X

This is not a paywall.

Register for free to continue reading.

We made a promise to you that we’ll never erect a paywall and we intend to keep that promise. We also want to continually improve your reading experience and you can help us do that by registering with us. It’s quick, easy and will cost you nothing.



Nearly there! Create a password to finish up registering with us:


Please enter your password or get a login link if you’ve forgotten


Open Sesame! Thanks for registering.

First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

We'd like our readers to start paying for Daily Maverick

More specifically, we'd like those who can afford to pay to start paying. What it comes down to is whether or not you value Daily Maverick. Think of us in terms of your daily cappuccino from your favourite coffee shop. It costs around R35. That’s R1,050 per month on frothy milk. Don’t get us wrong, we’re almost exclusively fuelled by coffee. BUT maybe R200 of that R1,050 could go to the journalism that’s fighting for the country?

We don’t dictate how much we’d like our readers to contribute. After all, how much you value our work is subjective (and frankly, every amount helps). At R200, you get it back in Uber Eats and ride vouchers every month, but that’s just a suggestion. A little less than a week’s worth of cappuccinos.

We can't survive on hope and our own determination. Our country is going to be considerably worse off if we don’t have a strong, sustainable news media. If you’re rejigging your budgets, and it comes to choosing between frothy milk and Daily Maverick, we hope you might reconsider that cappuccino.

We need your help. And we’re not ashamed to ask for it.

Our mission is to Defend Truth. Join Maverick Insider.

Support Daily Maverick→
Payment options

House Panel to Seek Breakup of Tech Giants, GOP Member...

Business Maverick

Business Maverick

House Panel to Seek Breakup of Tech Giants, GOP Member Says

Mark Zuckerberg, chief executive officer and founder of Facebook Inc., top right, Jeff Bezos, founder and chief executive officer of Amazon.com Inc., top center, Sundar Pichai, chief executive officer of Alphabet Inc., bottom left, and Tim Cook, chief executive officer of Apple Inc., center left, are displayed on a monitor while swearing in during a House Judiciary Subcommittee hearing in Washington, D.C., U.S., on Wednesday, July 29, 2020. Photographer: Mandel Ngan/AFP via Getty Images
By Bloomberg
06 Oct 2020 0

A House panel led by Democrats investigating competition in the technology sector is poised to propose sweeping reforms to block giants such as Amazon.com Inc. and Apple Inc. from both owning marketplaces and selling their own products on them, according to a critique of the recommendations by one Republican member of the subcommittee.

The critique and the panel’s report are still drafts and the contents of both could change. It’s not clear which members will endorse the report, whose release has been delayed because of last-minute information regarding Facebook Inc., CNBC reported earlier. The report was expected this week, but it’s been pushed back, according to a person familiar with the matter.

The recommendations, which would represent the most dramatic overhaul of competition law in decades if approved, are the result of a yearlong investigation by the House antitrust panel led by Democratic Representative David Cicilline. That probe is coming to its conclusion as federal and state antitrust enforcers are also investigating Alphabet Inc.’s Google and Facebook.

Cicilline’s recommendations would include what he has called a Glass-Steagall law for technology platforms, according to the draft discussion paper from Republican Representative Ken Buck of Colorado, which was reported on earlier by Politico and obtained by Bloomberg. Buck said that recommendation and some others in the staff report would be “non-starters” for the GOP. Glass-Steagall refers to the Depression-era law separating commercial and investment banking.

Cicilline’s proposal would prohibit tech companies from entering different lines of business and amount to a breakup of the companies, according to Buck. Amazon, for example, would be prevented from selling its own products on its marketplace, while Google couldn’t own both the world’s biggest search engine and YouTube. And Apple would be barred from owning the App Store and offering its own apps.

“The majority’s primary remedy to create competition in the tech marketplace is to enact legislation creating structural separation,” Buck wrote in the discussion. Buck said he agrees with Cicilline on the need to rein in the power of technology companies and agrees with certain remedies such as giving more resources to competition enforcers.

Spokespeople for Cicilline and Buck didn’t immediately respond to requests for comment.

Cicilline told Bloomberg in an interview in August that the companies are engaging in “deeply disturbing” abuse of their dominance to crush competitors. The panel issued information requests that yielded millions of pages of documents and held seven hearings, including one in July that featured testimony by the chief executives of Google, Facebook, Amazon and Apple.

The draft report would also recommend legislation that would require the tech companies to allow users to easily move their data from one website to another, according to Buck. It also recommends legislation to shift the burden of proof in merger cases to the tech companies, cap the market share in some mergers to 25% for buyers, overturn Supreme Court and other decisions that critics say have hampered enforcement agencies from blocking mergers and eliminate arbitration clauses in terms of service.

In addition to Cicilline’s investigation, federal and state antitrust enforcers are poised to file a historic monopolization lawsuit against Google, and additional cases could be in the pipeline, Bloomberg has reported. The U.S. Federal Trade Commission is preparing a possible case against Facebook. And Amazon and Apple are facing inquiries by federal antitrust authorities.

It wasn’t immediately clear whether other committee Republicans, including its top-ranking GOP members, would join Buck’s recommendations. Representative Jim Sensenbrenner, who is the top Republican on the subcommittee, said in an Oct. 1 hearing that he and Cicilline “ultimately disagree on the future of antitrust laws.”

Representative Jim Jordan, who is the top Republican on the Judiciary Committee that includes the antitrust panel, has repeatedly used the investigation’s hearings to rail against the companies for allegedly silencing conservatives. Buck, in the report, expressed concern about “censorship” across the political spectrum and cited “bias against conservative outlets and personalities” in particular.

Buck said the Democrats will recommend imposing restrictions that would make it tougher for tech companies to grow by acquiring other firms. While Buck didn’t provide details of the majority’s proposal, he described it as “shifting the burden of proof in merger cases.”

During their investigation, committee members often complained that the tech companies have been able to solidify their dominance by acquiring promising startups with little or no scrutiny from antitrust enforcers.

At a recent hearing, a former head of the Justice Department’s antitrust division said that courts have made it nearly impossible for the government to stop dominant companies from acquiring nascent competitors and suggested one fix would be to put the burden on buyers to prove that the deals would be good for competition. That could make it easier for antitrust enforcers to block deals.

While Buck said he supported a burden-shifting approach, he said Congress should gather more information on another proposal by the Democrats: a ban on acquisitions of future rivals and start-ups, like Facebook’s takeover of Instagram. Such a ban would prevent start-ups from profiting from their ideas by selling to another company, and reduce incentives for investors to back start-ups, Buck said.

The report’s recommendations face an uphill battle. With time running out in this Congress, any real legislative action wont happen until 2021. They’ll likely run into Republicans’ longtime skepticism about changing antitrust law. Even if the election hands the Senate majority to the Democrats, Republicans can still use procedural tools to block bills from passing.

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

No Comments, yet

Please peer review 3 community comments before your comment can be posted