US legislators propose major antitrust reforms for big tech firms

The US House of Representatives antitrust subcommittee’s recommendations could lead to the breakup of major tech companies if they are approved by Congress.

US capitol
A US House of Representatives antitrust subcommittee laid out its recommendations for overhauling competition law, which could lead to the breakup of tech companies if they are approved by Congress.

A House panel proposed a series of far-reaching antitrust reforms to curb the power of U.S. technology giants including Inc. and Alphabet Inc.’s Google, the result of a yearlong antitrust investigation that found the companies are abusing their dominance.

The recommendations, contained in a 449-page report from the House antitrust subcommittee, represent the most dramatic proposal to overhaul competition law in decades, and could lead to the breakup of tech companies if approved by Congress.

“Companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” the Democratic-led panel said. “These firms have too much power, and that power must be reined in and subject to appropriate oversight and enforcement. Our economy and democracy are at stake.”

The report’s most draconian recommendation is for Congress to consider legislation that would either prevent tech companies from owning different lines of businesses, which could lead to a breakup of the companies, or impose certain organizational structures on the companies.

The four large technology companies targeted in the report, Amazon, Apple Inc., Facebook Inc. and Google, all fell slightly more than the overall market, which had dropped on news that President Donald Trump was suspending stimulus negotiations. Nasdaq stock futures held onto their declines.

Google fell 2.2% to $1,451.02, Apple dropped 2.9% to $113.16, Amazon fell 3.1% to $3099.96 and Facebook was down 2.3% to $258.66 at 4:12 p.m. in New York.

The goal would be to reduce conflicts of interest that come from competing with other companies that depend on the platforms to access users, according to the report.

“Their ability both to use their dominance in one market as negotiating leverage in another, and to subsidize entry to capture unrelated markets, have the effect of spreading concentration from one market into others, threatening greater and greater portions of the digital economy,” the report said.

Source: Bloomberg