Congress should rein in top US tech companies, lawmakers' inquiry finds
Companies including Amazon, Google, Facebook and Apple have amassed too much power and should be reined in, US lawmakers concluded in a major report resulting from a 16-month inquiry into America’s largest tech platforms.
These companies “wield their dominance in ways that erode entrepreneurship, degrade Americans’ privacy online, and undermine the vibrancy of the free and diverse press”, the House judiciary committee concluded in its nearly 500-page report.
“The result is less innovation, fewer choices for consumers, and a weakened democracy.”
The historic investigation is the most significant effort to check big tech’s power since the government sued Microsoft for antitrust violations in the 1990s. It follows the committee’s lengthy inquiry into the effects of market dominance by major web platforms. That investigation saw the country’s leading tech figures – including Jeff Bezos, Tim Cook, Mark Zuckerberg and Sundar Pichai – testify before lawmakers during historic congressional hearings in July.
However, the report was critical of their testimony, saying that the CEOs’ “answers were often evasive and nonresponsive … raising fresh questions about whether they believe they are beyond the reach of democratic oversight”.
To address the alleged monopolistic behavior from these companies, the committee offered a list of nearly a dozen sweeping changes, including “structural separations” of some of the companies. It also suggested the prevention of future mergers that could lead to monopolization, and to reform antitrust laws to better rein in such explosive growth and domination before businesses are able to grow to this size.
Other actions put forward by the committee include preventing dominant platforms from unfairly prioritizing their own services, and increasing the budgets for the Federal Trade Commission and the Department of Justice’s antitrust division to keep a closer eye on anticompetitive activity.
Advocates working against big tech have called on Congress to take action swiftly in light of the findings. The report provides “evidence that Facebook, Amazon, Apple, and Google have
used anti-competitive conduct and acquisitions to grow and maintain their monopoly power”, said Sally Hubbard, the director of enforcement strategy at the Open Markets Institute.
“The report offers a path forward, and, at this turning point for our nation, with our democracy hanging in the balance, Congress must act now, decisively and with courage,” said Hubbard.
The report accused Amazon of monopolizing the online retail space, where 2.3 million sellers do business, 37% of which rely exclusively on Amazon for income. Amazon is also accused of harvesting data on consumer shopping habits to offer its own competing products at lower prices.
Amazon said in a statement that any actions against it “would have the primary effect of forcing millions of independent retailers out of online stores”, leaving consumers with fewer choices. “Large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong,” Amazon said.
Apple is accused of dominating the distribution of software by controlling what apps are allowed on iOS devices. The investigation cited that Apple favors its own services by preinstalling them on to iPhones and disadvantages its competitors by charging them as much as 30% in commission fees.
The allegations against Facebook are twofold: that the company dominates both social networking and online advertising. Facebook’s monopoly over social media is “firmly entrenched”, the report said. As of December of 2019, the Facebook app had more than 200 million users in the United States, reaching 74% of smartphone users.
Facebook has repeatedly acquired competitors or copied the products of competitors, giving it sweeping power. The lack of competition in the social media space has led to the erosion of privacy and data protection as the company mines user data for advertising, the report said.
Facebook and Apple did not respond to request for comment, but during the hearings executives rejected allegations of anticompetitive behavior and touted the jobs their massive companies create.
Facebook has argued it does not monopolize the tech space and that users have “multiple choices” for every service the platform provides, said Will Castleberry, the vice-president of state and local policy at Facebook.
“We understand that if we stop innovating, people can easily leave our platform,” he previously told the Guardian. “This underscores the competition we face, not only in the US but around the globe.”
Though the investigation was considered bipartisan in nature, the committee is majority Democrat and the results are already being politicized. Jim Jordan,the most senior Republican on the committee, said he will release his own report focusing on allegations of bias against conservatives by tech platforms. Representative Ken Buck of Colorado also said he will release his own report, saying he agrees with the majority of the House judiciary committee’s report but believes in different solutions.
A spokesman from Google said the company disagrees with the report and accused it of relying on” “outdated and inaccurate allegations from commercial rivals”. It said solutions offered in the report would “cause real harm to consumers”.
Groups that advocate for small business or against Amazon have endorsed the report. Stacy Mitchell, the co-director of Local Self-Reliance, an advocacy group for small businesses, said the recommendations represent a historic challenge to big tech that Congress should implement as soon as possible
“The investigation has uncovered extensive and detailed evidence that Amazon has amassed outsized market power and is exploiting its dominance to crush competitors and monopolize markets,” she said. “The cost to Americans is steep: Amazon is using its power to concentrate wealth, trample independent businesses and startups, and undermine communities.”