House Democrats urged an overhaul of antitrust laws to break up Silicon Valley, comparing them to Gilded Age monopolies, even as tech giants backed their calls for increased speech policing ahead of the November election.
That’s the main thrust of the 449-page report released on Tuesday by the majority on the House Judiciary Committee’s antitrust subcommittee. It found that Google has an unfair monopoly on online search, Facebook rules online advertising and social networking, Apple controls all software on iOS devices, and Amazon effectively monopolizes third-party sellers and many suppliers.
Bam, there it is. After more than a year of bipartisan investigations of Google, Facebook (plus Apple and Amazon), the U.S. House antitrust report just dropped. Time to go into deep-read mode. Tweets likely comin’. cc @dcnorghttps://t.co/6ATnizrPP6pic.twitter.com/8ZbXeA3Xw9
Big Tech used “killer acquisitions” to buy out rivals, forced small businesses into “oppressive” contracts and charged exorbitant fees because they could, the report argued.
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.
Moreover, competing in the marketplaces of their own making created “a position that enables them to write one set of rules for others, while they play by another,” the report added.
As proposed remedies, the Democrats want to give more money and power to the Federal Trade Commission and the Justice Department’s Antitrust Division. They also want to eliminate arbitration and allow class actions suits.
Platforms would also be forced to offer “equal terms for equal products and services,” rather than preferential treatment to their own, and be required to make their service compatible with competitors so users could transfer their data between them.
Breaking up the companies is also on the table. The report urges lawmakers to override “problematic precedents” in antitrust case law and review past mergers and acquisitions, such as Facebook’s purchase of Instagram and WhatsApp.
Allied Orthopedic Appliances v. Tyco Health Care Group LP; Ohio v. American Express; and United States v. Sabre Corp.AND clarifying that market definition is not required for proving an antitrust violation, especially in the presence of direct evidence of market power.2/2
Moreover, it wants to change the rules for future mergers to force companies to prove they would not harm competition, rather than making regulators prove that they would.
The recommendations come as no surprise, after the July hearing that featured virtual testimonies from the CEO’s of the four Big Tech firms – Apple’s Tim Cook, Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg, and Sundar Pichai of Alphabet, Google’s parent company.
Questions from Democrats on the panel focused on the accusations of monopolistic behavior, while Republicans were more concerned about censorship.
This is reflected in Tuesday’s report. While the staff from both parties did the research on which it was based, the actual document was compiled only by the Democrats, led by Rep. David Cicilline (D-Rhode Island). No Republican has endorsed it.
The committee’s ranking member, Rep. Jim Jordan (R-Ohio), described the report as “radical proposals that would refashion antitrust law in the vision of the far left.”
Jordan is preparing a minority report in response. His colleague Ken Buck (R-Colorado) has already published his own, calling for “targeted antitrust enforcement” rather than “onerous and burdensome regulation” that would kill innovation.
An ounce of prevention is worth a pound of cure. I would rather see targeted antitrust enforcement over onerous and burdensome regulation that kills industry innovation. https://t.co/IEpF1IYQQ7
The “presumption that success can only be the result of anti-competitive behavior is simply wrong,” an Amazon spokesperson said, after the Democrat report was made public. The company argued the proposals would hurt small businesses and customers alike.
Facebook has already pre-empted the report by leaking a 14-page memo to the media, arguing that it was so enmeshed with Instagram and WhatsApp – which it acquired in 2012 and 2014, respectively – that reversing the mergers would be “a complete nonstarter,” costing billions and hurting user experiences.
There is little chance any of the recommendations in either report would translate into specific policy before the November 3 election, but the timing of their release may also figure into the electoral calculus. Republicans have criticized Silicon Valley giants for censoring conservative opinions, while Democrats have accused them of not censoring enough, insisting that the platforms – once praised for their reach and innovation – endangered American democracy by helping President Donald Trump bypass traditional media in 2016 and allegedly spread “misinformation” since.
In response, Big Tech has embarked on a campaign of “deplatforming” content the Democrats have labeled as “hate speech,” while largely ignoring Republican criticism. While most Silicon Valley companies insist they aren’t partisan, their staff donates overwhelmingly to Democrats. Amazon’s Bezos also owns the Washington Post, a newspaper known for partisan coverage of the Trump administration.
Democrats attacking Jeff Bezos?This really is 2020
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