It’s finally here. After an investigation that lasted more than a year, a U.S. House antitrust subcommittee has come up with a robust game plan to rein in the biggest tech giants. In a report issued Tuesday, the panel accused Amazon.com Inc., Apple Inc., Facebook Inc. and Google parent Alphabet Inc. — whose collective market value is more than $5 trillion — of abusing the power of their platforms to cut off competitors and extend their dominance. It calls for a structural breakup of their businesses. I can’t argue with the logic, especially when it comes to Amazon.
“These firms have too much power, and that power must be reined in and subject to appropriate oversight and enforcement. Our economy and democracy are at stake,” the nearly 450-page final report said. “Our laws must be updated to ensure that our economy remains vibrant and open in the digital age.”
Each of the company’s anticompetitive practices were presented in excruciating detail in the document. Facebook, for instance, was accused of maintaining its monopoly power among social networks by using its data advantage to stifle and identify potential competitors and then “acquire, copy, or kill these firms.” Google was said to have used its dominance in search and online advertising to bolster its own vertical offerings and create an “ecosystem of interlocking” monopolies. Further, the internet behemoth allegedly used third-party app usage data from its Android operating system to inform the creation of its own apps. And Apple was stated to have “significant and durable market power” with its iOS mobile operating system, exerting a monopoly-type hold with its App Store, the panel said.
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Out of the group, though, Amazon seems to have engaged in the most egregious anticompetitive behavior, especially in regards to third-party sellers on its marketplace platform. Earlier this year, the Wall Street Journal reported Amazon’s employees used these vendors' data to inform the development of its own products. The company had previously vowed it would not use individual seller data to launch its private-label offerings, but the House investigation confirmed through several interviews with former employees and current sellers that Amazon had misused seller data and “routinely bullies and mistreats” them. And while Amazon publicly called third-party sellers “partners,” the investigation showed that behind closed doors, it referred to them as “internal competitors.” This is not great news for the nearly 2 million small and medium-sized businesses that sell on Amazon’s platform, roughly 40% of which rely on the company’s marketplace as their sole source of income.
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