The investigation into Google, Amazon, Facebook, and Apple, Monopoly power, Competition clash, Hearing on Antitrust, main concerns about the tech giants
We all believe that the free market is awe-inspiring and we are made to feel that the competition is also needed among different countries and companies, but what's not “great” is the censoring people and judiciaries from the changes they are implementing which can impact both social and political aspects. For instance, the presidential elections of Trump. So targeting these behemoth companies into law is important and one of the investigations was taken down by U.S Judiciary System to investigate the Facebook, Google, Amazon and Apple for the “Monopoly Power” on market and breaking the laws which are discussed further.
The inspection followed a 16-month congressional investigation into Google, Amazon, Facebook and Apple.
US tech companies have faced enormous surveillance in Washington over their size and power in recent years. This investigation was held by the House Judiciary Committee of the US. The 449-page report, created by committee staff, accused the companies of charging high fees, forcing smaller customers into unfavorable contracts and of using "killer acquisitions" to totter rivals.
It mentioned that,
“Companies that were startups once, now are challenging the world and became the monopoly we last saw in the era of oil barons and railroad tycoons”
This report was written by Democrats and claims that Big Tech has got so enormous that it now flouts anti-competition rules. This report of The House Judiciary Committee's report named into “Antitrust”
What did the report mention?
- Facebook consists of "monopoly power" in the market for social networking, which it perpetuated by using its data advantage to "acquire, copy or kill" emerging future threats.
- Google monopolized online search and advertising using "a series of anti-competitive tactics", including empowering its own content ahead of other websites.
- Amazon possessed the "anticompetitive conduct in its treatment of third-party sellers" by having the two sided “buyer and seller role” and hampering the policies by stealing the concept of third parties.
- Apple utilized monopoly power via its App store, which it leveraged "to create and enforce barriers to competition and discriminate against and exclude rivals while referencing its own offerings".
Talking about numbers, Facebook accounts for 2.4 billion active monthly users, Amazon comprises nearly 40 percent of all e-commerce spending in America, Google acquired more than 92 percent of global search engine inquiries & Apple became the first company to cross the $1 trillion speck in market capitalization.
July 29, 2020,
Hearing on Antitrust
The four companies’ leaders began raising their right hands and taking the customary oath to deliver truthful testimony.
Four Companies- Google, Amazon, Apple and Facebook, to testify in front of the House Judiciary Subcommittee on Antitrust, the hearing called “Online Platforms and Market Power” in the Rayburn House office Building on Capitol Hill in Washington.
The series of documents were released after the hearing, providing the appalling details like how Facebook CEO Mark Zuckerberg said he wanted to buy Instagram at least a chunk to squash a rising competitive threat, how Amazon CEO Jeff Bezos negotiated a deal with Apple to get Amazon’s Prime Video app on Apple TV. The Amazon-Apple deal was particularly interesting. Tim Cook’s testimony contradicts, when he said Apple treats all apps equally. But in reality, Amazon got special treatment from Apple that other apps didn’t. Today, Apple takes a 30% cut of subscription fees through its platform for the first year and 15% after that.
In hearing, Bezos has a different perspective than the other three. Jeff Bezos said the world "needs large" firms however, the heads of Facebook, Apple and Google argued their companies had impel innovation.
In the 5 hours of testimony, Jeff Bezos claimed that the firms were monopolies and
“Some need to be broken up and all need to be properly regulated”
Facebook's Mark Zuckerberg, Amazon's Jeff Bezos, Sundar Pichai of Google, and Tim Cook of Apple reiterated that they have done nothing illegal and emphasize the American roots and values they follow in their firms.
Democrats expressed agitation that the companies were misusing their power by compressing competitors or buying them out entirely and also accused the lack of patriotism and too much closeness with China.
Jeff Bezos was asked one question:
Does the company use the data it collects from other sellers on the platform for its own benefit?
To which Bezos replied, “Can’t Guarantee that Amazon used the seller data or not?”
"I can't answer that question yes or no," Bezos said. "We have a policy against using seller-specific data to aid our private label business, but I can't guarantee you that that policy has never been violated."
When Amazon observed that a third-party product is selling well on its site and utilized that information to launch its own private-brand alternative, which critics say Amazon promotes over competitors. At that time, Amazon acknowledged that the $1 trillion company can be misusing the data to overpower the independent sellers. Bezos stated that Amazon is conducting surveillance into the matter.
Though, The Wall Street Journal also mentioned that Amazon was digging up data from independent sellers and applying it to create its own competing products for which Amazon executives have denied it.
Importantly, The Amazon access to critical information about consumer habits, sellers' pricing and inventory data can be used feloniously.
Democrats believe we should pay more attention to the actions of Big tech companies due to their hefty amount of investments. In specific, the report claimed that Facebook surges its monopoly by analyzing the competitors in the market which can cause a threat by acquiring them or copying with them, or killing them. For instance, the acquisition of $1 billion Instagram.
Facebook owns the four most downloaded apps of the age:
There is not a place left where Facebook does not exist, in one form or another it will be introduced to the audience. The four most used applications in the world: Facebook, Facebook Messenger, WhatsApp, and Instagram. These are the topmost downloadable apps between 2010 and 2019.
Facebook acquired Instagram in 2012 for $1bn (£760m), and WhatsApp in 2014 for $19bn.
Imagine how much power and control Mark Zuckerberg withholds!
Politics & Technology | Cambridge Analytica Scam questioning the Uncertainty of Technological Companies breaching User Data for Political Gain.
Democrats claimed that the
“One company possessing the four behemoth communication applications can be called the “Data Monopoly”, the combination of data will lead to an extremely high level of precision in modeling our traits and behaviors. This amount of power should be regulated."
The collection of user's personal data allows the tech giants power by targeting advertising at individuals more effectively than others can.
Facebook withstands about half of UK online display advertising revenue, reaching £2bn in 2018.
At the hearing, legislators accused Google of stealing content created by smaller firms, like Yelp, in order to keep users on their own web pages.
Google takes an enormous share of search advertising sales in the UK, accounting for about 90% of the market with revenue of £6bn.
Google created an extensive-ranging monopoly that changed the whole face of technology, now is accused of domination in markets ranging from search to advertising to maps by favoring its own services and squashing third parties. The dominant provider captures around 81% of all general search queries in the U.S. on desktop and 94% on mobile.
"Alphabet-owned company - Google, used its search engine monopoly and control over the Android operating system to grow its share of the web browser market and favor its other lines of business." claimed the democrats
To contradict the statement, Google accused the lawmakers of looking more at helping competitors than consumers.
“Google’s free services 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 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.
The House Judiciary subcommittee disclosed a report that the Apple has “monopoly power” over software distribution on iPhones and this power allows Apple to produce large profits from the App Store and generate large profits from the App Store and extract rents from developers.
Apple comprises 45% of the market of smartphones in the United States. It also noted that Apple’s mobile ecosystem has significant benefits to consumers and app developers.
Apple Stated that.,
“We have always said that scrutiny is reasonable and appropriate but we strongly disagree with the conclusions reached in this staff report with respect to Apple,” Apple said in a statement. “Apple does not comprise dominant market share in any category in business.”
What are the main concerns about the tech giants?
Google and Facebook have become amalgamated into our daily lives: the average person conducts 3 to 4 Google searches and spends 35 minutes on Facebook every day. We may be uneasy now, but most of us willingly sign away our rights to get access to a service. How many times have you blindly accepted online terms and conditions?
The amount of power we have let these companies accumulate over us, our data, and our democracy. For instance, the case of Cambridge Analytica.
The Financial Times reported that the regulator will have new powers which will include imparting a new code of conduct for big tech firms and allowing more data accessibility for consumers.
There is also insufficient transparency about how their platforms work with publishers reporting dramatic drops in traffic after opaque alterations to Google and Facebook algorithms.
Congress doesn't want to break the services and products offered by these giants, the goal of antitrust law is to protect the consumers not swing the commercial rivals.