US inquiry asks if tech giants ‘view themselves above the law’

A high-ranking US Congressional committee has called for more powers to counter the power of digital platforms.

Facebook and Google have ‘an outsize influence’. Pic: AFP

A high-ranking US Congressional committee has slammed the power of digital platforms including Google, Facebook, Apple and Amazon, calling for more powers to combat their influence.

The US House Judiciary Committee said the question was raised whether the companies “view themselves above the law”.

The report tabled Wednesday (AEDT) comes as Australia’s competition watchdog is due to hand its media bargaining code to the federal government in the next couple of weeks.

Australian Competition and Consumer Commission Rod Sims gave evidence at the US inquiry along with EC chief Magrethe Vestager.

The bargaining code will lay down the rules for how media companies will be compensated for their content by the digital platforms.’

Communications Minister Paul Fletcher has promised legislation for the code will be in parliament by the end of the year.

It is expected to receive speedy passage.

The US inquiry is one of an increasing number of inquiries and investigations around the world into the power of the platforms.

The US Justice Department is reportedly considering taking antitrust action against Facebook and the State of Arizona has filed an action on privacy breaches by Google.

“The dominance of some online platforms has contributed to the decline of trustworthy sources of news, which is essential to our democracy,” the US committee said.

In several submissions, news publishers raised concerns about the “significant and growing asymmetry of power” between dominant platforms and news organisations, as well as the effect of this dominance on the production and availability of trustworthy sources of news.

Other publishers said that they are “increasingly beholden” to these firms, and in particular, to Google and Facebook.

“Google and Facebook have an outsizes influence over the distribution and monetisation of trustworthy sources of news online, undermining the quality and availability of high quality journalism.”

The rise of market power online has also materially weakened innovation and entrepreneurship in the US economy

Finally, the market power of the dominant platforms risked undermining both political and economic liberties. Subcommittee staff encountered a prevalence of fear among market participants that depend on the dominant platforms, many of whom expressed unease that the success of their business and their economic livelihood depend on what they viewed as the platforms’ unaccountable and arbitrary power.

The recommendations included looking at restoring competition in the digital economy; structural separations and prohibitions of certain dominant platforms from operating in adjacent lines of business; non-discrimination requirements, prohibiting dominant platforms from engaging in self-preferencing, and requiring them to offer equal terms for equal products and services; interoperability and data portability, requiring dominant platforms to make their services compatible with various networks and to make content and information easily portable between them and ;presumptive prohibition against future mergers and acquisitions by the dominant platforms.

The committee also urged further work on a safe harbour for news publishers in order to safeguard a free and diverse press, and prohibitions on abuses of superior bargaining power, proscribing dominant platforms from engaging in contracting practices that derive from their dominant market position.