The House Antitrust Subcommittee Majority Report on competition in online markets drew mixed reactions inside the Beltway.

The subcommittee report, which was released Tuesday (Oct. 6) and culminated a year-plus investigation into Facebook, Google, Amazon and Apple, found that tech giants had monopoly or near monopoly power that they abused to hurt competitors and protect themselves.

“NAB thanks Chairman Cicilline and the House Judiciary Antitrust Subcommittee for its important investigation into the dominant competitive power of digital technology platforms," said National Association of Broadcasters President Gordon Smith. "We applaud the Subcommittee for examining the challenges this presents to local media outlets, including radio and TV broadcasters, as they compete online for advertisers and audiences, and the impact on the future of local journalism. America’s broadcasters are committed to working with the Subcommittee and Congress on bipartisan solutions that level the playing field and preserve local journalism.”

NAB has submitted comments in the investigation arguing that dominant online platforms put TV and radio stations at a competitive disadvantage when it comes to monetizing their online content.

The subcommittee majority staff report definitely supported that conclusion.

Consumer Reports applauded the Hill report's conclusion. 

“The House staff report lays out clearly how our online marketplace is increasingly stacked against us, and is not serving consumers fairly," said Consumer Reports President Marta Tellado. "A handful of powerful companies are restricting and controlling the choices of everyone else, in order to enrich and entrench themselves. When we hear from American consumers through our survey research, we know that a majority of people are aware, and they care, about the power and control that these companies have built up. There is a better way, and people across the political spectrum continue to tell us they want these companies held accountable for how they treat consumers.”

The Computer & Communications Industry Association, whose members include Amazon, Facebook and Google, saw it quite differently. 

“As an organization advocating for a competitive tech industry for nearly 50 years, we appreciate the House Judiciary Committee’s efforts to better understand the digital economy," said CCIA President Matt Schruers. “If the goal is simply to knock down successful U.S. businesses, then perhaps this plan would score a hit. But if the goal is to benefit consumers, which has until now been the standard for antitrust policy, it is hard to see how this would do anything but invite regulators to micromanage business models.

“As countries from Europe to India and China ramp up their own tech sector to drive economic recovery from the pandemic, proposals to saddle competitive US companies with heavy regulation seem shortsighted and risky," he added. “New rules specific to a handful of prominent U.S. digital services won’t necessarily create an industry of equally dynamic small companies: it could instead hobble U.S. leadership and cede ground to foreign competitors.” 

“Some of the proposals are downright radical, and are controversial even among the committee itself. The suggestion to resurrect long-repealed Depression-era financial regulations and apply them to Internet companies is neither feasible nor beneficial for consumers.”

The Democrat-led House Antitrust Subcommittee has released its report on competition in online markets and it is a damning portrait. It concludes that social media giants have leveraged their gatekeeper power to "erode entrepreneurship, degrade Americans’ privacy online, and undermine the vibrancy of the free and diverse press. The result is less innovation, fewer choices for consumers, and a weakened democracy."

The staff report found that Facebook and Google monopolize their respective online spaces, while Apple and Amazon have "durable market power," and that Congress must step in to legislate.

In fact, it said, Facebook has tipped the market power scale to such an extent that it competes more vigorously among its own products, Instagram, WhatsApp and Messenger, than with their "actual competitors."

The report, which was released Tuesday (Oct. 6), is the product of an investigation launched in June 2019 of Facebook, Google, Amazon and Apple as well as of antitrust laws, competition policies and current enforcement and whether they are sufficient to handle the market power and anticompetitive conduct in digital markets.

It also follows the seventh and final hearing related to the investigation last week in the subcommittee, and while the report is from committee staff and "does not necessarily reflect [the views] of the Committee on the Judiciary or any of its members, some of the findings were telegraphed in the hearing by Democratic members who were clearly on the same page (actually pages, some 449 of them) as the committee signaled it was wrapping up the report.

The investigation found that all four companies are gatekeepers over Key distribution channels, abuse that power by "charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people and businesses that rely on them."

The report also concluded the companies protect that power by controlling infrastructure and surveilling other businesses to identify potential rivals so they could buy them out or cut them out of copy, then solidified their market power via predatory pricing and exclusionary conduct. 

"[W]e firmly believe that the totality of the evidence produced during this investigation demonstrates the pressing need for legislative action and reform," the report said. "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."

The House Antitrust Subcommittee will hold a field hearing on online platforms and market power Jan. 17 in Boulder, Colo. 

That is according to the University of Colorado Law School, which will be hosting the hearing. 

Related: House Continues Deep Dive into Digital Antitrust 

The Subcommittee is chaired by David Ciccilline (D-R.I.) but the vice chair is Joe Neguse (D-Colo.), who arranged for the road trip. Ken Buck (R-Colo.) is also a member. 

The school indicated that several "top executives" will be testifying, but did not say whom. 

“Through the Subcommittee’s investigation, it has become clear that the dominant online platforms have tremendous power to shape and influence online commerce,” said Rep. Cicilline. “This hearing is an opportunity to hear directly from a diverse group of innovative companies that are forced to rely on these platforms as gatekeepers to reach consumers and the online marketplace.”

Congress, the Justice Department and the Federal Trade Commission are all looking into the size and power of online platforms including Google and Facebook and Twitter and how they got that way.  

Journalists who want to cover the hearing in person--it will also be live streamed--must apply by Jan. 15.  The hearing was not on the committee's web site at press time but a school spokesperson said they had gotten the go-ahead to announce it .

WASHINGTON — Sounding a bit like Google execs in front of the Senate Commerce Committee almost a decade ago, a top Facebook official told the House Antitrust Subcommittee that it faces “vigorous” competition for its products and services, including fierce competition for revenue and low barriers of entry for new competitors.

That is according to the prepared testimony of Matt Perault, Facebook’s director of public policy.

He also said the company had been a boon to small businesses, saying it had "democratized advertising, helping millions of small and medium-sized businesses along the way."

Perault suggested Facebook had been successful because it had worked hard and taken risks. "America does not punish success,” he said. “It rewards it."

Google was represented at the same hearing by Adam Cohen, director of economic policy, who was making the same arguments in his testimony about being subject to vigorous competition for search, including from Bing, DuckDuckGo, Yahoo and "many more."

Last year, Cohen pointed out, 54% of product searches originated on Amazon, and specialized search services are growing in the areas of flights, hotels and restaurants.

RELATED: Hill Gets Pre-Pushback on Big Tech Antitrust Hearing

Amazon associate general counsel for competition Nate Sutton weighed in, too. He spoke in his testimony of how each of the company’s many businesses “faces intense competition from well-established competitors,” including its online retail business. Sutton said Amazon knows its retail customers have many options, including brick-and-mortar stores that operate their own online businesses and the third-party sellers Amazon hosts on its platform — many of which are small businesses it is helping out.

And for Apple, said chief compliance officer Kyle Andeer: “The competition is fierce. Our customers have an ever-growing number of choices when it comes to products and services. We compete against some of the largest companies in the world, both foreign and domestic."

Their statements were at odds with the general tenor of the House’s inquiry into Big Tech, which is based on the companies' massive size, market cap and dominance in various areas. Legislators on both sides of the aisle have talked about the need to rein in or break up giant edge providers, with Republicans pointing to allegations of conservative bias and Democrats speaking of the need to downsize converged corporate giants in general.

Rep. David Cicciline (D-R.I.), chairman of the Antitrust Subcommittee, gave the companies props for dynamism, immense tech breakthroughs and economic contributions. But he said they had been allowed to grow without sufficient antitrust oversight, leading to an increasingly concentrated and less open internet “growingly hostile to innovation and entrepreneurship.”

The companies’ protestations about fierce competition notwithstanding, Cicciline said Google controls nearly all the search in the country (about 90% of all searches), with Amazon controlling almost half of all online commerce, despite the company's statement that it only captures a small percentage or retail. Cicciline said Amazon’s closest competitor, eBay, controls less than 6% of the market.

Facebook controls more than half of the U.S. social media market, Cicciline said, with about 2.7 billion monthly users. Notwithstanding the growth of Chinese social app TikTok — which Perault noted as one of its fierce competitors — Cicciline said Facebook captures over 80% of global social media revenue.

Apple, the chairman pointed out, is under scrutiny for prices in its App Store and policies that may favor its own services and products.

RELATED: Big Tech Bashed in Senate Hearing On Protecting Kids Online

Cicilline said there was a good argument that the market lends itself to shielding dominant firms and producing a "kill zone" for new startups that might want to challenge them. “There is growing concern that anti-competitive practices and the gatekeeper role of online platforms is now imperiling small business in our communities,” he said, echoing the knock on ISPs inside the Beltway of the past decade.

Ranking member Rep. James Sensenbrenner (R-Ill.) raised red flags about coming down too hard on Big Tech. The antitrust laws don't exist to punish size or success, he said, adding that just because a company is big doesn't necessarily mean it is bad.

He echoed the Big Tech comments that they had actually helped small businesses, not hurt them. “Breaking up big businesses because they are large could wind up hurting small businesses throughout the country,” Sensenbrenner said.

He also said breaking up the companies would not solve all the problems, like privacy, he said.

Sensenbrenner did not dismiss the possibility of anti-competitive conduct, but said he was offering a counterpoint to some of the more radical speculation. He said they should look seriously at wrongdoing, but not break up companies by fiat because big was inherently bad.