US House of Representatives to recommend break up of Big Tech firms

AppleInsider

The forthcoming antitrust proposal by the US House of Representatives is being called a "thinly veiled call to break up" large technology firms including Apple, Google, and Facebook.

Following the US House of Representative's final hearing on the topic of big tech antitrust, a draft response claims that the as-yet unreleased proposals call for the breakup of Apple, Amazon, Facebook, and Google.

According to Reuters, Republican Congressman Ken Buck has responded to the forthcoming report, criticizing its main conclusions. "This proposal is a thinly veiled call to break up Big Tech firms," he wrote. "We do not agree with the majority's approach."

While Buck writes that he agrees with concerns about Big Tech, he objects to the report's plan to require companies to delineate a clear "single line of business." He reportedly points out that Amazon, for example, runs both its ecommerce store and the separate but hugely successful Amazon Cloud Services.

"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," continued Buck. "[However] these potential changes need not be dramatic to be effective."

The House antitrust subcommittee is expected to publish its report before October 9. Any road to break-up will take years, and may not happen, depending on political will going forward.

uffenman

Omg gimme a break....as if they’ve got the business experience to make that recommendation. Most of us are honestly so blessed and lucky to even have Apple as an investor and American. Just Zip it and write some good laws.

wood1208

US Government getting into non-government business affairs is how they screw them up. Leave them alone. Once upon time Bell/AT&T,Kodak,Standard oil,etc,etc were big and could have expanded globally but look at where they are today.. Even threatening to break up restricts their ability to invest,grow and compete globally especially against Chinese companies where Chinese government continuously help beyond normal instead of hurting them. To compete against larger global competitors, you have to be big in size and balance sheet.

mac_dog

This is when it would be good to have someone like Steve Jobs around. He would rip these guys new assholes. So much so, they couldn’t sit for weeks. Perhaps this is simply extortion to pad their accounts. 

I think, perhaps we need more tech savvy representation in government. 

I sure hope Apple has a plan “B” in place for this very potential idiotic rule. 

johnbear

Just make them pay fair taxes in US. I’m thinking at least 30% just as Apple charges for the AppStore 

foregoneconclusion

Have to wait and see what the recommendations actually consist of, but the earlier references to Glass-Steagall and comments about "platform owners not competing on the platform" make me think they were headed down the wrong path. I think it's going to be difficult to nail down a definition of a "clear line of business" for technology firms that will hold up to court challenges. Technology is more complicated than banking. Plus, you have public opinion to consider as well. I'm sure there are things the public would like to see addressed, but it's hard to view it as a front burner issue compared to other issues that effect people's lives and rights in a democracy. 

qwerty52

If happens, how this American companies would compete against the Chinese companies, which are practically state companies?
This guys (in the House of the Representatives) are completely out of the reality!
Do they know that we’re leaving in the year 2020?

cincytee

wood1208 said:

US Government getting into non-government business affairs is how they screw them up. Leave them alone. Once upon time Bell/AT&T,Kodak,Standard oil,etc,etc were big and could have expanded globally but look at where they are today.. Even threatening to break up restricts their ability to invest,grow and compete globally especially against Chinese companies where Chinese government continuously help beyond normal instead of hurting them. To compete against larger global competitors, you have to be big in size and balance sheet.

Your initial point isn't entirely unfounded, but your examples aren't so great. The regional children created by breaking up Standard Oil have been able to compete just fine globally: Standard Oil of New Jersey, aka Exxon; Standard of New York, aka Mobil; Standard of Indiana, aka Amoco; Standard of California, aka Chevron. Kodak's demise was the result of poor management decisions and hubris. AT&T agreed readily to be broken up because it was sure it could use its expertise and resources to become a giant in computer technology; it was wrong.

The argument about facing government-supported Chinese entities sounds like it was copied and pasted from the 1980s – just search for Japan and replace with China. That turned out not to be quite the danger it seemed. (Admittedly, China is larger and has more resources to bring to bear, so that might boost your argument.)

Still, the lines of business demarcation for possible breakups of, for example, Apple or Amazon, are not readily apparent. Even a Democratic tidal wave in 2020 will not lead to that draconian a solution, but it does make a strong negotiating starting point for the government.

jeffythequick

Can we break up the Federal Government into 50 smaller governments, and just let the Federal Government worry about borrowing money, regulating commerce with foreign nations and between the States (actual commerce between those states, not inferred commerce), Naturalizing, bankruptcy, coining money, fixing standard of weights and measures, punishing counterfeiters, establishing post offices, roads, patents/copyrights, punishing piracies on the high seas, declaring war and making rules concerning natures on land and water, making and regulating armies and a navy, making militias to execute the laws of the US and to suppress insurrections and invasions.

And leave the rest to those smaller governments, as long as they don't violate any of the other rules from the document where I pulled that list from.

gatorguy

jeffythequick said:

Can we break up the Federal Government into 50 smaller governments, and just let the Federal Government worry about borrowing money, regulating commerce with foreign nations and between the States (actual commerce between those states, not inferred commerce), Naturalizing, bankruptcy, coining money, fixing standard of weights and measures, punishing counterfeiters, establishing post offices, roads, patents/copyrights, punishing piracies on the high seas, declaring war and making rules concerning natures on land and water, making and regulating armies and a navy, making militias to execute the laws of the US and to suppress insurrections and invasions.

IMO more than half the readers won't get the joke. 

randominternetperson

This would be an excellent way to dramatically slow down innovation and the deployment of integrated, seamless solutions that customers love.

Frankly, I hard a hard to guessing how you would "break up" Apple in any reasonable way.  Is it just a matter of imposing on Apple the requirement that they support competing app stores?  Is so, that's not a "break up."

Likewise, how do you break up Facebook when their main product is a single worldwide social network?  Or do you just do the reasonable thing and not allow them to acquire additional social networks?

I fully expect that wiser heads will prevail and people will bring up all the other examples of feared monopolies that turned out to be temporary "winners" that were ultimately unable to prevent the rise of competitors and/or the radical evolution of their market.  For example, how did that big, bad Microsoft monopoly on desktop PC OSes and core office software work out?  Sure they are still the leading vendor in those spaces, but they face serious competition.  How about AOL's dominant position in the ISP market?  

gatorguy

randominternetperson said:

This would be an excellent way to dramatically slow down innovation and the deployment of integrated, seamless solutions that customers love.

Frankly, I hard a hard to guessing how you would "break up" Apple in any reasonable way.  Is it just a matter of imposing on Apple the requirement that they support competing app stores?  Is so, that's not a "break up."

Likewise, how do you break up Facebook when their main product is a single worldwide social network?  Or do you just do the reasonable thing and not allow them to acquire additional social networks?

I fully expect that wiser heads will prevail and people will bring up all the other examples of feared monopolies that turned out to be temporary "winners" that were ultimately unable to prevent the rise of competitors and/or the radical evolution of their market.  For example, how did that big, bad Microsoft monopoly on desktop PC OSes and core office software work out?  Sure they are still the leading vendor in those spaces, but they face serious competition.  How about AOL's dominant position in the ISP market?  

Some proposals in the US and elsewhere suggest Apple's hardware business being separated from the services: App Store, Apple TV, Apple Music, etc would become a standalone business with separate executive management and ownership. In the US the recommendations will include a ban on certain types of mergers, such as on “future acquisitions of potential rivals and start-ups” by major platforms.

mac_dog

johnbear said:

Just make them pay fair taxes in US. I’m thinking at least 30% just as Apple charges for the AppStore 

A better idea would be to charge everyone 30% tax on net income, including religious organizations and zero refunds. 

jeffythequick

mac_dog said:

johnbear said:

Just make them pay fair taxes in US. I’m thinking at least 30% just as Apple charges for the AppStore 

A better idea would be to charge everyone 30% tax on net income, including religious organizations and zero refunds. 

Or even better-er, charge everyone 23% on things they purchase, and not on their income.  Also, have a pre-bate, where the tax load on the basics of life are paid out to everyone.

Income taxes are inherently wrong, as they implicitly state that the money isn't yours.  What the government lets you keep is yours, only if you jump through hoops and are controlled by those that write the rules, so I guess the money isn't really yours.

ricmac

johnbear said:

Just make them pay fair taxes in US. I’m thinking at least 30% just as Apple charges for the AppStore 

OK, you first.  You pay 30%.

ro_ro_ur_boat

Our elected leaders are too busy figuring out how be re-elected. The proposal to breakup big tech is a quick and dirty to show and flex their power and spend as little time as possible on the matter so they can go back to figuring out how to be re-elected. 

I don’t think they realize that China, a communist country where all democratic nations depends on manufacturing, has long game is to take over and dictate the economic terms of the world. A world where competition is then dictating who can compete with them. Just look at what they’re doing to Africa. They went and learned how local products are made, cheaply manufacture it and put all small local textile out of business. As if our elected leaders are playing into China’s hands. 

SpamSandwich

cat52 said:

While there is absolutely no reason to break up Apple as they don't enjoy a monopoly in any of their business segments, the same cannot be said for Facebook.

In fact why Facebook was allowed to purchase Instagram and WhatsApp in the first place is beyond me, especially considering Facebook used their VPN app Onavo to spy on users and this is how they discovered how valuable WhatsApp was to begin with....

So yeah, I would break up FB in a NY second as we have antitrust laws for a reason, which is to say, monopolies are not your friend.

That’s not a rational argument. Who is forced to use Facebook? No one. How much are people charged to use Facebook? Nothing (except for information you volunteer when you sign up).

Glass-Steagal should be repealed and laws which suppress competition should be ended.

SpamSandwich

jeffythequick said:

mac_dog said:

johnbear said:

Just make them pay fair taxes in US. I’m thinking at least 30% just as Apple charges for the AppStore 

A better idea would be to charge everyone 30% tax on net income, including religious organizations and zero refunds. 

Or even better-er, charge everyone 23% on things they purchase, and not on their income.  Also, have a pre-bate, where the tax load on the basics of life are paid out to everyone.

Income taxes are inherently wrong, as they implicitly state that the money isn't yours.  What the government lets you keep is yours, only if you jump through hoops and are controlled by those that write the rules, so I guess the money isn't really yours.

Ah. The Fair Tax. It would be an improvement over the punitive system which exists today.

gatorguy

SpamSandwich said:

cat52 said:

While there is absolutely no reason to break up Apple as they don't enjoy a monopoly in any of their business segments, the same cannot be said for Facebook.

In fact why Facebook was allowed to purchase Instagram and WhatsApp in the first place is beyond me, especially considering Facebook used their VPN app Onavo to spy on users and this is how they discovered how valuable WhatsApp was to begin with....

So yeah, I would break up FB in a NY second as we have antitrust laws for a reason, which is to say, monopolies are not your friend.

That’s not a rational argument. Who is forced to use Facebook? No one. How much are people charged to use Facebook? Nothing (except for information you volunteer when you sign up).

Glass-Steagal should be repealed and laws which suppress competition should be ended.

It was repealed (for the most part) in 1999 by the Gramm–Leach–Bliley Act 

jeffythequick

Since this is a government idea, let's come up with the worst possible way to break things up:

Facebook:
Have the post monitor software developers housed on Pennsylvania Avenue
Have the company broken into 4 entities:
  Facebook Text posts
  Facebook Picture posts
  Facebook Infrastructure
  Facebook Web Interface
Facebook Infrastructure pays for the use of Facebook Picture Posts and Facebook Text posts and sells each post to Facebook Web Interface

Amazon:
Break it up into 58 companies:
  Amazon Audible Books and Originals
  Amazon Alexa Skills
  Amazon Devices
  Amazon Appliances
  ...  (the whole list from the Amazon site)
  Amazon Video Games
  Amazon Whole Foods Markets
  Amazon Web Services
  Amazon Delivery Service
  Amazon Warehouses
  Amazon Inter-Warehouse Delivery
  None of which can talk to each other without a Federal Magistrate Approval, for each instance of communication

Apple:
Break it into 8 companies, and put one company on each of the continents, and no two continents can have more than one of these new companies, and they must be located on US Soil.
  Apple Ideas
  Apple Wonderful Implementations
  Apple World Betterment
  Apple Stock Improvement
  Apple Calamity Avoidance
  Apple Patent Lawyers
  Apple Acquisitions 
  Apple iMac
Each of these companies can co-develop with each other, share secrets, and co-locate within each other's offices, and have employees report across company lines.  These companies can share a common HR system, resources, and management.

Netflix:
Break it into 3 companies:
  Netflix Kids Programming, where all content will be available
  Netflix Adult Programming.  No, not that kind of "adult", but content geared towards older audiences.  TV-M and above
  Netflix Damage Control - Where the company defends the other two companies from stupid decisions, and telling the public that they're stupid for calling Netflix' decisions stupid.

Google:
Break it up into 5.6 billion companies per day, one for each search done on the site.
Each company must set up health insurance, have a staff to ensure that search was successful, and is not allowed to communicate with any of the other 5.5999999999 billion companies, nor can they contract out their staffing

Well, there's my attempt to put this back on topic...

foregoneconclusion

gatorguy said: Some proposals in the US and elsewhere suggest Apple's hardware business being separated from the services: App Store, Apple TV, Apple Music, etc would become a standalone business with separate executive management and ownership. 

I just don't see that type of proposal as being practical from a legal standpoint or from a public opinion standpoint. Too different from how other markets in the U.S. are allowed to operate. There are tons of companies outside of technology that offer both products and services.