Tech Upstarts Say Tech Giants Abuse Market Power to Stifle Competition
January 17 2020 - 3:27PM
Dow Jones News
By Ryan Tracy
WASHINGTON -- Four midsize technology companies told Congress
that industry giants use their market power to beat back their
businesses, an unusual public airing of criticism that suggests
antitrust probes of the companies are gaining steam.
Executives from wireless speaker maker Sonos Inc., mobile-phone
accessory maker PopSockets LLC, business-software firm Basecamp LLC
and tracking-device maker Tile Inc. told the antitrust subcommittee
of the House Judiciary that Amazon.com Inc., Alphabet Inc's Google,
and Apple Inc. had abused their ubiquity and outsize market share
to stifle competition.
"It is apparent that the dominant platforms are increasingly
using their gatekeeper power in abusive and coercive ways," said
Rep. David Cicilline (D., R.I.), the subcommittee's chairman, at
the hearing at the University of Colorado Law School.
He applauded the witnesses "for their courage to share their
testimony in the face of potential retaliation by the dominant
platforms." He added that lawmakers had spoken with other companies
that weren't willing to testify publicly.
Four tech giants -- Apple, Amazon, Google, and Facebook -- have
turned over documents to the House committee as part of its inquiry
into whether antitrust laws need to be changed in the digital
age.
In addition to the House inquiry, federal and state authorities
with authority to sanction firms for anticompetitive behavior are
investigating online platforms, with probes against Google and
Facebook Inc. among the most advanced.
At Friday's hearing, each witness told the story of their
startup's rise -- and their struggle to maintain it in an online
marketplace dominated by a handful of giants.
"At some point, all companies will be competing with Big Tech
simply because Big Tech is expanding to the point" where a few
firms will control "absolutely everything", said David Hansson,
co-founder of BaseCamp.
In an echo of Princess Leia's appeal to Obi-Wan Kenobi in the
original "Star Wars" film, he said, "Help us, Congress. You are our
only hope."
Patrick Spence, chief executive of Sonos, said his firm competed
with Google and Amazon, which also sell internet-connected
speakers. He accused them of selling their speakers below cost,
potentially crowding out competition. "In the long-term, prices are
sure to go up," he said.
Mr. Spence also said Sonos invented technology to enable both
Google's and Amazon's voice assistants to work on its speakers
simultaneously. Amazon didn't object, but Google refused to allow
Sonos to use its voice assistant in that context, he said.
Sonos has a separate lawsuit accusing Google of stealing
intellectual property, which Google is disputing.
"Sonos has made misleading statements about our history of
working together," a Google spokeswoman said. "We deny their claims
vigorously, and will be defending against them."
David Barnett, founder of PopSockets, said before his company
stopped selling directly on Amazon, it was one of many sellers that
relied on Amazon to reach many customers and faced coercion to
follow Amazon's desires on pricing and other policies.
"While bullying is not technically illegal," he said, "one has
to ask how is it that such a successful business maintains
partnerships with so many companies while bullying them."
An Amazon spokesman said: "We sought to continue working with
Popsockets as a vendor to ensure that we could provide competitive
prices, availability, broad selection and fast delivery for those
products to our customers."
Tile General Counsel Kirsten Daru said Apple "exploited its
market power to advance its own interests at our expense," such as
by designing the iPhone's operating system to make it more
convenient for customers to use Apple's own device-tracking
app.
An Apple spokesman said the company "builds its hardware,
software and system level apps to protect user privacy and provide
the best products and ecosystem in the world."
The House panel is reviewing documents turned over by the large
tech companies last year and is expected later this year to call
senior executives at the firms to testify.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
January 17, 2020 15:12 ET (20:12 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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