The “Big Tech” companies — Apple, Amazon, Alphabet, and Facebook — face limited risk from a renewed antitrust push out of Washington D.C., analysts say.
Ryan Vlastelica for Bloomberg:
A House panel proposed far-reaching antitrust reforms designed to combat the power of companies like Amazon.com Inc., Apple Inc., Facebook Inc. and Alphabet Inc., the parent company of Google. The proposals could lead to the breakup of tech companies if approved by Congress, but Wall Street analysts say the chances of this are low, given Republicans largely shunned the report.
While there are areas of agreement between the two parties, “the nuanced differences in how to execute on those goals is still too far apart to drive bipartisan legislation,” wrote Chase White, an analyst at Height Securities. There could be some changes to antitrust laws, but the distance between the parties is “likely to result in any legislation being watered down from the Democrats’ recommendations.”
Wedbush analyst Daniel Ives wrote that the lack of consensus between the parties “remains a major issue to move things forward,” and that without core changes to antitrust law, “we believe this antitrust momentum hits a brick wall.” Wedbush’s Ives wrote that a blue wave “would change the game,” and “make a formidable force going after antitrust law changes with breakups possibly on the radar.” While this issue is a “contained risk” currently, he added, it could “morph into a threat.”
MacDailyNews Take: Since Apple, unlike some other Big Tech companies, doesn’t even hold a monopoly in any market in which they compete, they should face no risk whatsoever, regardless of election outcomes.
We have always said that scrutiny is reasonable and appropriate but we vehemently disagree with the conclusions reached in this staff report with respect to Apple. Our company does not have a dominant market share in any category where we do business. From its beginnings 12 years ago with just 500 apps, we’ve built the App Store to be a safe and trusted place for users to discover and download apps and a supportive way for developers to create and sell apps globally. Hosting close to two million apps today, the App Store has delivered on that promise and met the highest standards for privacy, security and quality. The App Store has enabled new markets, new services and new products that were unimaginable a dozen years ago, and developers have been primary beneficiaries of this ecosystem. Last year in the United States alone, the App Store facilitated $138 billion in commerce with over 85% of that amount accruing solely to third-party developers. Apple’s commission rates are firmly in the mainstream of those charged by other app stores and gaming marketplaces. Competition drives innovation, and innovation has always defined us at Apple. We work tirelessly to deliver the best products to our customers, with safety and privacy at their core, and we will continue to do so. — Apple