Wed. Oct 28th, 2020

US Congress publishes a report criticizing Apple, Amazon, Google, and Facebook.

A report was presented to the US Congress yesterday following a yearlong investigation into high-tech companies that criticized Apple, Amazon, Google, and Facebook. In their view, the congressmen presented irrefutable evidence that these companies are abusing their market position, behaving like monopolists, and harming competition. As a way out of this situation, the authors of the report proposed forcibly separating part of these companies’ operations and introducing restrictions on the takeover of other companies for them.

A report was presented to the US Congress yesterday following a yearlong investigation into high-tech companies that criticized Apple, Amazon, Google, and Facebook. In their view, the congressmen presented irrefutable evidence that these companies are abusing their market position, behaving like monopolists, and harming competition. As a way out of this situation, the authors of the report proposed forcibly separating part of these companies’ operations and introducing restrictions on the takeover of other companies for them.

The report, titled Investigating Competition in Digital Markets, is 450 pages long. Work on it began about a year ago, requiring seven Congressional hearings, an analysis of 1.3 million pages of documents and correspondence, testimonies from 38 antitrust experts, and interviews with 240 market participants, former company employees others. As a result, the accusations presented in the report, in fact, differed little from those expressed earlier during the hearings in Congress.

The report claims that Amazon, Apple, Facebook, and Google control the main distribution channels and, in fact, have become the guardians of the order in the market.

“If this goes on, then in just ten years, 30% of global economic activity will be associated with these companies and just with some others,” the congressmen noted.

The first to be criticized was Facebook, which was accused of monopolization and monopoly domination. For example, Facebook is actively competing in the marketplace between its own products (Instagram, WhatsApp, and Messenger). Thus, as stated in the document, the company is “pushing the market towards monopolization.”

The report notes that top managers of Facebook themselves described their acquisition strategy as “grabbing land” to “strengthen positions,” and the head of the company Mark Zuckerberg once said that “can just buy any competitive startup.” Instagram was cited as an example.

According to the authors, Google also received a lot of criticism, which maintains a monopoly on the Internet search market through a series of anti-competitive tactics. According to the document, Google is taking advantage of its monopoly in the search market by illegally appropriating third parties’ content and ramping up its own vertical search results. Also, Google flooded search result pages with ads, blurring the lines between search result links and sponsored links.

Another form of Google’s monopoly behavior has been “a series of anti-competitive purchases and contracts.”

“By purchasing the Android mobile operating system in 2005, Google began to restrict third-party activities and require manufacturers to pre-install applications for Google and its search engine.”

Similar accusations have been made against Apple. “The dominance of this company in the market is determined by its complete control of the mobile operating system iOS, which allows you to control the entire distribution of software for devices on iOS. As a result, Apple essentially has a monopoly on the mobile app market, controlling access to over 100 million iPhones and iPads in the US, ”the report says.

In turn, Amazon has been criticized for discouraging competition and monopolizing online merchandise trading.

It is often said that Amazon controls about 40% of all online retail sales in the US. But this is most likely underestimated data, and the real share of Amazon reaches about 50%, or even more, “- said in the report.

The head of the legal committee, Jerrold Nadler, and the head of the antitrust subcommittee, David Cicilline, said that “the investigation leaves no doubt that there is a clear need to take action, both by Congress and by the antitrust authorities.” According to the authors, these measures should be taken to restore competition, develop innovation, and protect democracy.

The authors of the report proposed a set of measures about leading technology companies:

  • the structural separation that would prevent the platform from running a business that depends on or overlaps with that platform itself,
  • platforms should create services compatible with competing networks for greater interchangeability and more active data exchange,
  • development of standards that would prevent strategic acquisitions leading to less competition,
  • Amendments and additions to antitrust laws – the Clayton Act, the Sherman Act, and the FTC Act to bring them in line with the digital economy’s current situation.

The companies themselves disagreed with the report’s findings. For example, Google said that free Google products like search, maps, and Gmail had helped millions of Americans. “We have invested billions of dollars in product research and development and are constantly improving it. We compete in a dynamic and highly complex industry. We disagree with the report’s conclusions based on outdated information or incorrect accusations from our competitors. ”

And in a statement, Amazon said: “Basically, there are suggestions that the government should tell sellers in which stores they should sell their goods and consumers – in which stores they should buy. But if you do this, it will become a destructive and destructive factor for some and others. ”

 

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