The country’s four largest tech firms wasted no time pushing back on a congressional antitrust report that suggested Amazon, Apple, Facebook and Google have become too powerful and might need to be broken up.
The companies claimed that they all compete fairly, with Amazon slamming “fringe notions” of antitrust in a blog post filed shortly after the report’s release.
“Misguided interventions in the free market would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices, and reducing consumer choice and convenience,” the world’s largest online retailer protested.
The Democratic-controlled House’s Judiciary subcommittee on antitrust issued a 449-page report Tuesday (Oct. 6) after a 16-month inquiry that recommended big changes to antitrust laws and enforcement regarding Big Tech. Proposed changes included potentially splitting up the companies in question or making it more difficult for them to acquire smaller companies. The study also suggested capping future Big Tech acquisitions and truncating horizontal growth.
The report comes as the four tech titans, which combined are worth more than $5 trillion, each enjoy market dominance in their respective niches. But that’s made them a lightning rod for criticism from all sides, with Democrats claiming Amazon squeezes out small local businesses and Republicans alleging Facebook and Google censor conservative political viewpoints.
Amazon Slams ‘Fringe Notions on Antitrust’
In a blog post entitled “Fringe Notions on Antitrust Would Destroy Small Businesses and Hurt Consumers,” Amazon said it’s done nothing to deserve such criticisms.
“All large organizations attract the attention of regulators, and we welcome that scrutiny,” the company wrote. “But large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong. And yet, despite overwhelming evidence to the contrary, those fallacies are at the core of regulatory spit-balling on antitrust.”
Google: Americans Like Our Free Products
In a similar rebuttal statement, Google protested that a forced break-up would only hurt consumers, claiming that the committee report used outdated, inaccurate allegations made by the company’s rivals.
“Free products like Search, Maps and Gmail help millions of Americans and we’ve invested billions of dollars in research and development to build and improve them,” Google said. “We compete fairly in a fast-moving and highly competitive industry. … Americans simply don’t want Congress to break Google’s products or harm the free services they use every day. The goal of antitrust law is to protect consumers, not help commercial rivals.”
Facebook: We Poured Billions Into Instagram and WhatsApp
Meanwhile, Facebook took exception with congressional assertions that the social media giant acquired burgeoning new companies to clone them and then put them out of business.
“Facebook is an American success story,” the company said, according to published reports. “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.”
For example, the company said its Instagram and WhatsApp subsidiaries — which Facebook bought from others — “have reached new heights of success because Facebook has invested billions in those businesses.”
Apple: 85 Percent of App Store Money Goes to Third Parties
Apple likewise rejected charges that it’s a monopoly.
“Our company does not have a dominant market share in any category where we do business,” Apple said, according to published reports.
The tech giant pointed out that its App Store had helped create countless new markets and products that were unimaginable a dozen years ago.
“Last year in the United States alone, the App Store facilitated $138 billion in commerce with over 85 percent of that amount accruing solely to third-party developers,” Apple said.
Meanwhile, a new settlement that European Union regulators reached with chipmaker Broadcom involving the use of a powerful EU injunction for the first time in nearly 20 years is also putting the spotlight on U.S. Big Tech.
Margrethe Vestager, executive vice-president of the EU Commission, said she would likely use more injunctions in other pending antitrust cases — a clear shot across the bow at the American tech giants.
“If you have taken a tool out of a toolbox and have some experience using it, it’s more likely that you’ll use it again,” she said, as quoted by The Wall Street Journal.
Are Big Techs Really Monopolies?
However, PYMNTS’ Karen Webster has argued that labeling Big Tech companies as monopolies is an “optical illusion,” especially given the ongoing consumer shift to digital that has only accelerated amid the pandemic.
“In a world gripped by a global pandemic, Apple, Amazon, Facebook, Google and many of the innovators that depend on them for distribution have become valuable ways for consumers to access essential goods and services and for businesses and consumers to interact,” Webster wrote.
Rather than stifling competition, she said their “growing portfolio of connected devices, data, artificial intelligence (AI) and payments” have expanded choice and made it easy and efficient for consumers and businesses to find each other, interact and transact.