Posted October 6, 2020 at 6: 33pm
Democrats on the House Judiciary Committee said Tuesday that Congress should consider forcing Amazon, Google, Apple and Facebook, some of the country’s largest and most successful technology companies, to separate key sections of their business empires to reduce alleged market dominance.
A staff report and recommendations released by the committee’s majority — led by Chairman Jerrold Nadler, D-N.Y., and Rep. David Cicilline, D-R.I., who chairs the antitrust subcommittee — said all four companies maintain monopolies in their unique markets: Amazon in its third-party seller market, Google in online search and advertising, Apple in software distribution on mobile devices and Facebook in social networking.
“By controlling access to markets, these giants can pick winners and losers throughout our economy,” Nadler wrote in a foreword to the report. “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.
“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,” Nadler wrote.
In addition to the prospect of forcing the companies to separate their businesses to prohibit them from exerting their market dominance in competition with “firms dependent on [their] infrastructure,” the report said Congress should limit the markets in which the companies could do business.
The report found that the federal agencies tasked with enforcing antitrust laws, the Justice Department and the Federal Trade Commission, had failed to properly regulate the companies as they experienced meteoric growth by buying up smaller competitors in the past two decades. And the report said that federal courts at the same time had weakened existing statutes to benefit businesses and had enforced only a price-based consumer welfare standard that the report called outdated.
To counter those trends, the report recommended that Congress reinvigorate its own antitrust enforcement and overhaul existing laws, including the Sherman Antitrust Act of 1890 and the Clayton Antitrust Act of 1914, to account for the rise of monopolies in the digital marketplace, where services, like those provided by the four companies, are often free to use.
The report — 450 pages long, with more than 2,500 footnotes — and the recommendations constitute a stunning rebuke of Silicon Valley by Democratic antitrust hawks in the nation’s capital whose concern over market dominance in the technology sector has grown since the 2016 presidential election.
Its release marked the culmination of a 16-month investigation by the committee that sought to determine whether Big Tech companies had grown powerful enough to be considered monopolies, and whether 20th-century antitrust laws, meant to ensure competition and protect consumers, remain adequate tools for regulating the 21st century’s rapidly growing technology sector.
And though the investigation, which began last March, was bipartisan, the report only bore the names of House Democrats and their staffers. In the course of the investigation, Republicans questioned technology executives on a host of issues unrelated to antitrust, including allegations of anti-conservative bias and censorship of conservative voices online.
“Big Tech is out to get conservatives,” said Rep. Jim Jordan, R-Ohio, the Judiciary Committee’s ranking member, in a statement. “Unfortunately, the Democrats’ partisan report ignores this fundamental problem and potential solutions and instead advances radical proposals that would refashion antitrust law in the vision of the far left.”
Later on Tuesday, Jordan and other committee Republicans released a second report detailing their grievances. In a letter to Nadler, Jordan said Democrats’ “stubborn refusal to acknowledge anti-conservative bias in Big Tech artificially narrows the committee’s investigation and ultimately discredits the [Democratic] report’s findings.”
A third way
A third report released by Colorado Rep. Ken Buck and other Republicans on the committee, including Georgia Rep. Doug Collins, a former ranking member who preceded Jordan, sought to strike a balance between the Democratic report and Jordan’s by agreeing that the companies had engaged in anti-competitive conduct but not supporting all of the Democratic overhaul proposals.
“While I do not support the recommendations presented in the subcommittee’s majority report, I fully support and am open to working with Chairman Cicilline to find a solution that reins in Big Tech and their anticompetitive behavior,” Buck said in a statement. “But 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.”
Still, in the closing stages of the committee’s investigation, it became clear that Republican leaders on the committee believe that the current statutes are not in need of changes or updates, muddling the legislative prospects for any overhaul measures that Democrats might introduce.
“It has been my experience after 42 years in Congress that this body is ill-suited to micromanage the economy and probably even worse at predicting what it will look like in the future,” Wisconsin Rep. Jim Sensenbrenner, the top Republican on Judiciary’s antitrust subcommittee, said last Thursday.
Sensenbrenner said he was “skeptical” of proposals to break up the companies, which he suggested “would ultimately stifle innovation and be more harmful to consumers.”
Still, the report arrives at a precipitous moment for the technology companies, who are facing antitrust probes by federal agencies and coalitions of state attorneys general, as well as inquiries from Congress on a host of other issues such as data privacy, civil rights and content moderation.
Representatives from Facebook, Google and Apple did not immediately respond to requests for comment on the report. In a statement posted to its blog, Amazon dismissed it as “regulatory spit-balling on antitrust.”
“Large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong,” the blog post said.