Fri, Mar 15, 2019 - Page 10 News List

UK study casts big tech companies as monopolies


A photo combination of images shows the Amazon, Google and Facebook logos.

Photo: AP

Facebook Inc, Google, Inc and Apple Inc are once again being cast as monopolies that have become too powerful for society’s good, a recurring theme that is increasing the pressure to rein them in.

A 150-page report commissioned by the British government depicts big digital companies in search, social media, advertising and e-commerce as threats to competition, innovation and personal privacy.

Meanwhile, the music streaming service Spotify AB filed an antitrust complaint in Europe against Apple, accusing it of stifling competition through its control over the iPhone’s operating system and app store.

Wednesday’s dual attacks provided more fodder in a worldwide debate about whether stricter rules need to be drawn up to handcuff or even break up leading tech companies as they try to extend their tentacles into new markets.

“What you’re seeing is a broad recognition that there is a problem,” said Matt Stoller, a fellow at Open Markets, an institution that studies corporate monopolies and advocates for more competitive markets.

In the US, Democratic presidential candidate Elizabeth Warren last week proposed breaking up the biggest US tech companies, saying they have too much market and political power.

That high-profile missive further emboldened long-time critics such as former US secretary of labor Robert Reich, now a professor of public policy at the University of California, Berkeley.

In a recent opinion piece for the Guardian, Reich compared Facebook, Google and Amazon to “robber barons” who built business empires on innovations in the late 19th century and were eventually broken up to foster more competition.

“I think we are seeing a turn of the pendulum,” Reich said on Wednesday in an interview with The Associated Press. “I think Silicon Valley executives really need to take a hard look in the mirror.”

The British government’s new report was led by Harvard University professor Jason Furman, who was a chief economic adviser to former US president Barack Obama.

The report found that global tech giants do not face enough competition, and says that existing rules are outdated and need to be strengthened.

“The digital sector has created substantial benefits, but these have come at the cost of increasing dominance of a few companies, which is limiting competition and consumer choice and innovation,” Furman said.

“Some say this is inevitable or even desirable. I think the UK can do better,” he added.

As for Spotify, the streaming service’s beef with Apple centers on a 30 percent tax that digital services have to pay to use Apple’s “in-app” payment system, making Spotify subscriptions more expensive than Apple Music.

That same commission system recently prompted Netflix Inc to stop accepting new subscription sign-ups through its iPhone app, as Apple prepares to unveil its own rival service.

British Chancellor of the Exchequer Philip Hammond said the government would respond later this year to the report’s recommendations, which must be approved by parliament to take effect.

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