Senate Judiciary Committee Hears Decreasing Innovation in Market a Result of Big Tech Influence

Committed discussed big companies shutting smaller ones out of the marketplace.

Senate Judiciary Committee Hears Decreasing Innovation in Market a Result of Big Tech Influence
Senator Amy Klobuchar, D-Minnesota

WASHINGTON, December 20, 2021 – In a Senate Judiciary Committee hearing on Wednesday, senators expressed concern that barriers being erected by big technology companies are reducing the pace of innovation in the technology market.

Lawmakers are concerned that smaller technology companies are being shut out of those markets either because of a lack of technology interoperability with the big companies or they are being charged for having their apps on the Apple or Google app stores.

Sen. Richard Blumenthal, D-Connecticut, argued Wednesday that fees charged by Apple and Google for app developers to sell in each company’s app store stifles innovation and raises consumer costs. With the ubiquity of Apple and Google’s app stores, developers who do not want to pay out these fees have almost no options for other places to sell their app products.

Blumenthal, Sen. Amy Klobuchar, D-Minnesota, and Sen. Marsha Blackburn, R-Tennessee, have introduced the Open App Markets Act in August to promote competition in the app stores by barring their operators from requiring app providers to use app stores’ in-app payment systems. That came after a fight in which Epic Games took Apple to court for removing it from the store because it bypassed the store operator’s fee system.

Diana Moss, president of the American Antitrust Institute, said during Wednesday’s hearing that the problem of fear and intimidation is growing in markets at an alarming rate and that this has a direct adverse effect on innovation.

Current enforcement agencies don’t have power right now

Klobuchar remarked that the current laws do not actually allow antitrust enforcement agencies to police markets, and that laws must be changed to allow proper regulation.

Calls to increase financial resources for these agencies are currently widespread among antitrust experts.

Several Republican senators used their time during the hearing to comment on how central conservative values are being repressed by the current market landscape.

Sen. Mike Lee, R-Utah, emphasized proper enforcement of antitrust regulations because with such enforcement comes less need for what he called “regulatory intrusions” elsewhere by financial regulators.

Republicans took time to comment on what they consider to be censorship of conservative voices by large and powerful tech corporations, with Lee, Sen. Chuck Grassley, R-Iowa, and Sen. Ted Cruz, R-Texas, all making similar statements.

Lee and Cruz both brought up conservative social media platform Parler’s removal from prominent app stores following the January 6 insurrection at the U.S. Capitol, with Cruz speaking to witness Roger Alford, a professor at Notre Dame Law School, on the legality of the matter.

Following its removal from Amazon’s servers, Parler launched an antitrust suit at the online marketplace.

To close the hearing, Klobuchar stated that without changes in the practices of large tech companies, the Senate will “have no choice but to make major changes to Section 230,” a legal provision that shields technology companies from legal trouble stemming from what their users post on their platforms.

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