Tech Gets Congress Antitrust Warning: ‘Change Is Coming’

House lawmakers kicked off an effort to tackle dominant technology companies, vowing a revamp of competition laws to curb their power.

The House antitrust panel, led by Representative David Cicilline, heard from antitrust experts Thursday about potential proposals aimed at fostering competition in digital markets, ranging from company breakups to new regulations to prevent tech giants from flexing their muscles.

“Republicans and Democrats agree that these companies have too much power, and that Congress must curb this dominance,” Cicilline said. “Mark my words, change is coming, laws are coming. Every day, policymakers around the world are undertaking a similar process.”

The hearing follows the findings of the panel’s 16-month investigation of tech companies released last year. The report determined that Alphabet Inc.’s Google, Facebook Inc., Amazon.com Inc., and Apple Inc. have all abused their gatekeeper power over the digital economy.

The committee’s report recommended a series of far-reaching antitrust reforms, including a measure that would prohibit a dominant tech platform from operating in competition with the firms dependent on it -- much the way banking laws once barred large lenders from acquiring insurers, real estate firms, and other non-banking companies. The committee also recommended restrictions on acquisitions by dominant firms.

Criticism of the tech companies was bipartisan at the hearing, suggesting a path for agreement on legislation. Republican Representative Ken Buck of Colorado, the ranking member of the antitrust panel, said tech companies “are able to act with complete impunity because of their status as monopolies.” He said he backed merger restrictions, saying tech companies have been able to solidify their dominance by acquiring other companies.

“The status quo is not working and we must act, but the key is to make sure we do not take a chainsaw to the whole economy, but rather that we should implement a scalpel-like approach to big tech,” he said.

Democrats are looking to capitalize on control of Congress to pass antitrust reform in response to evidence that industries across the U.S. economy have grown more concentrated, with many markets suffering from signs of declining competition. Competition policy is increasingly seen as a mechanism to combat economic woes such as income inequality and stagnant wages.

In the Senate, Democrats led by Amy Klobuchar of Minnesota introduced legislation earlier this month that would clamp down on mergers by making it easier for antitrust enforcers to stop deals.

Hal Singer, an antitrust economist, told lawmakers there is an “urgent need” to reform competition laws.

“Recent developments imply that certain platforms have accumulated so much economic and political power that they may not be governable, which militates in favor of cutting them down in size,” he said.

As Congress pursues legislative fixes, federal antitrust enforcers and state attorneys general across the country are pressing ahead with lawsuits against Google and Facebook that accuse the companies of violating antitrust laws. The complaint against Facebook filed by the Federal Trade Commission and states led by New York seeks to break up the company by unwinding its acquisitions of Instagram and WhatsApp.

There was Republican and Democratic support for a proposal known as interoperability that would require tech platforms to give competitors access to their networks, similar to the way mobile networks work with one another. Critics say the companies can effectively pick winners and losers in their markets by granting or denying access as they please.

Other measures backed by witnesses included more funding for U.S. antitrust enforcers, rules preventing them from discriminating against rivals on their platforms and a special tribunal that could decide antitrust complaints more quickly than traditional courts.

Morgan Harper, a senior adviser at the American Economic Liberties Project, an anti-monopoly organization, cautioned that break-ups of companies need to be on the table as the best way to correct conflicts of interest that can arise when tech companies compete with firms that depend on their platforms.

“Regulatory tools alone cannot address the problem of entrenched market power, and can sometimes make it worse,” she said. “The dominant tech platforms know they offer critical infrastructure, and can effectively ignore regulation.”

Eric Gundersen, the chief executive officer of Mapbox Inc., a software company that sells mapping tools to developers, told lawmakers that Google is using its power over internet search to harm competition. Gundersen said Google requires developers to use only Google Maps if they want to incorporate Google Search on a map, hindering competition from Mapbox.

“I need Google Maps to stop bullying and intimidating customers who want to both pay for Google Search and to use Mapbox maps,” Gundersen said. “Customers -- developers -- should be able to buy whatever maps they think are the best solution for their needs without anti-competitive interference from Google.”

Google in a statement called Gundersen’s claims “inaccurate.” The company said it doesn’t prevent developers from using other mapping products in addition to Google Maps’ services.

©2021 Bloomberg L.P.

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