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12 charges in the Damning House report on Amazon, Apple, Facebook and Google

The house’s lawmakers issued a scathing report on four of the world’s largest technology companies, accusing them of abusing market power. The report, which was released on Tuesday and concludes a 16-month investigation by Amazon, Apple, Facebook and Google, recommended breaking up the companies and sending the most comprehensive reforms to the antitrust law in decades.

Here is a summary of the allegations against each company in the report, which were only approved by Democratic lawmakers.

  • The company uses its market power as both the largest online retailer and the leading e-commerce market to its advantage and to deter potential competitors. Amazon sets the rules for digital commerce. About 2.3 million third-party sellers do business in the Amazon marketplace worldwide, the report said, and 37 percent of them trust Amazon as their only source of revenue – making them hostage to Amazon’s changing tactics.

  • Amazon gathers sales and product data from its marketplace to spot the best-selling items, copy them, and offer their own competing products, usually at lower prices. A former Amazon employee told the house investigators: “Amazon is first and foremost a computer company, they happen to use it to sell things.”

  • In cloud computing, where Amazon Web Services is the market leader, the company has dealt unfairly with some open source developers, whose software is often freely shared. An open source engineer said: “We develop all this work, and then a big company comes and makes money from it.”

  • Apple has a monopoly on the app market for iPhones and iPads, which allows the company to take an excessive cut in app developers’ sales and “generate overall profits.” Apple has charged 30 percent commission on many app sales since they introduced the tax more than a decade ago, forcing many developers to increase consumer prices or reduce investment in their apps.

  • Apple has used its control over the App Store to punish rivals, including ranking them lower in search results, restricting how they communicate with customers and removing them directly from the store. Apple is the only enforcer of sometimes opaque App Store rules, giving developers few opportunities to complain.

  • Apple favors its own apps and services on its devices by pre-installing them and making them the default options for a variety of actions. For example, when iPhone users click on a link to a webpage, song, or address, their devices will typically open Apple apps. Such an advantage, combined with the deep integration of the services into Apple software, makes it difficult for third-party apps and services to compete.

  • Facebook’s monopoly power in social networks is “firmly rooted”, and the company has denied competitors through strategic acquisitions and copying products. Services such as Onavo, a data analytics company acquired by Facebook, helped the company spot “early bird warning signals” on potential competitors that were rapidly increasing in the app store.

  • The company has grown so overwhelmingly strong that internal findings suggest that the biggest competition exists in itself. Services like Instagram, which is owned by Facebook, grew so fast that it threatened to overtake the popularity of Facebook. Mark Zuckerberg quickly changed his strategy, in what an employee called “interaction, but within an internal monopoly.”

  • Due to the absence of competition, users’ privacy has been eroded while misinformation and toxic content has spread across all of the company’s services, which are regularly used by more than three billion people.

  • Google maintained its search monopoly by obtaining information from third parties without permission to improve search results. In other cases, it introduced changes in the search to give up a point for its own services and degrade competitors’ offerings.

  • The committee found that the company goes to great lengths to keep Google search ahead and central to users. In the past, it has forced smartphone makers to install Google Search in order to use the Android software and access the Google Play App Store. It pays Apple billions to be the default search engine on iPhones, and it takes steps to prevent users from switching search providers on Chrome.

  • Google has nine products with more than one billion users. This gives the company a wealth of data that can be used as “almost perfect market information” and reinforces its dominance because Google can track what new products or services people use in real time to closely monitor competitors.

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