Google, Amazon, Facebook, and other tech giants are increasingly coming under antitrust scrutiny, with high-profile sentences in the EU, cries for alternative app distribution platforms in India, and today's Google vs. Oracle Supreme Court hearing in the U.S. In the latest turn of events, the House Judiciary Committee has released a report on its investigation of competition in digital markets. Following the public hearing in July, it concludes that big companies are using their dominance to stifle the competition and proposes changes to antitrust laws. Naturally, Google isn't happy about these ideas.
Companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons.
The report says that current antitrust agencies and regulations have failed when it comes to Amazon, Apple, Facebook, and Google, comparing them to "oil barons and railroad tycoons" of old. The companies are described as gatekeepers wielding tremendous power, "charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data" from businesses and people relying on them. Their position as gatekeepers allows them to maintain their market power by controlling the infrastructure, having "ultimately bought out, copied, or cut off their competitive threats."
The lawmakers propose several changes that would adjust antitrust laws to focus more on competition rather than on consumer protection only, which would be the biggest change in more than 40 years. Congress should pass commercial nondiscrimination rules, forcing dominant companies to offer equal terms to other businesses selling services or products on their marketplaces. These influential companies should also be barred from competing in "adjacent lines of business." The nondiscrimination rules could end up regulating big tech like telephone companies. The new rules would also make it harder for dominating businesses to acquire other firms — they'd first have to argue that the purchase would benefit customers.
The report reads,
To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons. Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price. These firms typically run the marketplace while also competing in it—a position that enables them to write one set of rules for others, while they play by another, or to engage in a form of their own private quasi regulation that is unaccountable to anyone but themselves.
Americans simply don’t want Congress to break Google’s products or harm the free services they use every day. The goal of antitrust law is to protect consumers, not help commercial rivals.
Google disagrees. In a statement, the company highlights that "millions of Americans" benefit from its free products, and that the American people "simply don't want" Congress to break up or harm these services. It emphasizes that it views antitrust laws as a means to protect consumers, arguing that a break-up would ultimately harm them. The company doesn't address the fact that it's competing in a few marketplaces that it runs itself, including the Play Store.
Google’s free products like Search, Maps and Gmail help millions of Americans and we’ve invested billions of dollars in research and development to build and improve them. We compete fairly in a fast-moving and highly competitive industry. We disagree with today’s reports, which feature outdated and inaccurate allegations from commercial rivals about Search and other services.
Americans simply don’t want Congress to break Google’s products or harm the free services they use every day. The goal of antitrust law is to protect consumers, not help commercial rivals. Many of the proposals bandied about in today’s reports—whether breaking up companies or undercutting Section 230—would cause real harm to consumers, America’s technology leadership and the U.S. economy—all for no clear gain.
We support Congress focusing on areas where clearer laws would help consumers, a few of which are mentioned in today’s reports: Google has long championed the importance of data portability and open mobile platforms; we are arguing a case before the Supreme Court tomorrow for the important principle of software interoperability; and we have urged Congress to pass comprehensive federal privacy legislation. We look forward to engaging with Congress on these and other issues moving forward.
You can read about our approach to competition at g.co/competition.
The situation is certainly complicated. Google is only able to offer so many services free of charge thanks to the vast amount of data it collects and uses to display tailor-made ads. If it really came to a break-up of the company, many services we take for granted these days couldn't exist anymore. But a shake-up like this could also bring a plethora of new, perhaps better and fairer services into consumers' hands. Either way, Congress has yet to pass any laws, and the report is nothing but a collection of recommendations right now, so we can only wait and see if any of them are implemented.