A report backed by Democratic lawmakers has urged changes that could lead to the break-up of some of America’s biggest tech companies.
The recommendation follows a 16-month congressional investigation into Google, Amazon, Facebook and Apple.
“These firms have too much power, and that power must be reined in,” Democratic lawmakers working on the probe wrote.
But Republicans involved in the effort did not agree with the recommendations.
In a statement, one Republican congressman Jim Jordan dismissed the report as “partisan” and said it advanced “radical proposals that would refashion antitrust law in the vision of the far left.”
Others have said they support many of the report’s conclusions about the firms’ anti-competitive tactics but that remedies proposed by Democrats go too far.
“Antitrust enforcement in Big Tech markets is not a partisan issue,” said Republican Ken Buck. “But an ounce of prevention is worth a pound of cure—I would rather see targeted antitrust enforcement over onerous and burdensome regulation that kills industry innovation.”
Monopoly power?
US tech companies have faced increased scrutiny in Washington over their size and power in recent years. The investigation by the House Judiciary Committee is just one of multiple probes firms such as Facebook and Apple are facing.
The 449-page report, penned by committee staff, accused the companies of charging high fees, forcing smaller customers into unfavourable contracts and of using “killer acquisitions” to hobble rivals.
“To put it 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,” it said.
It said the findings should prompt politicians to consider a series of changes.
Those included stronger enforcement of existing competition law, as well as changes to limit the areas in which a firm may do business or prevent companies from operating as players in areas where they are the dominant provider of infrastructure – as Amazon does, for example, when it acts as both a seller and marketplace for other merchants.
This report is blockbuster.
It carries heft too – it’s stacked with evidence collected over 16 months.
But the key thing here is these are Democrat suggestions.
This is not a bi-partisan set of recommendations.
In fact, from what we’ve already heard from Republicans many of the recommendations are “non-starters” for conservatives.
It’s also been reported that some Republicans were angered by omissions in the report.
Republicans wanted sections on alleged anti-conservative bias – which was apparently blocked by Democrats.
There are, however, Republicans who want to find common ground on antitrust.
For example, Republican Ken Buck has indicated he’d support some of the recommendations. For example, shifting the anti-competition burden of proof for acquisitions – making it more difficult to buy up the competition.
In truth though, we’re unlikely to see any concrete legislative proposals until after the election.
But what’s now crystal clear is both Biden and Trump – in their own different ways – offer existential challenges to the power of Big Tech.
‘Fringe notions’
In testimony before the committee in July, the bosses of tech firms defended their actions.
On Tuesday, Amazon hit back at what it described as “fringe notions of anti-trust” law, as competition law is known in the US.
“The fact that third parties having the opportunity to sell right alongside a retailer’s products is the very competition that most benefits consumers and has made the marketplace model so successful for third-party sellers”, the company said in a blog post.
Divisions in Washington between Republicans and Democrats make the prospects of significant action against the firms unlikely, tech analyst Dan Ives of Wedbush Securities said.
“The lack of consensus and divergence among both sides of the aisle on the antitrust issues remains a major issue to move things forward,” he said.
While that could change if Democrats gain more power in the upcoming US election, he said, “Despite the report/content and framework for recommendations around Big Tech players (e.g. M&A, business practices) without core law changes we believe this antitrust momentum hits a brick wall.”
In response, Facebook said in a statement: “Instagram and WhatsApp have reached new heights of success because Facebook has invested billions in those businesses.
“A strongly competitive landscape existed at the time of both acquisitions and exists today. Regulators thoroughly reviewed each deal and rightly did not see any reason to stop them at the time.”
What did the report say?
Facebook had “monopoly power” in the market for social networking, which it maintained by using its data advantage to “acquire, copy or kill” nascent threats.
Google monopolised online search and advertising using “a series of anti-competitive tactics”, including privileging its own content ahead of other websites.
Amazon possessed “significant and durable market power” in online shopping, which it furthered in part by “anticompetitive conduct in its treatment of third-party sellers” which it referred to as “internal competitors” behind closed doors.
Apple exerted monopoly power via its App store,which it leveraged “to create and enforce barriers to competition and discriminate against and exclude rivals while preferencing its own offerings”.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
