US Democratic Party to Submit Recommendation for Splitting IT Giants into Multiple Companies

Online Platforms and Platform Participation Should Be Separated

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Plans are underway to split IT giant companies like Amazon into multiple companies by sector.

According to the Wall Street Journal (WSJ) on the 30th (local time), Democratic lawmakers on the Antitrust Subcommittee of the House Judiciary Committee, which has been investigating IT giant companies, are expected to soon submit recommendations to promote competition among internet companies.

WSJ predicted that the recommendations would include prohibiting companies that provide their own platforms, such as Google or Amazon, from directly competing with other companies participating on their platforms.

David Cicilline, a Democratic subcommittee chairman, said, "A company like Amazon should not both set various regulations for online commerce and participate in the market as a seller at the same time."

Chairman Cicilline also compared this stance to the Glass-Steagall Act enacted in 1933.

Just as the Glass-Steagall Act strictly separated commercial banking and investment banking, online platforms and platform participation should be separated.

If such recommendations are legislated, Amazon would have to separate and operate its online platform division and product sales division. Google would also have to spin off various consumer services from its search engine division.

The IT industry is expected to strongly oppose this move by Congress.

Amazon CEO Jeff Bezos appeared at a hearing last July and drew a line by stating that Amazon does not consider selling products directly on its online marketplace to be a conflict of interest.

However, it remains uncertain whether the Antitrust Subcommittee’s recommendations will pass through the Judiciary Committee and actually become law.

Republicans maintain that existing antitrust laws are sufficient for regulation, and Democratic presidential candidate Joe Biden does not support the claims of progressive lawmakers within his party who advocate for the breakup of IT companies.