CEOs of the world's biggest tech companies found themselves hauled in front of Congress yesterday, virtually, as part of an antitrust hearing. Congress is investigating the amount of power that Google, Facebook, Amazon, and Apple have, and whether or not they are using it fairly.
Mark Zuckerberg, Tim Cook, Sundar Pichai and Jeff Bezos were all present, and didn't get an easy ride from representatives on either side of the House. Each CEO faced questions about user data, bullying competitors, left-wing bias, and more.
The first day of the hearing didn't necessarily resolve any of the questions from the committee. But, it certainly offered plenty of insight into how these companies operate, and their own perceptions of power.
What is the Aim of the Hearing?
Congress has called the giants of the tech industry to answer questions on whether or not the main players in the industry have become too big for their boots. Fears over anti-competitive practices, monopolization, and their threat to smaller businesses were discussed.
It's an investigation that has been a year in the making, with Congressman David Cicilline, chairman of the antitrust committee, presiding over the hearing. He kicked off the hearing by noting the dominance that the four companies at the hearing – Facebook, Google, Amazon and Apple – have on the lives of the vast majority of consumers, and their inescapable reach:
“Today, it is effectively impossible to use the Internet without using, in one way or another, the services of these four companies. I have long believed, with Thomas Jefferson and Louis Brandeis, that concentration of power in any form—especially concentration of economic or political power—is dangerous to a democratic society.” – Congressman David Cicilline
Cicilline also referenced the ongoing global pandemic, by noting that these companies have thrived during the lockdown, as users depend on their services for essentials such as communication, education, online retail, and entertainment.
To make his point, Cicilline referred to a similar situation that seemed a world apart from big tech – the railroads of the 1800's. He argued that these carved up the geography of America through discriminating against farmers and holding monopolies which prevented true choice.
Accusation: Big Tech is Anti-Conservative
The hearing, for the most part, was non-partisan. However, at times political lines were drawn in the sand. It's fair to say that there are some in the Republican party with a chip on their shoulder about tech, and recent events, such as Donald Trump Jr being temporarily banned from Twitter, and President Donald Trump's social media messages having inaccuracies flagged, only added fuel to the fire.
“We all think the free market is great. We think competition is great. We love the fact that these are American companies. But what's not great is censoring people, censoring conservatives, and trying to impact elections. If it doesn't end, there has to be consequences.” – Rep. Jim Jordan, Ohio
It's not the first time these fears have been flagged. In 2018, Google CEO Sundar Pichai found himself in front of Congress explaining why when a user Googled the word ‘idiot', the top result was Donald Trump. His answer at the time, which did little to appease Republicans, is that Google simply serves up the most relevant search results.
Rep. Jim Sensenbrenner also pitched in, stating that “Conservatives are consumers too,” and needed protection. Jordan clearly felt he still had a point to make, and repeatedly interrupted Chairman Cicilline's attempts to introduce Amazon CEO Jeff Bezos, before being sternly told to put his mask on and refrain from interrupting further.
Accusation: Facebook Crushes its Competition
Facebook's Mark Zuckerberg is no stranger to sitting in front of Congress, even if this time it was only a video link from his garden. He found himself in the line of fire as Committee Chairman Jerry Nadler raised the purchase by his company of Instagram in 2012, a direct competitor.
It's long since been noted that Facebook has adopted an “if you can't beat them, buy them” approach to its competitors, and Nadler expressed concern about the $1 billion dollar purchase of Instagram.
“Facebook saw Instagram as a threat that could potentially siphon business away from Facebook. And so rather than compete with it, Facebook bought it.” – Rep. Jerry Nadler
Nadler's exhibit A was a document obtained by the committee, written by Zuckerberg, which recommended pursuing Instagram to “neutralize a competitor.”
Zuckerberg's defense was that the Federal Trade Committee had approved the purchase at the time. But, Cicilline was quick to interject and state that the “failing” of the FTC did not necessarily mean that the merger didn't impinge antitrust laws.
Accusation: Apple's Pandemic Profiteering
Apple CEO, Tim Cook, had a fairly stress-free few hours during the early parts of the hearing, but as the day progressed, his companies dominance was brought into the limelight.
First up, Cook was questioned as to why parental-control apps were removed from the platform, shortly after Apple introduced its own native version. Concerns were raised that this behavior was anti-competitive. Cook responded that these apps were removed due to privacy concerns. Rep. Lucy Kay McBath showed the committee an email from a concerned parent to an Apple executive, questioning the removal of these apps, only to be told that they could use Apple's own version instead. When asked to comment, Cook stated that he was unable to view the email.
Nadler raised the recent issue of Apple's commission for payment from Airbnb and ClassPass, after the companies began offering virtual classes during the pandemic. This, stated Nadler, was “pandemic profiteering.”
Cook defended Apple's actions, stating that its own rules require companies that sell digitally to pay commission to Apple. These rules were brought up time and time again, with concerns that they weren't being followed fairly.
Tim Cook explained that Apple’s App Store rules are “applied equally to every developer,” yet the point was raised that Amazon's video service avoids the 30% commission fee in exchange for collaborative benefits.
Accusation: Amazon is ‘Bullying' Smaller Sellers
It was the first time Bezos had found himself sat in front of Congress, albeit via video link. In his opening statement, he painted himself as the perfect example of the American dream, telling the committee that his fortunate position was thanks to hard work and meeting customer demands.
However, for some sellers, whom representatives had spoken to, working with Amazon is less the American dream, and more of a nightmare.
Rep Lucy McBath, told the committee that when speaking to Amazon sellers, it wasn't uncommon to hear words such as “bullying, fear and panic,” with one seller comparing Amazon to a drug dealer.
Bezos countered by claiming that sellers have benefits from Amazon's growth, and that “third party sellers in aggregate are doing extremely well on Amazon.”
Amazon also came under attack from Rep. Pramila Jayapal, whose district includes Amazon’s Seattle headquarters. Jayapal claimed that employees treat seller data like “a candy shop,” which is then used to develop its own products for its house brand, a statement that Bezos was quick to deny.
“[Amazon has] a policy against using seller-specific data to aid our private label business, but I can’t guarantee you that that policy has never been violated.” – Jeff Bezos, Amazon CEO
Jayapal pushed the point by stating that Amazon has access to far more customer data than its sellers do, with whom they are directly competing.
Accusation: Google Has Become a Walled Garden
Google CEO Sundar Pichai is no stranger to speaking in front of Congress, and this time around found himself defending Google's search engine practices.
“The evidence seems very clear to me as Google became the gateway to the internet, it began to abuse its power and use its surveillance over the web traffic to identify competitive threats and crush them.” – Congressman David Cicilline
One of the main criticisms of late regarding Google is that it is circumventing other websites by serving up content within the search page itself, such as restaurant listings, recipes, purchase options, and other data. This removes the need to actually visit the websites providing the results, therefore keeping more of the user within Google's walled garden and keeping more advertising revenue for Google itself.
Pichai disagreed, and stated that Google had plenty of competitors, name-checking Amazon, as well as stating that the majority of Google searches do not carry adverts. He insisted that highlighting search data on the search page was done in the best interest of the consumer.
Not for the first time, Google's handling of data was also raised. Despite Pichai stating that Google users had absolute control over their own data, and that the company had simplified its settings, not everyone was on board. Rep. Val Demings dragged Google over the coals for its handling of user data.
“The more user data Google collects, the more money Google can make.” – Rep. Val Demings
It's pretty hard to argue with that statement, to be fair.
What Next for the Antitrust Hearing?
It was a rocky first day for the hearings, and it's unlikely either side came away feeling that they could claim a victory. With big tech facing some searching questions, they'll likely be feeling the pressure. But, at the same time, their responses will have raised more questions than answers with Congress.
The end result of all this is power – who yields it, who has too much of it, and who should be responsible for it.
The end result of all this is power – who yields it, who has too much of it, and who should be responsible for it. With so much influence over our lives, tech companies find themselves in a very privileged position of knowing almost everything about us, as well as controlling where we spend our money.
That's a problem for Congress, and if it can't get some reasonable reassurances out of tech companies, they could face having power wrestled from them, or even be broken up.
We'll have to wait and see what happens next, but it's certain that neither side will go down without a fight, while both claiming to have the public's best interests at heart.