An antitrust panel report, backed by Democratic lawmakers, has triggered speculations around possible break up of biggest tech companies of the United States to end their monopoly. The House Judiciary Committee’s Antitrust Subcommittee released the findings of over 16-month long investigation into the state of competition in the digital economy.
The 449-page report outlined the challenges presented due to the monopoly of Amazon, Apple, Google, and Facebook. The report found that Big Techs exploit their power to dictate terms and extract concessions that “no one would reasonably consent to” in a competitive market. In some cases, a dominant firm acquired nascent or potential competitors to neutralize a competitive threat or to maintain and expand the firm’s dominance.
Another dominant firm acquired smaller companies to shut them down or discontinue underlying products entirely, an act described by the antitrust panel as “killer acquisitions.” The panel observed that such monopoly has diminished consumer choice, eroded innovation and entrepreneurship in the US economy, weakened the vibrancy of the free and diverse press and even undermined Americans’ privacy.
During presidential primaries, several Democratic candidates had demanded the break-up of big tech firms as the antitrust panel continued its investigation. Massachusetts Senator Elizabeth Warren even promised to make “big, structural changes” to the tech sector to “promote more competition” - including breaking up Amazon, Facebook, and Google.
“About 49 per cent of all sales online happen in one place - that's Amazon. It collects information from every little business, and then Amazon does something else,” said Warren during a primary debate in December 2019.
“It runs the platform, gets all the information, and then goes into competition with those little businesses,” she added.
After the report was released, Judiciary Committee Chairman Jerrold Nadler and Antitrust Subcommittee Chairman David N. Cicilline said in a joint statement that the four Big Techs have expanded and exploited their power of the marketplace in anticompetitive ways. The recommendations include structural separations to prohibit platforms from operating in lines of business that depend on or interoperate with the platform and prohibiting platforms from engaging in self-preferencing.