House Panel Says Big Tech Wields Monopoly Power
House Panel Says Big Tech Wields Monopoly Power
Democratic-led report concludes after 16-month probe that Amazon, Facebook, Google and Apple stifle competition
A report by the House Antitrust Subcommittee says Facebook and Google have monopoly power, while Apple and Amazon have ‘significant and durable market power.’
By Ryan Tracy Updated Oct. 6, 2020 8:07 pm ET
WASHINGTON—America’s biggest technology companies have leveraged their dominance to stamp out competition and stifle innovation, according to a Democratic-led House panel, which said Congress should consider forcing the tech giants to separate their dominant online platforms from other business lines.
The report released Tuesday from Democratic staff of the House Antitrust Subcommittee capped a 16-month inquiry into the market power of Amazoncom , Facebook Alphabet Google and Apple
Republicans issued a separate response endorsing strong antitrust enforcement targeting the companies but didn’t endorse many of the Democrats’ policy prescriptions. It also accused the companies of bias against conservative viewpoints.
No legislative changes are imminent, but the report’s sweeping conclusions boost the odds for new laws in the future and publicizes evidence that will give momentum to the companies’ critics in both parties.
In one snippet, the report describes an alleged effort by Facebook’s leadership to prevent the company’s Instagram app from competing with the original Facebook platform.
A 2018 memo by Facebook executive Tom Cunningham on the possible “end states” of Facebook’s family of apps concluded that “it is unclear whether Instagram and Facebook can coexist,” the report said, with Mr. Cunningham worried about a possible tipping point in which one might come to dominate the other.
“Instagram and WhatsApp have reached new heights of success because Facebook has invested billions in those businesses,” Facebook said in a statement. “A strongly competitive landscape existed at the time of both acquisitions and exists today.”
The company is facing an antitrust investigation by the Federal Trade Commission, which is preparing a potential lawsuit, The Wall Street Journal has reported. Google is also expected to be the subject of an antitrust lawsuit filed by the Justice Department this fall.
Amazon disputed the report’s conclusions.
“All large organizations attract the attention of regulators, and we welcome that scrutiny,” it said in a blog post. “But large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong.”
Google said in a statement it disagrees with the findings, which it said “feature outdated and inaccurate allegations from commercial rivals.”
“Americans simply don’t want Congress to break Google’s products or harm the free services they use every day,” the company said.
Apple disputed the report’s findings. “We have always said that scrutiny is reasonable and appropriate but we vehemently disagree with the conclusions reached in this staff report with respect to Apple,” a company spokesman said in a statement. “Our company does not have a dominant market share in any category where we do business.”
The Democratic staff report says all four companies wield monopoly power and criticizes U.S. antitrust enforcement agencies as failing to curb their dominance.
“These firms have too much power, and that power must be reined in and subject to appropriate oversight and enforcement,” the 449-page report says. “Our economy and democracy are at stake.”
The report outlines a series of responses Congress could adopt, including legislation forcing at least some of the companies to separate certain dominant online platforms from other business lines, as well as changes to antitrust laws to reinvigorate a perceived lack of strong enforcement.
“This report could end up being a turning point in antitrust and tech,” said Paul Gallant, an analyst for investment bank Cowen “It creates momentum for legislation next year, and it also might nudge regulators to bring cases even under existing law knowing they’ve got congressional backup.”
Republicans on the panel issued a 28-page response, detailing what they say are abuses of power by social-media companies in censoring online speech. “Big Tech is out to get conservatives,” the report concluded, criticizing Democrats for ignoring the issue. The tech companies say they don’t make content moderation decisions based on political bias.
The report concluded that Amazon has monopoly power over its third-party sellers, bullies its retail partners and improperly uses third-party data to inform its strategy for selling self-made private-label products on its e-marketplace.