Antitrust chairman says tech giants crush competitors, charge massive rent

Antitrust chairman says tech giants ‘crush’ competitors, charge ‘monopoly rents’


Tim Cook answers questions about App Store business practices.
Tim Cook answered questions about App Store business practices last month.
Photo: C-SPAN

Congress’ big tech antitrust hearings are done and now, weeks later, investigators are gearing up to deliver their findings.

According to David Cicilline, the Democrat leading the House antitrust investigation into tech giants including Apple, the investigatory committee could reveal its recommendations next month. And things aren’t looking too rosy for the companies involved.

Bloomberg reports:

“Cicilline said in an interview Wednesday that his inquiry has confirmed that Alphabet Inc.’s Google, Apple Inc., Amazon and Facebook are abusing their market power to crush competitors and that Congress must act urgently to rein them in to protect consumers.”

Antitrust boss says Congress needs to take action

“All of these companies engage in behavior which is deeply disturbing and requires Congress to take action,” said Cicilline, chairman of the House antitrust subcommittee. “The kind of common theme is the abuse of their market power to maintain their market dominance, to crush competitors, to exclude folks from their platform and to earn monopoly rents.”

Tech CEOs including Apple’s Tim Cook, Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg and Alphabet’s Sundar Pichai participated in a congressional hearing in late July. This followed a year-long investigation into the companies.

As Cult of Mac editor Leander Kahney wrote, Cook largely avoided grilling during the hearing. Cook faced roughly half as many questions as his fellow CEOs.

Although Apple since became the first $2 trillion public U.S. company, Apple finds itself in an interesting position. That’s because it is not actually a market leader in any of the areas it operates in. Android commands a bigger market share than iOS and iPadOS. Windows PCs outnumber Macs. Spotify draws more subscribers than Apple Music, and so on.

Apple’s biggest vulnerability may be its control of the App Store. Since the hearings, Apple has engaged in a spat with Fortnite maker Epic Games. Epic accuses Apple of being a monopoly like the Big Brother figure portrayed in the famous “Nineteen Eighty-Four” Macintosh ad.

Antitrust laws to hobble the tech giants

Cicilline did not reveal what measures will be implemented to curb the tech companies’ power. One possibility could be a law that prohibits businesses from running a platform and competing on it at the same time. This could potentially impact the way Apple operates the App Store. (Apple, for its part, previously introduced measures to downgrade its own products in search results.)

The House antitrust panel will report its findings “as soon as” September. This will then lead to legislative proposals. Whether Congress will institute meaningful reforms, however, remains to be seen.

Apple faces similar antitrust investigations in other parts of the world, including Europe.