Big Tech platforms stifle innovation through anticompetitive conduct
For an industry built on disrupting and displacing established incumbents, it is shocking how quickly a few dominant Big Tech companies have solidified their position by employing the worst anticompetitive tactics of the old economy.
By limiting competition, copying competitors, and stifling new innovation, Big Tech platforms like Apple, Amazon, Facebook, Google, and Microsoft are robbing users like us from the promise of new and better products and services that we may never know.
In response to this behavior, a bipartisan group of senators this week introduced the American Innovation and Choice Online Act, joining a bipartisan group in the U.S. House that is pushing for a package of Big Tech bills. This bill would stop some of the worst abuses and level the playing field both for businesses that use their services as well as competitors.
While some of the companies targeted by this legislation and their allies have claimed that this proposal would stifle innovation, the opposite is true.
There is no doubt that Silicon Valley tech giants have innovated and provided us a range of products and services that have revolutionized the way we communicate, work, shop and learn. At the same time, the largest of these companies have refocused their businesses on maintaining their dominant positions instead of continuing to innovate.
They have gobbled up over 600 companies to prevent competing technology that might displace them. They have closed their platforms to ensure that users are fully dependent on their services. They have directly and unfairly competed with business users of their platforms by copying their products and self-preferencing their own products or services.
Meanwhile, startups have found that they are unable to get funding if they are in the “kill-zone” of the Big Tech companies. If a startup is attempting to operate in an area that is seen as too close or a competitive threat to the biggest tech companies, investors will assume that failure is guaranteed — either because of anti-competitive structures or the likelihood that the Big Tech companies will crush such threats.
More established companies like Roku and Sonos have struggled with Amazon and Google over access to markets where tech giants compete directly with their own devices and services. This has put these smaller companies at a distinct disadvantage but because of the dominance of the platforms they are locked in to unfair and contentious business arrangements.
In addition to stopping abusive and anticompetitive conduct, the American Innovation and Choice Online Act would require the Big Tech platforms to open up to competitors.
For example, a startup with a function related to how videos display on Instagram or YouTube would be given the ability to offer that product or service to users of those respective apps. Or on Amazon, marketplace sellers would be given alternatives to shipping and logistics from companies like UPS or FedEx.
This would unleash innovation among startups and competitors. It would also improve all of these products both for business and individual users.
It is these practices that have caused a bipartisan response in Congress and led groups like Public Citizen to call for these types of reforms.
The American Innovation and Choice Online Act is supported by a broad coalition including Small Business Rising, Consumer Reports, DuckDuckGo among others.
Its opponents are talking about innovation because if they simply said “we are afraid of this hurting our bottom line and force us to compete for users” it would be less compelling. However, that is exactly what the companies are concerned with, and exactly why Congress should pass this legislation.
It would free up the Big Tech stranglehold on platforms and bring about innovations that would benefit consumers and small businesses.
Harman is the competition policy advocate for Public Citizen.
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