House subcommittee alleges Big Tech giants engage in monopolistic practices

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The House Judiciary Antitrust, Commercial, and Administrative Law Subcommittee published the results of its 16-month investigation of U.S. Big Tech firms on Tuesday.

The panel’s 449-page report alleged Apple, Alphabet, Amazon, and Facebook have engaged in anticompetitive behavior and should be reined in. The report also features recommendations on how Congress can address the digital monopolies and implied that corporate breakups could act as a remedy.

The House subcommittee addressed many of its issues with Big Tech’s practices during a contentious series of hearings in July.

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House Subcommittee’s Allegations against Apple

The House panel slammed Apple for engaging in monopolistic practices via its App Store.

The group’s report called the corporation’s 30 percent cut of transactions made through its marketplace “exorbitantly high.” It also argued Apple prioritizes its applications over third-party software. The subcommittee noted former App Store review head Philip Shoemaker claimed the firm created reasons to ban programs from its ecosystem that competed with its offerings.

Other allegations in the report state that Apple works to lock consumers into its network to exert control over app developers.

Apple said it runs its online marketplace fairly and rebuffed the panel’s findings in a media statement. Moreover, the firm reiterated it has funneled billions of dollars to third-party developers since launching the App Store.

Congressional Group Asserts Google Used its Influence to Hurt Competitors

Alphabet’s subsidiary, Google, received serious criticism from the House subcommittee regarding how it uses its influence.

The Congressional panel argued the search engine purposefully steers web traffic away from its rivals. Its report specified the corporation identified sites like Trip Advisor, Monster, and Yelp as potential threats and strived to undercut their growth. The lawmakers also alleged the firm directed users to its services at the expense of other vertical search engines.

The regulators cited internal Google emails to make the case that the firm pushed handset manufacturers to highlight its email, payment, and search tools. It also suggested the corporation licensed its Android mobile operating system to smartphone manufacturers to gain an advantage over Yahoo and Microsoft.

In response, Google said it disagreed with the subcommittee’s report and claimed it contained “outdated and inaccurate” information.

House Report Hammers Amazon’s E-Commerce Practices

Congressional lawmakers accused Amazon of acting as a monopoly because of the way it runs its e-commerce platform.

The subcommittee stated third-party vendors are afraid to leave the firm’s marketplace because of its massive U.S. e-retail presence. The report cited allegations from multiple merchants who claim the corporation viewed their businesses as being expendable.

In addition, the group accused Amazon of showing a preference for its own products over those offered to buy outside vendors. It further declared that Amazon uses its influence to pressure suppliers to prioritize its business over its rivals.

In a blog post, Amazon stated it only represents 1 percent of the overall U.S. retail market and that its relationship with third-party vendors is mutually beneficial. It also called the subcommittee’s findings “flawed” and implied government intervention in its operations would hurt consumers and small businesses.

Facebook Called a Monopoly by House Subcommittee

Lastly, the House report outlined several instances of monopolistic behavior from the world’s largest social network.

The Congressional body claimed Facebook closely watches its rivals’ growth and moves to buy or chop them down if they become too big. The group argued the firm services have suffered because it lacks the competitive motivation to do better. The subcommittee chided the social network’s weakened privacy protections and unintentional spread of misinformation as products of its complacency.

Regulators also took aim at Facebook’s relationship which purposely undercuts its Instagram and WhatsApp subsidiaries to bolster its flagship service. The panel supported its accusations by citing an interview with one of its former executives who said it engaged in intercompany collusion.

After the report went live, a Facebook spokesperson issued a statement pushing back against its assertions. The company stated it had spent billions of dollars to grow Instagram and WhatsApp leading providers. The firm also noted Congress did not object to Facebook acquiring its now subsidiaries when the merger process took place.

House Subcommittee’s Recommendations

The House Judiciary subcommittee offered a few suggestions on how Congress might address Big Tech’s alleged digital monopolies.

The report called for new legislation that would prevent tech corporations from owning multiple different lines of business. It argued the lack of legislation against such practices had led to market concentration that threatens the online economy. The document indicated the Bank Holding Company Act of 1956 could act as a framework for 21st-century anti-competition laws.

The Congressional body called for modifying current antitrust laws to address the contemporary market inequities. For instance, the group suggests the sector’s largest participants be limited to a 30 percent share of their respective markets.

The subcommittee’s report indicates breaking up Apple, Google, Amazon, and Facebook’s respective monopolies would benefit the online marketplace. The document mentioned the separation of AT&T into discrete businesses had a positive holistic aftermath. It also noted foreign regulators have found Silicon Valley’s practices are self-preferential in nature.

House members want tech corporations to make it easier for consumers to move their data from one provider to another. The panel also recommended removing obstructions that prevent consumers from suing large conglomerates.

The subcommittee concluded its report with a 45-page rundown of Amazon, Apple, Google, and Facebook’s respective corporate acquisitions.

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