Tech Tent: Giants under the cosh from Congress

Sunday, 11 Oct, 2020

But Harvard University's Professor Jason Furman tells us Congress seems willing to go further: "In many ways this new House report leapfrogs past Europe into an even more aggressive posture on the big tech companies".

Because of Google's scale, the report said, the company has "near-perfect market intelligence" by tracking data in real time across markets.

So the tech firms may have more to fear from a President Biden than a returning President Trump.

The investigation found, for example, that Google has monopoly power in the market for search, while Facebook has monopoly power in the social networking market.

Click through to read about Google Cloud's allegedly manipulative videoconferencing moves, what the House subcommittee's report says about Google Cloud's market dominance and how its acquisitions allegedly limit competition - along with Google's full response. Facebook clearly bought Instagram and WhatsApp to shore up its users as the youth abandoned Facebook itself and migrated to the picture-sharing app. Apple and Amazon are accused, amongst others, of abusing their market dominance in the app store and marketplace, respectively.

Meanwhile, ranking member Rep. Jim Jordan of OH, who had stated during the July hearing that "Big Tech is out to get conservatives", has "asked his colleagues not to endorse the Democratic-led report".

Google took issue with both reports, saying they contain "outdated and inaccurate allegations from commercial rivals" about Google's search engine and other services. The result, the report said, harms news organizations and has "materially weakened innovation and entrepreneurship in the USA economy" as well as undermined privacy. In a statement to MacRumors, the company also said that it will offer a more in-depth rebuttal of the charges in a future press release.

Responding to the allegations in the report, Apple said the App Store provided $138bn in sales in the U.S., of which 85pc went to third-party developers. However, such reforms need congressional approval and would affect not just Silicon Valley but the nation's overall economy, making the Congressional antitrust committee proposal a major step against corporate consolidation.

The effort aimed to answer a key question: whether existing competition policies and century-old antitrust laws are adequate for overseeing the tech giants, or if new legislation and enforcement powers for regulators are needed.

Shares of Facebook, Amazon, Apple and Google all added to loses in after-hours trading.

The old dream of politicians like Democrat Elizabeth Warren to "chop up" big tech has not been possible.

The recommendations of the committee include, per CNBC, "imposing structural separations and prohibiting dominant platforms from entering adjacent lines of business", as well as instructing antitrust agencies to shift the burden onto companies merging with one another to show that such mergers would not harm competition, and increased budgets for the FTC and Department of Justice Antitrust Division.

Apple also disputed the report findings, stating that developers have benefited from Apple's App Store which has enabled new services and new markets in recent years.