up for Teams, a cloud-based communications technology. Earlier this year, a Spanish startup association filed a complaint with Spain’s National Market Competition Commission, alleging that Microsoft’s licenses make it difficult or economically impossible to run critical Microsoft software on non-Microsoft cloud platforms. In these situations, Microsoft uses its dominant position in the word processing software market to force consumers to sign up for Microsoft products in other markets, forcing out competitors who may offer cheaper and better products.
These kinds of constraints weaken workers. Amazon claims that it does not employ the thousands of delivery workers who deliver packages in gray Amazon vans with Amazon smiley faces painted on them. Instead, Amazon seeks to distance itself from these workers and from any legal responsibility for them under employment laws such as minimum wage and anti-discrimination protections. Amazon contracts with thousands of middlemen called “Delivery Service Partners” to directly employ these workers. But Amazon controls these drivers minute by minute through constraints on DSPs, including constraints that allow them to impose draconian work quotas on drivers. And the contracts are set up so that DSPs have no meaningful opportunity to contract with anyone other than Amazon. So if delivery drivers unionize, Amazon can terminate their contracts with their employers, making these workers completely jobless. These practices have been the subject of a letter sent to Amazon by more than 30 U.S. senators.
These vertical constraints are not just about money. They pose a huge threat to our privacy and dignity. For example, Microsoft remains unfazed by repeated hacks of consumer data, including multiple hacks of senior U.S. officials in the past 12 months. Microsoft has a monopoly on federal information technology contracts, requiring the government to buy many of its products as part of a single package. So much so that Oregon Senator Ron Wyden said, “The government is effectively tied to the company’s products, even as the company’s negligence has allowed foreign hackers to make multiple serious intrusions into U.S. government systems.” According to workers we represent in federal court in Colorado, Amazon’s vertical constraints on contractors effectively require Amazon drivers to deliver packages at breakneck speeds and urinate into bottles to keep their jobs. Through another vertical constraint, Amazon may require contractors to require drivers to waive their right to go to court to defend their rights.
Federal and state antitrust regulators and enforcement agencies have taken many important steps to curb corporate abuses of power. They have already pursued Amazon over vertical restraints imposed on independent sellers selling on Amazon Marketplace and filed lawsuits to block anticompetitive mergers. Additionally, the FTC has filed proposed rules to ban non-compete agreements, addressing one of the most problematic vertical restraints in the marketplace.
We need a concerted effort to combat vertical binds, and I urge the FTC and Attorney General Weiser to investigate Microsoft’s tying practices, as EU and UK regulators have done, and the vertical binds that Amazon and other companies use to control their workers while avoiding liability.
Antitrust laws and regulations were enacted long ago with the advent of the digital world and the proliferation of detailed agreements designed to limit competition and exert control. But those laws were enacted to address exactly this abuse of power. By aggressively enforcing these rules and standing up to unfair practices, we can break the unfair advantage Big Tech has seized and move us toward a safer, fairer future.
David Seligman is executive director of Towards Justice.
