US government's big tech investigation doesn't spare the hyperbole

Barons, monopolies, tycoons. These are some of the adjectives describing Amazon, Apple, Facebook and Google in a damning US government antitrust report on big tech.

Nick Wood

October 7, 2020

4 Min Read
US government's big tech investigation doesn't spare the hyperbole

Barons, monopolies, tycoons. These are some of the adjectives describing Amazon, Apple, Facebook and Google in a damning US government antitrust report on big tech.

The 16-month House Investigation of Competition in Digital Markets has published its conclusions in a 400-page document (PDF). In summary: these Internet giants routinely resort to anticompetitive behaviour to maintain dominance and crush smaller competitors. Self-regulation has done little to rein in these practices, so it is time for the government to act.

“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,” said Jerrold Nadler, chairman of the Committee on the Judiciary, and David Cicilline, chairman of the Subcommittee of the Judiciary on Antitrust, Commercial and Administrative Law, in a joint introduction to the report.

While Amazon, Apple, Facebook, and Google have delivered clear benefits to society, “each platform now serves as a gatekeeper over a key channel of distribution” that enables them to pick winners and losers, they said. “They not only wield tremendous power, but they also abuse it by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people and businesses that rely on them.”

Google has already come out swinging. “We compete fairly in a fast-moving and highly competitive industry,” said the trillion-dollar company whose brand has become a verb for looking up stuff on the Internet. “We disagree with today’s reports, which feature outdated and inaccurate allegations from commercial rivals about Search and other services.”

While the government’s findings don’t come as a surprise, it is refreshing to see that it has followed through on warnings that it will recommend bold steps to curb market abuse. Chief among them is the proposal to force structural separations to prohibit an online platform from operating in lines of business that depend on, or interoperate with, its own platform.

By way of example, the report found that Amazon used data gathered from third-party Amazon sellers to identify popular products for the purpose of introducing its own copycat versions that it could sell directly. Separating the platform that hosts the third-party merchants and the division that competes with those third parties would be an effective means of removing that conflict of interest.

Another recommendation is for regulators to ban platforms from self-preferencing. This practice has been a long-running issue with Google, for instance, which received a slap on the wrist from the EU a few years ago because its search engine was favouring results from its own shopping comparison service over those of its rivals.

Perhaps most interestingly though is the recommendation that platforms be interoperable and enable data portability. So if a user wants to switch from say, Instagram, to another photo-sharing platform, they could conceivably do so without losing any of their pictures.

The government also wants to stop online giants from simply buying smaller rivals that pose any kind of threat; give affiliates due process protections; and prohibit forced arbitration, a contract clause designed to stop platform users from taking platform owners to court.

Finally, the report also recommended overhauling various antitrust laws and improving regulatory transparency, as part of a drive to bring regulation into line with the challenges of the digital economy. Now the lobbying begins.

“The report marks a critical step forward for comprehensive reforms designed to mitigate any abuses instigated by dominant tech platforms,” cheered consumer advocacy group Public Knowledge, in a statement. “Public Knowledge urges Congress to update antitrust law and create new, pro-competition regulatory rules to rein in Big Tech – and allow the next successful company to take root.”

Funnily enough, Google sees it differently. “Americans simply don’t want Congress to break Google’s products or harm the free services they use every day,” it argued. “Many of the proposals bandied about in today’s reports… would cause real harm to consumers, America’s technology leadership and the US economy – all for no clear gain.”

Indeed, the tech titans won’t take this lying down, of course, and they have the resources to mount a blistering counter-attack. With an election imminent, they are likely to back whichever candidate is minded to give big business an easy ride. And we all know who that is.

About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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