Democrats circulate draft antitrust bills that could reshape Apple, Amazon, Facebook and Google

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3 years ago

June 9, 2021

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U.S. House Impeachment manager David Cicilline (D-RI) speaks on the second day of former President Donald Trump’s second impeachment trial at the U.S. Capitol on February 10, 2021 in Washington, DC.

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A group of House Democrats is circulating discussion drafts of antitrust bills that would force the biggest tech companies to change parts of their business models and curtail large acquisitions, according to copies obtained by CNBC.

While the drafts could still change significantly prior to their introduction, as currently written, they could require business model overhauls for Apple and Amazon by limiting their ability to operate marketplaces for products and apps while selling their own goods and apps on those same stores.

The bills would also make it harder for those companies plus Facebook and Alphabet (Google’s parent company) to complete large mergers, and would force them to make it easier for users to leave their platforms with their data intact. CNBC couldn’t immediately learn when the drafts will be introduced.

The draft bills come after a 16-month investigation by the House Judiciary subcommittee on antitrust into the four companies, which culminated in a nearly 450-page report from Democratic staff last fall. While Republicans on the subcommittee diverged from some of the Democrats’ more extreme proposals, several agreed with the main findings of monopoly power and anticompetitive behavior in the Democratic report and on the need to rein in Big Tech’s power with antitrust reform.

The drafts don’t indicate whether any Republicans are supporting the bills.

What the draft bills say

Specifically, the five discussion drafts would prevent platforms from owning businesses that present a conflict of interest, bar large platforms from favoring their own products over those of competitors that rely on their sites, make it harder for large platforms to complete mergers, raise filing fees for acquisitions and mandate ways for users to transfer their data between platforms.

One of the bills, sponsored by Rep Joe Neguse, D-Colo., appears to be companion legislation to the bipartisan Merger Filing Fee Modernization Act in the Senate, which passed in that chamber on Tuesday as part of a larger $250 billion tech and manufacturing bill. That bill would raise the fees companies pay to notify the Federal Trade Commission and Department of Justice Antitrust Division of large mergers with the goal of raising money for those agencies.

The other four drafts obtained by CNBC include:

Ending Platform Monopolies Act: Sponsored by Rep. Pramila Jayapal, D-Wash., the vice chair of the subcommittee, this bill would make it unlawful for a platform with at least 500,000 monthly active U.S. users and a market cap over $600 billion to own or operate a business that presents a clear conflict of interest. The draft defines an unlawful conflict as one that incentivizes a business to favor its own services over those of a competitors’ or disadvantage potential competitors that use the platform. Lawmakers have previously expressed concern that both Amazon and Apple, which run their own platforms for sellers and developers, respectively, could undermine competition due to a conflict of interest for their own competing products or apps.
Platform Competition and Opportunity Act: This proposal from Rep. Hakeem Jeffries, D-N.Y., would shift the burden of proof in merger cases to dominant platforms (defined with the same criteria as the previous bill) to prove that their acquisitions are in fact lawful, rather than the government having to prove they will lessen competition. The measure would likely substantially slow down acquisitions by dominant tech firms.
Platform Anti-Monopoly Act: This bill, proposed by Subcommittee Chairman David Cicilline, D-R.I., would prohibit dominant platforms from giving their own products and services advantages over those of competitors on the platform. It would also prohibit other types of discriminatory behavior by dominant platforms, like cutting off a competitor that uses the platform from services offered by the platform itself, and ban dominant platforms from using data collected on their services that isn’t public to others to fuel their own competing products, among several other prohibitions.
Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: This proposed bill from Rep. Mary Gay Scanlon, D-Pa., would mandate dominant platforms maintain certain standards of data portability and interoperability, making it easier for consumers to take their data with them to other platforms.

Representatives for those lawmakers did not respond or did not provide comment on the discussion drafts.

Axios first reported on the drafts.

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Technology

Nvidia shares slump 3% in premarket as quarterly revenue growth slows

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4 hours ago

November 21, 2024

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Nvidia shares slump 3% in premarket as quarterly revenue growth slows

POLAND – 2024/11/13: In this photo illustration, the NVIDIA company logo is seen displayed on a smartphone screen. (Photo Illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images)

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Nvidia shares dropped in U.S. premarket trading Thursday after the tech giant’s third-quarter earnings failed to impress investors.

Shares of the chipmaker slumped 3.21% at around 5:03 a.m. ET, following the Wednesday release of Nvidia’s quarterly results, which beat on both the top and bottom lines.

Revenue came in at $35.08 billion, up 94% year-on-year and exceeding the $33.16 billion forecast by LSEG analysts. Earnings per share was 81 cents adjusted, also above analyst expectations.

Other chipmakers fell on the back of the market reaction to Nvidia’s third-quarter results. Shares of Intel, Qualcomm and Micron Technology all lost 1% or more in value, while AMD declined 0.6%.

The slump in Nvidia also had a knock-on effect on European semiconductor firms. ASML, a key chip equipment supplier, dropped 0.9%, while compatriot Dutch chip firm ASMI fell 0.5%. Chipmakers BE Semiconductor, STMicroelectronics and Infineon slipped 0.8%, 0.7 and 0.6%, respectively.

Several notable chip names were also in negative territory in Asia. TSMC, which makes Nvidia’s high-performance graphics processing units, eased as much as 1.5%. Contract electronics manufacturer Foxconn dropped 1.9%.

Why are Nvidia shares falling?

Nvidia has largely cornered the market for the high-powered chips powering the world’s most advanced artificial intelligence models, such as OpenAI’s ChatGPT.

Despite nearly doubling sales year-on-year, Nvidia’s third-quarter results showed a slowdown from previous quarters. Nvidia previously reported growth of 122% in the second quarter, 262% in the first quarter, and 265% in the fourth quarter of 2023.

Derren Nathan, head of equity research at Hargreaves Lansdown, said in emailed comments Wednesday that the dip in Nvidia’s share price “suggests even outstanding isn’t enough for some investors,” adding that he expects the stock to bounce back once markets open.

“NVIDIA’s generated stellar gains for shareholders over many years now, and right now it’s pretty hard to see any major holes in the investment case,” Nathan added.

Analysts are looking ahead to the much-anticipated launch of Nvidia’s next-generation chip called Blackwell. On the firm’s earnings call, CEO Jensen Huang said that demand for the chip is exceeding supply.

– CNBC’s Kif Leswing contributed to this report

Technology

British regulators will soon announce competition remedies for the multibillion-pound cloud industry

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7 hours ago

November 21, 2024

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British regulators will soon announce competition remedies for the multibillion-pound cloud industry

Ofcom said it received evidence showing Microsoft makes it less attractive for customers to run its Office productivity apps on cloud infrastructure other than Microsoft Azure.

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LONDON — Britain’s competition regulator is preparing remedies aimed at solving competition issues in the multibillion-pound cloud computing industry.

The Competition and Markets Authority is set to unveil its provisional decision detailing “behavioral” remedies addressing anti-competitive practices in the sector following a months-long investigation into the market, two sources familiar with the matter told CNBC.

The sources, who preferred to remain anonymous given the investigation’s sensitive nature, said that the cloud market remedies could be announced within the next two weeks. The regulator previously set itself a deadline of November to December 2024 to publish its provisional decision.

A CMA spokesperson declined to comment on the timing of its provisional decision when asked by CNBC.

Plural co-founder on whether Nvidia's dominance can be shaken

Cloud infrastructure services is a market that’s dominated by U.S. technology giants Amazon and Microsoft. Amazon is the largest player in the market, offering cloud services via its Amazon Web Services (AWS) arm. Microsoft is the second-largest provider, selling cloud products under its Microsoft Azure unit.

The CMA probe traces its history back to 2022, when U.K. telecoms regulator Ofcom kicked off a market study examining the dominance of cloud giants Amazon, Microsoft and Google. Ofcom subsequently referred its cloud review to the CMA to address competition issues in the market.

Why is the CMA concerned?

Among the key issues the CMA is expected to address with recommended behavioral remedies, are so-called “egress” fees charging companies for transferring data from one cloud to another, licensing fees viewed as unfair, volume discounts, and interoperability issues that make it harder to switch vendor.

According to one of the sources, there’s a chance Google may be excluded from the scope of the competition remedies given it is smaller in size compared to market leaders AWS and Microsoft Azure.

Amazon and Microsoft declined to comment on this story when contacted by CNBC. Google did not immediately return a request for comment.

What could the remedies look like?

The CMA has said previously in June that it was more minded toward considering behavioral remedies to resolve its concerns as opposed to “structural” remedies, such as ordering divestments or operational separations.

The watchdog said in a working paper in June that it was “at an early stage” of considering potential remedies.

Solutions floated at the time included imposing price controls restricting the level of egress fees, lowering technical barriers to switching cloud providers, and banning agreements encouraging firms to commit more spend in return for discounts.

One contentious measure the regulator said it was considering was requiring Microsoft to apply the same pricing for its productivity software products regardless of which cloud they’re hosted on — a move that would have a significant impact on Microsoft’s pricing structures.

CMA Chief Executive Sarah Cardell is set to hold a speech on Thursday at Chatham House, a U.K. policy institute. In an interview with the Financial Times, she defended the regulator’s track record on competition enforcement amid criticisms from Prime Minister Keir Starmer that the agency was holding back growth.

She is expected to outline plans for a review in 2025 into whether the CMA should more frequently use behavioral remedies when approving deals, the FT reported.

Technology

Bitcoin climbs, reaching a new all-time high above $97,000

Published

9 hours ago

November 21, 2024

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Bitcoin climbs, reaching a new all-time high above ,000

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Bitcoin breached the $95,000 level for the first time Wednesday evening as investors continued pricing in a second Donald Trump presidency.

The price of the flagship cryptocurrency was last higher by more than 3% at $97,646.68, according to Coin Metrics. Earlier, it rose as high as $97,788.00.

Shares of MicroStrategy, a bitcoin proxy, gained 3% in extended trading. Mining stocks rose as well, with Mara Holdings up 4%.

Bitcoin continues its march toward $100,000

Bitcoin has been regularly hitting fresh records this month on hopes that Trump will usher in a golden age of crypto, which would include more supportive regulation for the industry and a potential national strategic bitcoin reserve or stockpile.

It is widely expected to reach $100,000 this year and double by the end of 2025.

“Bitcoin’s price continues to be driven by a number of factors including improved liquidity conditions, increased institutional adoption, and a regulatory environment that has flipped from a headwind to a tailwind,” said Sam Callahan, an analyst at Swan Bitcoin.

Another Trump term also implies larger budget deficits, potentially more inflation and changes to the international role of the dollar – all things that would have a positive impact on the price of bitcoin.

Bitcoin has gained more than 127% in 2024.