A House subcommittee believes the best way to slam the brakes on anticompetitive business practices of Big Tech is to break them up and limit their ability to make mega-acquisitions.

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As the Justice Department begins what could be a years-long antitrust lawsuit against Alphabet Inc.’s Google, there are still many questions about how far legislators can go to police Big Tech.

The antitrust complaint against Google GOOGL GOOG that was released Tuesday morning does not list potential remedies, instead requesting the court to install “structural relief as needed to cure any anticompetitive harm” and “restore competitive conditions in the markets affected by Google’s unlawful conduct.”

Google Chief Legal Officer Kent Walker countered the lawsuit would “do nothing to help consumers. To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.”

Longtime internet analyst Greg Sterling told MarketWatch it is “unlikely Google will emerge totally unscathed [from the DoJ suit], but far from certain that the requested ‘structural remedies’ will take place.”

A House subcommittee did address specific remedies earlier this month, however, saying the best way to slam the brakes on anticompetitive business practices of large technology companies is to install new antitrust laws, break up Big Tech companies and limit their ability to make mega-acquisitions.

Read more: Google officially charged with antitrust by Justice Department

Is that bold enough to help consumers and the vast majority of the tech industry succeed while the industry is so heavily dominated by the likes of Google, Apple Inc.
Amazon.com Inc.
and Facebook Inc.

? Eventually, yes, experts said after getting a peek at the subcommittee’s 449-page opus, which lays the groundwork for antitrust reform but will require enforcement in the courts to eventually benefit consumers and smaller tech companies.

The House report, based on seven hearings over more than a year, details the stratospheric financial heights reached by Big Tech and their impact on scores of markets. It marks a first step on the road to legislation, with a long list of potential remedies ranging from splintering business operations to severely limiting strategic acquisitions.

“This menu of solutions is the Cheesecake Factory of legislative options,” David Dinielli, senior adviser to the philanthropic investment firm Omidyar Network, told MarketWatch.

Read more: Congress should consider breaking up Big Tech and limiting acquisitions, House report says

For consumers, prescriptive measures to protect their data seem a ways off in terms of priority, according to antitrust experts.

“The report focuses almost entirely on the anticompetitive practices of Big Tech and only makes three broad recommendations, namely, to restore competition in the digital economy, strengthen antitrust laws, and revive antitrust enforcement,” Vasant Dhar, a professor at the NYU Stern School of Business, told MarketWatch.

“While these are steps in the right direction, it doesn’t address the major smoking gun, namely, the unethical gathering and use of personal and public data,” Dhar continued. “This is the glaring omission, and it is striking that the U.S. has no data protection laws in place despite numerous cases that scream for such legislation.”

Read more: Congress should consider breaking up Big Tech and limiting acquisitions, House report says

Tech platforms have scooped up data to accumulate more and more power, the report claims, leading legal experts to theorize that antitrust law could be reinterpreted and shaped in a digital world. At various times, House members compared Big Tech to railroad and telephone monopolies of the past.

Yet antitrust in the U.S. is enforced by lawsuits and the court system, not Congress. The legal underpinnings of the House report would require lawyers at the Justice Department and FTC to argue it in court.

The companies under assault assiduously declared no wrongdoing and dismissed the report’s findings as “outdated and inaccurate allegations from commercial rivals” (Google statement) or “fringe notions” (Amazon).

Google’s aggressive stance should come as little surprise. In America and Europe, it “is facing a lot of pressure,” Irene Ng, CEO of tech infrastructure company Dataswift, told MarketWatch.

“Ironically, Google rode off the antitrust lawsuit vs. Microsoft, and look where they are now,” Ng said. “But it’s not just them. The internet is a peculiar engine: Digital markets are not like conventional markets. They enable companies to grow at the speed of light” in size and scale, collecting mountains of data, she added.

Read more: If the Democrats win the Senate, Big Tech better be ready for a bigger fight

Then there are the repercussions legislation would have on the tech industry, as well as interconnected markets, should significant changes be made to antitrust laws for the first time in decades. In principle, antitrust laws are designed to shield smaller companies from the rapacious grasp of larger ones. On the flip side, only a few companies have the army of lawyers and billions of dollars in cash that FAANGs have to navigate such choppy legal waters.

If nothing else, smaller companies say the report is a crucial step in leveling a playing field dominated by a dozen behemoths.

“Short-term, it slows the more aggressive behavior by the big companies and makes them less brazen,” said Luther Lowe, senior vice president of public policy at Yelp Inc.
which has raised concerns about Google’s business practices for years. “In the long run, it signals to regulators in other jurisdictions [such as Australia, Europe, Asia, etc.] that the U.S. is going after these guys, and they have permission too.”

That effect has already arrived. On Monday, Kazuyuki Furuya, chairman of Japan’s Fair Trade Commission, said his country will assist the U.S. and Europe addressing market abuses by Big Tech.

Ben Volach, co-founder of Blix Inc., which has led the fight among developers against Apple’s 30% commission fee to its app store, expects to see a “real change” in the competitive landscape next year “if the courts and Congress” follow up on the report.

And even if new laws were to go into the books, it is unlikely to disrupt the $1.7 trillion tech economy world-wide. The ecosystem continues to haul in record amounts of venture funding as IPOs pile up.

“When antitrust went after Microsoft in the 1990s, it opened up the web for Google, social networks like Facebook, SaaS,” Duncan Davidson, a founding partner at venture firm Bullpen Capital, told MarketWatch. This, in turn, led to a surge in funding because there was open competition in a fledgling field.

Read more: Big Tech was built by the same type of antitrust actions that could now tear it down

“It’s not so much about the impact on consumers, but intermediaries in the tech industry,” Davidson said. “There are thousands of companies that benefit from antitrust actions against only a few.”

Tech might not even qualify as the industry most in need of scrutiny, based on research around its profitability, suggests Shivaram Rajgopal, a professor at Columbia Business School. “The biggest returns (earnings), dating to the 1980s, are in health care and financial services,” he told MarketWatch. “If I was Congress, I would be concentrating on health care and finance more than tech.”

The tech industry is more preoccupied coping with the pandemic than antitrust, according to Mark Cannice, professor of entrepreneurship & innovation at the University of San Francisco’s School of Management, who polls venture capitalists quarterly on their confidence level. Venture funding in the U.S. during the third quarter was the second-highest ever, at $36.5 billion, according to MoneyTree.

“Unless there is law and legislative changes to current antitrust laws… [punitive measures] will likely results in fines and business model tweaks rather than structural changes to FAANG,” Wedbush Securities analyst Dan Ives said in an Oct. 8 note. “Without core law changes, we believe this antitrust momentum hits a brick wall.”

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