Big Tech’s overly aggressive enforcement of trademarks locks out smaller entities of the market, preventing innovation

Big Tech’s exploitation of trademark law helps Big Tech reinforce its durable monopoly powers at significant costs for U.S. consumers. Big Tech’s anti-competitive practices have posed severe issues to the continuation of a free and open market. The lack of meaningful competition diminishes consumer choice and imposes significant costs to the consumer. Consumer costs include increased prices for products and services offered by Big Tech; increased data collection combined with nonexistent privacy controls by Big Tech; and a substantial deterioration in Big Tech’s quality of goods or services. A. Trademark Law allows Big Tech to increase prices & diminish quality (and user experience) for trademarked goods and services Online platforms’ dominance has left consumers with limited choice of platforms, thereby creating opportunities for exploitive conduct by Big Tech.132 Because market participants rely on Big Tech’s gatekeeper power to access users and markets, concessions and demands have become ‘“the cost of doing business’ given the lack of options.”133 This issue has become more prevalent, especially in light of the COVID-19 pandemic, where many businesses and consumers shifted “work, commerce, and communications online” and held events through video chat applications.134 Apple began to demand a 30% commission from businesses that moved their events online, using Apple’s video chat app (which is also a trademarked product) for virtual class offerings.135 Because Apple is the trademark owner for all Apple video chat products—iChat, iMessage, Facetime—Apple is incentivized to legally and strategically ensure that it reaps a financial benefit from trademarked products. These exploitive practices have allowed Apple stock to rise from $56.09 per share on March 23, 2020, to $125.91 as of closing on May 11, 2021.136 Despite the questionable moral ethics of price-gouging during a global pandemic, Apple has largely escaped criticism for its methods. Apple has retained significant brand loyalty, in no small part, due to the goodwill garnered by its trademarks.137 Apple’s trademarks not only serve to prevent competitors from using a similar mark, but in effect, also increase overall consumer costs, contrary to the intents of trademark law. Apple’s price increases have not been associated with an increase in quality of products, but rather “an inferior user experience and a reduction of innovation.”138 Google’s “AdWords,” also a registered trademark, is another manifestation of Big Tech monopoly power. AdWords is the only product that allows businesses to pay for the chance for their ad to appear alongside Google search results.139 The Subcommittee noted that even though Google claims to recognize trademark law by prohibiting users from using trademark terms in ads, Google “puts the onus of enforcement on victims” and does not stop trademark infringers unless the trademark is owned by Google.140 Thus, Google has created a circular economy where all its users contribute to the ultimate monetization of a supposed “free” product. Although Google search engine does not invoke a cost per search, AdWords is able to monetize the volume of searches by extorting businesses to pay for an opportunity to display their ads. Ultimately, all participants in this economy help direct money towards Google.141