Members of Congress investigating the activities of Amazon, Apple, Facebook and Google say antitrust reform is needed to “ensure that our economy stays alive and open in the digital age” and to protect democracy. The findings come from a document (PDF) released today that marks the culmination of a 16-month investigation conducted by the Antitrust Subcommittee, part of the House Judiciary Committee.
The report concludes that while any business has different types of monopolies, it is effectively a gatekeeper in the digital markets today, with the ability to pick winners and dispose of competitors. The document describes the monopoly and the anti-competitive behavior of the individual companies.
“To put it simply, companies that were once seedy, inferior startups that challenged the status quo have become monopolies that we last saw in the era of oil barons and railroad tycoons,” the report said. “While these companies have brought clear benefits to society, the dominance of Amazon, Apple, Facebook and Google comes at a price. These firms tend to operate the market while competing at the same time – a position that allows them to write one set of rules for another while playing after another, or to engage in some form of their own private quasi-regulation that is only accountable to himself by anyone else than himself. “
Antitrust law in the United States began in the late 19th century to curb the power of companies that dominate industries like steel and railways. In the past few decades, however, regulators have been far less active in regulating businesses to ensure open, competitive markets. The report, titled “Investigating Competition in Digital Markets,” concludes that each company has different types of monopolies: Facebook on social media and advertising, Google in search and advertising, Amazon in online retail and Apple on the app Store.
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The report recommends that Congress and the Antitrust Subcommittee pass laws to strengthen enforcement of existing antitrust law, as well as data portability and interoperability so that users can move data to another platform to encourage competition. Also under recommendations:
– Strengthening parts of the Sherman Act dealing with competition and monopoly by adding a ban on abuse of dominance or the leverage of monopolies.
– Bring back stronger control of antitrust enforcement by Congress; Several incidents have been identified where regulators did not prevent monopolists from consolidating market share and eliminating competitors
– Use rules to prevent favoritism, discrimination or the placement of an Amazon product in front of a third party via the Amazon platform
– Reinforce control of merger and acquisition activities to ensure that monopolies do not consume competitors. On the subject of Facebook’s takeover of Instagram in 2012, an unidentified former Instagram executive who testified to the committee last week said, “It was an arrangement but within an internal monopoly. If you have two social media utilities, they shouldn’t be allowed to support each other. I don’t know why this shouldn’t be illegal. “
– Shifting the burden of proof of a merger is not anti-competitive from regulators to big tech companies with merger assumptions. The report states: “Under this change, any acquisition by a dominant platform would be considered anti-competitive unless the merging parties could demonstrate that the transaction is necessary for the public interest and that similar benefits cannot be derived from internal growth and Expansion can be achieved. ”
– Enable news publishers to negotiate with Facebook and Google
The report also concludes that not every member of the Democratic Congressmen-led committee may agree with all of the investigations or recommendations. Rep. Ken Buck (R-CO) and Rep. Jim Jordan (D-OH) plan to issue separate reports.
Prior to the report’s release, several news outlets reported that the report had been delayed to include additional Republican feedback and that parts of the draft document were unsustainable for some committee members.
Committee members also contend that while companies like Facebook offer services at no financial cost, people pay a cost because “consumer choice decreases, innovation and entrepreneurship in the US economy undermines the vibrancy of the free and diverse The press weakened and the Americans were undermined ”. Privacy.”
Antitrust law is important to small business prosperity, startup innovation, competitive business practices, and democracy. Economists fear that the dominance of large corporations in the US will increase as a large number of small businesses are wiped out by a recession triggered by COVID-19. In contrast, big tech companies have seen record quarterly earnings gains since July. Currently, 8 of the 10 largest companies in the world are in technology.
This is the first major antitrust investigation by a congressional committee in decades. The antitrust hearings in the late 1990s preceded a lawsuit and settlement between the US and Microsoft, some of which are said to have allowed companies like Amazon, Facebook and Google to grow. The legislation resulting from the report may not be proposed until a new term begins in 2021. However, the document aims to provide a number of options for Congress to regulate reform of big tech and antitrust law for the months and years ahead.
The investigation process that led to the report’s publication today consisted of seven hearings and over a million documents. The trial culminated in July when Amazon CEO Jeff Bezos, Apple CEO Tim Cook, Google and Alphabet CEO Sundar Pichai, and Facebook CEO Mark Zuckerberg testified before the House Judiciary Committee.
Antitrust Subcommittee chairman David Cicilline (D-RI) has cited the concentrated power of tech giants as a threat not only to the economy but also to democracy. Speaking to antitrust experts at Yale Law School on Sunday, Cicilline said he believed some basic recommendations in the report were achievable, such as separation of powers that prevent a platform owner from preferring their own products over others and federal agencies who enforce antitrust law – like the Federal Trade Commission (FTC) – resources for more robust enforcement. He also said that any meaningful legislation by Congress will require the help of the American people because of the power and resources available to Amazon, Apple, Facebook and Google.
As part of other measures being taken in Washington DC to curb powerful corporations, the Senate Commerce Committee held antitrust hearings last month and recently summoned CEOs from Facebook, Google, and Twitter to discuss possible reforms in the coming weeks Section 230 testify. President Trump called for reforms to Section 230 earlier today after Twitter labeled his tweet as misleading and potentially harmful information about COVID-19. A Cornell University analysis last week declared Trump the largest source of COVID-19 misinformation in the United States today.
The US Department of Justice is expected to initiate proceedings against Google later this week.
Outside of US antitrust activity, big tech companies continue to face antitrust lawsuits and setbacks in Australia and the European Union. According to several reports last week, a draft digital services law under scrutiny by the European Parliament will require dominant tech companies to share some data with competitors and restrict corporate use of consumer data. Chinese officials are also considering antitrust proceedings against Google over Android’s dominance in smartphone markets, a person familiar with the matter told Reuters.
There’s more to come.