Daily Management Review

Tech giants face stricter government regulation in the US


The US Congress commenced hearings on the growing market influence of leading high-tech companies, namely, Amazon, Apple, Facebook and Google. The companies had to respond to claims of market dominance, obstructing competition, and careless handling of user data. Despite objections of the firms, many experts agree that, following results of the hearings, the market leaders are facing a serious tightening of state regulation and control.

At the meeting, Adam Cohen, Director of Economic Policy represented Google; Matt Perault, Director of Global Policy, stood for Facebook; Nate Sutton, Associate General Counsel, spoke for Amazon; Kyle Andeer, Vice President of Corporate law represented Apple.

Democratic Congressman Joe Neguse read the list of the largest social networks and services in the United States - Facebook was listed first, WhatsApp third, Facebook Messenger fourth, and Instagram sixth. Thus, four of the six services are owned by Facebook.

“When a company owns four of the six largest entities, there is a name for this - a monopoly or at least a monopoly right in the market,” the congressman said.

The congressmen are particularly concerned about Facebook’s plans to launch its own Libra cryptocurrency. Financial regulators in the US and the UK have already announced that they intend to carefully study this project for possible risks for the financial market. Congressmen were less diplomatic.
Google was blamed for for the growing number of complaints about storage and processing of an increasing amount of traffic on its websites and the increasingly frequent redirection of this traffic to its own services to the detriment of other market participants. Apple was accused of discriminating against third-party services and applications, especially in its App Store.

Representatives of companies rejected the monopoly allegations in every way. For example, Google said that the company contributes greatly to the American economy, creating thousands of new jobs and investing billions of dollars in the development of new technologies. In addition, the company spokesman said that advertising prices have declined largely thanks to Google, while the return from it increased.

The representative of Apple noted that users of its gadgets can use services of other developers and no one limits it.
However, these objections, apparently, were not enough to convince congressmen. Even on the eve of the hearings, many experts argued about how serious consequences could be. Senator Elizabeth Warren even called for forcibly splitting the largest high-tech companies, as was done in 1911 with the oil empire Standard Oil by John Rockefeller or the telecommunications company Bell in 1982.

However, such radical plans have not yet found full support even among the congressmen themselves. Republican Rep. Jim Sensenbrenner warned against “erroneous” calls for fragmentation of companies.
 “If a business is large, it does not mean that it is automatically bad. Antitrust laws are aimed at the behavior of companies so that this behavior is not bad. Laws should not punish companies just because they are large,” said Sensenbrenner. 

source: finance.yahoo.com