Home Business Congress Unveils Its Plan to Curb Big Tech’s Power

Congress Unveils Its Plan to Curb Big Tech’s Power

Gilad Edelman

Anyone who’s paid even slight attention to the congressional investigation of the power wielded by tech giants won’t be surprised by the report released Tuesday by the subcommittee’s Democrats. They say four companies—Apple, Amazon, Facebook, and Google—have monopoly power that threatens core economic and political liberties. The report, which ends a 16-month investigation and includes a trove of internal documents, lays out the most thorough case yet that Big Tech exploits its advantages in unfair ways. And it outlines a detailed vision for new legislation to fix those problems—with implications that could extend far beyond the tech industry.

The case against each firm is complex, but some key themes emerge in the 400-plus-page report, built on hearings, other testimony, and more than a million documents. The subcommittee accuses Apple of using its control over mobile apps to squeeze excessive fees out of app developers, who often pass those costs along to users. Amazon allegedly uses its dominant share of online retail to unfairly compete against the outside sellers who use its platform—37 percent of whom, the subcommittee finds, derive all their income through Amazon. The case against Google focuses on the company’s use of its dominant share of the search market to entrench its own position, advantage its own products, and take over other markets like maps and advertising. As for Facebook, the report contains explosive internal emails, some revealed for the first time, showing that the company’s executives openly discussed acquiring companies, including Instagram and WhatsApp, in order to snuff out growing competitors.

In emailed statements, all four companies said they welcomed regulation but vehemently denied the critical findings in the report.

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The tech companies aren’t the only entities who come in for abuse. The report heaps scorn on antitrust enforcers at the Department of Justice and Federal Trade Commission for waving through literally every one of the several hundred mergers and acquisitions the four companies made between 2009 and 2019, even cases that helped the companies cement their dominance, like Facebook’s acquisition of WhatsApp or Google’s takeover of DoubleClick. Unfettered by regulators, the companies continue to make deals to swallow rivals, such as Google’s planned purchase of Fitbit.

To address that problem, the report recommends strengthening antitrust enforcement, including through increased funding for the agencies. It also recommends new laws, drawing from “the antimonopoly toolkit,” to rein in the companies’ power. The boldest is a call for “structural separation”—prohibiting a dominant firm from competing against other businesses in a market that it controls. There is historical precedent for this: Congress kicked the railroad industry out of the coal business in the 1890s, and it barred banks in the 1950s from acquiring companies that might compete against other bank customers. In the case of Big Tech, it might bar Amazon from designing and selling its own products, or prohibit Google from competing against independent apps in the Android app store. The report notes that structural separation can mean divestiture—forcing a company to sell off certain divisions—but doesn’t have to.

It has become fashionable among a certain set of the tech pundit class to dismiss the antitrust movement on the grounds that “break up Big Tech” is too simplistic. In fact, the proposals for addressing the monopoly problem in Silicon Valley have always been more sophisticated than breakups alone. But the House report helps explain why the misconception persists: A great deal of the recommended solutions involve highly technical issues of antitrust doctrine that make no sense to anyone not steeped in the law.

The basic story of antitrust is that, since the late 1970s, the Supreme Court has interpreted the federal antitrust statutes so narrowly that it has become extremely difficult for the government to win a monopolization case or block a merger—which partly explains why enforcement has gotten so scarce. As a result, the report acknowledges, many of the anticompetitive practices it cites by tech firms are probably legal under current law. So much of the meat of the report suggests passing new laws to overrule those Supreme Court decisions.

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