A US House of Representatives panel that is currently looking into abuses of market power by four platform businesses discovered they used “killer acquisitions” to smite competitions, charged exorbitant prices and driven small companies into “oppressive” contracts in the name of profit.
The antitrust subcommittee of the Judiciary Committee urged that Google, Apple, Amazon and Facebook – with a combined market value of over $5 trillion – should not control and compete in associated companies.
The panel’s report also broadly recommended structural separations but stopped short of saying a particular company should be broken up.
The scathing 449-page report – the consequence of the first such congressional review of the technology industry – indicated grand modifications to antitrust legislation and described dozens of instances where the firms misused their power, demonstrating corporate cultures apparently bent on doing what they could to maintain dominance over large portions of the world wide web.
Despite the report, Amazon cautioned in a blog post Tuesday contrary to “fringe notions of antitrust” and market interventions which “would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices and reducing consumer choice.”
Facebook called itself “an American success story” in response to this report.
The business also defended its commission prices and stated it would issue a more extensive response in the coming days.
After over a year of investigation involving 1.3 million documents and over 300 interviews, the committee headed by Democratic Congressman David Cicilline found companies were conducting marketplaces where they also competed, creating “a position that enables them to write one set of rules for others, while they play by another.”
Coming just weeks ahead of the Nov. 3 presidential elections, the content of the report became increasingly political, an opportunity for Republicans and Democrats to improve their credibility in the struggle against market domination by large tech businesses.
That said, Congress is not likely to act on the findings this past year. Considering that the report reflects the perspectives of the Democratic majority in the House, it sends a very clear sign that should Joe Biden win the White House, the strain on the companies could well continue.
Also, the record is very likely to notify existing antitrust probes from the companies. Counsels for the committee, who didn’t want to be identified, said they’ve been speaking to the Federal Trade Commission, which is investigating Facebook and Amazon. Also, Chairman Cicilline has been in contact with state attorneys general, who are investigating Facebook and Google, they stated.
Separately, the US Justice Department is exploring large technology firms and is expected to deliver a lawsuit against Google shortly.
However, the report was split along party lines. Republicans on the committee published two short reports, one authored by Representative Ken Buck and encouraged by three fellow Republicans, which harshly criticized the companies but said he would not support any call to split them up.
Another was a letter authored by Representative Jim Jordan who criticized Democrats for not probing Big Tech firms for alleged conservative bias and neglecting to demonstrate that existing antitrust law was inadequate.
The panel advocated companies be banned from operating in closely aligned businesses. While they didn’t name any one business in particular, this recommendation would imply that Google, which conducts the auctions for internet ad space and participates in these auctions, should potentially be required to separate clearly, or not even operate, the two businesses.
Facebook’s acquisition of Instagram in 2012 is just another example of this. Instagram at the time was little and insignificant, but Facebook’s Chief Executive Officer Mark Zuckerberg saw its possible and noticed that it was “building networks that are competitive with our own” and “could be very disruptive to us,” the report stated.
Included in this report, the committee team drawn up a menu of potential fluctuations in antitrust law. The proposals ranged from the aggressive, such as potentially barring firms like Amazon.com from working the markets in which they also compete, into the less contentious, like raising the budgets of the agencies that enforce antitrust law: the Justice Department’s Antitrust Division and the Federal Trade Commission.
The report also urged Congress to allow antitrust enforcers more leeway in stopping businesses from purchasing potential rivals, something that is now hard.
The antitrust panel will assume the vast majority report following the October recess for formal adoption and will have a vote on this, the counsels for the committee stated.
The team at Platform Executive hope you have enjoyed the ‘American lawmakers detail Big Tech’s market abuses and press for reform‘ article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Nandita Bose and Diane Bartz. Additional reporting by Katie Paul, Paresh Dave, Stephen Nellis and Jeffrey Dastin. Writing by Chris Sanders; Editing by Edward Tobin and Cynthia Osterman.
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