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.”
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.
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”.
1 New Case Of COVID-19 In Windsor Essex As Of Monday – windsoriteDOTca News
The Windsor Essex County Health Unit has announced 1 new case of COVID-19 as of Monday, bringing the local total to 2,795. They say 2,687 people locally have recovered.
Cases increased from 2,794 on Sunday October 25th to 2,795 on Monday October 26th and 32 cases of COVID-19 are currently active in Windsor-Essex.
The Health Unit says Monday’s one new case is still under investigation.
Article Continues Below Local Sponsor Message
There have been no additional deaths due to COVID-19 as of Monday and the local death toll stands at 76.
As of Monday, the Health Unit lists 1 person as hospitalized with a confirmed case of COVID-19 in Windsor Essex, and 1 person in the ICU. Zero hospitalizations are listed at Windsor Regional Hospital.
As of Monday, the Health Unit says the following workplaces are under outbreak:
- 1 construction company (in Lakeshore)
- 1 food & beverage services company (in Kingsville)
A workplace outbreak is declared when two or more employees test positive for COVID-19 within a reasonable timeline to suspect transmission in the workplace, according to the Health Unit. Officials with the Health Unit have said a workplace will only be named if a threat to the public exists.
Ant Group raises $34.4 billion in the biggest IPO of all time – CNBC Television
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- Ant Group raises $34.4 billion in the biggest IPO of all time CNBC Television
- Ant Group set to surpass Aramco as biggest-ever IPO Aljazeera.com
- Chinese fintech could shatter records with US$35B share offer CTV News
- Jack Ma Wealth Surges Above Walmart Heirs’ With Record Ant IPO BNN
- Behold the Mighty Ant The Wall Street Journal
- View Full coverage on Google News
Ant Group set to surpass Aramco as biggest-ever IPO – Aljazeera.com
Jack Ma’s fintech giant Ant Group is set to raise $34.5bn through initial public offerings in Shanghai and Hong Kong – a listing that will rank as the largest ever.
Jack Ma’s Ant Group Co is set to raise about $34.5 billion through initial public offerings in Shanghai and Hong Kong, a blockbuster listing that will rank as the biggest IPO ever and make it one of the most valuable finance firms on the planet.
The fintech giant will have a market value of $315 billion even before exercising its greenshoe option, based on filings Monday. That’s about the same valuation as JPMorgan Chase & Co. and four times larger than Goldman Sachs Group Inc.
The IPO is attracting interest from some of the world’s biggest money managers, and sparking a frenzy among individual investors in China clamoring for a piece of the sale. In the preliminary price consultation of its Shanghai IPO, institutional investors subscribed for over 76 billion shares, or over 284 times of the initial offline offering tranche, according to Ant’s Shanghai offering announcement.
“This was the first time such a big listing, the largest in human history, was priced outside New York City,” billionaire founder Ma told the Bund Summit in Shanghai Saturday. “We wouldn’t have dared to think about it five years, or even three years ago.”
Such demand puts the much-anticipated IPO on track to surpass Saudi Aramco’s $29 billion sale last year. Ant priced its Shanghai stock at 68.8 yuan ($10.27) apiece and its Hong Kong shares at HK$80 ($10.32) each. The company may raise another $5.17 billion if it exercises its greenshoe options.
This is “a homecoming for capital markets in Shanghai and Hong Kong,” said existing investor John Ho, founder of Janchor Partners. Ho, who invested $400 million in Ant two years ago, added that he’s trying to secure a bigger allocation of the Hong Kong shares and that being able to invest in Ant “is priceless.”
T. Rowe Price Group Inc., UBS Asset Management and FMR LLC, the parent of Fidelity Investments, are among the money managers angling for a piece of the deal, a person familiar with the matter has said. Hong Kong stockbrokers are so confident Ant IPO will go smoothly that they’re offering to let mom-and-pop investors buy the stock with as much as 20 times leverage.
“The investment thesis of Ant is a systemic valuation transfer from mainstream Chinese financial institutions such as banks to a platform that’s data-driven, with a huge network effect, and enjoying almost zero marginal costs of cross-selling,” said Nick Xiao, CEO of Hywin International, the Hong Kong arm of Hywin Wealth which is helping rich individuals buy shares of Ant. “Every bank and securities house and fund manager will have to plug into it, while every consumer, corporate or individual, cannot live without it.”
The fintech giant that runs the Alipay platform is charging ahead with its landmark offering just days ahead of the U.S. election. The Hong Kong listing day will be on Nov. 5., only two days after the U.S. vote, an event that could spark market volatility if the vote is disputed or counting delayed.
Ant has picked China International Capital Corp. and CSC Financial Co. to lead its Shanghai leg of the IPO. CICC, Citigroup Inc., JPMorgan. and Morgan Stanley are heading the Hong Kong offering. Existing Ant shareholders won’t be able to sell shares for six months, according to the filings.
The company will issue no more than 1.67 billion shares in China, equivalent to 5.5% of the total outstanding before the greenshoe, according to its prospectus on the Shanghai stock exchange. It will issue the same amount for the Hong Kong offering, or about 3.3 billion shares in total.
Alibaba Group Holding Ltd., which was co-founded by Ma and currently owns about a third of Ant, has agreed to subscribe for 730 million of the Shanghai shares, which will be listed in Shanghai under the ticker “688688,” according to the prospectus. Alibaba will hold about 32% of Ant shares after the IPO.
(Updates with quotes and details throughout.)
© 2020 Bloomberg L.P.
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