American technology giants are in trouble if this proposal pulls through

 

The US House of Representatives Antitrust Subcommittee is investigating the state of competition in the American technology industry. The committee is preparing to put forward a comprehensive reform proposal. The proposal includes the splitting of American technology giants such as Amazon and Apple. These large technology companies technically own the market and sell their own products on the market. This has been often criticized to stifle competition and innovation.

Image: On July 29, 2020, at the hearing of the U.S. House of Representatives Judiciary Subcommittee, CEOs of four major technology companies including Facebook, Amazon, Alphabet, and Apple testify under oath

The U.S. House of Representatives Antitrust Subcommittee, led by Democratic Representative, David Cicilline, has been investigating the technology industry for a year. Its survey recommendations and report are in processing. It is unclear which members will support this report. According to inside sources, the committee will release its report this week. If its proposal pulls through, it will be the largest reform of competition law in decades.

American technology giants own the market and sell their product in the same market

Republican Representative, Ken Buck of Colorado revealed that Cicilline’s proposal would include using the “Glass-Steagall law” to deal with technology platforms. This bill was used to separate the business of commercial banks and investment banks during the Great Depression. Buck said that Cicilline’s proposal would prohibit technology companies from entering different business areas and would be equivalent to splitting these companies.

For example, Amazon will not be able to sell its own products on its market. Google cannot have the world’s largest search engine and YouTube at the same time. Apple will also not own an application store and provide its own applications.

Buck said: “The main remedy for most companies to create competition in the technology market is to create structural separation through legislation”. He agrees with Cicilline’s view that it is necessary to control technology companies and agree to give more competition enforcers.

According to the committee, the huge technology companies do not allow the competition to grow. Large companies often acquire start-ups even before they have the opportunity to compete. These large technology companies do this so as to maintain their market dominance.

However, the court has made it almost impossible for the government to prevent dominant companies from acquiring new competitors. The committee is also looking to prohibit the acquisition of future competitors and start-ups, such as Facebook’s acquisition of Instagram. Buck said such a ban would prevent startups from selling their ideas to other companies for profit.