The bid to target Big Tech with sweeping changes to antitrust laws in the US is “far-fetched” and “unlikely to go anywhere”, it has been claimed.
Democrats on the House Judiciary Committee’s antitrust panel published their 16-month long investigation into Apple, Amazon, Google, and Facebook on Tuesday.
The 449-page report claimed the four tech giants had developed monopolies last seen in the era of “oil barons and railroad tycoons". The panel proposed a range of legal recommendations that could fundamentally change the way in which tech companies operate, and potentially lead to their break up.
For instance, Congress was urged to consider making it illegal for tech giants to give their own products preferential treatment on their sites, such as the promotion of Amazon Basics products over other brands. The report also suggested that platforms should assume a role akin to a utility like the electricity grid.
Sam Bowman, director of competition policy at the International Law Economy Centre, said the proposed changes read like the “most extreme wish-list” for anyone who hated Big Tech.
“It’s ridiculous, it ends up reading like they tried to frame every single possible behaviour by these companies as harmful and anti-competitive, which is so far-fetched,” he said.
“No neutral reader could look at that report and not realise that they’re reading a political document.”
Mr Bowman said there was nothing in the report that demonstrated or alleged consumer harm. Instead, it focused on harms to other competitors, which were “alien” to American and British policy and “much more in line” with European norms.
The European Commission has taken a hard line on Big Tech and has imposed heavy fines for anti-competitive behaviour.
“I think where this will probably land — and this is still really bad — is this kind of forced interoperability, basically treating platforms as a utility,” Mr Bowman said.
Some Republicans back elements of the report but do not go so far as to endorse Congress to intervene and restructure tech companies. Colorado’s Ken Buck said he agreed with three quarters of the report but could not get on board with recommendations around breaking up the giant businesses.
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Dan Ives, managing director at Wedbush Securities, said the differences on how to tackle tech’s dominance between the Republicans and the Democrats made wide-scale change unlikely.
“Despite the report and framework for recommendations around Big Tech, without core law changes we believe this antitrust momentum hits a brick wall,” he said.
“A Blue Wave could change the antitrust political wild card. Absent a legislative fix, we do not see meaningful change in regulation for now.”
Mr Ives said both parties had struggled to gain a consensus on “more pressing issues” and as a result made agreeing to new laws on tech unlikely.
Throughout its investigation, the subcommittee spoke to employees at the companies and their rivals to determine if their competition had been unfairly crushed. As the inquiry neared its conclusion, the heads of all four companies were called to testify against allegations of monopolistic behaviour.
The Big Tech firms have undergone exponential growth over the past decade with the combined valuation of all four now standing at in excess of $5 trillion.
Christopher Rossbach, fund manager at London-based investor J. Stern & Co, said that the report provided a “blueprint for regulation” if Democratic nominee Joe Biden was elected.
“It confirms our view that the Democrats will investigate past acquisitions like Instagram by Facebook and Doubleclick by Google and raise the possibility of breaking up parts of the companies as one of the remedies,” he said.
“The report recommended changes to the antitrust law. Traditional antitrust focuses on harm to consumers. The simplest harm is higher prices. However, the Big Tech platforms are free to consumers and have increased choice and lowered prices so it is easier to argue for the benefit they have created than to identify harm.”
A range of investigations into the tech firms is ongoing across the US, with the contents of the report likely to encourage prosecutors. The Justice Department and several states are looking into Google while the Federal Trade Commission is examining Facebook’s moves for Instagram and WhatsApp. Both are believed to be exploring if Amazon is abusing its position of power to promote its own products. Apple has also drawn the attention of the Justice Department for its commission charged on App Store signups.
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