House lawmakers call Big Tech's power monopolistic, recommend sweeping changes

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The U.S. House Judiciary is recommending sweeping changes to antitrust law after it found that Apple, Amazon, Facebook and Google enjoy monopoly powers over their respective domains.

Credit: WikiCommons
Credit: WikiCommons


On Tuesday, the House Judiciary antitrust subcommittee released a nearly 450-page report concluding a broad investigation into dominant technology giants that it launched in June 2019. The report finds that the four tech giants engaged in anticompetitive and monopolistic behavior to gain their positions as dominant companies.

In the report, the antitrust subcommittee laid out their findings from interviews, hearings, and nearly 1.3 million documents that they examined. It concluded that "although these four corporations differ in important ways, studying their business practices has revealed common problems."
First, each platform now serves as a gatekeeper over a key channel of distribution. By controlling access to markets, these giants can pick winners and losers throughout our economy. 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. Second, each platform uses its gatekeeper position to maintain its market power. By controlling the infrastructure of the digital age, they have surveilled other businesses to identify potential rivals, and have ultimately bought out, copied, or cut off their competitive threats. And, finally, these firms have abused their role as intermediaries to further entrench and expand their dominance. Whether through self-preferencing, predatory pricing, or exclusionary conduct, the dominant platforms have exploited their power in order to become even more dominant.
The panel, for example, scrutinized Facebook's dominance in social media and online advertising -- including the 2012 acquisition of competitor Instagram. Documents were unearthed, for example, that suggested Instagram was a fast-growing rival of Facebook's, rather than a company that only survived because of the acquisition.

Although they investigated aspects of Google's advertising business and the Android operating system, the majority of their focus was on the company's dominance in online searches. One conclusion, for example, was that Google had scraped rival websites and forced its technology on third parties to gain and maintain its dominant position.

Apple and Amazon were examined for their marketplace dominance. The subcommittee found that both exerted monopoly power in their respective online marketplaces -- Amazon's retail site, and Apple's App Store -- and introduced rules meant to squash competition in those marketplaces.

"To put it simply, 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," the panel said. "Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price."

Alongside the investigation's findings, the House Judiciary also recommended broad changes to antitrust law and enforcement to reign in the power of dominant technology giants.

Those changes include prohibiting dominant platforms from entering adjacent lines of business; instructing regulators to assume mergers by dominant platforms are anticompetitive; and preventing dominant platforms from preferring first-party services.

Additionally, the panel recommended overriding "problematic precedents" in antitrust case law; increasing the budget of the Federal Trade Commission and the Justice Department's antitrust division; requiring the FTC to collect data on concentration; and strengthening private enforcement by nixing forced arbitration clauses and limits on class action lawsuits.
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Comments

  • Reply 1 of 21
    magman1979magman1979 Posts: 1,212member
    This is all I have to say...

    zeus423watto_cobra
  • Reply 2 of 21
    bshankbshank Posts: 216member
    Oh Gawd!!!
    zeus423magman1979watto_cobra
  • Reply 3 of 21
    sflocalsflocal Posts: 5,658member
    Thankfully iOS users represent only a small piece of the very large smartphone pie right?  Just like the trolls and iHaters constantly preach, the iPhone is a small player in the smartphone market.

    Wouldn't have anything to do with iOS users actually more willing to spend more money than the entire 10-fold-larger Android market right?
    edited October 2020 zeus423Grayeaglemagman1979watto_cobra
  • Reply 4 of 21
    Big Tech gave the largest donations to the majority House and this is what they get in return!  Love it!  :D
    castcoreGrayeagle
  • Reply 5 of 21
    If the Democrats take control of both houses of Congress expect a lot more of the heavy hand of government and the war on success to hit new levels of absurdity and stupidity.  
    zeus423Grayeagleequality72521watto_cobra
  • Reply 6 of 21
     To combat these monopolies the Democrats will propose a new “fee” on the big tech companies sales so they can extract billions of $$ from the citizenry (not the companies) in the name of protecting us from these evil corporations.  It’s always about the money. 
    zeus423Grayeagleequality72521watto_cobra
  • Reply 7 of 21
    zeus423zeus423 Posts: 110member
    Next maybe the House could borrow a page from the EU's rule book on how to grab cash from businesses that are successful.
    Grayeagleequality72521watto_cobra
  • Reply 8 of 21
    sflocal said:
    Thankfully iOS users represent only a small piece of the very large smartphone pie right?  Just like the trolls and iHaters constantly preach, the iPhone is a small player in the smartphone market.

    Wouldn't have anything to do with iOS users actually more willing to spend more money than the entire 10-fold-larger Android market right?

    Update:  Why did AI change everything about the original article?  This was about Facebook criticizing the privacy measures of iOS14.  Now it's an entirely different subject?  It's deceptive.
    Sigh.

    The "trolls and iHaters" - or more accurately people who are not as loyal and devoted to Apple as you are - do not claim that the iPhone is a small player in the smartphone market.

    Also - for the who knows how many time - Android generates more revenue than does iOS. What you see commonly reported is that the App Store generates more revenue than does Google Play. The revenue from all Android app stores - most specifically Amazon (which earns 3 times more per device than does Google Play devices), the China app stores and Google Play - does in fact exceed that of the iOS store and has for years.

    Finally, the issue is that due to its size, influence and revenue - something that "trolls and Android haters" love to mention in every other context - people argue that iOS constitutes its own market or industry. You have automobiles, movies and TV, textiles, restaurants ... and iOS apps. So if taken as a commercial sector all its own, then the App Store monopolizes it. 

    It is a new legal theory, a new definition of "trust", "monopoly" etc. that has been adapted to the current landscape that is defined by 3 things that weren't the case when our monopoly laws were written:

    1. Globalism
    2. Assets being intangible - i.e. data and code - as opposed to tangible (real estate, gold, oil, transmission lines, rail lines, factories, farmland)
    3. Companies adapting to anti-monopoly laws by focusing on vertical/horizontal integration (getting a decent market share in any number of industries) as opposed to dominating a single sector or related industries (i.e. Standard Oil owning oil wells, refineries and gas stations). The thinking is that Apple (and Google, Facebook, Amazon ... strange that Microsoft is absent) having a critical mass in so many industries makes avoiding doing business with them practically impossible and gives them even more influence than a company with, say, 80% of the tobacco market would have.

     Whether this new theory gets traction in the United States - and more to the point in Europe which would consider it if only to find yet another way to express their disdain for us Yanks - remains to be seen.
    elijahgGrayeaglemuthuk_vanalingamFileMakerFeller
  • Reply 9 of 21
    pslicepslice Posts: 120member
     To combat these monopolies the Democrats will propose a new “fee” on the big tech companies sales so they can extract billions of $$ from the citizenry (not the companies) in the name of protecting us from these evil corporations.  It’s always about the money. 
    And the GOP allowed airlines to merge, cellphone companies to gobble up others, drug companies to move overseas. Trump has imposed tariffs supposedly on the Chinese that Americans end up paying. The whole thing is screwed up. Government has no idea how to deal with business. I buy Apple because I like Apple snd I think Google is invasive. I like Amazon but I think Bezos is stingy. Total cluster. 
    watto_cobra
  • Reply 10 of 21
    Interesting. Verizon and Xfinity are monopolistic in that they control the cable and wireless markets. In fact, they're in the High Tech category. Apple and Google have to use them  - - but without them, neither company could function, much less flourish. 
    watto_cobra
  • Reply 11 of 21
    Yep, you broke up AT&T.  How did that work out for you?
    zeus423mjtomlinwatto_cobra
  • Reply 12 of 21
    arthurbaarthurba Posts: 117member
    Needless to say I haven’t read the whole report - but based on the quote in the article, and that the quote wasn’t specifically about Apple, but about the whole lot of them, it seems pretty reasonable to me.  

    Specifically- Apple’s first party services should compete on a level playing field. I absolutely detest that it takes me a month after I get a new iPhone to disable all the stupid ways it asks me to sign up to Apple Music.  Yes I want to play my music in their app, no I don’t want to subscribe to Apple Music.  That prompt (all 1000 of them) either shouldn’t exist or be open to third parties. If it was able to be used by every app on my device you bet that Apple would also provide a big fat single ‘stop bothering me about this offer’ switch. 

    I’m happy with the Apple App Store, but I also think Apple could allow 3rd party stores - but just like the first party option, it would need to be held to a contract.  And then Apple’s store would have to compete on features. At the moment I’m finding they don’t restrict apps enough. I think there is a market for a stricter App Store, maybe with higher commissions and far more checking (and re-checking) of apps. Maybe even a parent App Store where all the kids content is truly vetted.  Apple can allow completion without opening up the platform to security risks. 


    Grayeaglexyzzy01
  • Reply 13 of 21
    zimmiezimmie Posts: 536member
    A lot of what Apple does with the App Store is unethical. They do anticompetitive things. I don't think anybody can seriously argue against either of these points.

    That said, they patently do not have a monopoly, any more than Keurig or Tesla has a monopoly. The consumer can always choose a different platform.

    There is surely a term for what Apple is doing, but monopoly ain't it.
  • Reply 14 of 21
    mjtomlinmjtomlin Posts: 2,432member
    Where's Microsoft, Qualcomm and Intel?


    edited October 2020 watto_cobra
  • Reply 15 of 21
    mjtomlinmjtomlin Posts: 2,432member

    zimmie said:
    A lot of what Apple does with the App Store is unethical. They do anticompetitive things. I don't think anybody can seriously argue against either of these points.

    That said, they patently do not have a monopoly, any more than Keurig or Tesla has a monopoly. The consumer can always choose a different platform.

    There is surely a term for what Apple is doing, but monopoly ain't it.

    "A lot... unethical... anticompetitive" please explain.

    Apple makes hardware/devices... offers software and services for those devices and also ALLOWS 3rd parties to create and offer software, services and peripherals to users of their devices/hardware.
    mejsricwatto_cobra
  • Reply 16 of 21
    The “common problems” quote: you can alter a few nouns and the “bad guy” sounds just like the US government. :)
    watto_cobra
  • Reply 17 of 21
    mjtomlin said:
    Where's Microsoft, Qualcomm and Intel?

    Oh they donated more

    magman1979watto_cobra
  • Reply 18 of 21
    Shrugging. 
  • Reply 19 of 21
    tzx4tzx4 Posts: 13member
    I guess that I must be ignorant because very little of that government statement made any sense to me at all. The either know things that I don't, or they are ignorant.   It comes across to me as a collection of vague generalities. Grouping Amazon, Apple, FB,  and Google together makes little sense to me either.  They all have markedly different business models, granted that FB & Google have lots of overlap in that they are ultimately surveillance advertisers.
    watto_cobra
  • Reply 20 of 21
    zimmiezimmie Posts: 536member
    mjtomlin said:

    zimmie said:
    A lot of what Apple does with the App Store is unethical. They do anticompetitive things. I don't think anybody can seriously argue against either of these points.

    That said, they patently do not have a monopoly, any more than Keurig or Tesla has a monopoly. The consumer can always choose a different platform.

    There is surely a term for what Apple is doing, but monopoly ain't it.

    "A lot... unethical... anticompetitive" please explain.

    Apple makes hardware/devices... offers software and services for those devices and also ALLOWS 3rd parties to create and offer software, services and peripherals to users of their devices/hardware.
    Apple sometimes sees what these third-party companies make and decides to make their own version of it. It has happened so prominently, the name of one particular instance became the term people use to describe when Apple clones your application and takes your users: Sherlocked. Anticompetitive.

    They make developers censor descriptions of their applications, even in countries where the description discusses legal features. A lot of that article is nonsense, but the section which starts "In January 2020" is relevant, and other developers have reported similar problems. Unethical.

    When Epic made the decision to sue Apple, Apple retaliated by threatening to cut off a separate developer account without any allegations of that account breaking any rules. Unethical.

    They allow obvious ripoff applications into the store and the search is easy enough to manipulate that these ripoffs can get higher placement when you search for the exact name of the original application. Unethical.

    If applications allow users to buy a service (such as a Netflix subscription or Kindle books), but they don't use Apple's In-App Purchase platform, the applications are not allowed to offer their own payment platform, and are not allowed to even tell users how to pay them outside the application (section beginning with "Another change applies"). Anticompetitive.



    Separately from the App Store, Apple makes a big deal about how they think privacy is a human right, but they still manufacture most of their products in China and they censor things at the behest of mainland China's government. Clearly they don't think privacy is worth protecting at the expense of manufacturing costs or sales. Unethical.
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