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Google And Amazon Face Antitrust Accusations On The Hill

Google And Amazon Face Antitrust Accusations On The Hill

June 16, 2021 at 05:43PM
by PYMNTS

Last week U.S. lawmakers fired a shot across Big Tech’s bow, introducing five new bills designed to curb what lawmakers have described as “unregulated power” held by the firms of Silicon Valley. If enacted, the legislation would mark the biggest changes to U.S. antitrust law in decades.

And while the legislation will affect all firms, their congressional architects have been open in naming the specific targets of the legislation.

“Apple, Amazon, Facebook, and Google have prioritized power over innovation and harmed American businesses and consumers in the process,” Rep. Ken Buck (R-Col.), the ranking member on the House antitrust subcommittee, said in a statement. “These companies have maintained monopoly power in the online marketplace by using a variety of anticompetitive behaviors to stifle competition.”

The new pieces of legislation would prohibit a dominant platform from discriminating against rivals by offering its own products preference (American Innovation and Choice Online Act); stop firms from using acquisitions as a means of neutralizing potential threats (Platform Competition and Opportunity Act); ban dominant platform from using their power across multiple types of business to give themselves unfair advantages (Ending Platform Monopolies Act); make it easier for consumers to move their data when they want to switch to a new provider (Augmenting Compatibility and Competition by Enabling Service Switching Act); and change filing fees for the first time in two decades, providing the government funds to pursue antitrust actions (Merger Filing Fee Modernization Act).

Those bills are a long way and a lot of subcommittee hearings between now and becoming law — though regulation of Big Tech is one of the few areas where bipartisan action is still possible, as both Republicans and Democrats have qualms about the power Big Tech wields, and a determined interest in reining it in. And while the players most directly targeted by the new bills have not as yet offered any public comment, they will get their chance this week as they have been invited to appear before the House to testify.

Smart Tech Control

Executives from Alphabet’s Google and Amazon head the list of witnesses for a hearing before the Senate Judiciary Committee’s antitrust subcommittee this week, along with an executive from speaker maker Sonos Inc.

At a U.S. Senate antitrust subcommittee hearing on Tuesday (June 15), Google and Amazon defended their smart-speaker businesses as Republicans and Democrats alike raised concerns that their businesses were essentially anti-competitive in nature and design with their ability to do things like undercut the market on pricing and advantage themselves via their control of platforms.

Sen. Amy Klobuchar, chair of the Senate Judiciary’s antitrust panel, said the expansion of technology giants into more at-home devices risks further consolidating the market, using Amazon’s ability to push grocery buying only at Whole Foods locations as an example of the firm’s ability to further expand its control.

“In home technology, we see some of the most powerful firms that dominate tech today poised to dominate the platforms of the future,” she said. “Consumers should choose, not vertically integrated tech giants.”

That sentiment was echoed by Sonos Inc. Chief Legal Officer Eddie Lazarus in his key witness testimony before the antitrust subcommittee.

“Apple will only license Siri to companies that utilize the HomePod as a central hub to connect with Siri. Thus, Apple is conditioning interoperability with Siri on companies placing a competitive Apple product alongside their own,” Lazarus said, noting Apple was far from alone in deserving this criticism. He went on to name Google as an offender with its demand that a condition of Google Assistant was to never allow concurrency with another general voice assistant.

He also took aim at Matter, a new standard for smart home connectivity backed by Apple, Google and other tech giants.

“One could imagine, furthermore, a Trojan Horse aspect to all this,” Lazarus said in his testimony. “Those who control the standard and its evolution effectively control the nature and pace of innovation, including the innovations dreamed up by their competitors. The standard Matter is working on, as I understand it, is basically a creature of Google and Apple code. That is hardly a formula for fair competition or more creative invention. It’s a formula for further entrenching the dominance of the very few.”

Amazon executive Ryan McCrate responded to the critiques by asserting that Amazon makes its technology available to other developers so that competing music services, for example, are available through its voice-assistant service Alexa. Google Senior Director of Government Affairs Wilson White said the company priorities consumer choice and privacy and that within its operating system it allows users to set up rival products of all sorts, including Alexa.