A Blog by Jonathan Low


Jul 30, 2020

Did the Congressional Grilling of Big Tech Executives Actually Matter?

Maybe. After all the shouting and posturing on both sides, the final result had little to do with the questions and answers during a July hearing and a lot do with who wins the US election in November.

Because that will determine whether the US government will finally turn the full might and power of its regulatory apparatus on tech - or not, which would then signal to the rest of the world that big tech is fair game - or not. JL

Tony Romm and Cat Zakrzewski report in the Washington Post:

The leaders of Amazon, Apple, Facebook and Google took a brutal political lashing as Democrats and Republicans confronted the executives for wielding their market power to crush competitors, amass data, customers and sky-high profits. But the companies’ antitrust scrutiny may get worse. “They’re engaged in behavior that’s anticompetitive, which favors their own products and services, monetizes and weaponizes data, compromises the privacy of their users and creates a competitive disadvantage for companies attempting to enter the marketplace.”

Romm The leaders of Amazon, Apple, Facebook and Google took a brutal political lashing Wednesday as Democrats and Republicans confronted the executives for wielding their market power to crush competitors and amass data, customers and sky-high profits.
The rare interrogation played out over the course of a nearly six-hour hearing, with lawmakers on the House’s top antitrust subcommittee coming armed with millions of documents, hundreds of hours of interviews and in some cases the once-private messages of Silicon Valley’s elite chiefs. They said it showed some in the tech sector had become too big and powerful, threatening rivals, consumers and, in some cases, even democracy itself.

“Our founders would not bow before a king. Nor should we bow before the emperors of the online economy,” said Rep. David N. Cicilline (D-R.I.).
Cicilline, the chairman of the antitrust panel, opened a congressional investigation of Amazon, Apple, Facebook and Google last year, aiming to explore whether the tech industry’s most influential quartet of companies had attained their status through potentially anti-competitive means. In response, the four chief executives — Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai — took the witness stand to fiercely defend their businesses Wednesday as rags-to-riches success stories, made possible only through American ingenuity and the sustained support of their ever-growing customer bases.
But lawmakers repeatedly presented a different vision at their hearing, one in which Silicon Valley’s myriad advancements in commerce, consumer electronics, communication and a vast array of online services had come at an immense cost to the people who use those tools and the companies that seek to compete against the tech giants.
In exchanges likely to have lasting resonance, Democrats repeatedly confronted Facebook’s Zuckerberg with his own past emails. Rep. Jerrold Nadler (D-N.Y.), the top lawmaker on the House Judiciary Committee, brought up a 2012 message in which Zuckerberg apparently said he sought to acquire Instagram, which at the time was a rival photo-sharing app, out of fear that it could “meaningfully hurt us.” Later, Rep. Joe Neguse (D-Colo.) pointed to other Facebook communications that described the company’s acquisition strategy generally as “a land grab.”
“Mergers and acquisitions that buy off potential competitive threats violate the antitrust laws,” Nadler charged. “In your own words, you purchased Instagram to neutralize a competitive threat.”
“We compete hard. We compete fairly. We try to be the best,” Zuckerberg said earlier in the hearing.
Amazon, meanwhile, faced withering scrutiny over allegations it may have misled the committee. The e-commerce giant previously told lawmakers it does not tap data from third-party sellers to boost sales of its own products. But Democratic Rep. Pramila Jayapal (Wash.) brought up public reports that indicated to the contrary, prompting Bezos — delivering his first-ever testimony to Congress — to offer a striking admission of potential fault.
“What I can tell you is we have a policy against using seller-specific data to aid our private label business,” he said. “But I can’t guarantee you that policy has never been violated.”
For all four executives, the afternoon offered an abundance of additional uncomfortable clashes, laying bare the broad, bipartisan frustrations with the way Silicon Valley puts users’ privacy at riskpolices content online and hurts competitors, including small businesses that have told lawmakers they cannot hope to compete with these tech giants. On several occasions, lawmakers cut off or talked over the tech executives when they offered vague or long answers, seeking to hold them to account for the evidence investigators had gathered from their probe.

Republicans, meanwhile, largely used their time during the hearing to attack some tech companies for engaging in perceived political censorship against conservatives, a charge that the industry vehemently denies.
“We all think the free market is great. We think competition is great. We love the fact that these are American companies,” said Rep. Jim Jordan (Ohio), the top Republican on the House Judiciary Committee. “But what’s not great is censoring people, censoring conservators and trying to impact elections. And if it doesn’t end, there has to be consequences.”
Despite scattered outbursts of political theater, the hearing could carry immense weight at a time when Amazon, Apple, Facebook and Google have lost support among both political parties — while also facing a slew of investigations around the world. In the United States, the Department of Justice may file an antitrust lawsuit against Google as soon as this summer, The Washington Post has previously reported, with cases against other companies potentially further on the horizon.
Cicilline, for his part, is expected to issue a report in August outlining the case for updating federal competition rules that would give regulators more power to probe and penalize the industry. The fruits of his investigation could offer Congress one of the first major actions it can take if it aims to rein in big tech.

The four companies’ leaders began Wednesday by raising their right hands and taking the customary oath to deliver truthful testimony from the west coast. Videoconferencing software helped beam the typically made-for-television moment into a sparsely attended, windowless congressional committee room thousands of miles away from the country’s tech heartland.
Each of the tech executives took great pains to stress their contributions to the U.S. economy. Amazon described itself as one of the most popular consumer brands, where consumers can get their goods quickly and cheaply. Apple said it had enabled a wildly popular ecosystem of apps and widely prized, high-end phones to match. Facebook said it had stood for free expression and speech against a rising tide of international censorship, pointing to new competitors including TikTok. And Google said its tools made it possible for people to find information and businesses worldwide to grow.
Quickly, though, Democrats on the House’s top antitrust committee sought to unspool the circumstances behind the four tech giants’ successes.
Some lawmakers specifically accused Google of weaponizing its popular search engine to put rivals at a disadvantage. Cicilline specifically charged Google had “stolen content to build your own business,” citing its practice of culling and displaying information at the top of users’ search results.
Google historically has said its approach to search helps people find the answers they need or the products they’re looking for. In the case of Yelp, though, Cicilline questioned Google’s motives, stressing the search giant had stolen its restaurant reviews and threatened to “delist” the site when it complained. Cicilline also accused Google of monitoring web traffic to “identify competitive threats.”
“Our documents show that Google evolved from a turnstile to the rest of the web to a walled garden that increasingly keeps users within its sights,” he said.
Pichai, for his part, disputed the characterization that Google had stolen content and put rivals at a disadvantage. “Today, we support 1.4 million small businesses supporting over $385 billion in their core economic activity,” he said. “We see many businesses thrive, particularly even during the pandemic.”

Cook, the head of Apple, received fewer questions than his counterparts. But several lawmakers peppered him with questions about the way the company handles its App Store — and the companies that have developed competing products or services that Apple also offers.
Some lawmakers repeatedly raised the company’s policy to take up to a 30 percent commission on in-app sales and subscriptions, a fee that has chafed prominent companies including Spotify, who fear they have no choice but to surrender critical revenue to Apple. The iPhone giant maintains the fee essentially funds the entire app ecosystem, and Cook at one point Wednesday told lawmakers the company has not raised its rates since it opened the store in 2008.
But lawmakers later produced a document showing one of Apple’s executives, Eddy Cue, in 2011 had proposed requiring developers to pay more. They posted it online, while in the hearing, Cook generally stressed Apple had no desire to harm developers.
“We do not retaliate or bully people,” he said. “It is strongly against our company culture.”
 Zakrzewski Top tech executives’ more than five-hour public lashing may be over. But the companies’ antitrust scrutiny may be about to get worse. 
That’s because lawmakers on the House Judiciary antitrust panel came heavily stocked with new evidence from their year-long investigation into the tech industry's power, which has amassed 1 million documents from the companies and hundreds of hours of interviews with industry insiders. 
Lawmakers unveiled executives' own words, recordings of conversations with small businesses and a trove of other evidence at the hearing to bolster accusations that tech companies squash their competitors.
The investigation could have an enduring impact on how the world regulates the tech industry. The revelations come at a critical moment, as tech companies face antitrust probes both in the United States and Europe – and U.S. lawmakers seek to overhaul existing antitrust laws they say are outdated and ill-equipped to rein in tech companies today.


Post a Comment