The House Democrats released a 449-page report claiming that big technology firms like Facebook, Amazon, and Apple enjoy an unfair monopoly system.
After an investigation that lasted for over 16 months, the House Democrats concluded that certain technology giants must be split up for a fairer economy. The list includes vast companies like Google and Alphabet.
The panel said that the companies that were once underdogs in the market had become the very monopolies that they set out to compete against.
Significance of being a monopoly
The House Democrats believe that the said technology firms have too much power in the market, which needs to be controlled. Furthermore, the companies have abused their power to snuff out competition threats, which has led to lesser innovation in recent years.
According to Bloomberg’s report, the matter has also caused fewer choices for the consumers and a hobbled democracy.
The House Democrats also claimed that the technology industry’s monopolies allowed the giants to enter unrelated markets relatively quickly, potentially leading to a further monopoly in other sectors.
As soon as the report was released, Facebook and Apple saw drops in their stock prices.
According to the 449-page report released, Congress now discusses laws that would prevent technology companies from owning different business lines. A primary example is Facebook owning other companies like WhatsApp and Instagram.
This reform mandates the breaking up of such companies, supporting small technology firms as compared to monopolies.
The House Democrats also suggested another reform that prohibits a dominant platform from operating in competition with firms depending on it.
As per CNBC, the said idea comes from the Bank Holding Company Act of 1956, which prohibited large banks from acquiring insurers, real estate firms, and other non-banking companies.
Responding to the claims made by the House Democrats, the companies accused came out with defensive statements.
Amazon claimed that it accounts for less than 1% in the $25 trillion global retail market and 4% in the United States’ retail industry.
On the other hand, Facebook defended its accusation of acquiring WhatsApp and Instagram, saying the company helped them grow rather than eliminating its competition.
A similar statement was released by Google, wherein the company claimed that it “invested” money in Research & Development to better the industry.
Apple disagreed with the claims made and said it does not even have a dominant market share. The brand also defended its 30% commission rate and deemed it a “fairly competitive” move according to its market.
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