GAFA Breakup In The Offing? Five Bills Introduced In U.S Congress To Break Up Tech Quadropoly Of Google, Amazon, Facebook, Apple

A a bipartisan group of legislators in U.S Congress on Friday (Jun 11) introduced five antitrust bills to break up the biggest tech firms.

The bills aims to rein in the power of the tech quadropoly -Google, Apple, Facebook and Amazon by prevent them from offering services at a competitive advantage on platforms they own and making it harder for them to complete mergers and acquisition of competitors.

The Wall Street Journal reported that one of the five bills introduced on Friday called the 'Ending Platform Monopolies Act' will require structural separation of Amazon and other big technology companies to break up their businesses.

The proposed legislation would make it unlawful for a covered online platform to own a business that “utilizes the covered platform for the sale or provision of products or services” or that sells services as a condition for access to the platform. The platform company also couldn’t own businesses that create conflicts of interest, such as by creating the “incentive and ability” for the platform to advantage its own products over competitors.

Another bill would reduce the ability of big tech behemoth to use their platforms to promote their own products and services ahead of those of competitors — a rule that could represent a significant setback to Apple and Google.

By operating as both platform and marketing their own goods and services on it, dominant platforms especially Amazon have been accused of placing themselves in direct competition with some of the businesses that depend on them, creating a potential conflict of interest that platforms can exploit to further entrench their dominance, thwart competition, and stifle innovation.

Another bill aims at forcing online platforms to make their services interoperable with those of competitors.

Two other bills targets mergers, making it unlawful for a large platform to acquire rivals or potential rivals.

“The Platform Competition and Opportunity Act” seeks to ban major online players from buying competitive threats, while “The Merger Filing Fee Modernization Act” led by Rep. Joe Neguse (D-Co) would give enforcement agencies power and resources by requiring higher fees for mergers valued at $1 billion and more. It also seeks to lower fees for merger/acquisition transactions valued under $500,000.

The bills must pass the Judiciary Committee with a favourable vote and also have to be passed by the Senate before the president could sign them into law.

The antitrust reforms is a culmination of 16-month long investigation by the House Judiciary subcommittee on anticompetitive issues into the four tech behemoths that was completed last year.

In Oct 2019, the United States Department of Justice (DoJ) announced that it will be launching a comprehensive anti-trust review to establish whether the country’s leading technology behemoths are engaging in practices that have reduced competition, stifled innovation and in the process harming consumer interests.

The DoJ signalled that the probe was a response to "widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online".

While the DoJ did not explicitly identify any specific companies, the likely targets of probe could include Facebook, Amazon, Google and Apple.

Also Read - GAFA Monopoly: Why Google, Amazon, Facebook And Apple May Need Breaking Up