The House Judiciary Committee has released its conclusions on whether Amazon, Facebook, Apple, and Google are violating antitrust law. Its 449-page report criticizes these companies for buying competitors, preferencing their own services, and holding outsized power over smaller businesses that use their platforms. “Our investigation revealed an alarming pattern of business practices that degrade competition and stifle innovation,” said committee member Val Demings (D-FL). “Competition must reward the best idea, not the biggest corporate account. We will take steps necessary to hold rulebreakers accountable.”
The report is scathing when it comes to the major technology companies and their clear pattern of anti-competitive behaviour and antritrust abuse.
Although these four corporations differ in important ways, studying their business practices has revealed common problems. First, each platform now serves as a gatekeeper over a key channel of distribution. By controlling access to markets, these giants can pick winners and losers throughout our economy. They not only wield tremendous power, but they also abuse it by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people and businesses that rely on them. Second, each platform uses its gatekeeper position to maintain its market power. By controlling the infrastructure of the digital age, they have surveilled other businesses to identify potential rivals, and have ultimately bought out, copied, or cut off their competitive threats. And, finally, these firms have abused their role as intermediaries to further entrench and expand their dominance. Whether through self-preferencing, predatory pricing, or exclusionary conduct, the dominant platforms have exploited their power in order to become even more dominant.
Apple, Google, Amazong, and Facebook are likened to oil barons and railroad tycoons from the American 19th century, and advises to break them up into separate entities. Countless other safeguards and measures are suggested, too, all to create and maintain a level playing field in the technology industry and sectors adjacent to it.
While I have my doubts US Congress possesses the intellectual honesty and, quite frankly, grip on reality required to do anything with this report, they seem like much-needed recommendations that should’ve been implemented yesterday.
Is the monopoly assessment based on the dominance of the technology/company or is it based on the the control the company exudes? That’s the most important distinction here but it hasn’t been declared.
For example….
Amazon is by far the dominant online retailer.
Facebook is by far the dominant social media platform
Google is by far the dominant search engine.
The only one that doesn’t fit the mould is Apple who dominates only two industries that it competes within… tablets and smart watches… two industries which happen to also have healthy competition but the issue at hand is about neither of these products.
Perhaps the monopoly conclusion is referring to control of the platform. By that standard all these companies exert control over their platform in various ways, each according to their business model.
But if that’s the standard perhaps they should lump in Sony, Nintendo, Microsoft, Ford, BMW and a slew of other technology companies and auto manufacturers who are “guilty” of a monopoly on distribution of software apps on their consoles devices and vehicles etc.
The former classification is one that is relatively easy to push from a legal perspective (albeit sans Apple for the aforementioned reason).
The latter however opens up a Pandoras box of legal qualifiers that every business would be guilty of by dint of simply being the exclusive provider of its service or product under its brand name. Anyone who argues that it’s different with software is making the flawed argument for artificial legal constructs for different business models.
haus,
Nice try but regardless of your distinction, as a US phone manufacturer apple checks of both of your boxes anyways. Not only is apple the dominant phone manufacturer in the US, but they exert a tremendous amount of control and pressure on developers.
https://www.counterpointresearch.com/us-market-smartphone-share/
While I have have absolutely no faith in the government to balance the tables given the decade plus of inaction…lobbying can and probably will make this all go away for these trillion dollar companies, it’s at least encouraging that the house judiciary committee explicitly recognizes how bad it’s become. Thom is right too, such extreme consolidation of power and control is reminiscent of the robber-barons where they controlled way too much of the market and did not produce healthy competition.
Not for nothing, but you did not answer me last time I asked you if you had any financial ties to apple. Do you? I’ve pressed you pretty hard on it in the past and you were unable to think of a single fault with apple. Obviously apple’s made some mistakes, tell me one of them. No real company has a 100% positive track record. Prove to me you are not an apple shill by mentioning something negative about apple.
For example telephone, cable & train companies are all forced in large parts of the world to allow competitors to use their infrastructure. Which is why the analogy of railroad tycoons fits so well.
Your link shows that Apple has under 50% of the US market share while Android phones have greater than 50% in aggregate.
They are the largest single vendor but not dominant.
And the “prove to me you are not an apple shill by mentioning something negative about apple“ thing is juvenile.
mkone
The link shows apple has 46% market share, which is less than 50%, but still dominant and certainly enough to prosecute under antitrust law. If you look at app sales, IOS again leads. There’s no legal reason to break it down by operating system, but even if you do it doesn’t automatically save apple from antitrust prosecution, I don’t know where people get the idea that it does. Apple and google are both in dominant positions that form a duopoly, which can run afoul of antitrust if they exploit their dominance to gain unfair market advantages. Consider that both visa and mastercard faced antitrust action over abusing their positions to charge unfair fees to merchants. It didn’t matter that one was less than 50%, they were both guilty.
https://money.cnn.com/2018/09/18/news/companies/visa-mastercard-lawsuit-settlement/index.html
It wouldn’t make sense for Google to sue Apple over antitrust abuses, but it would make sense for a smaller victim like Epic to sue both Google and Apple over antitrust abuses. We’ll see where this takes us, but IMHO Epic’s case has legal merit, and possibly more merit against apple because IOS anti-competitive restrictions are forced on users and developers with apple banning alternatives outright.
My guess is what they are talking about is: Apple is a gatekeeper of the Apple Appstore which has a large marketshare in the US.
The good news is that the answer is in the report.
This is from the Executive Summary (page 10, section I.B.2.e “Findings”). It goes on, for anyone wanting the gruesome details.
>”Apple has significant and durable market power in the mobile operating system market. Apple’s dominance in this market, where it controls the iOS mobile operating system that runs on Apple mobile devices, has enabled it to control all software distribution to iOS devices.”
The problem with this legal philosophy is that it opens up a Pandoras box of legal qualifiers that every business would be guilty of by dint of simply being the exclusive provider of its service or product under its brand name. For example, osnews (for example) is the the exclusive provider of content it distributes under its brand.
That control osnews exudes is what separates it from other news sources. In the same way that it would be absurd to require that competitors with a different agenda dictate the content that shows here… so too is it absurd that Apple open up its platform to remove the main point of differentiation to that of its competitors.
haus,
You’ve repeated this exact same logic before and it didn’t make any sense then either. It completely (and I suspect deliberately) misses the point, Apple has tons of discretion over what it can carry in it’s store, the bigger problem is that apple is prohibiting owners from going to other stores. Your example is ridiculous when taken seriously, but if you insist on using it, then at least get your logic right: Osnews would have to have the means and determination to block users from going to other news sites and forcing them to use osnews. Obviously osnews doesn’t control our devices but hypothetically if they did then (and only then) would they deserve to be criticized for the same anti-competitive abuse as apple.
BTW you still haven’t answered my questions about ties to apple. It really seems like you are astroturfing.
Kids call this argument whataboutism now. It’s mostly just false equivalents. Does Ford control every car dealership in the U.S? Does Sony/Nintendo/Microsoft block each other’s games from running on their platform like Apple blocks anything that looks like competition on their platform (e.g. steamlink)? No, and no again. The device is not the competition, the app store duopoly with no competition is the problem, and now a 500 page report confirms your argument is nonsense. This will also be great kindling for the Epic v. Apple court case.
Calling those 4 companies “monopolies” is political grandstanding and theater, and it’s ridiculous. I am not forced to use any one of their goods or services, nor am I forced to pay for said service due to lack of competition. Vendor-lock in is NOT a monopoly. Not when there is direct competition to all the product or services delivered from the corporations below…..hence no monopoly. So, sorry Europeans, just because you don’t like an American company, you don’t get to claim “monopoly”.
What this IS about is the quest to control narratives, and punishment in US for those who do not cater and pay deference to our Dear Leader and his corrupt supporters and political party. Take special note of who the heads of some of these companies are and who they align with politically. This “lawsuit” or whatever this is, will go nowhere. Once our Lord and King Trump is out of office, this investigation will be quickly dismissed.
Phlopticals,
They’re not accused of being “monopolies”, they’re accused of anti-competitive behavior.
There seems to be alot of confusion of what antitrust is for. Antitrust does not outlaw being a monopoly. Companies are allowed to be monopolies. What’s prohibited is when they employ anticompetitive business models and bully their competitors into unfair arrangements. It doesn’t have to be monopolies, antitrust can apply to oligopolies too. I think one would have to turn a blind eye to not see the competition situation becoming increasingly dire over the years. Having two dominant players in mobile is not healthy competition. And it’s trivial to say “go elsewhere”, but in reality that’s not always viable because we’ve become so dependent on google’s and apple’s bundled proprietary services. Just this past month I was literally forced to get an official android or IOS phone to login for work, whereas my personal “choice” was to to use alternatives to avoid their proprietary services. It highlights exactly how non-viable competition and free choice have become. And it’s not just my employment, it’s my bank, schools, etc. The combined market power of IOS and android is so strong that many of us literally have no choice at all. And while you can argue it’s not google or apple’s fault the industry has circled the wagons around only them, a big part of that problem is that the services we depend on are vendor locked forcing us to buy & use one of the two duopoly platforms, which kills off the viability of 3rd party alternatives.
I’ve criticized these corporations long before the current administration took control of the whitehouse and will continue to criticize them long after. Free market competition is dying, to what end would you allow top multinational corporations to continue strangling the markets? If we sit back and do nothing, we don’t need a crystal ball to know where that will get us, we’ve been there already in the robber-barron era. Do you want a repeat of that?