Democrats call for Congress to rein in and break up Big Tech

Wed, 07 Oct, 2020 - 00:35

Marcy Gordon, Associated Press

US Democrats are calling for Congress to rein in several Big Tech companies, possibly forcing Facebook, Google, Amazon and Apple to break up their businesses.

The steps would also make it harder for such firms to acquire others and impose 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 break-ups 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.

Facebook is among the Big Tech firms in the sights of Democrats (Dominic Lipinski/PA)

The 450-page report offers politicians 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 company break-ups 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 US 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 had abused their market power by charging excessive fees, imposing tough contract terms and extracting valuable data from individuals and businesses that relied on them.

By controlling access to markets, these giants can pick winners and losers throughout our economy
House Judiciary Committee reports

“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.

It also asks Congress to boost the enforcement powers of anti-trust regulators, such as the Federal Trade Commission, and to increase the budgets of the FTC and the Justice Department’s anti-trust division.

Although the Judiciary anti-trust sub-committee’s investigation was bipartisan, Republican politicians on the panel did not sign on to most of the recommendations.

Republicans issued their own report on Tuesday titled “A Third Way to Take on Big Tech”.

Google has defended itself against anti-trust allegations (Yui Mok/PA)

Authored by House of Representatives member Ken Buck of Colorado, it called for “targeted” enforcement of existing anti-trust laws rather than “onerous and burdensome regulation that kills industry innovation”.

Google took issue with both reports, saying they contained “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 anti-trust 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 US 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”.