What you need to know
- A group of small tech firms has told Congress that Apple, Google, and Amazon used market dominance to crush them.
- Sonos, Tile, Basecamp, and PopSockets all appeared before a House antitrust committee on Friday, January 17.
- They all told stories of how larger tech companies used their market dominance to cripple competition.
Sonos, Tile, Basecamp, and PopSockets have all testified to a House antitrust committee, stating that big tech firms like Amazon, Apple and Google used their market dominance and bullying business tactics to crush the competition.
As reported by Business Insider:
Google, Amazon, Facebook and Apple were the subjects of scathing criticism by smaller tech companies during a Congressional hearing on Friday.
An assortment of tech firms that sell everything from speakers to phone accessories accused the tech giants of bullying business tactics.
Sonos, Tile, Basecamp, and PopSockets all appeared Friday at a hearing by the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law. Speaking at so-called "field hearing" that took place at the University of Colorado Law School in Boulder, Colo., the executives called for Congress to implement tougher regulation of Big Tech.
The executives told similar stories about how the larger tech companies had used their dominance in one market to cripple competition in its emerging products and tilt the field in their favors for its other product lines.
Basecamp CTO David Heinemeier Hansson (who famously blasted Apple Card's "sexist" credit limits last year) stated:
"At some point, all companies will be competing against Big Tech simply because Big Tech is bent on expanding until it does absolutely everything... Help us Congress, you're our only hope."
The report claims that companies testified to Apple's strict App Store rules that stifle innovation and drain resources, whilst Apple develops and boosts its own alternative products:
Tile makes stamp-sized Bluetooth trackers that help customers find their keys, wallets or phones. In some ways, the product competes with Apple's built-in Find My iPhone feature. According to Tile General Counsel Kristin Daru, the company has faced a series of stringent and arbitrary regulations from Apple that have drained its resources.
"Apple is acting as a gatekeeper to applications and technologies in a way that favors its own interests," Daru said. "You might be the best soccer team, but you're playing against a team that owns the stadium, the ball, and the league, and can change the rules when it wants."
It was also stated by Hansson that Apple's 30% App Store tax was "outrageous." Tile further testified to ways Apple exploited the App Store in its favor, such as by embedding the Find My app in iOS, and by burying Tile's setting in iOS 13. (An Apple statement to Business Insider claimed this was being rectified)
Sonos accused Google of having a marketing advantage "like nothing we've ever seen before" - CEO Patrick Spence alleged that Google pressured Sonos to allow its speakers to only sync with Google Assistant, rather than Amazon's Alexa.
Of Google's power over searching and its market dominance, PopSocket CEO David Barnett said:
"We could lose our listing in DuckDuckGo and we wouldn't even tell. We lose Google and we lose our business."
Basecamp also raised concerns that Google allowed competitors to buy ads that would run whenever someone searched for its trademarked name, claiming that Basecamp had to pay $70,000 a year in ads to counteract the problem.
According to Reuters, PopSockets chief exec also testified against Amazon:
Barnett said Amazon required PopSockets to pay almost $2 million in marketing so it could market its products as originals in the face of a wave of counterfeits. The online retailer "frequently lowered their selling price of our product and then expected and needed us to help pay for the lost margin," he said.
"On multiple occasions, we found that Amazon Retail was itself sourcing counterfeit PopGrips and selling them alongside our authentic products," he told lawmakers.
Both reports can be read in full, but if there's a foundation to the accusations being made by these smaller tech firms, they will serve as a damning report to congress about the way larger tech companies like Apple, Amazon, and Google conduct themselves