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Antitrust

Democrats and Some Republicans at House Judiciary Antitrust Subcommittee Take on Big Tech’s ‘GAFA’ Squad

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WASHINGTON, July 16, 2019 – In the House Judiciary Committee’s second hearing putting tech giants under the microscope, both the Democratic majority and some members of the Republican minority attempted to squeeze the companies into greater political compliance.

At a Tuesday hearing featured witnesses from the widely-feared “GAFA” companies — Google, Amazon, Facebook and Apple — Antitrust, Commercial and Administrative Law Subcommittee Chairman David Cicilline, D-R.I., raged against their level of market control with minimal regulatory oversight.

The internet has become more hostile and less open to entrepreneurs trying to enter the online market, he said, because these major firms are shielded from competition and smaller businesses face rising entry barriers.

Moreover, the prominence of big tech is not the inevitable result of innovation, but the result of choices made by policymakers, he said.

And while subcommittee Ranking Member James Sensenbrenner, R-Wis., doubted Democratic calls to break up big tech companies, a statement by the ranking member of the full committee, Doug Collins, R-Ga., put a bipartisan sheen on the tech-bashing.

“Almost all online engagement by individuals and businesses today runs through a few large platforms. When it comes to online communication, therefore, the platforms must be careful in how their businesses affect free expression,” Collins said in a statement.

“When it comes to online commerce, these platforms must be careful they don’t put consumers at increased risk of harm or facilitate illicit conduct. These expression and conduct issues raise different challenges that should not be conflated, but both issues can and should be discussed.”

Collins suggested that the platform companies’ business models shield them from market and other forces that leads them to lower levels of social accountability.

The ‘GAFA’ squad of companies respond to a hostile Congress

Witnesses at the hearing consisted of policy executives from the four major companies.

Google’s Director of Economic Policy Adam Cohen said that their work supports and accelerates innovation within other firms and open sources.

It’s a broad market because many Americans start their online searches for dedicated specialist competitors, he said.

Matt Perault, head of global policy development at Facebook, said that Facebook has “democratized” advertising by enabling small and medium-sized businesses to grow. Because there are low barriers of entry, new applications and technologies are constantly emerging.

Consumers benefit from all competition regardless of their business models, said Amazon’s Associate General Counsel Nate Sutton. Amazon’s mission is to be a customer-centric company and its success depends on its partnerships with third parties, he said.

We work hard to grow and retain consumer trust, said Kyle Andeer, vice president of corporate law at Apple. Every developer in the App Store abides by the same guidelines so that everyone has an “equal opportunity.” Apple continues to invest in resources and tools for developers, he said.

The panelists were asked about how their companies specifically devoted resources into promoting smaller, competitive firms. Perault said that Facebook looks to acquire “all services” that would be beneficial and bring value to their services.

Amazon is not the only way for merchants to advertise, said Sutton. Ebay, WalMart and Target are all examples of emerging online marketplaces. Moreover, the fastest growing market has a mixture of online and offline transactions, he said.

Critics in Congress were not amused by the Silicon Valley giants’ arguments

Rep. Lucy McBath, D-Ga., said that Amazon has been known to arbitrarily shut down merchant accounts “without explanation.” Sutton stated that Amazon has a “dedicated customer team” to which merchants can address their concerns. However, there are occasions where the firm takes “swift and immediate action” towards those whom it considers are “bad actors” selling on Amazon.

Google controls 90 percent of the search engine market in the U.S., said Rep. Jamie Raskin, D-Md., yet the company somehow claims that competition is “just a click away.”

Rep. Joe Neguse, D-Colo., asked Perault if Facebook identifies itself as a monopoly, referring to the social media platform’s past policy statement that said, “don’t replicate core functionality that Facebook already provides.”

The company evaluates Facebook’s terms and conditions on a regular basis, said Perault. He stated that Facebook has 2.7 billion users and that it is the parent company of WhatsApp, Messenger and Instagram.

Each of these four companies has a unique position in the market, said Rep. Hank Johnson, D-Ga., but Facebook is the “only one” with an edge in the social media market.

Because consumers have no other options, they have no choice but to accept these conditions, said Johnson.

(Photo of House Judiciary subcommittee Chairman David Cicilline, D-R.I., and Ranking Member James Sensenbrenner, R-Wisconsin, by Masha Abarinova.)

Antitrust

‘Time is Now’ for Separate Big Tech Regulatory Agency, Public Interest Group Says

‘We need to recognize that absolutely the time is now. It is neither too soon nor too late.’

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Photo of Harold Feld, senior vice president at Public Knowledge

WASHINGTON, June 21, 2022 – Public Knowledge, non-profit public interest group, further advocated Thursday support for the Digital Platform Commission Act introduced in the Senate in May that would create a new federal agency designed to regulate digital platforms on an ongoing basis.

“We need to recognize that absolutely the time is now. It is neither too soon nor too late,” said Harold Feld, senior vice president at Public Knowledge.

The DPCA, introduced by Senator Michael Bennet, D-CO., and Representative Peter Welch, D-VT., would, if adopted, create a new federal agency designed to “provide comprehensive, sector-specific regulation of digital platforms to protect consumers, promote competition, and defend the public interest.”

The independent body would conduct hearings, research and investigations all while promoting competition and establishing rules with appropriate penalties.

Public Knowledge primarily focuses on competition in the digital marketplace. It champions for open internet and has openly advocated for antitrust legislation that would limit Big Tech action in favor of fair competition in the digital marketspace.

Feld published a book in 2019 titled, “The Case for the Digital Platform Act: Breakups, Starfish Problems and Tech Regulation.” In it, Feld explains the need for a separate government agency to regulate digital platforms.

Digital regulation is new but has rapidly become critical to the economy, continued Feld. As such, it is necessary for the government to create a completely new agency in order to provide the proper oversight.

In the past, Congress empowered independent bodies with effective tools and expert teams when it lacked expertise to oversee complex sectors of the economy but there is no such body for digital platforms, said Feld.

“The reality is that [Congress] can’t keep up,” said Welch. This comes at a time when antitrust action continues to pile up in Congress, sparking debate across all sides of the issue.

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Antitrust

FTC Commissioner Concerned About Antitrust Impact on Already Rising Consumer Prices

Noah Phillips said Tuesday he wants the commission to think about the impact of antitrust rules on rising prices.

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Screenshot of Federal Trade Commissioner Noah Phillips

WASHINGTON, May 17, 2022 – Rising inflation should be a primary concern for the Federal Trade Commission when considering antitrust regulations on Big Tech, said Commissioner Noah Phillips Tuesday.

When considering laws, “the important thing is what impact it has on the consumer,” said Phillips. “We need to continue to guard like a hawk against conduct and against laws that have the effect of raising prices for consumers.”

Current record highs in the inflation rate, which means money is becoming less valuable as products become more expensive, has meant Washington must become sensitive to further price increases that could come out of such antitrust legislation, the commissioner said.

Phillips did not comment on how such movies would mean higher prices, but that signals, such as theHouse Judiciary Committee’s antitrust report two years ago, that reign in Big Tech companies and bring back enforcement of laws could mean higher prices. He raised concerns that recent policies are prohibiting competition rather than facilitating it.

This follows recent concerns that the American Innovation and Choice Online Act, currently awaiting Senate floor consideration, will inhibit America’s global competitiveness by weakening major American companies, thus impairing the American economy. That legislation would prohibit platform owners from giving preference to their products against third-party products.

This act is one of many currently under consideration at Congress, including Ending Platform Monopolies Act and Platform Competition and Opportunity Act.

Small businesses have worried that by enacting some legislation targeting Big Tech, they would be impacted because they rely on such platforms for success.

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Antitrust

Critics and Supporters Trade Views on American Innovation and Choice Online Act

American Innovation and Choice Online Act is intended to protect fair competition among businesses, but panelists differed on its impact.

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Photo of Amy Klobuchar from August 2019 by Gage Skidmore used with permission

WASHINGTON, May 10, 2022 – Experts differed on the effect that antitrust legislation targeting big tech companies allegedly engaging in discriminatory behavior would have on small businesses.

Small businesses “want Congress not to do anything that will screw up or weaken the services that they rely on for their business,” said Michael Petricone, senior vice present of the Consumer Technology Association, at a Protocol Live event on Thursday.

Petricone said that antitrust bill would encourage tech companies to relocate to other countries, harming the American economy. He said small businesses would be affected the most.

Instead, Petricone called for  a “smarter immigration policy” to allow foreign innovators access to American tech market, as well as the defeat of the antitrust legislation.

But other said that small businesses suffer from predatory behavior by big tech companies. “Companies can’t get their foot in the door when there is already self-preferencing,” said Awesta Sarkash, representative for Small Business Majority, an advocacy organization, adding that 80% of small businesses say they want antitrust laws to protect them.

Self-preferencing on online platforms is detrimental to the success of small businesses who rely on social media advertising for business, she said. The new antitrust proposals would ensure an level playing field and promote fair competition, she said.

The American Innovation and Choice Online Act would prohibit certain online platforms from unfairly preferencing products, limiting another business’ ability to operate on a platform, or discriminating against competing products and services.

The bill sponsored by Sen. Amy Klobuchar, D-Minn, was introduced to the Senate on May 2 and is awaiting Senate floor consideration.

The debate follows concerns raised by both democrats and republicans about America’s global competitiveness as the bill would weaken major American companies.

If passed, the bill will follow the European Union’s Digital Services Act which similarly sets accountability standards for online platforms, preventing potentially harmful content and behavior.

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