Thursday, 08 October 2020 10:26

US report says big four tech firms need to be reined in

US report says big four tech firms need to be reined in Pixabay

The US has unveiled a 449-page report on what is says are abuses of market power by four big technology companies - Google, Facebook, Amazon and Apple - finding that the firms have used acquisitions to stifle rivals, charged exorbitant fees and forced small businesses into "oppressive" contracts in order to make a profit.

The anti-trust subcommittee of the US House Committee on the Judiciary recommended that the four companies, which have a combined market value of US$5 trillion (A$7 trillion), should not be allowed to control and compete in related businesses.

Sweeping changes were recommended to anti-trust law, with the politicians saying the four companies were now the kind of monopolies that had been seen in the era of oil barons and railroad tycoons.

“Our investigation leaves no doubt that there is a clear and compelling need for Congress and the anti-trust enforcement agencies to take action that restores competition, improves innovation and safeguards our democracy,” Jerrold Nadler, Democrat (New York) and chairman of the judiciary committee, and David Cicilline, Democrat (Rhode Island) and chairman of the anti-trust subcommittee, said in a joint statement.

Anti-trust actions against the companies are likely to follow, with reports earlier this month saying Google would not only face action in the US, but also in China.

Prior to the report being made public, Amazon warned in a blog post against “fringe notions of anti-trust” and market interventions that “would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices and reducing consumer choice".

Google said in a statement that it competed “fairly 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 We disagree with today’s reports, which feature outdated and inaccurate allegations from commercial rivals about Search and other services".

"Americans simply don’t want Congress to break Google’s products or harm the free services they use every day. The goal of anti-trust law is to protect consumers, not help commercial rivals.

"Many of the proposals bandied about in today’s reports — whether breaking up companies or undercutting Section 230 — would cause real harm to consumers, America’s technology leadership and the US economy – all for no clear gain."

Facebook said: "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."

“Scrutiny is reasonable and appropriate, but we vehemently disagree with the conclusions,” was Apple's reaction.

Any action against the companies will require the Democrats and Republicans to agree which will be the biggest hurdle to cross.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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