Antitrust Subcommittee Publishes '449-Page Report' After 16 Months of Investigation
Former Facebook Employee: "Avoiding Competition with Instagram Was Our Job"
Calls for Strengthening Antitrust Laws Including Corporate Breakups
[Asia Economy Reporter Kwon Jae-hee] A U.S. House subcommittee has published a report stating that so-called IT giants such as Amazon, Apple, Facebook, and Google are abusing their market-dominant positions to hinder competition. The subcommittee also proposed a comprehensive revision of federal laws to prevent these companies' monopolistic behaviors, raising the possibility of a broader impact across Silicon Valley.
According to the Wall Street Journal (WSJ) on the 6th (local time), the Antitrust Subcommittee of the House Judiciary Committee released a 449-page report detailing the conduct of these major IT companies. The report contains findings from a 16-month investigation and analysis of 1.3 million documents. The New York Times (NYT) described the report as "the most significant effort since the U.S. government filed an antitrust lawsuit against Microsoft (MS) in the 1990s."
According to the report, Facebook acquired other social media platforms, especially Instagram, to maintain its monopoly power. The report quoted a former Facebook employee saying, "Our biggest challenge was to ensure that Facebook and Instagram did not compete against each other."
The report stated that Google improperly ignored competitors' websites and used its technological capabilities to maintain leadership in search and advertising. Amazon and Apple were described as exercising monopoly power to protect and grow their businesses. These companies reportedly created rules that disadvantaged sellers and developers over several years. Amazon was specifically criticized for exercising monopoly power over many small and medium-sized businesses.
The subcommittee compared these companies to past U.S. oil and railroad tycoons, stating, "The Big Tech four companies hold too much power, endangering our economy and democracy," and added, "They should be divided according to their service functions and must directly prove that future mergers and acquisitions will not disrupt existing market order."
Attention is focused on whether antitrust laws will be comprehensively revised. The Wall Street Journal reported, "Legal amendments are not mandatory, but they create momentum for the government to strengthen regulations in the future." The report emphasized a thorough overhaul of U.S. antitrust laws and recommended that the government prevent problematic mergers going forward. It included legislative proposals to prohibit tech companies from owning other business sectors.
Subcommittee Chair David Cicilline likened the situation to the 'Glass-Steagall Act,' which separated investment and commercial banks, arguing that online platforms and participants should be separated. He stated that operating a platform alone is allowed, but selling products within it should be restricted.
The committee plans to use this report to influence policymakers to pursue legislation. However, since the House majority is Democratic, Republican members oppose strong measures. Therefore, there are expectations that actual legislation will not be easy. Republican Representative Jim Jordan said, "The contents of this report are too radical." Bloomberg also predicted that due to time constraints, legislation is unlikely to be enacted by next year.
Strong opposition from the IT industry is also cited as an obstacle to legislation. Amazon responded, "All large organizations are under regulatory scrutiny, and we welcome such investigations," but countered, "The assumption that success is solely the result of antitrust violations is incorrect." The Consumer Technology Association likened large IT companies to jewels in a crown, commenting, "Targeting our country's most successful tech companies will undermine our competitiveness."
Paul Gallant, an analyst at investment bank Cowen, said, "This report will be a turning point for antitrust and the IT industry," adding, "While the report itself has no legal binding force, it will significantly affect new business ventures of Big Tech companies in the future."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
