On Wednesday, four of the most powerful people on the planet testified before Congress. The CEOs of Amazon, Apple, Facebook, and Google — who together control companies worth nearly $5 trillion — called in individually via videoconference and fielded questions for nearly six hours. Some questions were tough. Some were just all over the place.
It was a scattered and, at times, awkward hearing. Members of the House Judiciary Subcommittee on Antitrust received only five minutes at a time to ask all four executives questions. The event was also full of all the technical glitches you can expect in a standard video chat, as well as some anticipated but nevertheless distracting political drama.
Democrats focused on whether the companies are engaged in anticompetitive practices that crush competitors and harm consumers. Much to Democrats’ frustration, many Republicans diverted from antitrust issues to focus on unfounded claims of anti-conservative bias on social media platforms and Google.
While the marathon hearing won’t result in any immediate political or regulatory action, it could apply pressure to antitrust regulators at the FTC and DOJ and set the stage for broader government probes into these companies’ business practices and the laws that have failed to rein them in. The event also stands to influence the public’s opinion of tech at a time when nearly half the country thinks the industry needs government regulation. Naturally, some emerged from the debacle looking like winners. There were also some clear losers.
Rep. Pramila Jayapal
Pramila Jayapal, a Democratic Congress member from Washington, came prepared with sharp lines of questioning for the witnesses, particularly for Amazon CEO Jeff Bezos and Facebook CEO Mark Zuckerberg, who she grilled about the 2012 acquisition of his company’s then-competitor Instagram.
Jayapal directly quoted internal documents to press Zuckerberg when he repeatedly denied strong-arming Instagram founder Kevin Systrom into a deal. Instead of moving on to another question, Jayapal read back old emails and strategically reminded Zuckerberg that he was under oath to tell the truth. After a tense back-and-forth, the Facebook CEO told Jayapal he disagreed with her characterization of his messages to Systrom.
“I think it was clear that this was a space that we were going to compete in one way or another,” Zuckerberg said. “I don’t view those conversations as a threat in any way.”
But Jayapal, who had clearly done her homework, had more proof, citing messages in which Systrom shared his worries with an investor that Zuckerberg would go into “destroy mode,” copying and crushing his app if he rejected a deal.
“Facebook is a case study in monopoly power, because your company harvests and monetizes our data and then your company uses that data to spy on competitors and to copy, acquire, and kill rivals,” said Jayapal at the end of her round of questioning on the Instagram deal.
Jayapal’s questions produced some of the most damning evidence presented at the antitrust hearing. It demonstrated how Facebook’s market dominance can strike fear in its competitors, even if it’s still undecided whether that fits the legal threshold for anti-competitive behavior.
Even though his company has faced intensifying allegations of antitrust violations in recent weeks, Apple’s CEO Tim Cook only received about half of number of questions as his tech CEO rivals, according to an analysis by VentureBeat,
Cook did face some tough questions about whether Apple takes too big of a cut from the revenue of third-party developers that sell apps in its App Store. Spotify, for example, has very publicly complained about the issue, leading to European regulators launching a pair of antitrust investigations in June. Yet, on Wednesday, members of Congress didn’t focus their ire on Apple’s issues as they did on those of the other tech CEOs.
Overall, Cook won by laying low. To date, Cook has been masterful at staying quiet when he needs to in order to win at the hyperpartisan politics of the Trump era. And Wednesday’s hearing proved to be no exception.
The Facebook CEO, who’s testified at congressional hearings before, faced some of the toughest questions from lawmakers on both sides. Some argue that the young executive held up well to questioning, but the fact that Zuckerberg became the focus of so much ire undoubtedly directed negative attention to Facebook.
Democrats pressed Facebook about its inability to stop hate speech and misinformation from spreading on the platform. But where Zuckerberg struggled was in the line of questioning from members like Jayapal, who made strong cases for how Facebook has engaged in anti-competitive business practices over the years in what Jayapal called a “copy, acquire, and kill” strategy toward pushing competitors out of business.
Zuckerberg defended Facebook on this point in several ways. First, he argued that if Facebook hadn’t acquired smaller rivals like Instagram, those startups may have never succeeded at the scale they’re at today because they needed Facebook’s support and talent to grow. Second, Zuckerberg said that Facebook isn’t really a monopoly because it competes with companies like Google on ads, Amazon on commerce, and TikTok on social. Third, he claimed that if United States regulators break up tech giants like Facebook, other Chinese competitors (hint: TikTok) who are “less committed” to American values could take over.
But Zuckerberg’s grilling from Congress didn’t stop with acquisitions. Zuckerberg faced a slew of angry questions from Republicans who accused, with scant evidence, that Facebook is inherently biased against conservatives. Even if these claims are unfounded, they left Zuckerberg defending his company from all kinds of angles.
The famously soft-spoken, even-keeled Sundar Pichai, CEO of Google, was forced into controversy at Wednesday’s hearing, where he faced a hammering over Google’s privacy practices and dominance in the ads market.
Like Zuckerberg, Pichai was also on the receiving end of a lot of hell about largely unfounded accusations of political bias on Google. But the partisan Republican attacks didn’t end there. Several Republicans, like Reps. Ken Buck and Matt Gaetz, also took issue with Google dropping a major contract with the Pentagon to develop AI to be used in drone warfare. The project, nicknamed Maven, was abandoned in part due to thousands of Google employees’ open dissent, arguing that they didn’t sign up to be in the business of war.
In his questioning, Pichai acknowledged that employees’ anger about Maven factored into the decision to drop the project, which is an obvious and understandable conclusion that Rep. Gaetz framed as some kind of bombshell revelation. Pichai also said the company is actively working with US government agencies.
“We are not working with the Chinese military.”
Rep. Gaetz asks Google why an American company would aid the Chinese military pic.twitter.com/yG1r9oR8w7
— Bloomberg QuickTake (@QuickTake) July 29, 2020
This all puts Pichai in a tough spot, though. On the one hand, he has to keep his engineers — a narrow pool of talent who are notoriously difficult to recruit — happy. And many of those engineers are vehemently against developing technology that can cause physical harm. At the same time, as evidenced in the hearing, Pichai has to answer to angry lawmakers who see any refusal not to engage in military or police contracts as unpatriotic.
Google’s previous work to build a search engine in compliance with the Chinese Communist Party’s strict censorship was also a subject of questioning by Republicans, who accused Pichai of cozying up to the Chinese government.
For Google, all of this matters because it’s the company most likely to face potential antitrust action in the near future. The Republican-led DOJ is expected to file a lawsuit against Google this summer. So you might say there was no chance for Pichai to win on Wednesday.
Both winners and losers
The Amazon CEO and world’s richest man was calm, polite, and mostly direct in his answers during his first time testifying before Congress. He also survived more than an hour at the beginning of the hearing without being asked a single question thanks to a reported tech issue and didn’t face much in the way of “smoking gun” internal documents that would have put him in a tougher spot when the queries finally began.
But Bezos’s testimony did little to quash a variety of concerns about the power Amazon wields over its 1.7 million small and mid-sized sellers. These include suspicions over how the company uses data to develop competing products as well as its penchant for suspending or banning sellers with little notice or explanation. Bezos was also specifically called out for increasing the cut of sales that Amazon charges smaller sellers, a sum they must pay in order to have a shot at success on the giant shopping marketplace.
When confronted with anecdotes or accusations of Amazon abusing its power as the ruler of its marketplace, Bezos would express his disapproval, vow to look into it, and try to assure lawmakers that the problems weren’t systemic. Even if he’s right and the abuses are a series of one-offs, the pattern shows that Amazon has grown so powerful that it can massively disrupt or upend its own partner businesses — even it does so by neglect or by accident.
Rep. Jim Jordan
The Ohio Congress member was the most outspoken of his Republican colleagues in attacking the tech giants, claiming that they censor or otherwise suppress conservative viewpoints in various ways. “I will just cut to the chase. Big tech is out to get conservatives,” he said in his opening. So if success for Republicans was based on airing as many unproven theories of bias as possible, Jordan was the star. And if you watched the hearing and didn’t know who he was before, you certainly do now.
But Jordan wasted precious opportunities to ask hard questions of the tech titans on the actual task at hand: to document whether or how they abuse their power over partners and competitors. To a certain extent, these hearings are a form of theater and most politicians are looking for a catchy soundbite showing them speaking truth to power. If you give an amazing performance for a different show than the one the audience paid for, though, you deserve to be booed off the stage.
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