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Congress looks to break up Big Tech with bold new antitrust bills

Congress looks to break up Big Tech with bold new antitrust bills

Congressional lawmakers are targeting tech giants over antitrust concerns — and the proposed legislation could force them to overhaul or even break up their increasingly dominant business empires.

The package of five antitrust bills introduced by a bipartisan group in Congress on Friday — aimed at Amazon, Apple, Facebook and Google’s parent Alphabet — would make it harder for the biggest tech platforms to complete mergers and keep them from owning businesses that create conflicts of interest.

Two of the new bills could be particularly tricky for Amazon and Apple to navigate as they both run marketplaces that include their own products or apps that compete with outside sellers that rely on their services.

Called the “Ending Platform Monopolies Act,” sponsored by Rep. Pramila Jayapal (D-Wash) and the “The American Innovation and Choice Online Act” sponsored by House Judiciary subcommittee on antitrust Rep. David Cicilline (D-RI), the reforms could potentially break up the tech behemoths by cracking down on conflicts of interest between their different business lines.

Rep. David Cicilline
Rep. David Cicilline (D-RI).
Mandel Ngan/Pool via REUTERS

The second bill introduced by Rep. Cicilline would reduce the ability of big tech companies to use their platforms to promote their own goods ahead of those of competitors — a rule that could slam Apple and Google’s Android software over their app-store policies, and Amazon over its massive third-party marketplace.

“Unregulated tech monopolies have too much power over our economy,” said Cicilline. “They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work. Our agenda will level the playing field.”

Rep. Ken Buck (R.–Colo.), the top Republican on the antitrust panel, the legislation “breaks up Big Tech’s monopoly power to control what Americans see and say online, and fosters an online market that encourages innovation.”

The other three bills are aimed at curbing mergers that Silicon Valley giants have used to grow and neutralize competition. “The Platform Competition and Opportunity Act” led by Rep. Hakeem Jeffries (D-NY), would ban major online players from buying competitive threats, while “The Merger Filing Fee Modernization Act” led by Rep. Joe Neguse (D-Co) would give enforcement agencies power and resources by requiring higher fees for mergers valued at $1 billion and more.

Meanwhile, “The Augmenting Compatibility and Competition by Enabling Service Switching Act” led by Rep. Mary Gay Scanlon (D-Pa) is meant to increase competition by forcing companies to give consumers the ability to switch data between platforms.

The Judiciary Committee will need to vote on the bills before they make their way to the House for approval and then the Senate. Only then can the bills be signed into law by the president.

The bipartisan support for the package is bad news for the tech titans, which are believed to wield too much power over the industry.

The bills are aimed at tech giants Google, Amazon, Facebook and Apple.
The bills are aimed at tech giants Google, Amazon, Facebook and Apple.
Alamy Stock Photo

The tech giants did not immediately respond to requests for comment on Friday, but reports that the bills were coming had already spurred pushback.

“Adopting the European regulatory model would make it harder for American tech companies to innovate and compete both here and globally,” Geoffrey Manne, president and founder of the International Center for Law & Economics told CNBC, which added that the group has received funding from Google in the past.

In a Medium post published earlier this week, Adam Kovacevich, chief executive of Chamber of Progress, an advocacy group backed by the five tech giants, argued that consumers would miss out on “conveniences” such as Amazon Prime free shipping and cross posting between Facebook and Instagram, under those proposals.

“With all the challenges facing our country — pandemic recovery, crumbling infrastructure, racial equity, and climate change — it’s a bit strange that some policymakers think our biggest problem worth fixing is…Amazon Basics batteries,” Kovacevich wrote.

Rep. Pramila Jayapal
Rep. Pramila Jayapal (D-WA).
Drew Angerer/Getty Images

The antitrust reforms follow a 16-month long investigation by the House Judiciary subcommittee on anticompetitive issues into the four tech giants that was completed last year.

At the time, the investigation’s 450-page report found that Amazon, Apple, Facebook and Google hold monopoly power and that antitrust laws should be revised to better deal with today’s digital media landscape. The report said that major changes for big tech companies may have to spin off or separate parts of their businesses or make them harder to buy smaller companies.

While Democrats and Republicans have disagreed on some of the solutions, they have found common ground on the alleged antitrust issues and agreed that reform was necessary to spark competition.

Amazon has caught flak from lawmakers for allegedly using data from third-party businesses to develop and promote Amazon-label products like “Amazon Basics.”

Amazon’s private label represents a substantial section of the tech giant’s business, boasting 158,000 products from dozens of different brands, according to the report.

The company also has substantial business lines in everything from streaming entertainment through Prime Video and e-readers via Kindle to voice-activated assistants through Echo and doorbell cameras via Ring. Untangling its various subsidiaries would likely be a long and costly process.

The Ending Platform Monopolies Act is being floated as a tech-world equivalent of the landmark 1933 Glass-Steagall Act, which separated commercial and investment banking, according to the Journal.

The potential legislative battle comes less than a month before Jeff Bezos is set to step down as CEO of Amazon in July, handing the reins to web services chief Andy Jassy and then blasting himself into space on a Blue Origin rocket shortly thereafter.

Amazon worker makes deliveries
Amazon, which employs 1.3 million people, could be forced to split itself up under new legislation being considered in Congress.
Getty Images

The US is not the only country where Jassy is expected to tussle with regulators.

On Thursday, the Journal reported that a European Union privacy overseer has proposed a $425 million fine over Amazon’s data collection practices. The fine would be the biggest to date under a strict data-privacy law the EU enacted in 2018.

About the author

John Angulo

John is a well experienced hockey player and has won many championships. He intends to build a bright career in the media industry as well. He is a sports freak who loves to cover the latest news on NHL.

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