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Apple, Google and Facebook used market dominance to cripple competition says smaller firms

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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

14 Comments
  • Another thing Amazon does (or did at least) is letting customers with a bad rep buy directly from their partners and letting customers with a good rep buy the goods from Amazon directly. That way their partners will get to deal with all the ******** that order products, use them intensively and than return them just in time etc.
  • Hold on, I'm trying to be shocked by this news.....
    Its good to see MS's name not involved in this. Well done.
  • MS hasn't been named yet. They'll probably find themselves in the crosshairs before long.
  • MS has a totally different approach though... They're not free to begin with and they are platform agnostic. And they depend on other product compatibility to sell their own... Heck even their hardware is there to motivate other companies to do cheaper similar products...
    The model is different... They might not be perfect but I doubt they are as bad in that regard than the other GAFA
  • Microsoft is only "platform agnostic" because they do not have a choice. Their platform is dieing, so they have to support the competition.
  • Not true at all. They absolutely have a choice and their platform is not dying. Their market share in the PC OS market is nearly 90%, a number that Google only dreams of in the web search or mobile OS markets and Amazon will never achieve in any market in which it competes. Apple isn't even the leader in the mobile OS market. Facebook is the only company named in the article that might be able to boast better numbers (they do have 100% Facebook market share) but not if you consider "social media" as a market segment. Microsoft became more open because it was severely sanctioned by the US government and the European Union for the exact same types of anti-competitive monopolist behaviors. While the term of those sanctions has since expired, Microsoft has found a new approach to participating in competitive markets that places value in openness and compatibility and, by all accounts (except for your inaccurate one above) it has been highly successful for them and their shareholders.
  • You have to qualify it as a PC OS because when you look at all operating systems, Windows is 3rd and dropping. Developers have moved on, they are rumoured to begin shutting down the app store this summer, and the only thing they can sell is legacy PC hardware. Every other form factor they have attempted has failed. People only use Windows these days because they have to.
  • I find it hard to believe that Windows is third given that they are shipping more windows based PC's than Apple iOS devices yearly (although Apple have stopped listing their shipment numbers since November 2018, so we don't know what they did in 2019 but I doubt shipment numbers jumped 25% in one year). Also 2019 is the first year since 2011 that PC numbers have increased over the year before (by only a handful of million, but an increase is still an increase).
  • Thing is my friend they could kill windows and still be a leader in the market... Windows ain't their main product anymore... hasn't been for a while... And I'm not even talking about how much all the other are forking for each licence of their own product to use the gigantic amount of patents MS owns just to be able to have something decent to offer on their hardware.
  • Lol bleached stop drinking it.... They've been platform agnostic since for ever.... I'm talking PC you can pretty much load their OS on any build you want... And their software is present on Mac since fore ever even when Apple was about to go under and was saved by MS (granted it was to avoid anti trust issues back then)... Man get a clue MS is probably the strongest of them all in the long run all the other don't have anywhere close to the string foundation MS stands on.... They did make mistake that cost them a lot... But any of the other does a similar mistake and they are gone... It's not like Apple FB have really any backup plan.... There is a reason MS keeps striving year after year regardless of the competition... I'm convinced MS will be standing when I retire... The other not so sure...
  • Considering MS's experiences with google during the Windows Phone days, these fresh allegations seem to check out.
  • This is perhaps the greatest reason of them all why Microsoft should never had discontinued Windows 10 Mobile. Microsoft will be in the hand of Google with the Surface Duo phone. Told you so.
  • I think Yelp has a big lawsuit against Google. I still consider Yelp very good but Google twists Android users arms to leave reviews of places they just visited. Yelp leaves you alone, which is the right choice. That's not fair to Yelp or the consumer.
  • For example, Facebook will calls Supreme Cour for disclaimers
    Heypple steals patents
    And Usa gets the cash
    But who receives gifts at the congress ?