House finds Google, Apple wield ‘monopoly power’ that demands changes

The Big Tech hearing in Congress may not have provided a lot of meaningful answers, but the investigation associated with that hearing could produce significant results. The House of Representatives Antitrust Subcommittee has published the results of a 16-month investigation (via CNBC) and found that Google, Apple, Amazon and Facebook all have a “monopoly power” that warrants substantial changes.

Google allegedly has a search monopoly enforced through “anti-competitive tactics” including Android. The company has reportedly abused its power to require phone manufacturers to pre-install and default their apps, which solidifies their leads in search and some app categories. According to the subcommittee, it also exercises dominance over Chrome, Google Maps, and Google Cloud, and uses programs like Android Lockbox to keep track of the competition.

Connected: Android is becoming a monopoly and that could be a problem

Apple, meanwhile, allegedly claimed a monopoly on the app market for iOS devices, where it discouraged competing apps and charged “above average” prices. Amazon’s supposed monopoly was to acquire businesses, undermine third-party sellers, and use Alexa to advertise products while collecting user data. The committee accused Facebook of creating a monopoly by specifically acquiring companies like Instagram and WhatsApp to stifle competition, while exploiting the network effect to make it harder to leave.

The House Subcommittee then recommended serious anti-trust measures. It called for “structural separations” (which do not necessarily dissolve companies) and the dominance of dominant platform operators in entering “neighboring” companies. Politicians also wanted to prevent monopolists from preferring their services to others, making services compatible with the competition, and enabling data transfers that would help people switch.

Whether or not any of these potential reforms take place is another question.

Officials asked to change the antitrust authorities’ strategies. The FTC and Justice Department’s antitrust team would have to assume that mergers are anti-competitive by default and ask companies to prove why they wouldn’t affect competition. The FTC would also have to collect data on performance concentration on a regular basis. The government would even ban enforced arbitration and restrictions on class actions.

Whether or not any of these potential reforms take place is another question. Republicans have already opposed some of the proposed measures of the Democrat-led investigation, including breakups. The House would have to get both the Senate and the President on board to pass meaningful laws. This does not preclude one form of action, however, and the November 3 elections could change the political landscape in favor of harsher measures.

Google has historically rejected claims of monopoly and opposed efforts to curb its Android and search policies. If it were up to investigators, it might have to do more to accommodate third-party apps and stores, including those that come pre-installed on non-Pixel phones. That might be good for competition, although it’s not guaranteed – the Play Store and Google apps like Gmail are still considered cell phone must-haves in the US, although there are plenty of alternatives.