Last year, the US Senate Committee on the Judiciary initiated an investigation into the supposed monopoly of “big tech” companies. These big tech companies include Amazon, Apple, Facebook, and Google. The investigation reached a climax this year, with CEOs of these companies attending highly-publicized hearings regarding their companies’ market standing.

Now, the investigation has wrapped up. The Subcommittee on Antitrust, Commercial, and Administrative Law recently released a report detailing the investigation. In the report, the subcommittee found out that big tech companies abused their market position through monopolies and aggressive market expansion.

SEE ALSO: Everything you need to know about the congressional big tech hearing, Part 1 | Part 2

Key takeaways

The subcommittee report revealed key problems regarding big tech’s common business practices. All companies were found to be acting as an “exclusive gatekeeper” on “key channel of distribution”. That is, these companies acted as monopolies on market segments of their own products. Furthermore, these companies “charged exorbitant fees, imposed oppressive contract terms, and extracted valuable data” from individuals and businesses.

The subcommittee also found on its investigation that companies used their monopolies to maintain market position. Practices identified to maintain dominance include identifying key rivals, buying them, or copying their selling features.

The report also stated that these big tech companies are able to maintain further dominance by abusing their intermediary position. It even named the ways how the abuse was carried out: through “self-preferencing, predatory pricing, or exclusionary conduct”.

Further details about how each big tech companies abused their position were also included.

Facebook

Internal communications obtained by the subcommittee reveals that Facebook used acquisitions to cut off potential startups and business threats. The report’s finding suggests that the company’s growing monopoly towards social networking created further internal divisions. In an obtained memo, it was revealed that the company is more concerned with the “rivalry” between its platforms, specifically Instagram.

In the end, the report noted that Facebook’s monopoly led to the deterioration of its platform over time. This led to the neglect of privacy protections and the eventual rise of misinformation, the report added.

Google

For Google, its rise to dominance in search happened through a string of anti-competitive practices. Documents obtained by the subcommittee revealed that the company misappropriated content from third-party providers. When it became a monopoly, it injected search results with its own ads and content, effectively blurring the distinction between organic results and its own.

Other tactics used by the company to maintain dominance are exclusive contracts and diversification. For the former, the report noted how Google forced Android manufacturers to bundle their own apps and services as the default for users. For the latter, the company exploited market segments such as web browsers (Chrome), navigation (Maps), and internet-of-things (Cloud).

Lastly, it was concluded that Google used massive amounts of data from users to reinforce market dominance and capitalize further on its advertising revenue.

Amazon

For Amazon, the report noted that the company is now the dominant leader in the US for online shopping. Amazon’s dominance meant that small and medium businesses have no other alternatives for reaching out to online consumers. Over the years, the company also brought competitors to cut off any alternative online shopping outlets.

Worse, the subcommittee found that the company engaged in anti-competitive practices with its third-party sellers. Obtained internal documents showed how Amazon treated its partners as internal competitors. The company exploited its seller’s data to improve its own line of products — Amazon Basics.

The subcommittee further noted that Amazon has the potential for abusing the market segments where Alexa (voice assistance) and Amazon Web Services (cloud computing) operates.

Apple

The subcommittee concluded its overview of findings with a look at Apple’s tactics over the mobile market. The company exerts dominance over the mobile market and services, owing to the huge popularity of iOS and iPads. This dominance, the report notes, is apparent with the company’s leverage of the App Store in enforcing barriers and cutting off competition.

The maturation of hardware sales also moved Apple to increase sales of its own apps and services. This even compelled them to raise commissions and fees on the App Store, the report noted. Combined with absolute control over the App Store, the company effectively harmed consumers and businesses and reduced app innovation.

Moving forward

All of the big tech companies have individually put out a response in the wake of the findings. Unsurprisingly, all of the responses denied the report’s allegation.

Finally, the report also gave some recommendations moving forward. These recommendations are: addressing anti-competitive practices in the digital market; strengthening the enforcement of anti-trust laws and regulations; and finally, improving anti-trust regulations through other mechanisms.

These recommendations, however, do not recommend any concrete actions. It will be interesting to see how the US government responds in general to these recommendations. Perhaps, it could affect any future proceedings on anti-trust cases like the one facing Apple now.

Source: US House Committee on the Judiciary