Apple and Facebook faces punishment from the US for monopolization

Yesterday, US Democratic Senators Amy Klobuchar and Richard Blumenthal proposed a new bill called “Monopolization Deterrence Act”. This bill seeks to increase the punishment on companies which violates the anti-monopoly laws. As of now, Apple and Facebook are on top of the list of companies which may get punished. According to reports, the bill will enable the US Federal Trade Commission (FTC) and the Department of Justice (DOJ) to pursue new civil penalties. In theory, this could expose these companies to 15% loss of their US revenue.

Sen. Amy Klobuchar

Recently, Facebook got a $5 billion fine for violating user privacy. However, the company’s revenue in 2018 exceeds $55.8 billion, making it relatively easy to recover. Although Apple and Facebook are at the forefront, FTC and DOJ are preparing for a more in-depth investigation of other technology giants such as Amazon, and Google. Representatives of all four companies were before the House Judiciary Committee in July to defend their practices.

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Apple’s criticism usually hovers around its App Store. According to reports, Apple prevents developers from selling iPhone and iPad apps anywhere else. Apple has to extract up to 30% of each transaction, and several US lawsuits claim that this artificially exaggerates the final price. According to Spotify, this provides an advantage for Apple services because it has deeper integration with the software. In its defense, Apple claims that developers are buying a range of revenue-distributing services, such as marketing. However, remains to be seen if there are other online stores offering similar benefits without exclusivity.

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