US Congress Mulls Breaking Up the Big Tech Companies (Google, Facebook, Amazon, Apple)

US Congress Mulls Breaking Up the Big Tech Companies (Google, Facebook, Amazon, Apple)

In July, the US’ tech “big four”, Google, Facebook, Amazon and Apple were grilled by the Congress Committee in one of the biggest antitrust inquiries in the United States, which started 16 months ago. The inquiry was prompted by allegations of monopolistic practices against the “big four”, which is on the verge of totally eliminating competition.

The CEOs of the Silicon Valley giants, Mark Zuckerberg, Sundar Pichai, Jeff Bezos and Tim Cook drew lines of defense for their practices by excusing what the Committee pointed out as obvious actions to muzzle competition, including buying other companies with competitive potentials.

“Their answers were often evasive and non-responsive, raising fresh questions about whether they believe they are beyond the reach of democratic oversight,” said Rep. Jerrold Nadler, who leads the House Judiciary Subcommittee on antitrust.

Registration for Tekedia Mini-MBA edition 9 (Sep 12 – Dec 3 2022) is ongoingRegister here. Cost is N60,000 or $140 for the 12-week program. Beat early bird for free books and other bonuses. 

“Although these four corporations differ in important ways, studying their business practices has revealed common problems. All are gatekeepers over key distribution channels; all use their gatekeeper position to maintain market power, and all have abused their role as intermediaries to further entrench and expand dominance,” he added.

Founders of Facebook and Amazon

The case of Facebook buying WhatsApp and Instagram was a typical example of bullying to dominate the market. And for the others, they play gods in their respective fields that no other company measures up to their scale.

Facebook controls the social media realm with Instagram and WhatsApp. Apple and Google control mobile app markets. Google rules supreme in online search while Facebook and Google dominate online advertisement. Amazon’s online shopping platform controls 75% of online sales.

These records confirm the fears of those concerned about the powers the tech companies are wielding, and lends credence to the call of Democratic Senator, Elizabeth Warren to break up the big tech companies.

In August, antitrust experts weighing in on the matter said the US regulators are already late in curtailing the powers of the tech giants. The more time they are allowed, the more power they acquire. And three among them have similar patterns of crippling rivals.

“Three of the companies [Amazon, Facebook, and Google] basically have the same set of accusations against them, which is that competitors come on your platform, you take their information, you preference your own results, compete against them, drive them out of business, or buy them cheap,” Gary Reback who convinced the US Department of Justice to file antitrust suit against Microsoft in the 1990s told Venture Beat.

Reback said the solution lies on two lines of action – antitrust enforcement on these companies or a new legislation that will enforce a single line of business.

“If we can’t get antitrust enforcement on [these companies]… we need legislation like the type Elizabeth Warren is suggesting, where if you own the platform then you can’t own anything on it. That would be a big change, but if there’s no way to police the [current] situation so that competitors get a fair shot and you don’t run everybody else out of business by using their data against them, if there’s no way to police that, then you don’t have any alternative but new legislation,” he added.

Following the surging anti-competition and antitrust complaints leveled against the big four, corroborated by leaked internal discussions within the companies that reveal oppressive business intents, the Subcommittee, which has just concluded its inquiry, thinks It’s time to break up the big tech.

The Subcommittee is expected to publish its report this week and there has been unusual support from Republicans, backing the call for a breakup of the big tech firms, to make it harder for them to buy smaller rivals.

Democrats have been leading the charge to disintegrate the giants, now draft from the Committee published earlier by Politico, which Reuters got Ken Buck, a Republican Representative to confirm its authenticity, shows that Republicans are backing the call and may likely take a step further to make it real.

Buck said he agreed with the Democrats in many fronts, particularly on the power the big tech firms wield, with their Penchant for “killer acquisitions” to eliminate rivals and self-preferencing in guiding customers to their other products. But he also said he disagrees with the majority’s approach; for instance, the plan that requires the firms to delineate a clear “single line of business”.

Each one of the big firms has subsidiaries that have become integral part of them. delineating a single line of business will be a difficult decision to reach by lawmakers.

“The proposal is a thinly veiled call to break up Big Tech firms. We do not agree with the majority’s approach… the report offers a chilling look into how Apple, Amazon, Google and Facebook have used their power to control how we see and understand the world,” Buck said.

It is not clear how many Republicans are on board the breakup idea recommended by the report, what is clear is that the US Congress is closer to the idea now more than ever before.

Share this post

Post Comment