The rush to invest in big tech may soon slow significantly – especially if the trend toward further regulation continues.
In Washington, a bipartisan plan is moving forward.
A House of Representatives panel is pushing legislation that restricts global giants such as Facebook and Google, and that, combined with the European antitrust investigations of Apple and Google, could make investors hesitate.
U.S. antitrust laws, too, are at issue in legal fights with many of those companies.
“Is it a growing risk? Yes,” Nicholas Hyett, senior equity analyst at Hargreaves Lansdown, told CNN Business. “And it probably does limit to some degree what tech stocks can do.”
Tech companies are strongly lobbying against the flurry of legislation.
But it’s not a subject to be decided along party lines, and it’s not a matter likely to be decided quickly.
From the New York Post:
“Conservative Republican lawmakers haggled over legislative language and pushed concerns of perceived anti-conservative bias in online platforms but couldn’t halt the bipartisan momentum behind the package.
“The drafting session and votes by the House Judiciary Committee are initial steps in what promises to be a strenuous slog through Congress. Many Republican lawmakers denounce the market dominance of Big Tech but don’t support a wholesale revamp of the antitrust laws.”
CNN Business said big companies may face challenges.
- Amazon may have to pick between operating a marketplace for third party sellers or returning to when it was the only retailer on its platform.
- Google could face a court order to sell YouTube or parts of its advertising operation.
- Apple may have to change its policies for app developers.
Key parts of the legislation would require big tech online platforms to allow users to communicate directly with users on rival services, which could give consumers more power over the destinations for their personal data.