Little Tech Takes on Big Tech in Boulder

Posted on January 18, 2020 by Paul Thurrott in Amazon, Apple, Cloud, Google, Social with 10 Comments

Emboldened by the “techlash,” some smaller tech firms went public with the abuses they’ve suffered at the hands of Big Tech at a congressional hearing in Boulder, Colorado this past week. And they’re asking—even begging—lawmakers to curb the abusive business practices of Amazon, Apple, Facebook, and Google.

“It’s like playing a soccer game,” Tile vice president and general counsel Kirsten Daru said during the hearing. “You might be the best team in the league, but you’re playing against a team that owns the field, the ball, the stadium, and the entire league, and they can change the rules of the game in their own favor and anytime.”

The “they” in Tile’s case is Apple, which has been accused of similar lawbreaking and anticompetitive practices by Spotify in the EU. Tile says that because Apple wants to own its market for tracking devices, it places roadblocks for its mobile app on iOS that don’t apply to Apple’s own solutions. For example, Apple restricts the location data it collects, a limit not placed on Apple’s own technology.

And there’s Sonos, which is already suing Google for blatantly stealing its patented smart speaker technology and says that Amazon has done the same.

And PopSockets, which makes smartphone grips, claims that online retailing giant Amazon “bullied” it into lowering its prices while ignoring complaints about counterfeit rip-offs that it continued selling. PopSockets was so upset with Amazon’s behavior that it tried to stop using the retailer and lost $10 million. “We have $10 million less to innovate this year” because of Amazon, PopSockets founder David Barnett said.

And Basecamp, which makes online productivity tools, accused Google of abusing its dominant position in online search by pushing its position in search results lower unless it met Google’s demands. The firm now spends over $70,000 each year on advertising just to counteract the effect of Google’s abuse.

“The internet has been colonized by a handful of big tech companies that wield their monopoly powers without restraint,” Basecamp co-founder David Heinemeier Hansson said.

Facebook, meanwhile, is under fire for refusing to prevent lying in political advertising, a policy House Speaker Nancy Pelosi says makes the firm “accomplices in misleading the American people.”

That these firms are speaking out publicly is somewhat incredible. During Microsoft’s antitrust troubles in the mid-to-late 1990s, few of the software giant’s competitors felt safe doing so even privately. But this time is different: Antitrust regulators from around the world are moving aggressively against Big Tech and the power it collectively wields. And in the U.S. alone, the U.S. Federal Trade Commission and Justice Department are both investigating Big Tech in addition to the U.S. House of Representatives.

“It has become clear these firms have tremendous power as gatekeepers to shape and control commerce online,” representative David Cicilline said during the hearing’s opening. Cicilline chairs the House’s top antitrust committee.

“Help us, Congress,” Mr. Hansson said. “You’re our only hope.”

Tagged with

Join the discussion!


Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Comments (10)

10 responses to “Little Tech Takes on Big Tech in Boulder”

  1. north of 49th

    Frenemies…  We have this issue with more than just tech.  For example, large supermarket chains have house brands (some premium) that compete with established players for shelf space. I think the line between producer/distributor/retailer continues to be blurry and the public isn’t always aware of who owns what and how the rules of their venue work enough to vote intelligently with their dollars.

    I do hope that the platform owners get held accountable to be enablers of their platform and curb the abuse of power each seems to believe is their right.* 

    *As long as those companies on the platform are working with the safety and security of the end consumer in mind – and are kicked off when they don’t.  I have no issue booting a poor actor off a platform.

    • wright_is

      In reply to North of 49th:

      You are correct, but in Big Tech, especially the likes of Amazon or Google, they have the ability to "deep six" your products from the search results, promoting their own products, or sponsored products instead.

      I did a search for a smartphone on Amazon a few days back, as I wanted to check the current pricing. Giving the exact model name of the phone, the first page and a half of results were all for cases, protective films, chargers etc.

      At least in the supermarket, the original product is usually on the shelf next to the own-brand product, at least here in Germany.

  2. redstar92

    Return of the robber barons :( I hope that someone backs these small companies in this fight! The path out should not always be acquisition by someone bigger or complete decimation...

    • wright_is

      In reply to redstar92:

      That is funny, I was listening to the first couple of chapters of Shoshana Zubhoff's book, "the age of surveillance capitalism" and I was thinking exactly the same thing, we are dropping back to a digital feudal society with robber barons and we are just the tithed serfs to these big corporations.

  3. infloop

    There is an episode of Patriot Act with Hasan Minhaj where he looked Amazon and its practices. One of the things he mentioned was AmazonBasics, how they looked at what items were popular sellers and would then replicate it to sell under the AmazonBasics brand at low prices, undercutting the products that were being sold on Amazon.

    Similar to what PopSockets has said, the small businesses whose products Amazon had replicated are then stuck in a quagmire. If they stopped using Amazon, they'd lose even more money.

    The ThurrottNow post on Elastic last month and the Sonos situation sound similar.

  4. wright_is

    Why does Spotify need location data? It is playing music, there is no need to know where I am.

    The other claims are more serious and have some validity. I've often heard of Amazon forcing manfucaturers out of the market or not following the laws on couterfeit products. They use the same, typical, Big Tech excuses, that the market place is too big to police properly.

    Sorry, Amazon, that is not an excuse to ignore the law. The law is there for all people and companies to follow. If you don't have the resources to ensure you are working legally, you need to ensure that those resources are put in place, not complain that the laws are too difficult to comply with.

    Google have used this excuse for over a decade with YouTube and copyrighted material. Facebook and Twitter with political advertising - in Europe there are a lot of legal restrictions around political advertising, such as in France, I believe in the last couple of weeks before an election there is a complete ban on political advertising. In Germany and the UK, there are restrictions on political advertising, they must be backed up by provable facts, you can't bad-mouth your opponents, you can only play up your own position and there are strict spending limits for political campaigns. Big Tech just seems to ignore this, because "the problem is too big", who cares how big the problem is, you made the problem and it is your legal responsibility to ensure that you stay within the law. Zero sympathy, you should have dealt with this problem at the beginning and scaled it up, not wait until you are too big, so that it will cost you several hours of profits to deal with.

    It is like GDPR, many of the tech companies seem to just ignore it, thinking it will go away - which is one of the reasons that WhatsApp is being banned in many companies, because it isn't GDPR compliant - it uploads all of the contact data on the user's device and sends it to their servers in the USA and shares it with Facebook; all contraventions of GDPR, they must first obtain the permission of every person in the contacts list, before it can be uploaded and it must be stored in Europe or in a country with equivalent privacy standards. The USA has Privacy Shield to help with this, but even after half a decade, the USA still hasn't fulfilled the basic elements of the agreement - for example there is no Federal Data Protection Ombudsman in the USA, even though the US promised to fill this position in 2015.

    I think it will actually take a couple of multi-billion dollar fines against Big Tech, before they will actually even bother to look at the laws they are breaking on a daily basis.

    • ken_loewen

      In reply to wright_is: Spotify licenses music from the publishers in each country in which it operates so can only serve you the content it has licensed in your country. They're also responsible for paying the requisite fees based on your consumption and will likely seek to only license in future the content that is sought by customers in a particular country.
    • ulrichr

      In reply to wright_is:

      The other reason for the location data is that Spotify will advise you if any artists you are interested in are playing near your location in the coming months.

  5. t-b.c

    “Help us, Congress,” Mr. Hansson said. “You’re our only hope.”

    If Congress is our only hope, all is lost.