Tech Giants Get Congressional Antitrust Warning: ‘Change Is Coming’

(Bloomberg) — House lawmakers have launched a fight against dominant technology companies, vowing to change competition laws to curb their power.

The House antitrust panel, led by Rep. David Cicilline, will hear from antitrust experts Thursday on potential proposals to increase competition in digital markets, ranging from corporate breakups to new regulations to prevent tech giants from flexing their muscles.

“Republicans and Democrats agree that these companies have too much power and that Congress must limit that dominance,” Cicilline said. “Mark my words, change is coming, rights are coming. Every day, policymakers around the world engage in a similar process.

The hearing follows the panel’s findings from a 16-month investigation into technology companies, published last year. The report indicates that Google, Facebook Inc., Amazon.com Inc. and Apple Inc. owned by Alphabet Inc. have abused their power as guardian of the digital economy.

The commission’s report recommended a series of far-reaching antitrust reforms, including a measure that would prohibit a dominant technology platform from operating in competition with companies that depend on it – much as banking regulations once barred large lenders from taking over insurers, corporate real estate and other non-bank businesses. The commission also recommended restrictions on takeovers by parent companies.

Hal Singer, an antitrust economist, told lawmakers there is an “urgent need” to reform competition law.

“Recent events suggest that some platforms have accumulated so much economic and political power that they may be unmanageable, which argues for reducing their size,” he said.

Democrats want to use control of Congress to pass antitrust reform in response to evidence that industries are more concentrated across the U.S. economy and there are signs of declining competition in many markets. Competition policy is increasingly seen as a mechanism to combat economic problems such as income inequality and wage stagnation.

In the Senate, Democrats led by Amy Klobuchar of Minnesota introduced legislation earlier this month that would make this possible put an end to it mergers, making it easier for antitrust enforcement authorities to stop the deal.

Antitrust reform has Republican support. Rep. Ken Buck of Colorado, the antitrust panel’s ranking member, said technology companies “can operate with complete impunity because of their monopoly status.”

“The status quo is not working and we must act, but the most important thing is not to take a chainsaw to the entire economy, but rather to take a scalpel approach to big tech,” he said.

As Congress works on legislative fixes, federal antitrust enforcers and state attorneys general across the country continue to pursue lawsuits against Google and Facebook that accuse the companies of violating antitrust laws. The complaint against Facebook filed by the Federal Trade Commission and states led by New York seeks to break up the company by pulling out of its acquisitions of Instagram and WhatsApp.

Witnesses at Thursday’s hearing in the House of Representatives include: Morgan Harpersenior adviser at the American Economic Liberties Project, which advocates for the breakup of tech giants, and Charlotte Slaimandirector of competition policy at the technology policy organization Public Knowledge.

One of the propositions raised by Slaiman in her written testimony, which has support at least some Republicans, requires technology platforms to provide competitors with access to their networks, similar to the mutual cooperation of mobile networks. Critics say companies can effectively pick winners and losers in their markets, granting or denying access as they see fit.

Also scheduled to testify is Eric Gundersen, CEO of Mapbox Inc., a software company that sells mapping tools to developers, who claims that Google uses its power over the Internet search engine to harm competition.

Gundersen said in written testimony that Google limits interoperability. He said Google forces developers to only use Google Maps if they want to put Google Search on a map, making it difficult to compete with Mapbox.

“I need Google Maps to stop bullying and intimidating customers who want to both pay for Google Search and use Mapbox maps,” Gundersen said. “Customers – developers – should be able to buy the maps they believe best suit their needs, without anti-competitive interference from Google.”