U.S.: Big Tech are Abusive Monopolies That Should be Regulated or Broken Up

Posted on October 6, 2020 by Paul Thurrott in Amazon, Apple, Cloud, Google, Social with 87 Comments

A damning House Judiciary Committee report says that Amazon, Apple, Facebook, and Google are monopolies and might need to be broken up.

“To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” the 449-page report explains. “Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price. These firms typically run the marketplace while also competing in it—a position that enables them to write one set of rules for others, while they play by another, or to engage in a form of their own private quasiregulation that is unaccountable to anyone but themselves.”

What the committee recommends is that these companies—which together represent over one-third the entire value of the S&P 100—be regulated to prevent further abuses and, in some cases, be broken up into non-dominant, smaller companies.

“These firms have too much power, and that power must be reined in and subject to appropriate oversight and enforcement,” the report continues. “Our economy and democracy are at stake.”

“The market power of the dominant platforms risks undermining both political and economic liberties,” a section of the report dedicated to market impact adds. “Subcommittee staff encountered a prevalence of fear among market participants that depend on the dominant platforms, many of whom expressed unease that the success of their business and their economic livelihood depend on what they viewed as the platforms unaccountable and arbitrary power. Additionally, courts and enforcers have found the dominant platforms to engage in recidivism, repeatedly violating laws and court orders. This pattern of behavior raises questions about whether these firms view themselves as above the law, or whether they simply treat lawbreaking as a cost of business. Lastly, the growth in the platforms market power has coincided with an increase in their influence over the policymaking process. Through a combination of direct lobbying and funding think tanks and academics, the dominant platforms have expanded their sphere of influence, further shaping how they are governed and regulated.”

As for its recommendations, the committee is providing what it calls “a menu of reforms” that it says will restore competition, strengthen U.S. antitrust laws, and revive antitrust enforcement. And they do include “structural separations”—breakups of the abusive Big Tech firms—and major changes to these firms’ business practices.

I’m going to review this massive document further and see whether it addresses each firm’s abuses directly. But this is clearly the most important antitrust-related action to come out of the United States government since the Microsoft case in the late 1990s. And it’s scope is dramatically wider.

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