The US House of Representatives Antitrust Subcommittee proposed a series of far-reaching antitrust law reforms to curb the influence of technology giants such as Amazon and Google. This 16-month antitrust investigation found that these large technology companies abused their dominant positions.
In a 449-page report, the subcommittee puts forward the most radical reform proposal for antitrust laws in decades. If approved by Congress, it may lead to technology companies splitting their businesses.
The survey results target the four major US technology companies, namely Amazon, Google, Facebook, and Apple. The report describes them as gatekeepers of the digital economy, who can use market influence to choose winners and losers.
The report says these large technology companies abuse their dominant position to eliminate competition threats. Moreover, thereby detrimental to innovation, consumer choice, and democracy.
After the report was released, Facebook fell more than 1% in late trading. Amazon and Apple fell less than 1%, and Google held steady.
The most severe recommendation of the report is that Congress should consider legislation to prevent high-tech companies from owning different business categories. Which may lead to the spin-off of these technology giants.
From anti-monopoly to user privacy and security, to Facebook cryptocurrency, many members of the Republican and Democratic parties in the US Congress continue to exert pressure to strengthen supervision of US technology giants.
What is a monopoly market?
Complete monopoly market refers to a market structure in which there is only one supplier and many demanders in the market. The hypothetical conditions of a complete monopoly market have three points. First, there is only one manufacturer in the market that produces and sells goods. Second, the goods produced by this manufacturer do not have any close substitutes. Third, it is extremely difficult for other manufacturers to enter the industry Or impossible, so monopolists can control and manipulate market prices.
On the other hand, antitrust investigations are also facing challenges. In the past 40 years, rising prices due to corporate actions have been the criterion for judging whether consumers’ interests are harmed. However, Google and Facebook are free, while Amazon is known for its low prices, and “harming consumers” needs a new definition.
Analysts are also worried that as the general election unfolds, the antitrust stance of the two parties will diverge. Robert Litan, a former antitrust official of the U.S. Department of Justice and a partner at the Krein-Tillery Law Firm, believes that the current government does not like technology companies, mainly because these companies tend to favour the Democratic Party and suppress conservative speech. Monopoly investigations may be just a countermeasure, not really concerned about consumer interests and the competitive environment.
The U.S. Federal Trade Commission approved a settlement agreement with Facebook for approximately US$5 billion due to Facebook’s involvement in user data abuse scandals. However, Facebook’s revenue in 2018 was as high as 56 billion US dollars. In contrast, fines are only a drop in the bucket.
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