US House antitrust report blasts Amazon, Apple, Facebook and Google as ‘monopolies from the age of oil barons’ – but stops short of calling for breakup of the Big Tech firms
- Democrat-led House antitrust subcommittee released the report on Tuesday
- It takes aim at Amazon, Apple, Facebook and Google parent Alphabet
- Blasts firms for anti-competitive behavior but stops short of urging breakups
- It is not yet clear how many Republicans in Congress would support breakups
- Trump on Tuesday lashed out at Facebook and Twitter over ‘censorship’
A U.S. House of Representatives panel looking into abuses of market power by four of the biggest technology companies found they used ‘killer acquisitions’ to smite rivals, charged exorbitant fees and forced small businesses into ‘oppressive’ contracts in the name of profit.
The panel, an antitrust subcommittee of the Judiciary Committee, recommended that Google parent Alphabet, Apple, Amazon and Facebook should not both control and compete in related business activities but stopped short of saying they should be broken up.
The scathing 449-page report described dozens of instances where the companies misused their power, revealing corporate cultures apparently bent on doing what they could to maintain dominance over large portions of the internet.
‘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 report said.
Facebook CEO Mark Zuckerberg is seen earlier this year. A U.S. House of Representatives panel looking into abuses of market power by four of the biggest technology companies found they used ‘killer acquisitions’ to smite rivals, such as Facebook’s purchase of Instagram
Amazon CEO Jeff Bezos is seen during House antitrust hearings. Amazon warned in a blog post Tuesday against ‘fringe notions of antitrust’ and market interventions that ‘would kill off independent retailers and punish consumers’
Facebook, Apple and Google did not have an immediate comment.
In anticipation of the report, Amazon warned in a blog post Tuesday against ‘fringe notions of antitrust’ and market interventions that ‘would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices and reducing consumer choice.’
After more than a year of investigation involving 1.3 million documents and more than 300 interviews, the committee led by Democratic Congressman David Cicilline found companies were running marketplaces where they also competed, creating ‘a position that enables them to write one set of rules for others, while they play by another.’
Coming just weeks before the Nov. 3 presidential election, the content of the report became increasingly political, an opportunity for Republicans and Democrats to boost their credibility in the fight against market domination by big tech companies.
That said, Congress is unlikely to act on the findings this year.
Ultimately, the report reflects the views of the Democratic majority in the House, and two other reports were expected to be authored by Republican members on the panel, two sources told Reuters earlier in the day.
Apple CEO Tim Cook is seen at Apple Park in Cupertino, California, on September 15. As part of the report, the committee staff drew up a menu of potential changes in antitrust law
Alphabet CEO Sundar Pichai is seen in January. The report found companies were running marketplaces where they also competed, a practice it recommended banning
The panel recommended companies be prohibited from operating in closely aligned businesses.
While they did not name any one company, this recommendation would suggest that Google, which runs the auctions for online ad space and participates in those auctions, should potentially be required to separate clearly, or not even operate, the two businesses.
The report urged Congress to allow antitrust enforcers more leeway in stopping companies from purchasing potential rivals, something that is now difficult.
Facebook’s acquisition of Instagram in 2012 is an example of this. Instagram at the time was small and insignificant, but Facebook CEO Mark Zuckerberg saw its potential and noted that it was ‘building networks that are competitive with our own’ and ‘could be very disruptive to us,’ the report said.
As part of the report, the committee staff drew up a menu of potential changes in antitrust law. The suggestions ranged from the aggressive, such as potentially barring companies like Amazon from operating the markets in which it also competes, to the less controversial, like increasing the budgets of the agencies that enforce antitrust law: the Justice Department’s Antitrust Division and the Federal Trade Commission.
Republican Congressman Ken Buck said in a draft response that the report contains a ‘thinly veiled call to break up’ the companies.
In the draft, Buck said he shared Democratic concerns about the power of Big Tech firms, with their penchant for ‘killer acquisitions’ to eliminate rivals and self-preference in guiding customers to their other products.
Rep. Jim Jordan (center left) and Rep. Ken Buck (center right) are expected to release two additional reports from a Republican perspective on Big Tech issues
However, he objected to a plan to require them to delineate a clear ‘single line of business’.
Social media platform Facebook also owns Instagram and WhatsApp, search engine provider Google’s businesses include YouTube and Android, and e-commerce leader Amazon operates a massive cloud computing unit.
‘This proposal is a thinly veiled call to break up Big Tech firms. We do not agree with the majority’s approach,’ Buck wrote.
A Buck representative confirmed the authenticity of the draft response, which was first reported by Politico.
It is not yet known how many Republicans will support the report, which is being led by Democratic Chairman David Cicilline. Reports and recommendations with bipartisan support usually have a bigger impact.
‘The report offers a chilling look into how Apple, Amazon, Google and Facebook have used their power to control how we see and understand the world,’ Buck wrote.
He agreed with some of the report’s recommendations, such as making it easier for the Justice Department and Federal Trade Commission to stop mergers by lowering their burden of proof, and allowing consumers to take control of their data through data portability and interoperability between platforms.
‘These potential changes need not be dramatic to be effective,’ Buck wrote.
Buck also said he was displeased that the report failed to address conservative allegations that some platforms have tried to stifle conservative voices.
Republicans on the subcommittee are expected to issue two independent reports on Big Tech questions, as bipartisanship among committee members appeared to break down.
The two reports from Republicans are likely to come from Buck and Rep. Jim Jordan. A draft of Buck’s report and recommendations was released on Monday, and said efforts such as those aimed at breaking up tech companies would not be supported by conservatives.
Buck said in an interview with Reuters that he agreed with most of the majority’s lengthy report, which is expected to be very critical of some Big Tech business practices.
‘Of the 350 pages, I’m agreeing with the majority in 330 pages. I think that’s historic,’ he said.
Buck reiterated areas of agreement with the Democratic majority, including giving more resources to antitrust enforcers and requiring companies to allow consumers to move data from one platform to another.
The report from Jordan is likely to focus on the issue of conservative bias, sources said.
Jordan’s response to the majority report is expected to accuse Big Tech of stifling conservative voices; urge that companies be stripped of some protections under Section 230, a federal law that protects internet companies; and call for rigorous enforcement of existing antitrust law, according to a Republican spokesman for the House Judiciary Committee.
President Donald Trump on Tuesday tweeted a demand for the repeal of Section 203, apparently lashing out after Facebook and Twitter deleted or placed warning messages on his posts suggesting that coronavirus poses an equivalent risk to the seasonal flu.
Democrats are urging Republicans to join Buck’s response because it largely supports the majority report, according to a source familiar with the matter.
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