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Legislators are determined to split Facebook, Amazon, Google and Apple because they are abusing
07.10.2021 [18:47],
Alexey Razin

A 16-month antitrust investigation against Alphabet, Facebook, Apple and Amazon has spawned rather radical legislative initiatives. It is proposed to revise the US laws, taking into account the specifics of the business practices of these American companies that have achieved a dominant position in the market.

Image source: Reuters

A group of US congressmen representing the Democratic Party have published their proposals to reform US antitrust laws in a 450-page report, CNBC notes. Key recommendations are described below:

  • It is proposed to limit the ability of corporations to simultaneously engage in related types of business. To reduce the degree of monopoly influence on the market, it is proposed to structurally divide companies into independent legal entities. In practice, this would mean, for example, that Google should have given independence to YouTube, and Facebook should have relinquished ownership of Instagram and WhatsApp.
  • According to lawmakers, it is necessary to strengthen control over mergers with the participation of companies with a dominant position in the market. Participants in the transaction must provide more evidence that the merger will not harm competition.
  • It is proposed to oblige dominant platforms to ensure compatibility of data formats with competing solutions so that users can freely transfer personal data.
  • The budgets of the US federal antitrust authorities are proposed to be increased, as well as to oblige the Federal Trade Commission (FTC) to regularly collect data on the degree of business concentration.

A proposal to force companies to divestitures has already sparked protests among GOP representatives in the US Congress. Some of them agreed with certain points of the program, but expressed concern that increased regulation in the industry will limit the pace of innovation.

Certain claims in the text of the report relate to the business practices of specific companies. For example, the authors of the investigation argue that by the time of the purchase in 2021, Instagram was successful and actively growing, and Facebook absorbed it only out of a desire to eliminate a competitor. Representatives of Facebook, in response to such accusations, said that the company is an example of an “American success story”, and acquisitions are an integral part of any industry. Instagram and WhatsApp, according to a statement from incumbent business owners, have reached new heights only with billions of dollars in investment from Facebook.

E-commerce giant Amazon accuses congressional report of infringing sellers who use its platform to do business. Third-party sellers are said to be called “Amazon partners” only in word, but in reality the company refers to them as “internal competitors”. Lawmakers also have questions about the history of acquisitions that took place during the expansion of Amazon’s business.

Apple gets paid for the pricing policy for software developers to whom it provides access to its own app store. Naturally, Apple responded to such claims that it is the developers who benefit from its software distribution policy, and the commission level corresponds to the practice of its main competitors. Last year, the turnover of the branded app store amounted to $ 138 billion, about 85% of this amount went to third-party developers.

Image source: medium.com

The main complaint against Google is that it has a close-to-monopoly position in the search engine segment and related advertising business. Using information about its users retrieved through various services, Google is able to strengthen its dominant position, according to the authors of the report. Abuses in the field of mobile applications are also mentioned, when Google dictates to smartphone manufacturers what software should be used by default for certain operations. Google itself objected to these accusations that its free applications make life easier for millions of Americans, and the company has spent billions of dollars on their development and continuous improvement. She called the claims of legislators based on outdated and distorted information, often obtained from the company’s competitors.

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