U.S. Antitrust Committee Likens Tech Companies Including Apple to 'Oil Barons and Railroad Tycoons'
Apple, Facebook, Google, and Amazon have been the subject of an ongoing antitrust investigation conducted by the U.S. House Judiciary Antitrust Subcommittee, which today said the tech companies "have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons."
As outlined by CNBC, the subcommittee has released a 450 page report [PDF] highlighting findings from multiple hearings (including one with of the CEOs from each company), interviews, and more than 1.3 million documents, with the report also including recommendations for new antitrust laws.
The recommendations are focused on promoting fair competition in digital markets, strengthening laws related to mergers and monopolization, and restoring vigorous oversight and enforcement of antitrust law.
The committee wants Congress to prohibit dominant platforms from entering adjacent lines of business, encourage antitrust agencies to view mergers by dominant platforms as anticompetitive by default, and prevent dominant platforms from preferencing their own services with a requirement that they offer equal terms for equal products and services.
The subcommittee says that dominant firms should also make their services compatible with competitors and allow users to transfer their data, that "problematic precedents" need to be overridden in antitrust case law, and that forced arbitration clauses and limits on class action lawsuits should be eliminated.
Although these four corporations differ in important ways, studying their business practices has revealed common problems. First, each platform now serves as a gatekeeper over a key channel of distribution. By controlling access to markets, these giants can pick winners and losers throughout our economy. They not only wield tremendous power, but they also abuse it by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people and businesses that rely on them. Second, each platform uses its gatekeeper position to maintain its market power. By controlling the infrastructure of the digital age, they have surveilled other businesses to identify potential rivals, and have ultimately bought out, copied, or cut off their competitive threats. And, finally, these firms have abused their role as intermediaries to further entrench and expand their dominance. Whether through self-preferencing, predatory pricing, or exclusionary conduct, the dominant platforms have exploited their power in order to become even more dominant.
As for Apple specifically, the subcommittee determined that Apple has a monopoly when it comes to the distribution of software apps on iOS devices and that its control over iOS "provides it with gatekeeper power over software distribution on iOS devices."
In contrast, Apple owns the iOS operating system as well as the only means to distribute software on iOS devices. Using its role as operating system provider, Apple prohibits alternatives to the App Store and charges fees and commissions for some categories of apps to reach customers. It responds to attempts to circumvent its fees with removal from the App Store. Because of this policy, developers have no other option than to play by Apple's rules to reach customers who won iOS devices.Owners of iOS devices have no alternative means to install apps on their phones.
The committee cited multiple interviews with App Store developers, including those that have been in major conflicts with Apple, such as the CEO of email app "HEY" and the General Counsel of Tile, along with public disputes with companies like Airbnb and ClassPass, who recently clashed with Apple over fees for digital events during the ongoing public health crisis.
Through interviews and document review, the committee reviewed Apple's 30 percent App Store fees, its control over the App Store, the dominant position of its own apps as default apps, App Store search rankings, blocking rival content like parental control apps, App Store guideline enforcement, Apple's decision not to allow other voice assistants to replace Siri as the default, and more, with the data outlined starting on page 329 of the report for those interested.
Much of what was shared was already known through prior reports and coverage of Apple's disputes with various companies, and the recommendation document provides broad recommendations for action rather than recommendations specific to Apple, but Apple could be impacted in a multitude of ways should the recommended antitrust laws be implemented.
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