July 30, 2020 9:11:38 pm
The CEOs of four of the world’s largest technology companies faced an onslaught of questions posed by a 15-member panel of democratic and republican lawmakers at the historic congressional antitrust hearing on Wednesday, where they faced condemnation for having “too much power”.
During the five-hour virtual hearing on Capitol Hill, the “emperors of the online economy” — Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai — were accused of allegedly abusing their power by misusing data and stifling competition in their bid to dominate the market.
The hearing in Washington marked the culmination of a year-long investigation by the Congress’ top lawmakers, which raked up millions of documents and hundreds of hours worth of recorded testimony from all four tech giants.
In a rare act of bipartisanship, Democratic and Republican lawmakers were able to find something that they agree on — they collectively believe that the US’ century-old antitrust laws are in desperate need of an upgrade. While democrats accused the companies of crushing their competitors by misusing data, republicans claimed that the firms displayed an implicit anti-conservative bias.
“These companies as they exist today have monopoly power. Some need to be broken up. All need to be properly regulated and held accountable,” the House Judiciary Committee’s Democratic chairman and Rhode Island Rep. David Cicilline said.
Here are some highlights from the historic antitrust hearing
Democrats accuse Amazon of using seller data to develop its own competing products
For years, governments across the world have accused prominent technology companies like Apple, Amazon, Facebook and Google of choking small businesses and stifling competition, either by acquiring their competitors or obliterating potential threats entirely by making competing products.
At Wednesday’s congressional hearing, all four chief executives were asked about their alleged missteps in approaching competitors. Amazon CEO Jeff Bezos, in particular, faced an onslaught of questions about his companies’ alleged use of third-party seller data to develop its own competing products — an allegation first laid out in a report by the Wall Street Journal this year.
Quite unexpectedly, Bezos admitted that Amazon may have misused seller data to develop its products. This is the first time that an admission of this sort has been made by the company. Previously, representatives of the e-retailer have categorically denied these allegations.
Responding to a question posed by Democratic Rep Pramila Jayapal of Washington’s 7th district, Bezos said, “We have 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.”
The company was also criticised for its aggressive approach towards acquiring small companies that it sees as a threat.
Questions were raised about Amazon’s acquisition of diapers.com in 2011. When the online baby product retailer was initially reluctant to sell, Amazon began drastically cutting prices on baby products. Ultimately, diapers.com was forced to shut shop after Amazon managed to capture its market share.
“I don’t remember that at all,” Bezos responded.
Zuckerberg questioned over emails when Facebook acquired Instagram
Mark Zuckerberg came under fire for emails he sent to other Facebook executives in 2012, where he stressed on the need to acquire photo-sharing app Instagram. Zuckerberg claimed the app could become “very disruptive” to Facebook in a series of emails, which were later accessed by the House Judiciary Committee as part of their investigation.
In what was then its largest acquisition, Facebook bought Instagram for about $1 billion in cash and stock in April, 2012. The app had around 30 million users at the time. Instagram now has well over 1 billion monthly active users.
Rep Jerry Nadler accused Zuckerberg of violating antitrust laws by acquiring a competitor to neutralise the threat that it posed. During the hearing, he said the emails exchanged by Zuckerberg and his colleagues “told a very disturbing story”.
“If this was an illegal merger at the time of the transaction, why shouldn’t Instagram now be broken off into a separate company?” Nadler asked.
Responding to the Democrat’s allegations, Zuckerberg claimed he has always maintained that Facebook viewed Instagram as “both a competitor and as a complement” to its services. “At the time, almost no one thought of them as a general social network,” he added.
Republicans say tech companies have ‘liberal bias’
Ohio Republican Jim Jordan claimed that the big four tech companies were “out to get conservatives”. He claimed that conservative voices were often censored on online platforms, which allegedly favour liberal thought.
“Big Tech is out to get conservatives. That’s not a suspicion, that’s not a hunch — that’s a fact,” he said. He cited several instances of alleged censorship during the hearing — among them were, President Donald Trump’s Twitch account being suspended over “hateful conduct”, Google’s ad platform threatening to restrict the right-leaning online publication The Federalist, and YouTube taking down videos that contain information, which goes against WHO recommendations.
“We’re 97 days before an election, and the power – as the previous chairman and ranking member have said – the power these companies have to impact what happens during an election, what American citizens get to see before their voting, is pretty darn important,’ he said.
Florida Republican Rep. Gregory Steube claimed that campaign emails sent to supporters were often blocked or sent directly to Gmail’s spam folder.
“There’s nothing in the algorithm that has anything to do with political ideology,” Google CEO Sundar Pichai said in response. “We do get complaints across the aisle.”
Google accused of stealing content from small businesses
The House Judiciary Committee’s Democratic chairman David Cicilline accused Google of creating a “walled garden” and engaging in “anticompetitive” practices by stealing content from smaller businesses.
Google was accused of stealing thousands of reviews from Yelp and also closely monitoring web traffic to keep its competitors in check.
Denying the allegations, Pichai said, “Today, we support 1.4 million small businesses supporting over $385 billion in their core economic activity. We see many businesses thrive, particularly even during the pandemic.”
Apple accused of favouring developers on App Store
Apple CEO Tim Cook was questioned about whether some developers were favoured over others on the App Store. Democratic Rep. Lucy McBath of Georgia asked Cook why the platform took down external parental control apps like OurPact soon after Apple introduced its own service Screen Time.
“We were concerned, Congresswoman, about the privacy and security of kids,” Cook said in response. He claimed that the OurPact act was vulnerable to third-party takeovers. “So we were worried about their safety,” he added.
Cook claimed that Apple’s guidelines for its App Store were “open and transparent” and applied “evenly to everyone”.
According to a tally by the New York Times, Cook was asked the least number of questions during the Congressional hearing.
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