Antitrust

09/02/2020

NetChoice Releases Report Showing American Antitrust Laws Work Remarkably Well, Refuting Contrary Claims Made By House Democrats

Carl Szabo
Carl Szabo Vice President and General Counsel

Today, NetChoice released a new report, “Aggressive Competition in Markets: Proof Our Antitrust Laws Work,” in response to accusations and claims made at the House Judiciary Antitrust Subcommittee hearing earlier this summer titled “Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google.”

This report examines American antitrust law alongside accusations made against Amazon, Apple, Facebook, and Google. It concludes that market realities show that not one of these businesses has monopoly power, not one has acted anti-competitively, and not one has harmed consumers. To the contrary: each of these tech companies faces stiff competition, follows innovative business practices, and benefits consumers.

“It’s crucial that our lawmakers let antitrust law work for consumers, rather than use it to attack companies they don’t like,” said Carl Szabo, Vice President and General Counsel at NetChoice. “Our report shows that all of the businesses publicly berated at the July 27 Antitrust Subcommittee hearing have followed the law–indeed, they’ve practiced what it preaches.”

“The consumer welfare standard continues to protect American consumers and American innovation while also helping competition in digital markets grow even stronger.”

Below are some highlighted quotes from the report.

On antitrust law:

“But far from being symptoms of an outdated antitrust regime, tech companies are proof that the country is getting antitrust right…Instead of reflexively preferring the comfort of the tried-and-true, lawmakers should embrace the new and-better. Our antitrust law should too—as they currently do.”

On the case against Amazon:

“In sum, Amazon copied its competitor’s business model. But Amazon did not eliminate competition—parents continue to buy diapers from their brick-and-mortar retailers and Walmart keeps Amazon on its toes. And, in fact, Amazon inadvertently helped launch its largest rival, which underscores that digital markets are hard to predict.”

On the case against Apple:

“Is it appropriate to hold a company liable for conduct that far predates its current market share? The answer should be no. For starters, Apple doesn’t have monopoly power in the smartphone market. But even if it did, Apple has charged app developers the same price—30% commission—since the very beginning. If Apple were a monopolist, that price would increase without any change in quantity.”

On the case against Facebook:

“Under Facebook’s ownership, over 1 billion people enjoy Instagram, it generates roughly $20 billion in revenue, and it developed from being a niche photo-sharing app into a free and widely used app for creating, sharing, and interacting with content that users love. And thanks to Facebook’s investments, it now uses spam blockers and Facebook’s other technology to protect users from harmful content… Dismissing acquisitions as predatory and anticompetitive makes little sense in theory and even less sense in practice.”

On the case against Google:

“Google is large and it’s popular. But its business practices all support improving its services, not monopolizing the market. Google wouldn’t need to spend so much on research and development and improving its search engine or YouTube if it had monopoly power.”

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