Four Big Tech CEOs – Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Sundar Pichai of Google and Tim Cook of Apple – are testifying on their companies’ practices on the issue of market dominance in the industry. (July 29)
Amazon, Apple, Facebook and Google are rebuking a House Judiciary Committee report from Democratic lawmakers that suggests Congress should pass legislation to rein in Big Tech.
The report, issued Tuesday and entitled “Investigation of Competition in Digital Markets,” suggests reforms aiming to “address anticompetitive conduct in digital markets” and strengthen antitrust enforcement.
In addition to proposing separations of some dominant tech platforms from the companies’ other businesses, the report also calls for the platforms to be required to offer equal terms for equal products and services for all users. It proposes laws be changed to impose a higher bar for approving future tech industry mergers and acquisitions.
“To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” the 450-page report issued by the House Judiciary antitrust subcommittee’s Democratic staff. “Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price.”
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The report comes after a 15-month investigation by the committee into the tech giants’ market dominance. But those tech companies pushed back against the report.
“We have always said that scrutiny is reasonable and appropriate but we vehemently disagree with the conclusions reached in this staff report with respect to Apple,” the company said in a statement sent to USA TODAY. “Our company does not have a dominant market share in any category where we do business.”
Google’s statement to USA TODAY, noted that its free products “like Search, Maps and Gmail help millions of Americans and we’ve invested billions of dollars in research and development to build and improve them. We compete fairly in a fast-moving and highly competitive industry. We disagree with today’s reports, which feature outdated and inaccurate allegations from commercial rivals about Search and other services.”
The report offers Congress a possible roadmap for action, potentially with a new balance of political power in Congress and a new president next year.
Democratic presidential contender Joe Biden has said that company breakups should be considered. If such steps were mandated, they could bring the biggest changes to the tech industry since the federal government’s landmark case against Microsoft almost 20 years ago.
Forced breakups through a legislative overhaul would be a radical step for Congress to take toward a powerful industry. The tech giants for decades have enjoyed light-touch regulation and star status in Washington, but have come under intensifying scrutiny and derision over issues of competition, consumer privacy and hate speech.
The investigation found, for example, that Google has monopoly power in the market for search, while Facebook has monopoly power in the social networking market. The report said Amazon and Apple have “significant and durable market power” in the U.S. online retail market, and in mobile operating systems and mobile app stores, respectively.
Facebook called itself “an American success story,” in a statement to USA TODAY. “We compete with a wide variety of services with millions, even billions, of people using them. Acquisitions are part of every industry, and just one way we innovate new technologies to deliver more value to people. … Regulators thoroughly reviewed each deal and rightly did not see any reason to stop them at the time.”
The report said the four companies have abused their market power by charging excessive fees, imposing tough contract terms and extracting valuable data from individuals and businesses that rely on them.
“Each platform now serves as a gatekeeper over a key channel of distribution,” the report says. “By controlling access to markets, these giants can pick winners and losers throughout our economy.”
The report also asks Congress to boost the enforcement powers of antitrust regulators, such as the Federal Trade Commission, and to increase the budgets of the FTC and the Justice Department’s antitrust division.
In a blog post Tuesday, Amazon warned that “fringe notions on antitrust would destroy small businesses and hurt consumers,” without mentioning by name the report or the House antitrust subcommittee. It decried “misguided interventions in the free market.”
Although the Judiciary antitrust subcommittee’s investigation was bipartisan, Republican lawmakers on the panel didn’t sign on to most of the recommendations.
Republicans issued their own report Tuesday titled “A Third Way to Take on Big Tech.” Authored by Rep. Ken Buck of Colorado, it called for “targeted” enforcement of existing antitrust laws rather than “onerous and burdensome regulation that kills industry innovation.”
In its investigation over the past 15 months, the antitrust panel heard testimony from mid-level executives of the four companies as well as from competitors and legal experts. It held a highly charged hearing in July to question the CEOs of the Silicon Valley behemoths. Its staff pored over more than a million internal documents from the companies.
The effort aimed to answer a key question: whether existing competition policies and century-old antitrust laws are adequate for overseeing the tech giants, or if new legislation and enforcement powers for regulators are needed.
Both Republicans and Democrats have accelerated their criticism of Big Tech in recent months, though sometimes for different reasons. The Trump Justice Department is moving toward antitrust action against Google, focusing on the company’s dominance in online search and whether it is used to stifle competition and hurt consumers. A bipartisan coalition of 50 U.S. states and territories, led by Texas Attorney General Ken Paxton, also has been investigating Google’s business practices. They have cited “potential monopolistic behavior.”
Google has argued that although its businesses are large, they are useful and beneficial to consumers. It maintains that its services face ample competition and have unleashed innovations that help people manage their lives. Most of its services are offered for free in exchange for personal information that helps Google sell ads.
Facebook, Amazon and Apple also have been targets of sweeping antitrust investigations by the Justice Department and the Federal Trade Commission.
Contributing: The Associated Press
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