U.S. lawmakers go after Big Tech for market abuses

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Recommendations stop short of a call to break them up. The question remains if Big Tech will be broken into pieces in the upcoming years.

A U.S. House of Representatives panel looking into abuses of market power by four big technology companies found they used “killer acquisitions” to crush competitors, according to Reuters.

The antitrust subcommittee of the Judiciary Committee recommended that Alphabet Inc’s Google, Apple Inc., Amazon.com and Facebook should not both control and compete in related businesses.

The report is the result of the first such congressional review of the tech industry. It suggested expansive changes to antitrust law and described dozens of instances where the companies misused their power. The report further reveals corporate cultures doing “whatever it took” to maintain their dominance over large segments of the internet.

Politics plays a role

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. Since the report reflects the views of the Democratic majority in the House, it sends a clear signal that should Joe Biden win the White House, the pressure on the companies could well continue.

Recommendations

The House panel’s report recommended broad structural separations but stopped short of saying a specific company should be broken up.

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.com from operating the markets in which they also compete, to the less controversial, like increasing the budgets of the agencies that enforce antitrust law.

The report also urged Congress to allow antitrust enforcers like the Justice Department’s Antitrust Division and the Federal Trade Commission more latitude in preventing companies from purchasing potential rivals.

Big Tech reacts

Amazon warned in a blog post Tuesday against “fringe notions of antitrust” and market interventions that “would kill off independent retailers and punish consumers.”

Google said in a statement, “we disagree with today’s reports, which feature outdated and inaccurate allegations from commercial rivals about Search and other services.”

Facebook insisted: “We compete with a wide variety of services with millions, even billions, of people using them. Acquisitions are part of every industry, and just one way we innovate new technologies to deliver more value to people.”

Apple said, “Scrutiny is reasonable and appropriate but we vehemently disagree with the conclusions.”

Also read: Should Europe compete for technological world domination?