The House Judiciary Antitrust Subcommittee on Tuesday (10/6) released a hefty 449-page report outlining its majority staff report and recommendations derived from its investigation of competition in digital markets.
In short, the subcommittee is accusing four of the “GAFAN” members of antitrust violations, as their digital platforms offer an unfair advantage over other forms of communication — including radio and TV.
At the heart of the report: the “dominant competitive power of digital technology platforms,” something NAB President/CEO Gordon Smith noted in comments that saw the nation’s dominant broadcast media lobbying group applaud subcommittee chairman David Cicilline and Judiciary Committee Chairman Jerrold Nadler.
The NAB believes the Subcommittee was just in examining the challenges the dominance of Google, Amazon, Facebook and Apple presented to local media outlets, including radio and TV broadcasters, as they compete online for advertisers and audiences. In particular, the impact on the future of local journalism is a key concern for the NAB. “America’s broadcasters are committed to working with the Subcommittee and Congress on bipartisan solutions that level the playing field and preserve local journalism,” Smith said.
The Judiciary Committee’s review of online competition dates to June 2019, and the legislative body was quick to note it is a bipartisan investigation.
As part of “a top-to-bottom review of the market,” the Subcommittee examined the dominance of Amazon, Apple, Facebook, and Google, and their business practices. The goal: “to determine how their power affects our economy and our democracy.”
At the same time, the Subcommittee performed a review of existing antitrust laws, competition policies, and current enforcement levels to assess whether they are
adequate to address market power and anticompetitive conduct in digital markets.
“Over the course of our investigation, we collected extensive evidence from these companies as well as from third parties—totaling nearly 1.3 million documents,” Nadler said in the report.
This includes comments filed by NAB in September with the Subcommittee asserting that “the dominant marketplace power of these platforms puts local broadcast radio and television stations at a competitive disadvantage for advertising revenue and impedes broadcasters’ ability to effectively monetize their own content online.”
Seven hearings were held to review the effects of market power online—including on the free and diverse press, innovation, and privacy— and a final hearing to examine potential solutions to concerns identified during the investigation was convened.
A year after initiating the investigation, the Committee famously received lackluster testimony from the CEOs of the four companies. “For nearly six hours, we pressed for answers about their business practices, including about evidence concerning the extent to which they have exploited, entrenched, and expanded their power over digital markets in anticompetitive and abusive ways,” Nadler said. “Their answers were often evasive and non-responsive, raising fresh questions about whether they believe they are beyond the reach of Democratic oversight.”
To put it simply, Nadler said, “Companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons. Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price. These firms typically run the marketplace while also competing in it—a position that enables them to write one set of rules for others, while they play by another, or to engage in a form of their own private quasi regulation that is unaccountable to anyone but themselves.”
He concluded, “Although we do not expect that all of our Members will agree on every finding and recommendation identified in this report, we firmly believe that the totality of the evidence produced during this investigation demonstrates the pressing need for legislative action and reform. These firms have too much power, and that power must be reined in and subject to appropriate oversight and enforcement. Our economy and democracy are at stake.”
On pages 57-73 of the report, the Subcommittee addressed the effect the tech platforms’ competitive power has on local media outlets’ ability to invest in, produce and deliver local news and information.
Potential legislative reforms are included on pages 387-389.
“To address this imbalance of bargaining power, we recommend that the Subcommittee consider legislation to provide news publishers and broadcasters with a narrowly tailored and temporary safe harbor to collectively negotiate with dominant online platforms,” the report concludes.
