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https://www.vox.com/recode/2020/10/6/21505027/congress-big-tech-antitrust- report-facebook-google-amazon-apple-mark-zuckerberg-jeff-bezos-tim-cook

A long-awaited report from top Democratic congressional lawmakers about
the dominance of the four biggest tech giants had a clear message on
Tuesday: Amazon, Apple, Facebook, and Google engage in a range of anti- competitive behavior, and US antitrust laws need an overhaul to allow for
more competition in the US internet economy.

“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,” the report’s
introduction states.

The 400-plus page report, written by the majority staff of the Democratic members of the House Judiciary Subcommittee on Antitrust, is the result of
a 16-month investigation into whether these corporate giants abuse their
power, and whether the country’s antitrust laws need to be reworked to
rein them in. The report released Tuesday cites numerous examples of each
tech titan engaging in acts that the lawmakers believe have hurt
innovation and impede competition. While the anti-competitive behaviors
cited vary from company to company, they are all linked by the allegation
that the four giants abuse their gatekeeper status in various internet industries to secure and grow their market power in those sectors and
others.

So what’s the solution? The report recommends creating new laws that would potentially break up tech companies and make it harder for them to pursue acquisitions; it also calls for clarifying existing antitrust laws with
the goal of making them easier to enforce, particularly for tech
companies. For now, the report’s recommendations are only high-level
guidance to Congress for potential future legislation; it won’t lead to immediate action against these companies.

The release of the report was complicated on Tuesday by news that the Republican lawmakers in the House Antitrust Committee refused at the last minute to sign the report with their Democratic colleagues. Instead, Rep.
Ken Buck (R-CO) and Jim Jordan (R-OH) each plan to release their own
reports. Buck’s report, a draft of which Politico published on Monday,
largely agrees with the Democrats’ conclusion that the big four tech firms
have amassed too much power. But he disagrees with Democrats on how to fix
the problem: Instead of creating new laws, Buck’s memo calls on Congress
to fund and empower regulatory agencies and government departments like
the Federal Trade Commission (FTC) and Department of Justice (DOJ) to go
after Big Tech under existing laws. Jordan’s report hasn’t yet been
released, but Reuters coverage indicates it will focus on so-far unproven claims of tech companies’ supposed anti-conservative bias, which he has
shouted over his colleagues about in previous hearings.

These partisan divides are somewhat besides the point: Regardless of the specifics of how they advise to go after Big Tech, the fact that
Republicans and Democrats agree that these companies pose a threat to the
free market is significant.

“This is the first time since the 1970s that a congressional committee has devoted this kind of attention to dominant firms … and changing the
structure of a major American industry,” said William Kovacic, the
Republican former chairman of the FTC.

Here’s a breakdown of some of the key claims the report makes about each
of the four major tech giants:

Amazon
With Amazon accounting for nearly 40 percent of all e-commerce sales in
the US — making it more than seven times larger in this arena than No. 2 Walmart — the Democrats’ report argues that the tech giant has used its powerful position in anti-competitive ways. (The report also alleges that Amazon’s US e-commerce market share is closer to 50 percent or more in the country, rather than the near-40 percent figure commonly cited based on estimates from the research firm eMarketer). The report argues that the
company unfairly gleans data and information from its third-party sellers
that it uses to strengthen the retail side of its business, including
favoring its own product brands over those of competitors, giving this merchandise exclusive merchandising space on its virtual shelves, and prioritizing it in search results.

Another criticism is that Amazon can charge sellers ever-increasing fees because of its dominant position, and that most sellers and brands have practically no negotiating power due to their reliance on the Amazon sales channel. Amazon also penalizes sellers for selling their merchandise for
lower prices on other retail sites.

Amazon released a company blog post in response to Tuesday’s report,
calling it “flawed thinking” that Amazon is engaging in anti-competitive business practices, and that antitrust regulatory action “would have the primary effect of forcing millions of independent retailers out of online stores.”

“All large organizations attract the attention of regulators, and we
welcome that scrutiny. But large companies are not dominant by definition,
and the presumption that success can only be the result of anti-
competitive behavior is simply wrong,” reads the post.

Facebook
Tuesday’s report argues that Facebook has expanded its monopolistic power
in the social media industry by using a “copy, acquire, kill” strategy
against its competitors, and by unfairly hurting rival companies like
Instagram (which the company purchased in 2012).

Specifically, the report argues that Facebook’s acquisition of Instagram
was a blatant attempt to “neutralize a nascent competitive threat.” The
report alleges that after Facebook bought Instagram, it intentionally
stymied the photo-sharing app’s success so that it wouldn’t compete with Facebook internally.

The report cites a slew of internal emails, memos, and testimony from senior-level Facebook employees, including CEO Mark Zuckerberg, which
support the argument that Facebook crushed Instagram by exerting monopoly power.

In one email, Zuckerberg told Facebook’s former CTO that “ that he had
“been thinking about ... how much [Facebook] should be willing to pay to acquire mobile app companies like Instagram ... that are building networks
that are competitive with our own.” The report argues this proves that Zuckerberg had anti-competitive interests from the beginning.

The report also cites a former senior-level Instagram employee who told Congress that Zuckerberg oversaw “brutal infighting between Instagram and Facebook” after the acquisition, with Zuckerberg slowing down Instagram’s natural growth to benefit Facebook proper. The Instagram whistleblower
went so far as to call it “collusion, but within an internal monopoly. …
It’s unclear to me why this should not be illegal.”

As part of their investigation, the subcommittee found an internal
Facebook document called “The Cunningham Memo,” written in 2018 by Thomas Cunningham, a senior data scientist and economist at Facebook, which
allegedly shows that Facebook has knowingly “tipped” its company toward becoming a monopoly, acknowledging that social media apps have tipping
points where “either everyone uses them, or no-one uses them,” according
to the memo. This memo was a key part of Zuckerberg’s acquisition strategy ahead of the Instagram purchase, according to internal documents and an interview the subcommittee conducted with a former Facebook employee
involved with the project.

In a statement to Recode on Tuesday, Christopher Sgro, a spokesperson for Facebook, disagreed with the report’s conclusions. “Facebook is an
American success story. We compete with a wide variety of services with millions, even billions, of people using them. 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. 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,” Sgro wrote.

Google
The Democrats’ report argues that Google has a monopoly in the online
search and marketing industry, creating an “ecosystem of interlocking monopolies” — which it has maintained through anti-competitive practices
in two key ways.

The first is by launching an “aggressive campaign to undermine” what the
report calls “vertical search providers” — which are search engines for specific topics, such as Yelp for restaurants, or Expedia for travel. The report says Google uses its dominance to “boost Google’s own inferior”
content over some of these other companies’ content in its search results.

The second major way that Google has demonstrated anti-competitive
behavior, the report argues, is through “a series of anti competitive contracts” that pushed people to rely on Google search when using phones
with the Android operating system (Google purchased Android in 2005).

“Documents show that Google required smartphone manufacturers to pre-
install and give default status to Google’s own apps,” the report states.

Unsurprisingly, Google told Recode it disagreed with Tuesday’s reports,
saying they “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,” read a statement in part from Julie McAlister, a spokesperson for Google.

Apple
According to Tuesday’s report, Apple exerts monopoly power through its oversight of software that’s downloaded on half of all mobile phones in
the US. That’s a direct reference to Apple’s App Store — if you have an
iPhone, you can only use apps that you download from the company’s tightly controlled store. The subcommittee staff investigating Apple say in the
report that the company has exploited its dominance to exclude some rivals
from its store, unfairly favor its own apps, and charge fees that some app developers told the subcommittee are “exorbitantly high.”

Such a battle between Apple and developers over in-app fees exploded into public spotlight earlier this year when the maker of Fortnite, Epic Games,
told its users they could buy the game’s virtual currency directly from
Epic rather than through the Apple iOS version of the app. The reason?
Epic wanted to avoid the 30 percent fee Apple charges for such in-app purchases. Dueling lawsuits ensued, and Apple even banned the game from
the App Store. This is just one example of many cases like this that the
report cites.

Apple, of course, refuted the conclusions in Democrats’ report, telling
Recode in a statement, “Our company does not have a dominant market share
in any category where we do business. ... Last year in the United States
alone, the App Store facilitated $138 billion in commerce with over 85% of
that amount accruing solely to third-party developers. Apple’s commission
rates are firmly in the mainstream of those charged by other app stores
and gaming marketplaces.”

So what’s next?
Depending on the results of the November election, Democrats may not need Republicans’ support on antitrust legislation — if Democrats sweep
Congress and win the White House. (The latest polls show Democrats and
Biden currently have an edge, but poll-based predictions are far from
certain.)

If Joe Biden does win the presidency, “this [report] is a roadmap for how
you would tackle this under a President Joe Biden … administration,” a
staff member for a Democratic member of the subcommittee told Recode.

Rep. Pramila Jayapal (D-WA), a member of the subcommittee, told Recode in
an interview on Tuesday, “I do anticipate ... that we will have signed
pieces of legislation pass the House of Representatives next year.” The bipartisan subcommittee will meet later this year to debate and
potentially amend the report.

Tuesday’s congressional reports are just the beginning of upcoming
antitrust regulatory proceedings against Big Tech. The DOJ is imminently expected to file a lawsuit against Google for anti-competitive business practices, which several state attorneys general may sign on to.
Separately, the FTC is also investigating the business practices of the
tech giants over antitrust concerns.



--
No collusion - Special Counsel Robert Swan Mueller III, March 2019.

Donald J. Trump, 304 electoral votes to 227, defeated compulsive liar in
denial Hillary Rodham Clinton on December 19th, 2016. The clown car
parade of the democrat party ran out of gas and got run over by a Trump
truck.

Congratulations President Trump. Thank you for cleaning up the disaster
of the Obama presidency.

Under Barack Obama's leadership, the United States of America became the
The World According To Garp. Obama sold out heterosexuals for Hollywood
queer liberal democrat donors.

President Trump has boosted the economy, reduced illegal immigration,
appointed dozens of judges and created jobs.

Senile loser and NAMBLA supporter Nancy Pelosi got "Trumped" on February
5, 2020. "President Trump, Not Guilty."

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