A recent bipartisan investigation by a U.S. House of Representatives panel has raised concerns over the practices of major tech companies, including Amazon, Apple, Google, and Facebook. The committee suggested that these corporations be broken up, with a “presumptive prohibition against future mergers and acquisitions by the dominant platform”.
Reasons for Investigation
The aforementioned tech giants have been under scrutiny in various nations due to their extensive spending and aggressive strategies against potential rivals. These strategies include vendor manipulation and rival buy-outs. The US House panel launched the investigation to assess the online competition environment and the data control mechanisms used by these companies.
Investigation Findings
In the investigation, leaders of these companies were questioned concerning evidence of anti-competitive behaviors and abusive tactics used to enhance their digital market dominance. Responses were typically elusive and deflective, raising questions about the independent power of these platforms and their accountability to democratic oversight.
The Role of Companies: Gatekeepers of Distribution
Each corporation acts as a gatekeeper within its respective distribution channel, controlling access to markets and determining sector winners and losers. Such control extends to setting exorbitant fees, imposing onerous contract terms, and extracting valuable data from dependent individuals and businesses. These companies also skew marketplace competition in their favour with tactics like self-preferencing, predatory pricing, and exclusionary conduct.
Recommendations from the Panel
The House panel recommended “structural separations”, suggesting that these corporations be divided into smaller entities to decrease their substantial influence over the digital marketplace. This includes prohibiting operation in an “adjacent line of business” and placing a “presumptive prohibition” against mergers and acquisitions.
Potential Impact of Recommendations
Though not legally binding, these recommendations could spark conversation and further research towards imposing more controls on big tech companies. Laws concerning vertical mergers and problematic legal decisions could be revisited and amended following these suggestions. While there may not be immediate impact, tech giants can expect increased scrutiny from worldwide regulators and investigative agencies.
Increased Scrutiny in the U.S.
These corporations are likely to face more questioning and probes from U.S states, with increasing pressure for them to limit their influence on daily life aspects.
Big Tech’s Influence in India
The panel’s report also highlighted how big tech companies could inhibit competition in India. It cited ongoing antitrust investigations against Google, which has had multiple conflicts with the Competition Commission of India (CCI). Amazon and Facebook, both trying to establish a retail presence in India, could also face scrutiny over product pricing and competition tactics.
