US Lawmakers Propose Breaking up Amazon, Apple, Google, Facebook to Prevent Monopoly

Sunday, 11 Oct, 2020

The House Judiciary Committee's Antitrust Subcommittee on Tuesday released the findings of its 16-month-long investigation into the challenges posed by the dominance of tech giants in the digital economy.

The scrutiny surrounding big tech companies have been a growing issue in 2019.

Describing how the firms "have exploited, entrenched and expanded their power over digital markets in anticompetitive and abusive ways", the report asked if "this pattern of behaviour raises questions about whether these firms view themselves as above the law, or whether they simply treat lawbreaking as a cost of business". It's hard to see where this report will lead, given that elections are looming in the USA, along with the concern that meddling with the country's most successful companies during a severe economic downturn would be foolhardy.

In response to the report, Facebook claimed that the company is an "American success story". It will be up to the new Congress elected in November to decide whether to take action on the report.

It was the Democrats on the House Judiciary Committee who wanted a really tough approach - a minority report from the Republicans agreed there was a problem, but favoured milder solutions. Another suggestion is for Amazon to stop operating on markets where it also competes with other retailers, but the report also urged US Congress to act on allowing antitrust enforcers more freedom to stop purchases of potential rivals.

Largely along party lines, according to reports. The company was called a "gatekeeper" in the report that uses its power to collect data from websites. Moreover, said Amazon, it is only a small fraction of the global online retail market and only has a 4% market share of the USA market.

Google rejected the report: "We disagree with today's reports, which feature outdated and inaccurate allegations from commercial rivals about Search and other services", it said in a statement.

Spokespeople for Apple didn't immediately return a request for comment. 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. Its staff pored over more than a million internal documents from the companies.

"But if the goal is to benefit consumers, which has until now been the standard for antitrust policy, it is hard to see how this would do anything but invite regulators to micromanage business models".

The old dream of politicians like Democrat Elizabeth Warren to "chop up" big tech has not been possible. A bipartisan coalition of 50 USA states and territories, led by Texas Attorney General Ken Paxton, also has been investigating Google's business practices.

Google has argued that although its businesses are large, they are useful and beneficial to consumers. Most of its services are offered for free in exchange for personal information that helps Google sell ads.

The Committee's proposed changes would effectively break up Amazon, Apple, Facebook and Google - worth a collective $US5 trillion - and hand new oversight and powers to U.S. agencies policing market competition.