US report accuses Big Tech of monopoly power. What now?

By Yair Oded

Published Oct 16, 2020 at 10:48 AM

Reading time: 3 minutes

We all remember the Cambridge Analytica scandal and the Senate investigation into Facebook’s mishandling of our data. It’s hard to shake off the memory of a smug and unperturbed Zuckerberg finagling his way out of culpability and an overwhelmingly tech-illiterate group of senators fumbling through a trainwreck of a hearing. But while we were busy drooling over our social media feeds and surviving a global pandemic, a far more thorough investigation was conducted by US lawmakers into Apple, Google, Facebook, and Amazon. Its conclusion? These companies have been abusing their monopoly power and must be broken up.

Earlier this month, the House Judiciary Committee’s Democratic leadership published a 499-page report that details the transgressions committed by America’s largest tech giants and its recommendations for how to rein them in. The companies are accused by lawmakers of resorting to unscrupulous tactics to maintain their dominance in key markets—from commerce to advertising to information sharing, quashing competition, harming small businesses and consumers, and jeopardising the public’s privacy rights in the process.

Democrats at the helm of the 16-month inquiry recommended breaking up the companies, reforming antitrust laws (which promote market competition), and empowering government agencies that monitor monopolistic behaviours of companies.

In its report, the committee states that the companies “wield their dominance in ways that erode entrepreneurship, degrade Americans’ privacy online, and undermine the vibrancy of the free and diverse press.” The result, the committee finds, “is less innovation, fewer choices for consumers, and a weakened democracy.”

The report’s findings were based on interviews with hundreds of competitors and clients of the tech companies, as well as a July 2020 hearing in which Jeff Bezos, Tim Cook, Sundar Pichai, and Mark Zuckerberg testified via videoconference in front of a panel of senators. During the hearing, lawmakers of both parties grilled the four executives about their companies’ predatory behaviour, albeit with different motives, with Democrats focusing on attempts to stifle competition and vanquish nascent start-ups and Republicans delving into the platforms’ alleged bias against conservatives. While the hearing was intentionally designed as a crowd-pleasing spectacle, it nonetheless emboldened Democrats to dig deeper into these companies’ dealings. “[A]nswers were often evasive and non-responsive … raising fresh questions about whether they believe they are beyond the reach of democratic oversight,” the report states.

Among the accusations levelled against Amazon in the report were claims that the online retail behemoth has established its dominance over numerous industries and has been unfairly promoting its own products over those of independent merchants who utilise its platform—37 per cent of which depend exclusively on Amazon for their income. The company is also accused of mining customer’s data in order to boost sales of home products and of bullying smaller sellers.

Apple is accused of acting as a gatekeeper of the software marketplace by determining which apps get to be featured on its App Store and favouring their own applications. The company has also been chided for charging a 30 per cent commission from sales of certain apps, which, in turn, raises prices for consumers.

As for Google, the report finds that the giant maintains a monopoly in search and search advertising and mines data from third parties in order to keep its edge over other search engines.

Facebook, ever the Voldemort of the tech world, faces multiple accusations, among which is the company’s usage of anti-competitive tactics to ‘entrench’ its monopoly over social networking and online advertising. The report accuses Facebook of systematically acquiring and cloning features of competitors in order to maintain their hegemony, and of violating data and privacy rights as it does so.

“As gatekeepers to the digital economy, these platforms enjoy the power to pick winners and losers, shake down small businesses and enrich themselves while choking off competitors […] Our founders would not bow before a king. Nor should we bow before the emperors of the online economy,” said Representative David Cicilline (D-RI), chairman of the House Judiciary Committee’s antitrust subcommittee, in a statement.

The House Judiciary Committee’s investigation constitutes the most significant attempt to bridle tech companies’ power since the 1990s, when the US government sued Microsoft for antitrust violations. Alas, as all things American these days, conclusions about how to act against these tech giants had split along party lines. While the committee’s Democratic leadership has been unequivocal in its call to enact “structural” changes in these companies and empower federal agencies to monitor their conduct, Republicans rejected some of the report’s findings, instead focusing on the need to tackle tech companies’ muzzling of conservative voices, and were largely opposed to fortifying antitrust legislation and breaking up the companies.

Still, many view this report as a harbinger of change. Advocates for small businesses and figures fighting against tech monopolies believe that the committee has laid the groundwork for future antitrust legislation and have been urging congress to act swiftly.

With the future of our democracies on the line, and global markets (as well as the planet itself) quavering under the pressure of swelling monopolies, a genuine effort to rein in the rising American technocracy is desperately needed.

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