Top US Tech Companies Accused of ‘Monopoly Power’

A report supported by Democratic lawmakers has sought changes that could lead to the break-up of some of America’s top tech companies.

The recommendation contains a 16-month congressional investigation into Google, Facebook, Amazon, and Apple.

“These firms have too much power, and that power must be reined in,” Democratic lawmakers working on the probe wrote.

But Republicans pushed in the effort that did not concur with the recommendations.

Republican congressman Jim Jordan dismissed the report in a statement describing it as “partisan” and said it advanced “radical proposals that would refashion antitrust law in the vision of the far left.”

Others have expressed they agree many of the report’s conclusions about the companies’ anti-competitive policies but that solutions proposed by Democrats go too far.

“Antitrust enforcement in Big Tech markets is not a partisan issue,” said Republican Ken Buck. “But an ounce of prevention is worth a pound of cure—I would rather see targeted antitrust enforcement over onerous and burdensome regulation that kills industry innovation.”

Monopoly power?

Some prominent US tech firms have faced increased investigation in Washington over their size, asset, and power in recent years. The probe by the House Judiciary Committee is just one of many probes companies such as Apple and Facebook are dealing with.

In its 449-page report, committee staff accused the firms of charging high fees, drawing smaller customers into unfavorable agreements and of using “killer acquisitions” to

The 449-page report, penned by committee staff, accused the companies of charging high fees, forcing smaller customers into unfavourable contracts and of using “killer acquisitions” to trap rivals.

“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,” it said.

It said the findings should encourage politicians to consider a series of changes.

Those involved strict enforcement of existing competition law, as well as amendments to limit the fields in which a company may do business or prevent companies from operating as platforms in areas where they are the dominant provider of infrastructure – as Amazon does, for instance, when it acts as both a seller and marketplace for other traders.

This report is interesting.

It carries weight too – it’s piled with evidence collected over 16 months.

But the main point here is these are Democrat suggestions.

This is definitely not a bipartisan series of recommendations.

In fact, from what we’ve already collected from Republicans many of the suggestions are “impractical” for conservatives.

It has also been noticed that some Republicans were unsatisfied by omissions in the report.

Republicans wanted sections on alleged anti-conservative bias – which was apparently blocked by Democrats.

However, there are many Republicans who want to discuss common points on antitrust.

For example, Republican Ken Buck has said he’d support some of the recommendations. For example, shifting the anti-competition burden of proof for acquisitions – making it harder to buy up the competition.

In simple words, we’re unlikely to witness any concrete legislative proposals until after the polls.

But one is common with both Biden and Trump – in their own different ways – offering existential challenges to the authority of Big Tech.

‘Fringe notions’

In statements before the committee in July, the chief of tech organizations defended their actions.

On Tuesday, Amazon responded to what it described as “fringe notions of anti-trust” law, as competition law is recognized in the US.

“The fact that third parties having the opportunity to sell right alongside a retailer’s products is the very competition that most benefits consumers and has made the marketplace model so successful for third-party sellers”, the company said in a blog post.

Dissents in Washington between Democrats and Republicans make the plans of significant action against the firms unlikely, tech analyst Dan Ives of Wedbush Securities said.

“The lack of consensus and divergence among both political parties on the antitrust issues remains a major debate to move things forward,” he said.

While that could alter if Democrats achieve more power in the upcoming US election, he said, “Despite the report/content and framework for recommendations around Big Tech players (e.g. M&A, business practices) without core law changes we believe this antitrust momentum hits a brick wall.”

In return, Facebook said in a statement: “Instagram and WhatsApp have reached new heights of success because Facebook has invested billions in those businesses.

“A great competitive landscape existed at the time of both acquisitions and still exists today. Regulators thoroughly reviewed each deal and rightly did not see any reason to stop them at the time.”

What did the report say?

Facebook had “monopoly power” in the area of social networking, which it preserved by using its data advantage to “acquire, copy or kill” budding threats.

Google monopolized web search and advertising using “a series of anti-competitive strategies”, including pushing its own content ahead of other websites.

Amazon acquired “valuable and durable market power” in online shopping, which it cultivated in part by “anticompetitive conduct in its treatment of third-party sellers” which it referred to as “internal competitors” behind closed doors.

Apple exerted monopoly power via its App store, which it leveraged “to create and enforce barriers to competition and discriminate against and exclude rivals while preferring its own offerings”.