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House Democrats say Big Tech must be reined in

Current state of technology and social media in the U.S.
Current state of technology and social media in the U.S. 06:54

Democratic lawmakers are calling for the U.S. to rein in the power of technology titans Amazon, Apple, Facebook and Google, as well as overhauling U.S. antitrust law, in a sweeping report on the dominance of Big Tech in American lives and markets.

The 450-page report, released Tuesday by the House Antitrust Subcommittee, details a range of anticompetitive practices, charging the four companies with acting as gatekeepers, stifling competition, charging "exorbitant" fees and eroding democracy.

"Put simply, 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," the report said.

The panel calls for sharply curtailing the biggest tech companies' power, including forcing them to spin off their platforms from their other lines of business. This can be done by either splitting up tech companies or by limiting them to a single industry, according to the report.  

Under current law, companies active across multiple industries can use their dominance in one area to undercut competition elsewhere. For instance, the committee found that Google's ownership of the Android smartphone operating system gives it "near-perfect market intelligence" on companies that develop apps for Android, which allows the internet giant to easily create competing apps. 

Amazon also uses information on third-party sellers on its popular marketplace to develop competing products, the report said. 

"Each platform now serves as a gatekeeper over a key channel of distribution," the report argued. "By controlling access to markets, these giants can pick winners and losers throughout our economy."

Big tech CEOs testify before Congress 01:25

The lawmakers also called for the platforms to be required to offer equal terms for equal products and services for all users. That would prevent companies from favoring their own products on platforms they run, as Amazon has been accused of doing in its marketplace, and Google has been accused of doing in search.

The report proposes changing antitrust laws to impose a higher bar on approving tech industry mergers and acquisitions. Critics say excessive consolidation in the sector reduces competition and results in higher prices for consumers. 

Finally, it proposes doing away with so-called mandatory arbitration clauses in tech companies' terms of service. These clauses have proliferated in recent years and prevent users from going to court or joining class-action lawsuits if they have a dispute, instead requiring them to resolve disputes individually in private arbitration proceedings.

Although the 15-month investigation was bipartisan, Republican members of the antitrust committee dissented from most of the panel's recommendations. Republican members issued a competing report that disagreed with the suggestions to break up large tech companies. 

The GOP report alleged that Google and Facebook censored conservative content and decried the Democrats for declining to look into Twitter, which has also been accused of having an anticonservative bias.

Threat from a "blue wave"?

Tech industry critics praised the antitrust panel's findings.

"Not only is this investigation and report a victory for workers, small businesses and consumers, it is an immense achievement for the anti-monopoly and Break Up Big Tech movements," Sarah Miller, executive director of the American Economic Liberties Project, said in a statement. "The DOJ, FTC and state attorneys general should also use the Subcommittee's findings to support their own investigations into the power of big tech monopolies."

The Department of Justice is reportedly planning to unveil an antitrust suit against Google as soon as this week. The Trump administration, including the Federal Trade Commission, and various state attorneys general are also investigating Amazon, Apple and Facebook.

Despite the push by some lawmakers to rein in the country's biggest tech players, the ongoing bitter partisanship in Congress could work in the companies' favor. 

"We likely do not see Congress agreeing on legislation unless both houses of Congress and the Presidency are controlled by the same party, as the parties have had difficulty reaching consensus on more pressing issues," Wedbush stock analyst Dan Ives said in a research note. "However, a potential 'blue wave' in November would change the game on this front."

The Associated Press contributed reporting.

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