Judiciary Antitrust Subcommittee Investigation Reveals Digital Economy Highly Concentrated, Impacted By Monopoly Power
The House Judiciary Committee's Antitrust Subcommittee today released the findings of its more than 16-month long investigation into the state of competition in the digital economy, especially the challenges presented by the dominance of Apple, Amazon, Google, and Facebook and their business practices.
The report, entitled Investigation of Competition in the Digital Marketplace: Majority Staff Report and Recommendations, totals more than 400 pages, marking the culmination of an investigation that included seven congressional hearings, the production of nearly 1.3 million internal documents and communications, submissions from 38 antitrust experts, and interviews with more than 240 market participants, former employees of the investigated platforms, and other individuals.
"As they exist today, Apple, Amazon, Google, and Facebook each possess significant market power over large swaths of our economy. In recent years, each company has expanded and exploited their power of the marketplace in anticompetitive ways," said Judiciary Committee Chairman Jerrold Nadler (NY-10) and Antitrust Subcommittee Chairman David N. Cicilline (RI-01) in a joint statement. "Our investigation leaves no doubt that there is a clear and compelling need for Congress and the antitrust enforcement agencies to take action that restores competition, improves innovation, and safeguards our democracy. This Report outlines a roadmap for achieving that goal."
After outlining the challenges presented due to the market domination of Amazon, Apple, Google, and Facebook, the report walks through a series of possible remedies to (1) restore competition in the digital economy, (2) strengthen the antitrust laws, and (3) reinvigorate antitrust enforcement.
The slate of recommendations include:
Structural separations to prohibit platforms from operating in lines of business that depend on or interoperate with the platform;
Prohibiting platforms from engaging in self-preferencing;
Requiring platforms to make its services compatible with competing networks to allow for interoperability and data portability;
Mandating that platforms provide due process before taking action against market participants;
Establishing a standard to proscribe strategic acquisitions that reduce competition;
Improvements to the Clayton Act, the Sherman Act, and the Federal Trade Commission Act, to bring these laws into line with the challenges of the digital economy;
Eliminating anticompetitive forced arbitration clauses;
Strengthening the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice;
And promoting greater transparency and democratization of the antitrust agencies.
"After conducting this country's first major congressional antitrust investigation in decades in which we held hearings, heard from experts and questioned the CEOs of dominant tech platforms, I can say conclusively that self-regulation by Big Tech comes at the expense of our communities, small businesses, consumers, the free press and innovation,"said Congresswoman Pramila Jayapal. "By reasserting the power of Congress, we now have a thoroughly researched and meticulously reasoned roadmap for the work ahead as we rein in anti-competitive behavior, help prevent monopolistic practices and allow innovation to thrive. I'm looking forward to continuing this urgent work."
"This comprehensive report is a roadmap to a future where digital behemoths with considerable power over their markets are kept accountable to consumers, small businesses, and their workers,"said Rep. Hank Johnson, Chairman of the Subcommittee on Courts, Intellectual Property and the Internet. "By following these recommendations, we can bolster antitrust protections to ensure consumer choice, data privacy, and affordability in online marketplaces. But in doing so, we must also answer the overarching question that we've been grappling with: How do we remain a country where small businesses can thrive, even as we shift from brick and mortar to lines of code? That is our challenge now."
Rep. Val Demings added, "Our investigation revealed an alarming pattern of business practices that degrade competition and stifle innovation. These companies have made remarkable advancements that have shaped our markets and our culture, but their anticompetitive acts have come at a cost for consumers and small businesses. Competition must reward the best idea, not the biggest corporate account. We will take steps necessary to hold rulebreakers accountable. I thank Chairman Cicilline for his leadership, and will continue to work for a fair marketplace and a tech industry that can advance quality of life for every person without undermining it for others."
"Small businesses are the backbone of our economy and they must be able to compete on a level playing field,"said Rep. Lucy McBath. "We must do all we can to ensure our economy remains fair, our entrepreneurs have the incentive to innovate, and our small businesses are given the opportunity to prosper and create new and good-paying jobs."
"This investigation has revealed that Apple, Amazon, Facebook, and Google were committed to drowning out competition through unfair and anti-competitive practices -- often doing so at the expense of user privacy and innovation," said Rep. Scanlon. "We must do everything we can to protect consumers and this report is a roadmap to the work that lies ahead. I look forward to developing and introducing legislation to restore fairness to the digital marketplace."