Our founding partner, Juan Carlos Gómez, comments on the US Congressional subcommittee’s report on digital competition in markets. The investigation focused on the market power of the Big Four of the digital economy: Amazon, Apple, Facebook and Google.
After fifteen months of work, the report of the US Congressional subcommittee on competition in digital markets was published a fortnight ago. The investigation focused on the market power of the Big Four of the digital economy: Amazon, Apple, Facebook and Google. The aim was to determine the effect of the behavior of these companies on the economy and democracy and to assess whether the applicable legislation was adequate in the face of their immense power.
Unsurprisingly, the report’s conclusions are not favorable to the Big Four. After the collection of 1.3 million documents, the statements of dozens of experts and the testimonies of their CEOs, several behaviors were identified that, in the view of the subcommittee, obstruct entrepreneurship, violate privacy and erode press freedom and diversity. These companies began as startups and today control the gateway to the digital marketplace.
The annex to the report details the multiple mergers and acquisitions that have allowed them to expand their dominance in their markets, such as Amazon (Whole Foods), Facebook (WhatsApp and Instagram) or Google (Waze).
Naturally, the Big Four vehemently opposed the report’s conclusions. Success is not necessarily the result of anti-competitive behavior and they have created an ecosystem that has multiplied wealth and stimulated innovation.
The report quotes a nearly century-old dictum by Supreme Court Justice Louis Brandeis: “We must choose; we can have democracy, or we can have wealth concentrated in a few hands, but we cannot have both”. This is evidence of the concern of legislators in the face of the power that these companies have attained and the inability of institutions to control them.
Measures equivalent to those taken against the dominating power of AT&T in the 1980s or Microsoft in the 1990s no longer seem useful. Other tools are needed that would require a profound reform of competition law, which will not happen for the time being, as long as the political forces in the US Congress are not recomposed.