US Investigation: Amazon, Apple, Facebook and Google abused monopoly positions

Amazon, Apple, Facebook and Google have a monopoly and abused their dominant position, a committee of the United States House of Representatives concluded after investigation. One of the recommendations is to break up the companies, as the four tech companies have become the kind of monopolies of the days of the oil barons and rail tycoons, the competition committee said. The tech companies have abused their position to impose prices and set the rules in the e-commerce, search, advertising, social networking and publishing markets. The New York Times and CNBC, among others, publish the findings, with the latter publishing the 449-page report, advising Democrats in the committee to enforce divestments and prevent unwanted expansion of dominant platforms. They also want to reverse the burden of proof in acquisitions, so that companies themselves must make it clear that the acquisition does not harm competition, instead of a competition authority having to do so. This should prevent so-called killer acquisitions, whereby an emerging company is taken over to prevent it from becoming too successful and a threat to a dominant platform.

The charges against Facebook, Apple, Google and Amazon

In defusing competition through acquisitions, the committee refers to Facebook and Instagram. An internal memo would indicate that Instagram was also not allowed to compete with Facebook as a subsidiary after the takeover. Facebook has a monopoly position in online advertising and social networking, according to the research. Amazon is accused in the document of abuse of market power by suppliers and third parties who sell through its platform. Amazon calls these sellers partners, but would view them internally as competitors. Amazon now accounts for 40 to 50 percent of online sales in the US As far as Apple is concerned, the document mentions its market position with the App Store and its operating systems. Apple would use it to create barriers to competition, fend off rivals, impose high prices on app developers, and prioritize its own offerings. According to the claims, Google has a monopoly in online search and the market for advertisements around search. By combining the user data from multiple services, Google is able to strengthen its dominant position and the enforcement of the installation of Google apps on Android also hurts competition, according to the report. Republicans in the committee do not or partly participate in the recommendations. For example, the advice for split-ups goes too far for most of them, but a few support the advice to strengthen the position of competition authorities.

Rebuttal from the tech companies

The tech companies are speaking out against the findings. Google points out that its services help millions of US users and that billions of dollars have been invested in improving the services. Amazon writes that the proposed rules harm small businesses and consumers. According to Amazon, there is a lot of competition in the retail market and Walmart’s revenue is double its own. Apple strongly rejects the conclusions, saying that the App Store is actually enabling new markets, services and products, where developers can reap the benefits. Facebook claims to compete with services that have billions of users and the company calls acquisitions part of every industry and just one way to “innovate and bring more value to people.”