U.S. antitrust committee finds Apple, Google, Amazon, and Facebook guilty of “using monopoly power”

The antitrust subcommittee of the Judiciary Committee has completed its investigation into competition in digital markets to examine the abuses of market power by Apple, Google, Amazon, and Facebook. In a 449-page report, the committee shared findings and recommendations. 

The report indicated that, as of September 2020, the combined valuation of the four big tech companies is more than $5 trillion—more than a third of the value of the S&P 100, and those companies “have captured control over key channels of distribution and have come to function as “gatekeepers”. The committee found that the companies create “a position that enables them to write one set of rules for others, while they play by another.”

“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. Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price,” reads the report.

“These firms typically run the marketplace while seven also competing in it—a position that enables them to write one set of rules for others, while they play by another, or to engage in a form of their own private quasi regulation that is unaccountable to anyone but themselves.”

The report emphasizes that one of the main factors reasoning the market power of these four tech companies as their “killer acquisitions”.  It says that Google, Amazon, Facebook, and Apple use their monopoly power to acquire potential competitors. 

“In some cases, a dominant firm evidently acquired nascent or potential competitors to neutralize a competitive threat or to maintain and expand the firm’s dominance. In other cases, a dominant firm acquired smaller companies to shut them down or discontinue underlying products entirely—transactions aptly described as “killer acquisitions.””

The report recommends “structural separations and prohibitions of certain dominant platforms from operating in adjacent lines of business”. 

It also suggests strengthening the antitrust laws by reasserting the anti-monopoly-goals and taking additional measures to strengthen overall enforcement. 

In response to the report, Google said in a statement that “We compete 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.” 

Facebook called itself an “American success story” and said  “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. Instagram and WhatsApp have reached new heights of success because Facebook has invested billions in those businesses. A strongly competitive landscape existed at the time of both acquisitions and exists today. Regulators thoroughly reviewed each deal and rightly did not see any reason to stop them at the time.”

Apple said “Our company does not have a dominant market share in any category where we do business. From its beginnings 12 years ago with just 500 apps, we’ve built the App Store to be a safe and trusted place for users to discover and download apps and a supportive way for developers to create and sell apps globally. Hosting close to two million apps today, the App Store has delivered on that promise and met the highest standards for privacy, security and quality. The App Store has enabled new markets, new services and new products that were unimaginable a dozen years ago, and developers have been primary beneficiaries of this ecosystem. Last year in the United States alone, the App Store facilitated $138 billion in commerce with over 85% of that amount accruing solely to third-party developers. Apple’s commission rates are firmly in the mainstream of those charged by other app stores and gaming marketplaces. Competition drives innovation, and innovation has always defined us at Apple. We work tirelessly to deliver the best products to our customers, with safety and privacy at their core, and we will continue to do so.” in response to the report. 

Amazon said “Misguided interventions in the free market would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices, and reducing consumer choice and convenience.“

You can find the panel’s full report here

Written by Jordan Bevan

Leave a Reply

Your email address will not be published. Required fields are marked *

Google Adds Web Stories To Its Search App For Android And iOS

The game industry has reached $20.5 billion in IPOs, investments, and acquisitions in 2020