U.S. Lawmakers Plan Tougher Reforms To Curb Big Tech’s Market Abuses

An antitrust subcommittee of the Judiciary Committee concluded in a 499-page report that many of the world’s leading tech giants had been indulging in subverting the market competition regulations. The committee, under the aegis of the U.S. House of Representatives panel, found that the United States (U.S.) based four big technology companies had abused their market power and forced small businesses to lure into “oppressive” contracts with charging excessive fees.

In separate cases, the U.S. Justice Department and the Federal Trade Commission are currently investigating antitrust probes against these tech giants namely Alphabet Inc.’s Google, Apple Inc., Amazon.com, and Facebook Inc. Experts suggested that the Congress, however, was not keen to complete the findings this year since the content of the report became increasingly political and lawmakers were currently engaged to the upcoming U.S. presidential election, scheduled to be held on November 3.

All four tech giants have opposed and expressed their disagreement with the report. Some of them are preparing to file various lawsuits against the report in the coming days. Meanwhile, the lawmakers have sought a reform to tighten the existing market regulations against the misuse of market power by big tech companies.

U.S. Justice Committee Reports

The committee led by Democratic Congressman David Cicilline was investigating the antitrust probes of the tech giants for more than a year and had examined 1.3 million documents with more than 300 interviews. The committee unveiled the report saying that these four tech giants, which have a combined market value of over $5 trillion, had involved in dozens of instances where they misused their power by bending the market rules and extracting their unfair advantages.

The report stated that these companies have created “a position that enables them to write one set of rules for others, while they play by another.” It further added, “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.”

Reflecting on the potential changes in antitrust law, the committee panel recommended these companies must be prohibited from operating in closely aligned businesses and barred from operating in related businesses. The report also urged Congress to allow the antitrust enforcers to shrink the scope for buying companies of potential rivals and included proposals to increase more budgets for the agencies.

Tech Giants Opposed the Report

Following the report, Amazon warned in a blog post on Tuesday, October 6, 2020, against “fringe notions of antitrust” and stressed that such market interventions “would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices, and reducing consumer choice.”

Condemning the report, Google released a statement saying that it competes “fairly in a fast-moving and highly competitive industry. We disagree with today’s reports, which feature outdated and inaccurate allegations from commercial rivals about Search and other services.” Reflecting on the allegation of frequently mentioned Facebook’s acquisition of Instagram in 2012, the social network stated, “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.”

Similarly, Apple defended that its market operations and commission rates are working with the compliance of market regulations. The company said, “Scrutiny is reasonable and appropriate but we vehemently disagree with the conclusions.” The company said it would issue a more extensive response in the coming days. Meanwhile, the antitrust panel would be proceeding to have a vote about the report after the October recess for formal adoption.