Government Report Urges Breakup of Big Tech Monopolies

After a 16-month investigation, the House Judiciary Committee presented a 449-page report stating that Big Tech companies Amazon, Apple, Facebook and Google abused their monopoly positions and calling for reform of the antitrust laws. Lawmakers stated the companies had evolved from startups to “the kinds of monopolies we last saw in the era of oil barons and railroad tycoons” and stated their breakup would restore competition. This marks the biggest antitrust effort since the government sued Microsoft in the 1990s.

The New York Times reports that Judiciary Committee chair Jerrold Nadler (D-New York) and Antitrust Subcommittee chair David Cicilline (D-Rhode Island) issued a joint statement with the report, which is “expected to kick off other actions against the tech giants.” Antitrust investigations have been ongoing against Amazon, Apple, Facebook and Google by the Justice Department, the Federal Trade Commission and “four dozen state attorneys general.”

As to a remedy, “the House antitrust subcommittee split along party lines,” with Democrats suggesting the companies be broken up in “structural separations” and banned from providing preferential treatment to their own products. They also recommended “adding to antitrust laws, including clearer rules that could block the tech giants’ attempts to buy other companies.”

Republicans “agreed with proposals to bolster funding for antitrust enforcement agencies but balked at calls for Congress to intervene in restructuring the companies and their business models.” Others, “refused to endorse” any of the Democrats suggestions, with Jim Jordan (R-Ohio), the top Republican on the committee, stating that the report ignored the topic of these tech companies’ alleged bias against conservatives, which “ultimately discredits the draft report’s findings.”

Four other Republican legislators, including Ken Buck (R-Colorado) issued “The Third Way,” “outlining their mixed reception of the Democrats’ proposals.” Buck called the suggestion to breakup the companies “the nuclear option.”

Elsewhere, NYT provides a summary of accusations against the four Big Tech companies. The report accused Amazon of using its “market power as both the largest online retailer and the leading e-commerce marketplace to its advantage and to hobble potential competitors.” With about 2.3 million third party sellers, 37 percent of which rely on Amazon as their “sole source of income,” Amazon controls the “rules for digital commerce … making them hostage to Amazon’s shifting tactics.”

Apple’s monopoly “on the app marketplace on iPhones and iPads” enables it to “take an excessive cut of app developers’ sales” and “generate supra-normal profits.” It uses its App Store control to “punish rivals” and is “the sole enforcer of sometimes opaque App Store rules.” Apple also “favors its own apps and services on its devices.”

Facebook has “firmly entrenched” monopoly power in social networking, destroying competitors “through strategic acquisitions and copying products.” In the absence of competition, “user privacy has been eroded while misinformation and toxic content have proliferated across all of the company’s services.”

Google has a monopoly over search by “grabbing information from third parties without permission to improve search results” and “goes to great lengths to keep Google search front and center for users.” The company has nine products with “more than one billion users” that provides it with enough data to have “near-perfect market intelligence.”

Related:
U.S. House Antitrust Chairman Calls Unwinding Facebook’s Instagram Buy ‘The Right Answer’, Reuters, 10/7/20
Amazon Accused of Using Monopoly Power as E-Commerce ‘Gatekeeper’, The Wall Street Journal, 10/7/20