‘America Has a Monopoly Problem’: Coalition Backs Legislation to Break Up Big Tech

Yves here. Now that we have far too many billionaires, demonstrating how wonderful monopoly profits can be, the officialdom in the West is rather late in waking up to the seriousness of the problem. And unlike a one party state, they can’t take our answer to Jack Ma and put him under indefinite house arrest pour décourager les autres.

Matt Stoller believes continuing supply chain disruptions will keep monopolies in the hot lights:

By Julia Conley. Originally published at Common Dreams

Government watchdog Public Citizen led dozens of organizations on Thursday in calling on Congress to pass several pieces of legislation to rein in the power of powerful tech companies like Facebook, Amazon, and Google—bills that represent the interests of a majority of Americans, polls show.

The groups—which also included Jobs With Justice, the Center for Popular Democracy, and New York Communities for Change—said Congressional leaders should pass six bills that were  “carefully crafted to address the abusive practices of the Big Tech companies” following a two-year investigation by the House Judiciary Committee.

After conducting 10 hearings and 240 interviews and pouring over 1.3 million documents, the committee compiled a 450-page report concluding that “Apple, Amazon, Google, and Facebook each possess significant market power over large swaths of our economy” and “that there is a clear and compelling need for Congress and the antitrust enforcement agencies to take action that restores competition, improves innovation, and safeguards our democracy.”

“America has a monopoly problem,” the groups said Thursday in their letter (pdf). “Reining in these companies is an essential first step to reverse the damage of concentrated corporate power throughout our economy.”

The groups cited research (pdf) showing how Amazon now controls over 35% of e-commerce in the U.S.—forcing other sellers to rely on Amazon to reach their own customers and “laying waste to a once diverse marketplace”—and detailing Facebook and Google’s attacks on the free press by diverting “ad revenue away from publishers and into their own pockets.”

The companies also worsen wage stagnation by stifling competition, the groups said. In the case of Apple and several other tech firms, the companies required employees to sign “no poach” agreements guaranteeing they wouldn’t work for competitors—leaving the workers with little leverage in negotiating their pay, as the companies didn’t have to worry about them leaving for other large firms.

To “bring urgently needed change and accountability to these companies and an industry that most Americans agree is already doing great harm to our democracy,” the groups said, Congress must pass:

  • The American Innovation and Choice Online Act (H.R. 3816), to promote innovation and competition by prohibiting dominant Big Tech platforms from anti-competitive discrimination;
  • The Ending Platform Monopolies Act (H.R. 3825), to give government enforcers the ability to break up or separate certain parts of the businesses that create conflicts of interest;
  • The Platform Competition and Opportunity Act (H.R. 3826), to prevent the most problematic mergers and acquisitions, such as those that include competitors, potential or nascent competitors, or will enhance or maintain the company’s market power;
  • The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act (H.R. 3849), to require Big Tech platforms to allow users to take their data with them if they decide to leave;
  • The Merger Filing Fee Modernization Act (H.R. 3843), to authorize much-needed funding for antitrust enforcement agencies; and
  • The State Antitrust Enforcement Venue Act (H.R. 3460), to make it easier for state attorneys general to bring a federal antitrust suit rather than having a defendant seek to move a case to a more favorable venue.

“Americans support taking action against these companies,” said the groups. “Recent polling found that 57% of Democrats and Republicans and 61% of Independents believe that Big Tech companies should be broken up.”

“We are proud to support this important legislative package and encourage all members of Congress to vote for its swift passage,” they added.

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  1. Science Officer Smirnoff

    The companies also worsen wage stagnation by stifling competition, the groups said. In the case of Apple and several other tech firms, the companies required employees to sign “no poach” agreements guaranteeing they wouldn’t work for competitors—leaving the workers with little leverage in negotiating their pay, as the companies didn’t have to worry about them leaving for other large firms.

    Apple, Google, others settle antipoaching lawsuit for $415 million
    US District Judge Lucy Koh has approved the settlement, which is $90.5 million more than a previous offer she rejected last year.—news headline from 2015

    Once, again peanuts for the parties concerned.

  2. jo6pac

    If these pass then those companies will do what banking cartel and others have done. They’ll buy congresscrittiers and the rest of the govt. and instill there own on any oversight group. Just like ftc, fda, and the list goes on. The sad truth in Amerika.

    The revolving door in the belt way never stops. Sad

    1. notabanker

      America has a corporate owned government problem, monopolies are a symptom. They’ve already bought the congress, and judicial, and local and regulatory bodies. I stopped reading after the first paragraph. When is the last time Congress did anything that represents the majority interests of America?

      1. MonkeyBusiness

        The American Dream has come true. We’ve traded one tyrant 3000 miles away for 3000 tyrants one mile away!!!

        Amazing stuff.

      2. baldski

        Why should they? I mean they have no incentive to change anything, when 98% of incumbents get re-elected to office.

      3. Anon

        Are we still arguing about capitalism? Surely we’ve given up on that by now… competition is so passé. Like potable tap-water.

    2. Jeremy Grimm

      Even if Congress passes some or all of these laws, they will have little beyond symbolic meaning, if they are not enforced. I thought the u.s. already had laws intended to prevent the construction of monopolies — they just have not been enforced since the 1980s.

      1. drumlin woodchuckles

        The Reagan Administration began the process of redefining the law out of existence.

        A Newer New Deal Administration might begin a process of de-redefining the law back into existence.

        If we were to get a Newer New Deal Administration.

        1. 1 Kings

          Looking forward to the ‘we ain’t gonna pass sh..t” act.. otherwise known as monopolies today, monopolies tomorrow, monopolies forever..

  3. petal

    A light needs to be shown on science as well-ie ThermoFisher & PerkinElmer, for two. It’s becoming an increasing problem.

      1. petal

        I haven’t really looked. I happen upon the merger articles from time to time in the news, or come across it when trying to buy something from a company that has been bought. Wiki isn’t the best, but there’s info there about their mergers/takeovers/whatever one calls them. I’ve been in science 20 years and have been observing/dealing with the consequences firsthand.

    1. KLG

      Indeed. When I began Gerald Ford was president and the marketplace for research instrumentation, reagents, chemicals, and supplies was quite competitive. I developed an allergy to Sigma Chemical Company early on but if Aldrich didn’t have it, Fluka or EM-Darmstadt did. Now it’s Sigma-Aldrich who owns them all? Research Organics of Cleveland is also an appendage of Sigma IIRC. High-end instrument suppliers were many. LKB products were golden. Beckman and Perkin Elmer were trusted. Sorvall and Varian were the best at what they did. A Sorvall centrifuge never died, if taken care of. Now, not so much. By the time I moved on I was down to three suppliers who could be trusted in the lab without doing our own quality control: New England Biolabs, Bio-Rad, and Promega. That was it.

    2. Rolf

      Yes. And in science publishing. In 2013, three dinosaurs controlled almost half (>47%) of all papers published in science: Reed-Elsevier, Springer-Nature, and Wiley Interscience [1]. This concentration continues to increase with 1) the creation of new journals by the above (which are added to the bundled subscription fees that university libraries must pay, identical in scheme to the marketing of cable TV channels), and 2) M&A of previously independent publishing houses (e.g., Springer Nature formed in 2015 by Springer-Verlag + Nature Publishing Group + Palgrave-Macmillan). This, in an industry with estimated profit margins approaching 40%. Content is provided by researchers for free (publications are the coin of the realm in academia), peer review and editorial handling (necessary to maintain the integrity of published work) is also provided for free by fellow scientists. What does the publishing house actually do? Final typesetting, posting online, printing, and marketing. No other industry has its core product provided to them essentially without cost.

      Of course, open access publishing (free-to-read) by the above firms is now a thing. But who pays for this? The authors (or their parent institution) do. Because scientific research in the US is publicly funded, this amounts to huge public subsidies for these giants. The public pays for the research, and must pay again to read the results.

      [1] https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0127502

      1. petal

        Yes, you are right-that is another area that needs it, too. I just had to pay an invoice for $3400+ to get an open access paper published. I told my boss it had better be scratch n’ sniff for that amount. It was Wolters Kluwer. They’re a huge firm, too.
        KLG, you are right, as well. Sigma is another one. I believe Sorvall was bought by ThermoFisher. I need to get ours repaired but it’s proving a challenge. I fear for smaller companies like NEB and Cell Signaling-figure it’s just a matter of time before they’re gobbled up, too, and quality drops.

        1. Rolf

          People outside of science may be unaware of 1) the extremely high cost of instrumentation and 2) the fact that these instruments have a relatively brief service life before they are effectively judged obselete. Still functional, yes, but after a given time no longer supported by the manufacturer (support contracts are a very significant laboratory expense), and not capable of the performance of newer equipment (resolution, precision, etc.) that colleagues in other institutions may have. New instruments are bought as part of a new faculty’s hiring start-up package, but after that faculty are on their own. Universities do not typically pay for replacing your 20 year old atomic force microscope or secondary ion mass spectrometer — and neither will NSF. Market consolidation means there may be only one instrument manufacturer to call, with no competing bid possible.

          1. anEnt

            You’re welcome. Knuth was far more articulate than I am and he had the benefit of having the data before him. He is also public-spirited. If his name sounds familiar it is because he wrote TeX, from whence came the free typesetting applications many academics use for paper submissions. The whole 14 page letter is worth reading.

      1. petal

        Good god. That’s interesting! Thanks!
        They just bought a company called Biolegend. They make flow cytometry antibodies and antibodies for use in in-vitro assays, and we’ve had good luck with their stuff and have used them for many years. They’ve been solid and responsive. Coworkers and I are all expecting quality to drop into the basement and prices to get jacked, because it’s PE. I saw the article about it at the time and sent it to a friend that runs another group, and we both had the same reaction-“Sh-t!”. If their quality goes down and product becomes unreliable, a lot of groups are in trouble. Same if prices go up. Money’s tight these days.

  4. orlbucfan

    America has an excessive greed and stupidity problem. I wish these groups the very best of luck. They will need it.

  5. Reify99

    It’s everywhere. If I want to buy a copyright license to record a cover of a song I am funneled (take the easy way!) to a subsidiary of Blackstone.

  6. Lost in OR

    This goes way beyond big tech. I have represented manufacturers providing products to lubrication distributors, hydraulic hose and fittings suppliers, and industrial supply stores in the Pacific Northwest. All three industries have undergone significant consolidation in just the last decade. It seems with so much cheap credit flowing it is easier to consume the competition than innovate or actually compete with them.

  7. Gulag

    We do indeed have a big Monopoly problem.

    But things have gone way beyond that.

    if you want to understand a growing part of the zeitgeist at ground level ck out the latest screed by James Howard Kunstler–it is called Coiling and Rattling.

    “Everybody I consort with has had enough of the whole nauseating game–the lying politicians, the lying media, the lying medical bureaucrats, the lying generals, the lying teachers, the lying tech moguls, the entire armature of counter-reality you want to impose on our once fair land. We will never do your bidding. We will never peel your grapes. There is more of us than you. Go ahead, push just a little harder.”

  8. Hepativore

    If I may put on my doomer hat for a moment, I really doubt much will be done for the remainder of the existence of the US as a country to reign in monopolies and corporate regulatory capture. This is because while similar conditions have led to uprisings and massive strikes in the US in the past, most workers are too atomized to think of doing such a thing. There is also the fact that modern companies have so many means of surveillance of the labor class as well as sharing the data collected on people with each other that it is much easier for them to nip any potential strikes or unionization in the bud, not to mention the fact that the automation, militarization and merging of law enforcement with the interests of private capital makes it easier than ever for a relatively small squad of police and drones to disperse entire groups of people.

    I hope I am wrong, but I do not see any victories over monopolization and neoliberalism happening in the US anytime soon.

  9. Glen

    I use to hear all the cheering from the elites about American’s entrepreneurial spirit and innovation.

    Believe me, if any real innovation is occurring in small companies it is quickly bought and snuffed out by the mega corps.

    Game changers would be make it easier for people to start companies by providing everbody healthcare, make college free so more people can go, and reform access to Fed funding so it doesn’t always end up with the same elites, and elite banks that have so ably demostrated they should be broke, broke, broke rather than making decisions about who is a winner and who is a loser.

  10. Sound of the Suburbs

    The US was dominated by huge trusts in the early 20th century.

    I have been looking at the history of neoliberalism and this reveals the Mont Pelerin Society went round in a circle and got back to where they started.
    Western liberalism failed miserably in the 1930s and new ideas took hold, but those in favour of Western liberalism looked to bring it back in a different form.
    They were initially well aware of past failings and sought to address these problems, but as time went on, they moved further and further to the right and got back to pretty much the old form of Western liberalism, with its old problems.

    In the early days of the Mont Pelerin Society, they were acutely aware of the problems of Western liberalism and none more so than the Germans.
    They looked for a form of liberalism that would also provide a stable society, and came up with Ordoliberalism, which they implemented in Germany. It was a huge success.

    The rest of the Mont Pelerin Society gradually forgot the problems of the old Western liberalism, and unintentionally got back to pretty much where they started.
    The Mont Pelerin Society remembered the problems with consolidation and monopoly until 1950, and then they forgot.
    Actually, their wealthy sponsors ensured they forgot.
    When private backers fund academics, they can control the direction the academics take.

    The Americans have remembered that monopolies are a problem again, and the Chinese are catching up fast.

    As the neoliberalism (new liberalism) is pretty much the same as the old liberalism, they could underpin it with the same economics, neoclassical economics.
    When you start to look back, you realise all our economic ideas are old ideas that have been tried, tested and failed in the past.
    They are the economic ideas that existed before Keynesian capitalism.

    1. Sound of the Suburbs

      The US was dominated by huge trusts in the early 20th century.
      How did the Americans forget?
      It’s the United States of Amnesia.
      They can barely remember what happened last week.

      1. Eustache de Saint Pierre

        ” When private backers fund academics, they can control the direction the academics take “.

        As is obvious now in the health sector & perhaps they should just replace the H with a W & lump it all together with al of the other locust colonies.

        Thanks for the above – Killing the Host from Michael Hudson comes to mind & I wonder if we are approaching a cliff from both internal & external sources.

        “For greed all nature is too little.” – Seneca

  11. John k

    What about banks? And mic sole-source contracts? And Medicare not allowed to negotiate pharma drug prices?
    Everything is monopolized.
    Why move against tech? Let me guess… they haven’t yet donated enough to congress? Cheap bastards, show them the horse’s head… they’ll pay all right…

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