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The Antitrust Hearing

On the 30th of July 2020, law makers held an initial hearing with the chief executives of the tech industries four most powerful players.

We need to ensure the antitrust laws first written more than a century ago work In the digital age. When these laws were written, monopolists were men named Rockefeller and Carnegie. Their control of the marketplace allowed them to do whatever it took to crush independent businesses and expand their own power. The names have changed, but the story is the same.

Congressman David Cicilline, Chairman of the House Antitrust Subcommittee

What famous four are we talking about exactly?

Well its none other than: Amazon’s CEO Jeff Bezos, Apple’s CEO Tim Cook, Facebook’s CEO Mark Zuckerberg and Google’s CEO Sundar Pichai.

What is the Antitrust Subcommittee?

It ultimately argues that the law should prioritise and protect competition in a free market. It deals with the following:

  • Oversight of antitrust law and competition policy, including the Sherman, Clayton and Federal Trade Commission Acts
  • Oversight of antitrust enforcement and competition policy at the Justice Department
  • Oversight of antitrust enforcement and competition policy at the Federal Trade Commission
  • Oversight of competition policy at other federal agencies.

What do they stand accused of?

All four companies are building a defence against the accusation that they in various forms: stifle competition in the tech industry by controlling how information is disseminated and distributed, they leverage their market dominance to suppress competition, they copy and assimilate competitors and have predatory pricing to manipulate the marketplace. They are also accused of giving preferential treatment and promotion to their own products.

Where’s the evidence? (courtesy of www.the verge.com)

  1. Google made Google Meet free for anyone at the end of April, and it has wasted no time integrating the service into Gmail ever since… Not only to build Google Meet into Gmail, but to inflict a giant button on inbox screens for all G Suite users by default. It can be turned off, but the company is clearly sacrificing user experience to push its own agenda against Zoom.
  2. Spotify has claimed Apple uses its App Store to stifle innovation and limit consumer choice in favour of its own Apple Music service.
  3. Apple takes up to a 30-percent cut of revenue on in-app purchases and subscriptions, so developers try to avoid signing up users within their app whenever possible to avoid the steep tax.
  4. Apps and their metadata may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.
  5. Amazon acknowledged that there is a policy that prohibits the use of third-party seller data to support Amazon’s own private-label business. But, he admitted, “I can’t guarantee you that policy has never been violated.”

How did they defend themselves?

Walmart’s online sales grew 74% in the first quarter. And customers are increasingly flocking to services invented by other stores that Amazon still can’t match at the scale of other large companies, like curbside pickup and in-store returns.

Amazon’s Jeff Bezos

The smartphone market is fiercely competitive, and companies like Samsung, LG, Huawei and Google have built very successful smartphone businesses offering different approaches. Apple does not have a dominant market share in any market where we do business. That is not just true for iPhone; it is true for any product category.

Apple’s Tim Cook

People have more ways to search for information than ever before — and increasingly this is happening outside the context of only a search engine. Often the answer is just a click or an app away: You can ask Alexa a question from your kitchen; read your news on Twitter; ask friends for information via WhatsApp; and get recommendations on Snapchat or Pinterest. When searching for products online, you may be visiting Amazon, eBay, Walmart, or any one of a number of e-commerce providers, where most online shopping queries happen.

Google’s Sundar Pichai

Stay tuned to see how this progresses.