For much of Wednesday, the CEOs of America’s biggest tech companies — Jeff Bezos (Amazon), Tim Cook (Apple), Mark Zuckerberg (Facebook), and Sundar Pichai (Google) — testified before a House Judiciary Committee about whether their market dominance violates antitrust laws.
The topic is a crucial one, as the tech industry employs millions of Americans and generates trillions of dollars — and increasingly, only a handful of companies are responsible for that success. Amazon may control just 5.5% of all retail sales, for example, but the company will capture 38% of US ecommerce sales in 2020, according to industry tracker eMarketer. Likewise, Facebook and Google dominate the online advertising industry, with some reports claiming the pair together control as much as 80% of the market — which is why some have called for an end to big tech.
The hours-long hearing was marked by piercing questions about anti-competitive practices … as well as bizarre diversions into tech support and internet drama. And in the end, it may not have accomplished anything at all. Sigh. Here’s a recap of the Congressional tech hearing, including the biggest clashes between lawmakers and the Silicon Valley titans.
Cicilline concludes that all four companies have monopoly power
By Will Nicol
3:35 p.m PT. Rep. David Cicilline (D-R.I.) finished the hearing with a condemnation of the four companies present, saying that “This hearing has made one fact clear to me: These companies as [they] exist today have monopoly power. Some need to be broken up. All need to be properly regulated.”
Cicilline compared the CEOs present to 20th-century business leaders like Rockefeller and Carnegie, whose “control of the marketplace allowed them to do whatever it took to crush independent businesses and expand their own power. The names have changed, but the story is the same.”
According to Cicilline, the committee will next publish a report on its investigation and propose solutions.
“This must end,” he said.
Google’s ad market share comes under fire
By Will Nicol
3:10 p.m. PT Rep. Pramila Jayapal (D-Wash.) turned the conversation to advertising, questioning Pichai about Google’s dominance in the ad market. Jayapal pointed to a CMA study that found Google controls 50% to 60% of the ad exchange market, a dominant middleman between publishers and advertisers. Jayapal emphasized that Google’s control of both the buy and sell sides of advertising is squeezing the ad revenue out of newspapers across the country.
Pichai responded that Google is “deeply committed to publishers.”
Is Facebook “too big to moderate”?
By Will Nicol
2:30 p.m. PT Rep. David Cicilline (D-R.I.) took Facebook to task for its failures to remove misinformation around the coronavirus, asking Zuckerberg if the social media giant is too big to moderate.
Cicilline pointed to Facebook’s slow response to a misleading video that racked up millions of views about hydroxychloroquine’s ability to fight coronavirus. Though Zuckerberg said Facebook ultimately removed the video, Cicilline noted it took 5 hours. He asked Zuckerberg if Facebook was “so big that even with the right policies in place, you can’t contain deadly content.”
“Facebook gets away with it because you’re the only game in town,” Cicilline said. “There’s no competition forcing you to police your own platform.”
Cook calls Apple App Store an “economic miracle”
By Will Nicol
2:20 p.m. PT Rep. Lucy Kay McBath (D-Ga.) also inquired about Apple’s ability to cull competitors from the App Store, pointing to a report from 2019 that Apple removed a number of apps that lock screen-time for kids. She asked Cook if they were removed because they competed with Apple’s Screentime app.
Cook responded that Apple removed the apps because they endangered the privacy of children on those devices. He added that “there are over 30 parental control apps on the App Store today,” an example of the “vibrant competition” within the store.
Cook emphasized the App Store’s benefits to smaller developers, saying “We have 1.7 million apps on the App Store, it’s an economic miracle.”
Cook defends Apple’s App Store practices
By Will Nicol
2:00 p.m. PT After a long stretch without hearing from Apple, Rep. Val Demings (D-Fla.) questioned Cook about Apple’s control of its App Store, asking if Apple picks winners and losers. Demings cited an incident in which Apple removed one app that conflicted with Apple’s parental controls while allowing a similar, Saudi-developed app to remain. Demings asked whether the fact that the removed app conflicted with Apple’s own parental controls impacted the decision.
Cook responded that Apple’s decision was made for the safety of children using Apple products.
Bezos: “It wouldn’t surprise me if Alexa sometimes promotes our own products.”
By Will Nicol
1:10 p.m. PT Rep. Jamie Raskin (D-Md.) questioned Bezos on the matter of Amazon surfacing its own products above competitors. Raskin cited a New York Times story about Amazon’s Alexa devices; the story detailed how, when customers ask Alexa to order batteries, Alexa would ask if they want Amazon Basics batteries.
“It wouldn’t surprise me if Alexa sometimes promotes our own products,” Bezos replied.
Jayapal probes Facebook’s aggressive acquisition practices
By Will Nicol
12:55 p.m. PT Rep. Pramila Jayapal (D-Wash.) questioned Zuckerberg on Facebook’s methods of acquiring other companies, citing internal documents obtained by Congress in which executives like Zuckerberg and COO Sheryl Sandberg discuss the need to quickly copy features of competitors to keep them from establishing a foothold.
Zuckerberg responded that Facebook adapts features from other services, as other services adapt features of Facebook’s.
Jayapal asked Zuckerberg if Facebook had ever threatened to clone another company’s features while in talks to buy said company, specifically accusing Facebook of strong-arming Instagram in negotiations to buy the company.
Neguse returns to Facebook’s buying of rivals
By Will Nicol
12:35 p.m. PT Rep. Joe Neguse (D-Colo.) brought the conversation back to Facebook’s habit of swallowing up smaller rivals, honing in on the purchase of WhatsApp. Internal documents outlined concerns that WhatsApp, one of the world’s most popular messaging apps, could pose a threat to Facebook.
Neguse brought up an internal email obtained by the committee in which Zuckerberg said “We can likely always just buy any competitive startups, but it will be a while before we can buy Google.”
When asked if he remembered saying that, Zuckerberg said he didn’t, adding that it seemed like a joke.
Scanlon grills Bezos on predatory pricing
By Will Nicol
12:20 p.m. PT Rep. Mary Gay Scanlon (D-Pa.) questioned Bezos on Amazon’s history of using predatory pricing to undercut competitors and drive them out of business. Scanlon cited internal documents showing that Amazon considered Diapers.com a threat in the diaper-selling business, and formed a plan to weaken its rival. According to the documents, Amazon cut prices sharply, bleeding money in order to undercut Diapers.com’s prices. After weakening its rival and buying it out in 2010, Amazon then raised prices on diapers.
When Scanlon asked Bezos for his take on the strategy, he replied “I don’t remember that at all,” adding that it was around a decade ago.
Bezos doesn’t deny Amazon used third-party seller data
By Will Nicol
11:55 a.m. PT Rep. Pramila Jayapal (D-Wash.) questioned Bezos about reports that Amazon employees access third-party seller data to directly compete with its own products.
When Jayapal asked whether or not Amazon accesses third-party seller data, Bezos replied that he couldn’t give a “Yes or no” answer, and that Amazon was investigating the reports.
Jayapal continued to interrogate Amazon’s data practices, arguing that if Amazon is siphoning off data from sellers on its platform to design products, it makes it impossible for small businesses to compete.
“You can set the rules of the game for your competitors but not have to follow them yourself,” she said. Bezos replied that Amazon was “proud” of its work with third-party sellers.
Analysis: Scattershot questions keep Big Tech hearing unfocused
By Paul Squire
11:30 a.m. PT Having four tech giants testify before Congress was billed as an opportunity to have Big Tech answer accusations that they are powerful monopolies — but with all four answering questions at once, the hearing has been unfocused.
The hearing so far has veered from topic to topic, from Apple’s App Store policies and Facebook’s acquisition of Instagram to decidedly un-antitrust discussions of censorship and coziness with China. Few of the Big Tech CEOs have faced follow-up questions yet, giving them a natural chance to catch their breath. Amazon CEO Jeff Bezos hasn’t even been asked a question yet.
If each company had been asked to attend its own hearing, we may have seen more pointed questioning.
Republicans criticize Google on ties to China
By Will Nicol
11:30 a.m. PT Rep. Matt Gaetz (R-Fla.) interrogated Pichai about Google’s connections to China, citing the company’s A.I. lab in China and accusing the company of helping the Chinese military develop better systems.
“We are not working with the Chinese military. That is absolutely false,” Pichai countered, adding that Google’s work in the country is “very limited in nature.”
Nadler interrogates Zuckerberg about Instagram acquisition
By Will Nicol
11:15 am. PT Rep. Jerrold Nadler (D-NY) challenged Zuckerberg about Facebook’s acquisition of Instagram, arguing that gobbling up competitors is anticompetitive behavior.
“In the space of mobile photos, and camera apps, they were a competitor,” Zuckerberg admitted, but pointed out that there were plenty of apps like Instagram at the time.
“It was not a guarantee Instagram was going to succeed,” Zuckerberg said, claiming that Facebook helped the platform grow. Zuckerberg also said the FTC cleared the acquisition at the time.
However, Rep. Cicilline noted the FTC’s previous decision doesn’t clear Facebook from facing antitrust investigations or action.
Zuckerberg defends taking down conspiracy theories
By Will Nicol
11:05 a.m. PT Rep. Jim Sensenbrenner (R-Wis.) questioned Zuckerberg about social media platforms’ decisions to take down posts touting hydroxychloroquine as a cure for coronavirus. The congressman wondered whether that is a matter best left between people and their doctors.
“We do not want to be the arbiters of truth,” Zuckerberg said. But he added that Facebook has an obligation to remove content that could pose immediate harm to people, such as false claims of cures for the coronavirus.
Cicilline grills Pichai
By Will Nicol
11:00 a.m. PT Rep. Cicilline accused Google of stealing from other companies during his questioning of Pichai, saying the search giant took content from other sites.
He cited Yelp’s feud with Google, in which the former accuses the company of putting its own links above other, better ones in response to search queries.
“Why does Google steal content from honest businesses?”
While Pichai disagreed with the accusation, Cicilline claimed that Google’s internal documents reveal that it spies on and steals ideas from other companies.
When Cicilline pressed Pichai if Google ever used its data to identify possible competitors, Pichai didn’t deny it, saying: “Just like other businesses, we try to understand trends from data, which we can see, and we use it to improve our products for users.”
Zuckerberg goes on the defensive
By Will Nicol
10:55 a.m. PT Facebook CEO Mark Zuckerberg argued that tech companies like his are competing against not just older American companies but rivals coming up in other countries like China. If American countries aren’t allowed to grow, he argued, other companies will take their place.
He also emphasized that Facebook follows American values of competition and success.
“We compete hard. We compete fairly,” he said. “And when we succeed, it’s because we make products people love.”
Cook claims Apple makes life easier for customers and competitors
By Will Nicol
10:50 a.m. PT Apple CEO Tim Cook gave a forceful defense of Apple’s business, arguing that the company is so successful simply because its products are the best.
“Products like iPhone just work,” he put it.
He also disagreed that Apple uses its App Store to stymie competing apps, pointing out just how many millions of apps find success on their platform.
“If Apple is a gatekeeper,” he said, “what we’ve done is open the gate wider.”
Pichai argues that Google supports competition
By Will Nicol
10:45 a.m. PT Alphabet/Google CEO Sundar Pichai argued that Google’s business practices support competition, not stifle it. Pichai cited the openness of the Android platform, which he said stimulates innovation among small app developers.
“Google succeeds when others succeed,” Pichai said.
Bezos says that Americans love Amazon
By Will Nicol
10:35 a.m. PT Amazon CEO Jeff Bezos portrayed Amazon as a true American success story, citing his own humble beginnings in Albuquerque, New Mexico, and the challenges Amazon faced early on. Bezos emphasized that although the U.S. has its problems, he thinks it’s a country that nurtures the entrepreneurial spirit better than any other.
Bezos also pushed back against the idea that Americans are angry at Amazon. On the contrary, Americans love Amazon, he argued.
“Who do Americans trust more than Amazon to do the right thing?” Bezos asked. “Only their doctors and the military.”
Rep. Jim Jordan accuses tech companies of silencing conservatives
By Will Nicol
10:25 a.m. PT Rep. Jim Jordan (R-Ohio) laid into Big Tech in his opening statement, accusing them of censoring conservative politicians on their platforms.
“I’ll just cut to the chase,” Jordan said. “Big Tech is out to get conservatives. That’s not suspicion. That’s not a hunch. That’s a fact.”
Jordan expressed outrage over social media platforms moderating posts by President Trump, and even accused them without evidence of “shadowbanning” conservative politicians.
Rep. Cicilline warns that Big Tech has “too much power”
By Will Nicol
10:15 a.m. PT In his opening statement, Rep. David Cicilline (D-R.I.) fired a salvo of criticism at the tech industry, outlining the massive reach they each have across multiple sectors (for example, using their control of digital infrastructure to spy on competitors and box them out). He also pointed out that these companies have grown stronger despite controversies.
“Simply put,” Cicilline said, “they have too much power.”
Cicilline also warned that the coronavirus pandemic could leave these companies in an even more dominant position, able to service an increasingly online society as local businesses collapse. Is it time to break up big tech?
“Our founders would not bow before a king,” Cicilline concluded. “Nor should we bow before the emperors of the online economy.”
Trump threatens executive action
By Will Nicol
9:45 a.m. PT Ahead of the hearing, President Trump threatened on Twitter to regulate Big Tech, which he has often sparred with.
If Congress doesn’t bring fairness to Big Tech, which they should have done years ago, I will do it myself with Executive Orders. In Washington, it has been ALL TALK and NO ACTION for years, and the people of our Country are sick and tired of it!
— Donald J. Trump (@realDonaldTrump) July 29, 2020
It wouldn’t be the first time Trump targeted an entire sector of the tech industry with an executive order; in May he issued an order targeting social media platforms.
Another short delay
By Will Nicol
9:09 a.m. PT The hearing has been delayed according to a tweet by Luther Lowe, senior vice president of public policy at Yelp. Lowe said the delay is due to cleaning after a hearing by the House Immigration Committee. Journalist Mark Gurman confirmed that the delay would be an hour.
Scratch that… hearing delayed up to an hour. Things going well already.
— Mark Gurman (@markgurman) July 29, 2020
A sneak preview of the tech CEOs’ opening statements
By Mathew Katz
8:39 a.m. PT Generally, opening statements are the least interesting parts of these sorts of hearings. As we’ve seen before, the fireworks really start when lawmakers bluntly question CEOs live on camera. That said, each of the tech titans have released their opening statements, and you can read them in full below:
- Mark Zuckerberg’s opening statement.
- Jeff Bezos’ opening statement.
- Tim Cook’s opening statement.
- Sundar Pichai’s opening statement.
Why the Big Tech antitrust hearing matters
By Will Nicol
7:30 a.m. PT It’s a momentous event, the first time these four men will all have to face a Congressional grilling at the same time. It’s also important because lawmakers will get the chance to challenge some of the most powerful business leaders in the U.S. about practices many consider anti-competitive. These companies have enormous reach, and given how some of them both create products and control the marketplaces on which competing products are sold, they have the power to dictate the rules of the game.
Ahead of the hearing, both Bezos and Zuckerberg have released statements expressing their views on the issues. Unsurprisingly, both defended their business practices, but will likely face intense scrutiny from lawmakers.
