The US Congress released a 449-page report on the big tech companies and antitrust laws. Amazon, Apple, Facebook, and Google are the four companies on the committee’s radar.
It also gives recommendations to curb the big tech’s monopoly over various markets on the internet. Going by the report, there are many things that matter to the end-user and might change the way we use social media platforms and online shopping portals in the near future, if the recommendations are followed.
The report matters not only in the United States but all around the world. It is so because antitrust laws are there to protect consumers against predatory business practices. Since the report clearly finds the companies are not following the laws, it means the consumers haven’t been fairly treated.
People’s Verdict?
Its not just the Congress report that says big tech like Amazon, Apple, Facebook, and Google are creating a market monopoly. A segment in the overview of the report showcased public opinion about these companies and their practices.
Public Opinion On Data Sharing
A Consumer Report Survey from September states that 85% of Americans are “very concerned” about how tech firms store their data. 81% are concerned that the companies are holding this data to build more intricate consumer profiles. The survey also says that 79% of people think big tech mergers and acquisitions undermine competition.
An increasing number of people are becoming aware of their data and how it’s used. While the data collection and usage is justified by the company through lengthy and rather convoluted legal terms, their monopoly over user data is a big issue. It’d not be wrong to say that Google knows more about your lifestyle than your own family. Think about it.
The Big Four’s M&A game
Moving further, the congress report addresses the issue of mergers and acquisitions. If you’re a small business, moving up in the world, chances are you’ll be approached by the big-four. Amazon, Apple, Facebook, and Google have acquired thousands of startups and businesses in the last decade or so.
It’s a matter of concern because not all of these were healthy acquisitions. The report presents emails from Facebook employees, including CEO Zuckerberg, talking about acquiring Instagram because it was a ‘threat.’ The report also says that Facebook has created a monopoly in the social networking market.
Let’s take the example of Amazon here. The report showed email exchanges between Amazon employees about the company willing to take a $200 million loss, just to beat their competitor Diaper.com. Amazon later acquired Diaper.com. This is a clear policy for capsizing the competitor, then acquiring and killing it.
You may be enjoying the huge discounts and perfectly synchronized service, but there is another side to it. Amazon took losses to kill the competition because it could. Facebook, on the other hand, owns WhatsApp and Instagram, so forget options when it comes to instant messaging and social networking.
Congress’ Report on Hardware Monopoly
The report doesn’t end on data and competition weaving a spider web over the internet, it comes to your phones too. Apple has been blamed in the report for excluding rivals and preferring its own offerings in the App Store. While the report refers to Apple as “primarily a hardware company,” the reality is complicated.
Apple sells iPhones that maintain the exclusivity of app access through Apple’s proprietary App Store. This walled approach of the Cupertino Giant allows it to generate large profits by charging commissions and fees from third-party apps and developers. Basically, Apple is selling and supporting their hardware so they can earn from their software offerings. The co-dependence of hardware and software, in Apple’s case, is clearly an anti-competitive approach.
The Apple App Store is facing a lot of backlash for collecting commissions and fees from other app developers.
It affects you because you’re ultimately paying for it. The recently assembled Consortium for App Fairness talked about how a Fortnite purchase costs $9 from the Fortnite store and about $12 from the Apple Store. If you wish to have the peace of mind while purchasing from Apple, you end up paying a couple of extra bucks.
The Solution
Investigation of Competition In Digital Markets, or the Congress’ report indicates several measures to restore a fair market.
The measures include restoring competition, strengthening antitrust laws, and reviving antitrust enforcement. One should note that the report refers to government bodies being enablers to big tech companies in reaching a point where it’s next to impossible to end their dominance in the market.
The report mentions that various governments cleared the mergers and acquisitions leading to a situation of monopoly. Had the government been more vigilant and careful, the formation of a monopoly would’ve been visible much earlier.
Like I said in the beginning, antitrust laws are there to protect the consumers. If companies have violated these laws, they’ve contributed to the creation of a bubble where you have services, but not options. In a market without options, the consumer isn’t the king.
The post US Congress Wants To Curb Big Tech’s Powers: Why It Matters To You! appeared first on Fossbytes.
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