House antitrust report suggests big changes are coming to how Big Tech operates

nanoguy

Posts: 585   +8
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The big picture: The biggest tech companies went from puny startups to trillion dollar giants with a collective market valuation that amounts to over $5 trillion. House officials have concluded that they have acquired too much power, which has led to a lot of anticompetitive behavior that calls for strict measures to prevent it in the future.

House lawmakers have spent more than 15 months analyzing over 1.3 million documents from Facebook, Apple, Amazon, and Google to gain a better understanding of the mechanisms that led to their monopolistic power and whether or not they abused it in any way. They've also grilled the CEOs of the four companies in a landmark antitrust hearing, but their questions were mostly met with generic answers.

The House Judiciary Committee's Antitrust Subcommittee Democratic members have published a 449-page report where they detail their conclusions, as well as proposals for legislative changes that they'd pursue should they manage to hold the White House and Congress after November.

The first conclusion is that the four companies had turned from "scrappy" underdog startups to "the kinds of monopolies we last saw in the era of oil barons and railroad tycoons." And while officials recognize the benefits these firms have delivered to society as a whole, they also discovered that more often than not they tend to run a marketplace while competing in it, which allows them to set the rules for others while seemingly ignoring them.

Facebook is described as a social giant that acquired its power through a strategy of "copy, acquire kill," which has led to many privacy and misinformation scandals. Amazon is seen as a gatekeeper of an online marketplace where it also operates as a seller, which has resulted in mistreatment of third-party sellers.

Google dominates search, search ads, and a big portion of web advertising, and uses its treasure trove of user data to undermine its competition. Apple exerts strict control of software distribution on its mobile platform and has a tendency to exploit rivals with commissions and copy their services.

One of the recommendations offered by Democratic staff is something we've seen before -- breaking off big tech companies or imposing a different organizational structure so that online marketplaces can operate as independently-run businesses. However, CEOs like Facebook's Mark Zuckerberg have been working and doing everything in their power to make this as difficult as possible.

As noted by Bill Gates, who was involved in one of the biggest antitrust cases in history, splitting a bad company into multiple, smaller bad companies does little to solve the underlying problem.

Another proposal is to increase the budgets of the FTC and the Department of Justice Antitrust Division and requiring them to become more transparent. At the same time, Democratic staff wants all big mergers and acquisitions to be scrutinized more carefully before getting the green light.

Under new legislation, the companies would have to prove their deals aren't anticompetitive, as opposed to having antitrust enforcers prove that they could be.

Dominant platforms would also have to adapt their services so they are cross-compatible with their competitors, including the ability to migrate user data from one service to another. Furthermore, they'd have to offer "equal terms for equal products and services," as well as refrain from providing preferential treatment to some content providers.

Naturally, Republicans object to some of the findings and proposals in the report, especially the ones involving structural separations of big tech companies and data interoperability. However, they do agree with the proposed increase in resources allotted for antitrust enforcement agencies. Even with the disagreement on some of the bolder proposals in the Democratic majority's report, it seems like Big Tech is looking at an entire "menu of potential changes" to how they'll operate in the future.

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Kshipper

Posts: 229   +36
TechSpot Elite
Those tech companies are the main reason the stock market has performed so well....once you do to them and do what they did to Bell Telephone, things will be better? This will hurt the US economy for sure.
 
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Evernessince

Posts: 5,418   +6,011
Those tech companies are the main reason the stock market has performed so well....once you them and do what they did to Bell Telephone, things will be better? This will hurt the US economy for sure.
You kind of prove the counter to your point. Bell Telephone was broken up and the market continued to advance with lower prices for customers to boot.
 

GeforcerFX

Posts: 963   +447
I wonder if Microsoft isn't mentioned since it seems they mainly compete in many segments but don't dominate many (outside desktop operating systems). They compete in gaming against Sony and Nintendo, they compete in cloud computing against a dozen other companies. They compete in almost every software market they are in but have no definitive lead over the competition. This is like the 5th or 6th article I have read that only mentions the other 4 and this one and at least two others showed that Microsoft is as large as the others in market value. I wonder what would happen to them if the more extreme measures were taken here, since that would leave a lot larger than the broken up companies that remain. I mean at this moment out of the five shown I would trust them the most, but only if no other choices were given.
 
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Plutoisaplanet

Posts: 298   +341
Realistically I think there is no way to prevent ending up with big players. In different portions of the technology sector, there will be oligarchies because customers want to interact with family and friends. And as we’ve seen in the car manufacturer, cereal, fast food, and other industries, oligarchies aren’t bad so long as they’re regulated to prevent anticompetitive behavior. I don’t see why the technology sector has to be any different.
 

SixTymes

Posts: 65   +35
Demorats, a bunch of cry babies, they're mad because they are seeing trump ads, and think not enough biden. and regarding harris, have people lost their minds being followers of hers. She promoted a bail fund to help a man accused of sexually raping a child. THAT is disgusting. what is wrong with people?
 

yRaz

Posts: 3,386   +2,921
Okay, fine, they're too big, I get that. let's talk about what the plan is to break them up and what it'll be replaced with before we say yes or no. Frankly, I can agree that all but microsoft should be "broken up". Big data has had a huge impact on privacy and that's more concerning to me than monopolistic practices.
 
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Endymio

Posts: 625   +514
Bell Telephone was broken up and the market continued to advance with lower prices for customers to boot.
Yes. However, AT&T was at the time a government-mandated monopoly -- its power was the result of government passing laws which actually made it illegal to compete with the company in any way, even to the point that it was once illegal for a customer to use or even connect to the line a non-AT&T made phone. The is the exact opposite of the free-market, in which companies achieve market dominance by doing a better job than their competitors.

A much better example is the breakup of Standard Oil. Done with the goal of "benefitting consumers", it actually raised real oil prices to consumers for the next decade and more.
 

Aryassen

Posts: 82   +81
While I am all for fair competition, splitting up these companies definitely won't automatically improve the situation (just lik Bill said, and I not even a fan of his).

Improved regulations may (!) help, but that's vey much a double-edge sword, and we can easily end up in a worse position than the one we are in now. As usual, the devil is in the details...
 

NicktheWVAHick

Posts: 193   +187
You kind of prove the counter to your point. Bell Telephone was broken up and the market continued to advance with lower prices for customers to boot.
True, but you MUST to use a telephone...you DONT have to use Apple, Facebook, Amazon, Google or MSFT to survive...there are other choices. That’s the difference. Just stop using them.
 

Uncle Al

Posts: 7,485   +5,992
It's one thing to say it, but considering how much political donations are out there I doubt we will see any meaningful results .....
 
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Puiu

Posts: 4,072   +2,622
While I am all for fair competition, splitting up these companies definitely won't automatically improve the situation (just lik Bill said, and I not even a fan of his).

Improved regulations may (!) help, but that's vey much a double-edge sword, and we can easily end up in a worse position than the one we are in now. As usual, the devil is in the details...
Regulations are kinda needed now even if you dislike the idea. You cannot expected them to self-regulate anymore, it's not going to happen.

The first thing the US should do is to break up the regional monopoly ISPs have and to allow other ISPs to enter the market like in Europe. You have a lot of good legislation with a proven track record that the US can borrow and adapt to its needs.

Once a proper internet infrastructure is put into place you'll naturally see growth and competition will rise. Then they can tackle the big boys like Apple, Google, Facebook, etc with proof to back their actions.
 

Kshipper

Posts: 229   +36
TechSpot Elite
I'm glad there is some lively discussion on this topic...I guess a course of action is to slow the Big 3 down somehow? Apple has 2 trillion and Google and MS each have a trillion? How much money does one company need in the bank? Even Bill Gates and Warren Buffett figured out how to give back in their later years. I would like to see more of that happening. Big 3 are you listening? Don't wait for something to happen. Be proactive and use your huge clout to make meaningful change for humanity or at least the country and its people that provided this prosperity, and not your pockets. It's all the 'pocket lining' that starts lawsuits like Apple vs Epic.
 
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Endymio

Posts: 625   +514
How much money does one company need in the bank?
Which sounds remarkably like the tail end of Marx's famous quote: "...to each according to his needs." Here in the US we came up with a better system. Instead of allowing people -- and companies -- what they "need", we allow you to have what you can earn. It's worked out far better than nations who give you what they determine you "need" -- and keep from you what they feel you don't need.

I would like to see more of that happening. Big 3 are you listening? Don't wait for something to happen. Be proactive and use your huge clout to make meaningful change for humanity
Microsoft and Intel created the personal computer as we know it. Apple assisted in that PC revolution, and sparked the mobile revolution with its iPod, iPad, and iPhone, and Google popularized the search engine with its -- for then -- revolutionary PageRank algorithm. Not meaningful enough for you?

It's interesting that, 10-15 years ago all the talk was about breaking up Microsoft. Today, no one cares about Microsoft, because the market has already neutered Microsoft for us. The market solved the problem for us much better than any government action could have.
 
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Avro Arrow

Posts: 211   +204
I'm glad there is some lively discussion on this topic...I guess a course of action is to slow the Big 3 down somehow? Apple has 2 trillion and Google and MS each have a trillion? How much money does one company need in the bank? Even Bill Gates and Warren Buffett figured out how to give back in their later years. I would like to see more of that happening. Big 3 are you listening? Don't wait for something to happen. Be proactive and use your huge clout to make meaningful change for humanity or at least the country and its people that provided this prosperity, and not your pockets. It all the pocket lining that starts lawsuits like Apple vs Epic.
It depends on what classifies a company as "big" because as the chart showed, the "big" three of yesteryear would be considered "meh"-sized by today's standards. We could be dealing with a "Big 50" or "Big 100" that all need to be slowed down. One thing is certain, something must be done.
 

Ultraman1966

Posts: 141   +47
Which sounds remarkably like the tail end of Marx's famous quote: "...to each according to his needs." Here in the US we came up with a better system. Instead of allowing people -- and companies -- what they "need", we allow you to have what you can earn. It's worked out far better than nations who give you what they determine you "need" -- and keep from you what they feel you don't need.

Microsoft and Intel created the personal computer as we know it. Apple assisted in that PC revolution, and sparked the mobile revolution with its iPod, iPad, and iPhone, and Google popularized the search engine with its -- for then -- revolutionary PageRank algorithm. Not meaningful enough for you?

It's interesting that, 10-15 years ago all the talk was about breaking up Microsoft. Today, no one cares about Microsoft, because the market has already neutered Microsoft for us. The market solved the problem for us much better than any government action could have.
Is that a joke? Microsoft didn't get self regulated by the industry, did you not notice the humongous fines that the EU handed out to it to stop its monopolistic behaviour?
Free market only operates well in a level playing field, when one player has a huge, huge lead it becomes skewered and out of kilter.
 

Endymio

Posts: 625   +514
Microsoft didn't get self regulated by the industry, did you not notice the humongous fines that the EU handed out
A $2B fine on a company which has made several trillion in revenues is trivial. Microsoft is no longer a monopoly today not because of the EU, but because explosive growth in the mobile segment supplanted the PC-centric model that made Microsoft king. The free market, in other words.

when one player has a huge, huge lead it becomes skewered and out of kilter.
You mean like the huge, huge lead General Electric once had? At one point it manufactured nearly half of all electrical appliances in the world, not to mention a leading role in jet engines, industrial equipment, medical equipment, and a dozens. Just 12 short years ago, it was the largest corporation in the world ... and then ten years later, it wound up delisted from the Dow. Not because of antitrust action, but again due to the free market. Countless other examples could be given. No matter how large a company becomes, the moment it stops performing better than its competitors, it declines rapidly -- unless government steps in and artificially halts the process.
 

Evernessince

Posts: 5,418   +6,011
Because countries will end up being run by the large corporations. The US is most guilty of this with their legal "bribery" also knows as lobbying and donations.
I wouldn't say that in the future tense, it's pretty much true right now. Just look at the cabinet of the US.
 

Endymio

Posts: 625   +514
The US is most guilty of this with their legal "bribery" also knows as lobbying and donations.
I see that between CoD respawns, you've really been researching this topic:

"A report from the anti-corruption group Transparency.org found that of 19 European countries assessed, only 7 have some form of dedicated lobbying law or regulation, allowing for nearly unfettered influence of business interests on the daily lives of Europeans. The 19 countries together score just 31 per cent (out of 100 per cent) when measured against international lobbying standards."

Transparency.org: Lobbying and Corruption Report.

The United States scored 69% on that scale -- more than double the average European nation. Romania is near the bottom of the list, and in fact Romania just a couple years ago had massive protests over the issue:

"[Widescale national] protests started after the current Romanian government passed a law making it almost impossible to convict people in political office for abuse of power. This has all but officially legalized corruption in the Eastern European country. The law also implies that thousands of prison sentences will be commuted—especially those of politicians sentenced for corruption and misappropriating millions in public funds...."
 

Puiu

Posts: 4,072   +2,622
I see that between CoD respawns, you've really been researching this topic:

"A report from the anti-corruption group Transparency.org found that of 19 European countries assessed, only 7 have some form of dedicated lobbying law or regulation, allowing for nearly unfettered influence of business interests on the daily lives of Europeans. The 19 countries together score just 31 per cent (out of 100 per cent) when measured against international lobbying standards."

Transparency.org: Lobbying and Corruption Report.

The United States scored 69% on that scale -- more than double the average European nation. Romania is near the bottom of the list, and in fact Romania just a couple years ago had massive protests over the issue:

"[Widescale national] protests started after the current Romanian government passed a law making it almost impossible to convict people in political office for abuse of power. This has all but officially legalized corruption in the Eastern European country. The law also implies that thousands of prison sentences will be commuted—especially those of politicians sentenced for corruption and misappropriating millions in public funds...."
Never said Romania is ok. Corruption in such countries does run rampart, but it's not legal. Protests were because of some laws that they tried to pass and people went into the street to prevent it (as they should in a democracy, I was there in the street).

Legislation is still evolving, but in 2019 the EU Parliament adopted binding rules on lobby transparency. Amending its Rules of Procedure, the Parliament stipulated that MEPs involved in drafting and negotiating legislation must publish online their meetings with lobbyists (according to the European Transparency Initiative).

The biggest difference between the EU and US is that in the EU lobbying is not made to elected people. This automatically excludes campaign "donations". When you do not need huge amounts of money to fundraise for re-election, negotiations are much more down to earth.
 
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