This Wednesday, leaders of four great American tech companies will face the House Subcommittee on Antitrust, Commercial, and Administrative Law to prove that their operations do not break American antitrust law.
Mark Zuckerberg (Facebook), Jeff Bezos (Amazon), Tim Cook (Apple) and Sundar Pinchai (Alphabet, the parent company of Google) will have to answer to accusations that the monopoly power of companies they lead distorts markets. These four companies have an almost unprecedented amount of control over people’s consumption of entertainment and goods online. For example, Amazon controls 38% of US online sales while its closest competitor has about 6% while Google processes about 90% of all web searches.
Recently decision makers and regulators have voiced their worries more and more often and company executives were involved in several Congressional hearings. According to their critics, these companies are in a position of market dominance to the effect of stifling competition and preventing competitors from entering their market.
If these accusations are proven to be true, American legislation even allows for breaking up the companies to protect market competition. For example, in 1984 American telecoms giant AT&T was broken into eight separate companies.
During a hearing in January, many smaller tech companies claimed that tech giants exploit their size and influence and use objectionable business practices to suppress them, such as stealing or copying their innovations.
This will be the first time the CEOs of the big four will testify at the same time. Getting CEOs to testify isn’t easy: for example, David Cicilline, leader of the House subcommittee had to threaten to subpoena Jeff Bezos in order to get him to attend – this will be the first time the world’s richest person faces the Congress. Republican committee members tried to get Twitter’s Jack Dorsey to testify as well after a massive security breach earlier in July.
Spectators are advised to lower their expectations though: the real developments will come later as all four companies face their separate antitrust probes. The aim of this hearing most likely will be to get a public commitment from the CEOs to reform their competition practices (for example by stopping the buyouts of their competition).
It is also important to keep in mind that monopolies are a natural occurrence owing to the fact that as companies grow bigger they are able to make their operations more profitable thanks to economies of scale. There is a window of opportunity to start-ups, when they can be more profitable than big companies, however, if the venture is viable it is often bought up by the same big companies they might have competed against.
Author: Richard Nieva; Kiss Soma Ábrahám
https://www.cnet.com/news/four-of-the-biggest-tech-ceos-are-about-to-be-grilled-by-congress/ ;