Oct 6, 2020 - Technology

House Judiciary's tech antitrust report urges sweeping legal changes

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Illustration: Eniola Odetunde/Axios

The House Judiciary Committee on Tuesday laid out Democrats' vision of a U.S. antitrust policy built to rein in Google, Apple, Amazon and Facebook and other giant tech firms.

Why it matters: The long-awaited staff report on antitrust and Big Tech, which sprawls over 450 pages, outlines legislative and enforcement fixes that Democrats could enact should they hold the White House and both houses of Congress after November.

Driving the news: The report finds that Amazon, Facebook, Google and Apple all hold monopoly power of various kinds.

It proposes a variety of updates to antitrust law to help reverse this concentration of power, including:

  • limiting companies' ability to compete unfairly against third parties on their own platforms by either requiring online marketplaces to be independently run businesses or establishing rules for how such marketplaces can be organized;
  • blocking online platforms from giving themselves preferential treatment or playing favorites with other content providers;
  • requiring social networks to be interoperable so that people can communicate across platforms and carry their data over from one platform to another;
  • directing antitrust enforcers to assume that an acquisition by a dominant tech firm is anticompetitive unless proven otherwise; and
  • allowing news publishers to team up to negotiate against tech platforms looking to carry their content.

Between the lines: The report's authors repeatedly and pointedly refer back to the intent, letter and enforcement history of existing antitrust laws, framing the proposals as naturally evolving out of the existing antitrust regime, rather than totally overhauling it.

Yes, but: Republicans declined to endorse the report. Top Judiciary GOP Rep. Jim Jordan offered up his own set of conclusions based on the premise that tech companies are biased against conservatives, while Rep. Ken Buck (R-Colo.) led a minority report that agrees in part with some of the Democrats' findings while identifying other issues and policy prescriptions.

What they're saying: "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," write the authors of the report, led by staffers for Judiciary's antitrust subcommittee, in their introduction.

  • The report notes that the companies withheld certain documents from the committee, citing ongoing antitrust investigations.
  • "Our investigation leaves no doubt that there is a clear and compelling need for Congress and the antitrust enforcement agencies to take action that restores competition, improves innovation, and safeguards our democracy," Judiciary Committee chairman Jerrold Nadler (D-NY) and antitrust subcommittee chairman David Cicilline (D-RI) said.

Where it stands: The report also goes deep on concerns raised by each major tech company's record and practices.

Amazon: The internet retail giant achieved its dominant position in part through acquiring competitors; has a monopoly over and mistreats third-party sellers; and has created a conflict of interest through its double role as an operator of its marketplace and also a seller there.

  • Amazon criticized the report in a blog post: "Large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong."

Apple: The report says Apple exerts monopoly power over software distribution to more than half the mobile devices in the U.S., accusing it of exploiting rivals with commissions and fees and copying apps, and giving preference to its own apps and services.

  • In a statement, Apple said it vehemently disagrees with the committee's conclusions about it and that it does not have a dominant market share in any category it does business in.

Facebook: The social media network has monopoly power in the social networking space, the majority staff write, and has a "copy, acquire, kill" pattern for would-be rivals such as WhatsApp and Instagram, both of which it bought in the early 2010s.

  • Facebook's quality has deteriorated from a lack of competition, the report says, and user privacy and information dependability have suffered as a result.
  • A Facebook company spokesman said acquisitions are part of every industry and that WhatsApp and Instagram would not have been as successful as they are now without Facebook.

Google: The search engine has a monopoly in the general online search and search advertising markets, according to the report, maintaining its position through anticompetitive tactics such as undermining vertical search providers and acquiring rivals.

  • Google's troves of user data further reinforce its dominance across markets, the report says.
  • "We disagree with today’s reports, which feature outdated and inaccurate allegations from commercial rivals about Search and other services," Google responded in a blog post.

What's next: The committee plans to take up consideration and adoption of the report when Congress's recess ends after the November elections.

Editor's note: This story has been updated with additional details.

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