The representatives of Democrats in the USA have issued a report in October 2020 explaining the strategies adopted by four big technology giants, to gain predominance in online searching, advertising, social networking, shopping, and other businesses.
The investigations were mainly included aimed at four tech giants Apple, Amazon, Facebook, and Google.
The findings and recommendations:
Apple
Findings: Apple has a dominance on distributing software onto the iPhone by charging much above the market prices from the developers for App Store sales, to exclude rival apps and services, and to misappropriate data from developers and use it to create competing services and features.
Recommendations: The proposals made by the lawmakers could force Apple to stop engaging in markets where its competitors depend on its App Store to reach customers. Another suggestion is to create rules against self-preference which could hamper Apple’s ability to remove apps from its App Store. Even though there is no clear-cut path on the impact of these proposals after they are implemented, it is expected that they could compel Apple to quit major businesses, such as streaming music, streaming television and cloud storage.
Amazon
Findings: Amazon does selling of its own brands along with brands from other vendors on a single platform. It was alleged that Amazon exercised control over the independent vendors who did not have any other option except Amazon to reach to their online customers. Also there was a conflict of interest as Amazon was using the vendors’ data as a base to sell its own goods and services.
Recommendations: The lawmakers suggested Amazon to detach and refrain itself from competing with vendors who were dependent on Amazon to sell their products. Amazon is both a platform and a player. However Amazon has replied that this separation policy would have the primary effect of forcing millions of independent retailers out of online stores. This will thereby deprive small business houses of one of the fastest and most profitable way to reach to their customers. For the consumers, the result would be less choice and higher prices. Amazon stated that it represents less than 4% retail sales of USA.
Findings: Facebook holds monopoly power in social media networking. They obtained monopoly by adopting two strategies: (1) they secured dominance by crippling their potential rivals and copying their content, (2) they also acquired their potential competitors WhatsApp and Instagram. Facebook was also accused selectively enforcing its platform policies to deactivate a threat video sharing application ‘Vine’.
Recommendations: It was suggested that weak antitrust enforcement had led to reduction in competition and innovation. It proposed boosting budgets of antitrust enforcers for reversing illegal and anti-competitive mergers. This would help in investigations into Facebook’s alleged anti-competitive practices and make future transactions trickier. Facebook responded by saying that with success comes accountability, but it cannot be enforced by calling for a break-up of a successful organisation.
Google:
Findings: It was found that more than 70% of internet traffic goes through sites owned or operated by Google. To retain the highest position, they practised self-preferencing, predatory pricing, or exclusionary conduct. Investigators found that Google used restrictive customer and partner contracts and other means to ensure its own services are favoured over those of competitors in search, phone and tablet software, advertising technology, and mapping technology. It was also found that Google’s top executives had manipulated to make Google search, as “front and center” on mobile devices.
Recommendations: The lawmakers wanted to have a policy of non-discrimination and bargaining laws for tech giants like Google to provide access to their systems. Only under such circumstances, device makers, ad tech companies, and app developers can have an option to shift from Google tools.
Though these investigations, findings and recommendations are in place it will not be an easy task to bring it into existence.
Reference to India
The influence of these Big Tech companies in India also featured in the investigations. It referred to the various antitrust probes going on against Google in India. Google has had run-ins with regulators, especially the Competition Commission of India. Amazon and Facebook, which are trying to enter the retail space in India, are also likely to be under the lens for the way they price their products and the space they give/deny to their competition.
Sources: indianexpress