"Big tech has responded to the mammoth antitrust report put out by the U.S. House Judiciary Committee yesterday with blanket denials there’s any monopolistic behaviour or competitive imbalances to see here.

Below is a quick run down of Amazon,  Apple, Facebook and Google’s rebuttals.

Among the committee’s (many) recommendations are structural separations and prohibitions on certain dominant platforms from operating in adjacent lines of business; interoperability and data portability requirements; non-discrimination requirements and a ban on self-preferencing; and beefed up merger and monopolization enforcement, as well as better administration of antitrust laws.

 

Amazon

In a lengthy but punchy blog post the ecommerce giant brands the committee’s views on antitrust “fringe notions” and “regulatory spitballing” — lathering on dire predictions of doom for small business and hoards of inflated-price-enraged consumers should lawmakers deign to dabble in any “misguided interventions”.

Sample quote:

The flawed thinking would have the primary effect of forcing millions of independent retailers out of online stores, thereby depriving these small businesses of one of the fastest and most profitable ways available to reach customers. For consumers, the result would be less choice and higher prices. Far from enhancing competition, these uninformed notions would instead reduce it.

The substance of Amazon’s argument against the need for antitrust intervention is the top-line claim that retail is “thriving and extraordinarily competitive” — with the tech giant saying it accounts for a tiny fraction of global retail and isn’t even the largest US retailer by revenues (that’s Walmart). Among the grab-bag of competitors Amazon lists as evidence that it’s a mere retail minnow are Best Buy, Costco, Facebook,  Kroger, Google  Shopping, Home Depot, Shopify and Target. (It doesn’t mention Whole Foods because it already consumed that competitor.)

The strategy here is to claim online and offline retail are just one giant market — because of course if lawmakers slice by online retail alone there’s no denying Amazon’s oversized punch.

Another chunk of rebuttal is against what it claims is “false narrative” that its own interests don’t align with “the thousands of small and medium-sized businesses thriving as sellers in our store”.

“The opposite is true: Amazon and sellers complement each other, and together we create a better customer experience than either could create alone,” it pouts, before going on to say SME sales account for around 60% of all physical products sold on its marketplace, and that it “typically” makes the same or more revenue on third-party sales — rubbishing the idea there could possibly be any conflict of interest at all from Amazon also selling own brand rival products on the same marketplace where only Amazon gets an overview of merchants’ data.

NB: European regulators aren’t so convinced about the lack of competitive risks on dual-sided platforms.  

Apple

Asked for its response to the committee report, Apple sent us an on the record statement in which it writes that it “vehemently” disagrees with the conclusions reached — adding the beautiful kicker to the sentence “with respect to Apple”. Epic trolling Tim.

It also said it would be issuing a more “extensive refutation” of the accusations levelled at its business in the coming days.

Here’s the rest of its statement:

Our company does not have a dominant market share in any category where we do business. From its beginnings 12 years ago with just 500 apps, we’ve built the App Store to be a safe and trusted place for users to discover and download apps and a supportive way for developers to create and sell apps globally. Hosting close to two million apps today, the App Store has delivered on that promise and met the highest standards for privacy, security and quality. The App Store has enabled new markets, new services and new products that were unimaginable a dozen years ago, and developers have been primary beneficiaries of this ecosystem. Last year in the United States alone, the App Store facilitated $138 billion in commerce with over 85% of that amount accruing solely to third-party developers. Apple’s commission rates are firmly in the mainstream of those charged by other app stores and gaming marketplaces. Competition drives innovation, and innovation has always defined us at Apple. We work tirelessly to deliver the best products to our customers, with safety and privacy at their core, and we will continue to do so.

In further background comments the gist of Apple’s argument boils down to ‘Don’t mess with a good thing’.

Aka billions of users across 175 countries can’t be wrong nor unhappy — nor can the tens of millions of developers making wares for its kit, given, for example, how many (1.8M) apps are now on the App Store. (Developers whose apps get excluded are unlikely to be so happy, of course.)

It also defends the 30% commission it takes on app sales — aka the ‘Apple tax’ — pointing to a recent study by Analysis Group that the structure is “similar in magnitude to those of other app stores and digital content marketplaces” — and further noting that for in-app subscriptions the tax falls to 15% after the first year.

Lastly it invokes privacy, pointing out that by reviewing apps and curating its users access to third party software it can offer protection from surveillance, as well as keep things clean by rejecting objectionable, harmful, unsafe, and illegal content. (Albeit, even the Apple gods can’t always do that.)

Facebook

In a brief on the record statement — presumably while it prepares the next chapters of its neverending ‘hard questions‘ series of lobbyist ‘literature’ — the social media giant sought to paint its business success as American as apple pie or, er, the freely unfettered market. ..."

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