Amazon, Apple, Facebook and Google have grown into “the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” abusing their dominant positions by setting pricing and rules for digital services, according to US lawmakers.
The US House Judiciary Committee this week released a landmark report on competition in digital markets following a 16-month investigation. The Democrat-led committee said the US tech giants had exercised and abused monopoly power, and recommended sweeping changes to antitrust laws to help break them up.
“These firms typically run the marketplace while also competing in it — a position that enables them to write one set of rules for others, while they play by another, or to engage in a form of their own private quasi regulation that is unaccountable to anyone but themselves,” the report states.
The tech giants have railed against the report, claiming competition is alive and well in the markets they dominate.
The Committee’s proposed changes would effectively break up Amazon, Apple, Facebook and Google — worth a collective $US5 trillion — and hand new oversight powers to US agencies policing market competition.
“Our investigation leaves no doubt that there is a clear and compelling need for Congress and the antitrust enforcement agencies to take action that restores competition, improves innovation and safeguards our democracy,” Jerrold Nadler, Democrat of New York and Chairman of the Judiciary Committee, and David Cicilline, Democrat of Rhode Island and Chairman of the Antitrust Subcommittee, said in a joint statement.
The report lays the groundwork for the biggest intervention in the technology market since the US government sued Microsoft for antitrust violations in the 1990s over its bundling of software with PCs.
The report may also assist the US Justice Department in its ongoing individual antitrust investigations of the tech giants. But any law changes could hinge on the upcoming US election, because the antitrust subcommittee responsible for the report is split on party lines in how to remedy the market dominance.
Democrats are advocating for direct intervention through law changes that would force “structural separations” of the companies and prevent them from favouring their own products. Republicans, meanwhile, support more resources for antitrust enforcement but are unwilling to support forced breakups.
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In response to the report, the tech giants have “blown a collective raspberry”.
In a lengthy blog post, Amazon chided what it said are “fringe notions of antitrust” that would hurt consumers. The ecommerce giant insists retail is thriving and competitive, although it cited figures of the collective market rather than the online one it dominates.
Apple said it “vehemently” disagrees with the report findings “with respect to Apple”. In a statement, the company championed the success of its App Store, saying 85 per cent of the $US138 billion in commerce it facilitates goes to third-party developers.
Apple, like its App Store duopoly rival Google, takes a 30 per cent cut from any app sales — a model which the Australian competition regulator is currently examining.
Facebook, a platform repeatedly found to spread hate and misinformation, declared itself an “American success story”.
“We compete with a wide variety of services with millions, even billions, of people using them,” a Facebook spokesperson said. “Acquisitions are part of every industry, and just one way we innovate new technologies to deliver more value to people.”
In its defence, Facebook said its acquisition of rival platforms Instagram and WhatsApp improved the apps for consumers.
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Google pointed to the millions of people its “free” apps help and the billions it invests in research and development as counterpoints to the antitrust claims.
“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.”