Big Tech responds to “oil barons and railroad tycoons” comparisons by House Democrats
Did we really need a 449 page report to tell us Big Tech is anticompetitive?
Last night, House Democrats dropped a juicy 449-page document. The long-awaited report, which compared Big Tech to “oil barons and railroad tycoons,” was packed with evidence collected over the past 16 months that was designed to prove the companies held "monopoly power".
Unsurprisingly, it announced that all four companies are monopolies.
The proposed solution would be to essentially break up the companies, embolden the agencies that police market concentration, and make it harder for powerful companies to acquire start-ups.
Unsurprisingly, all four companies were quick to defend themselves.
Google even dominated the report, with a total of 1,966 mentions. It was accused of holding monopoly power in online searches, and favouring its own content over other websites.
“We compete fairly in a fast-moving and highly competitive industry. We disagree with today’s reports, which feature outdated and inaccurate allegations from commercial rivals about Search and other services,” Google wrote in a blog post.
“Americans simply don’t want Congress to break Google’s products or harm the free services they use every day. The goal of antitrust law is to protect consumers, not help commercial rivals. Many of the proposals bandied about in today’s reports—whether breaking up companies or undercutting Section 230—would cause real harm to consumers, America’s technology leadership and the U.S. economy—all for no clear gain.”
Amazon, mentioned 1,861 times in the report, was accused of holding monopoly power in third-party sales.
“Fringe notions on antitrust would destroy small businesses and hurt consumers,” Amazon wrote in a blog post.
“Misguided interventions in the free market would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices, and reducing consumer choice and convenience.”
Amazon also argued that it “accounts for less than 1% of the $25 trillion global retail market and less than 4% of retail in the U.S. Unlike industries that are winner-take-all, retail has ample space for many winners”.
Apple, which was mentioned 1,285 times, was accused of holding monopoly power in the distribution of software apps on iOS devices, and using this "to create and enforce barriers to competition and discriminate against and exclude rivals while preferencing its own offerings".
Over the past few months, Apple has been embroiled in a fierce battle with Fortnite developer Epic Games, which has drawn a lot of attention to the company's anti-competitive practices.
"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," Apple said in a statement to CNBC. "Our company does not have a dominant market share in any category where we do business."
Bizarrely, Facebook was mentioned only 944 times. It was accused of holding monopoly power in online advertising and social networking, and maintaining this through “acquire, copy, or kill” threats.
According to a CNBC report, a Facebook spokesperson said that “acquisitions are part of every industry, and just one way we innovate new technologies to deliver more value to people. Instagram and WhatsApp have reached new heights of success because Facebook has invested billions in those businesses. A strongly competitive landscape existed at the time of both acquisitions and exists today. Regulators thoroughly reviewed each deal and rightly did not see any reason to stop them at the time.”
At the same time as the antitrust report was released, Facebook also announced it was banning QAnon from its platform.
This report is just one of an increasing number of investigations -- the Trump administration could launch an antitrust lawsuit against Google any day now, and the FTC's investigation into Big Tech's business practices is ongoing.
The effects of this report in particular will depend largely on the outcome of the November election.
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