How ‘Big Tech’ gain and maintain market dominance

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Democrats from a US House of Representatives subcommittee issued a report detailing strategies it said four of the largest platform businesses used to gain dominant placement in online search, advertisements, social networking, e-commerce and other businesses.

Below are some notable findings:

AMAZON.COM

The issue: Amazon.com Inc sells its products in addition to products from independent retailers on a single stage. The Congressional report alleged that Amazon has “monopoly power” over a number of these retailers, which “do not have a viable alternative to Amazon for reaching online consumers.” The result, the report declared, is a “conflict of interest” in which Amazon has an incentive to use competing merchants’ data and can advantage its own goods and services.

Amazon also countered claims of its dominance by saying it represents less than 4% of US retail. A percentage that still equates to a massive number.

APPLE

Apple used that monopoly power to charge above-market prices to developers in the form of a 30% commission on App Store sales, to exclude rival apps and services and to misappropriate data from developers and use it to create competing services and features.

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The fix: The lawmakers’ proposals can force Apple to quit competing in markets where its rivals rely on its own App Store to reach customers. Though the report has few details about how such rules would operate, in theory they could induce Apple to exit major companies such streaming music, streaming tv and cloud storage. Another suggestion to make rules from self-preference could hamper Apple’s ability to remove apps out of its App Store that compete with its own services.

Apple didn’t immediately respond to a request for comment.

FACEBOOK

The issue: The panel found that Facebook holds monopoly power in the “social networking” marketplace, which it distinguished from the market for more content-centric social media products such as YouTube and TikTok.

Facebook secured its dominance because highly concentrated marketplace by identifying nascent rivals and copying, acquiring or killing them until they could mature into competitive threats, the report said.

Investigators said the organization’s two biggest acquisitions, of Instagram and WhatsApp, fit that pattern. They also accused Facebook of enforcing its platform policies to defuse a danger from video-sharing app Vine, which Twitter shut down back in 2016.

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The fix: The report stopped short of advocating a breakup of Facebook, but suggested fostering the budgets of antitrust enforcers and enabling them leeway to prevent companies from buying prospective opponents.

That may strengthen regulators’ hands in current investigations into Facebook’s alleged anti-competitive practices and make future transactions trickier.

Facebook did not immediately comment.

GOOGLE

The issue: Investigators found Google has used restrictive customer and partner contracts and other means to ensure its own services are favored over those of competitors in search, phone and tablet software, advertising technology and mapping technology.

For instance, the committee found in internal Google documents that top executives such as now-CEO Sundar Pichai approved stiff-arming partners to make sure Google search, in the company’s own words, was “front and centre” on mobile devices.

When one hardware manufacturer in 2014 whined about its apparatus being bombarded with required Google apps, the search giant blamed it for not creating gadgets with more memory.

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The fix: The committee called for Congress to pass non-discrimination and bargaining laws requiring large service providers such as Google to give fair access for their systems. Such a rule could give up a leg to device manufacturers, ad tech companies and app developers who want to change out of Google tools.

Google did not immediately comment

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Nandita Bose and Diane Bartz in Washington and Jeffrey Dastin, Paresh Dave, Stephen Nellis and Katie Paul in SF. Editing by Greg Mitchell and Aurora Ellis.

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