Democrats Call for Congress to Rein In, Break Up Big Tech

October 7, 2020by Marcy Gordon, AP Business Writer
Democrats Call for Congress to Rein In, Break Up Big Tech
This file combination of 2019-2020 photos shows Amazon CEO Jeff Bezos, Apple CEO Tim Cook, Google CEO Sundar Pichai and Facebook CEO Mark Zuckerberg. (AP Photo/Pablo Martinez Monsivais, Evan Vucci, Jeff Chiu, Jens Meyer, File)

WASHINGTON (AP) — Democratic lawmakers are calling for Congress to rein in Big Tech, possibly forcing Facebook, Google, Amazon and Apple to break up their businesses, while making it harder for them to acquire others and imposing new rules to safeguard competition.

The proposals in a report issued Tuesday follow a 15-month investigation by a House Judiciary Committee panel into the companies’ market dominance.

Those kinds of forced breakups through a legislative overhaul would be a radical step for Congress to take toward a powerful industry. The tech giants for decades have enjoyed light-touch regulation and star status in Washington, but have come under intensifying scrutiny and derision over issues of competition, consumer privacy and hate speech.

The 450-page report offers Congress a possible roadmap for action, potentially with a new balance of political power in Congress and a new president next year. Democratic presidential contender Joe Biden has said that company breakups should be considered. If such steps were mandated, they could bring the biggest changes to the tech industry since the federal government’s landmark case against Microsoft almost 20 years ago.

The investigation found, for example, that Google has monopoly power in the market for search, while Facebook has monopoly power in the social networking market. The report said Amazon and Apple have “significant and durable market power” in the U.S. online retail market, and in mobile operating systems and mobile app stores, respectively.

Some critics of the companies have singled out Facebook’s Instagram and WhatsApp services and Google’s YouTube and Android cellphone operating system as among the businesses that should be considered for divestiture.

The report said the four companies have abused their market power by charging excessive fees, imposing tough contract terms and extracting valuable data from individuals and businesses that rely on them.

“Each platform now serves as a gatekeeper over a key channel of distribution,” the report says. “By controlling access to markets, these giants can pick winners and losers throughout our economy.”

In addition to proposing separations of some dominant tech platforms from the companies’ other businesses, the report also calls for the platforms to be required to offer equal terms for equal products and services for all users. It proposes laws be changed to impose a higher bar for approving future tech industry mergers and acquisitions.

And it asks Congress to boost the enforcement powers of antitrust regulators, such as the Federal Trade Commission, and to increase the budgets of the FTC and the Justice Department’s antitrust division.

Although the Judiciary antitrust subcommittee’s investigation was bipartisan, Republican lawmakers on the panel didn’t sign on to most of the recommendations.

Republicans issued their own report Tuesday titled “A Third Way to Take on Big Tech.” Authored by Rep. Ken Buck of Colorado, it called for “targeted” enforcement of existing antitrust laws rather than “onerous and burdensome regulation that kills industry innovation.”

Google took issue with both reports, saying they contain “outdated and inaccurate allegations from commercial rivals” about Google’s search engine and other services.

“Americans simply don’t want Congress to break Google’s products or harm the free services they use every day,” the company said in a statement. “The goal of antitrust law is to protect consumers, not help commercial rivals. Many of the proposals bandied about … would cause real harm to consumers, America’s technology leadership and the U.S. economy — all for no clear gain.”

Facebook said acquisitions “are part of every industry, and just one way we innovate new technologies to deliver more value to people.”

“Instagram and WhatsApp have reached new heights of success because Facebook has invested billions in those businesses,” the company’s statement said. “A strongly competitive landscape existed at the time of both acquisitions and exists today. Regulators thoroughly reviewed each deal and rightly did not see any reason to stop them at the time.”

In a blog post Tuesday, Amazon warned that “fringe notions on antitrust would destroy small businesses and hurt consumers,” without mentioning by name the report or the House antitrust subcommittee. It decried “misguided interventions in the free market.”

Spokespeople for Apple didn’t immediately return a request for comment.

In its investigation over the past 15 months, the antitrust panel heard testimony from mid-level executives of the four companies as well as from competitors and legal experts. It held a highly charged hearing in July to question the CEOs of the Silicon Valley behemoths. Its staff pored over more than a million internal documents from the companies.

The effort aimed to answer a key question: whether existing competition policies and century-old antitrust laws are adequate for overseeing the tech giants, or if new legislation and enforcement powers for regulators are needed.

Both Republicans and Democrats have accelerated their criticism of Big Tech in recent months, though sometimes for different reasons. The Trump Justice Department is moving toward antitrust action against Google, focusing on the company’s dominance in online search and whether it is used to stifle competition and hurt consumers. A bipartisan coalition of 50 U.S. states and territories, led by Texas Attorney General Ken Paxton, also has been investigating Google’s business practices. They have cited “potential monopolistic behavior.”

Google has argued that although its businesses are large, they are useful and beneficial to consumers. It maintains that its services face ample competition and have unleashed innovations that help people manage their lives. Most of its services are offered for free in exchange for personal information that helps Google sell ads.

Facebook, Amazon and Apple also have been targets of sweeping antitrust investigations by the Justice Department and the Federal Trade Commission.

A+
a-
  • Amazon
  • Apple
  • Big Tech
  • Congress
  • Facebook
  • Google
  • House Judiciary Committee
  • In The News

    Health

    Voting

    Technology

    March 28, 2024
    by Dan McCue
    Vice President Harris Rolls Out First Government-Wide Policy to Mitigate AI Risks

    WASHINGTON — Vice President Kamala Harris on Wednesday rolled out the Biden administration’s first government-wide policy intended to mitigate the... Read More

    WASHINGTON — Vice President Kamala Harris on Wednesday rolled out the Biden administration’s first government-wide policy intended to mitigate the risks associated with artificial intelligence while still enabling its use to advance the public interest. The new policy, which is being issued through the White House... Read More

    March 21, 2024
    by Tom Ramstack
    Lawmakers Say US Semiconductors Sometimes Used by Foreign Adversaries

    WASHINGTON — A congressional panel juggled competing interests Thursday of trying to lead the world in industrial development without having... Read More

    WASHINGTON — A congressional panel juggled competing interests Thursday of trying to lead the world in industrial development without having the new technologies fall into the hands of foreign militaries that might want to harm the United States. More than anything, lawmakers want more and better... Read More

    March 21, 2024
    by Dan McCue
    DOJ, 16 States Sue Apple Over Alleged Smartphone Monopoly

    WASHINGTON — The Justice Department and 16 state attorneys general sued Apple on Thursday accusing the Cupertino, California-based tech giant... Read More

    WASHINGTON — The Justice Department and 16 state attorneys general sued Apple on Thursday accusing the Cupertino, California-based tech giant of operating an illegal monopoly in the smartphone market. According to the lawsuit, which was filed in federal court in New Jersey, Apple has used the... Read More

    House Passes Bill That Would Lead to TikTok Ban if Chinese Owner Doesn't Sell. Senate Path Unclear

    WASHINGTON (AP) — The House on Wednesday passed a bill that would lead to a nationwide ban of the popular video app... Read More

    WASHINGTON (AP) — The House on Wednesday passed a bill that would lead to a nationwide ban of the popular video app TikTok if its China-based owner doesn't sell, as lawmakers acted on concerns that the company's current ownership structure is a national security threat. The bill, passed by... Read More

    In New York City, Heat Pumps That Fit in Apartment Windows Promise Big Emissions Cuts

    NEW YORK (AP) — For 27 years, the heat in Regina Fred’s Queens apartment building came from a noisy steam... Read More

    NEW YORK (AP) — For 27 years, the heat in Regina Fred’s Queens apartment building came from a noisy steam radiator that she couldn't control and sometimes didn't come on at all, leaving her shivering. Sometimes, the radiators ran so hot that residents had to keep... Read More

    March 7, 2024
    by Tom Ramstack
    Congress Warned US Competition for Biotechnology Creates Promises and Perils

    WASHINGTON — New scientific discoveries mean the future is bright for biotechnology but laced with many dangers in the competition... Read More

    WASHINGTON — New scientific discoveries mean the future is bright for biotechnology but laced with many dangers in the competition with China, according to expert witnesses at a congressional hearing Wednesday. China’s military dominance of its industries means its biotechnology could be used to find weaknesses... Read More

    News From The Well
    scroll top