Four of America’s richest and most powerful tech CEOs faced a combative audience at the US House of Representatives’ antitrust subcommittee Wednesday, taking harsh questions about alleged predatory business practices, theft of digital content and aggressive copying and purchasing of competing businesses. The hearing, which ran five and a half hours, proved tough for Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Apple’s Tim Cook and Alphabet’s Sundar Pichai.
Tech CEOs vs. Congress: Everything you need to know
Lawmakers came prepared. They showed up with internal corporate emails and the results of interviews with smaller companies that said they were harmed by anti-competitive practices. In many cases, the tech bosses simply rejected the premise of the questions, which almost uniformly portrayed the companies as monopolistic, ruthless or both.
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The hearing, held virtually amid the coronavirus outbreak, is the culmination of a 13-month investigation into Big Tech’s dominance. The participation of the four CEOs, who are among the most recognizable names in business and tech, marked the first time they had spoken to Congress as a group. Bezos, whose early participation was marred by a technical glitch, attended his first-ever public hearing.
If the tenor of the questions is an indication, the committee appears poised to find new ways to corral the tech giants. Questions portrayed the companies stomping on the invisible hand of the free market to further their own business. A report from the committee, which will synthesize the results of six hearings and more than 1.3 million documents, was delayed due to the pandemic but is expected sometime this year.
“It’s clear the antitrust argument around all four tech stalwarts centers around each platform as a bottleneck for competition and ultimately cutting off access and opportunity for potential rivals,” analysts at Wedbush Securities wrote in an initial analysis. “The anti-trust storm clouds appear to be building in the Beltway against Big Tech.”
The bitter tone of the hearing is hardly surprising. Most Congressional hearings cater to grandstanding and political point-scoring — both of which were on display Wednesday — more than fact-finding. Lawmakers used their five minutes per round of questioning to make speeches to the CEOs. They often interrupted the witnesses as they answered, which, of course, prevented the CEOs from filibustering.
In his opening statement, US Rep. David Cicilline, a Democrat from Rhode Island, set the confrontational tone, raising concerns that Big Tech could consolidate power even more fully during the coronavirus pandemic. He said it was important to confront monopoly power so it doesn’t crush other businesses.
“This hearing has made one fact clear to me,” Cicilline, the chairman of the subcommittee, said hours later in his closing remarks. “These companies as they exist today have monopoly power. Some need to be broken up. All need to be properly regulated and held accountable.”
On the other side of the aisle, Rep. Jim Jordan, a Republican of Ohio, raised concerns about alleged anti-conservative bias by major tech platforms, including Twitter censoring President Donald Trump’s tweets. “I’ll just cut to the chase,” he said. “Big Tech is out to get conservatives.”
The differing perspectives were repeated as Republicans pushed concerns about online censorship of conservative voices and Democrats complained about potential monopolistic practices. Republicans were clear about their pro-business posture, repeatedly saying big and successful companies aren’t necessarily bad.
But bipartisanship — hard to come by in Washington — was also clearly evident, as both Democrats and Republicans raised many concerns about anti-competitive practices. For example, both Cicilline and Republican Ken Buck of Colorado, accused Google of stealing digital content from smaller companies, such as Yelp and Genius. In the case of Yelp, Cicilline said Google threatened to delist it when Yelp raised concerns.
“The choice Google gave Yelp was let us steal your content or effectively disappear from the web site. Isn’t that anti-competitive?” Cicilline asked in a pointed and forceful line of questioning.
Somewhat sheepishly, Pichai avoided a direct answer, saying: “When I run the company, I’m really focused on giving users what they want. We conduct ourselves to the highest standard. Happy to engage, understand the specifics, and answer your questions further.”
Pichai faced the toughest questioning as lawmakers prodded him about Google’s management of user information, its acquisitions of YouTube and DoubleClick, and alleged aid to Hillary Clinton’s 2016 campaign.
Bezos, who appeared shaky at the start but quickly found his footing, was questioned about Amazon’s use of private label goods to copy the products of smaller sellers on its site, alleged predatory practices at the company and an alleged Amazon effort to hobble Diapers.com in a price war so it could be bought. Zuckerberg had to defend his acquisitions of WhatsApp and Instagram, both rival companies, and accusations of anti-conservative bias.
Similar to earlier antitrust hearings, Cook was questioned the least. That may reflect the fact that Amazon, Facebook and Google are the clear leaders in their main businesses, while Apple doesn’t dominate in smartphones or computers though it wholly control its App Store.
The virtual setting was anticlimactic though the hearing did produce some memorable exchanges. Rather than four tech titans being sworn in before Congress, the men raised their hands in sterile rooms that gave little sense of their personalities, images that were displayed on a screen in the Rayburn House Office Building. The hearing room was equally otherworldly because of empty seats, social distancing and masked legislators and aides. Piped in via a Cisco Webex feed, the CEOs often ended up talking over lawmakers who in turn were often trying to interrupt the tech bosses as they responded.
While each company faces different sets of concerns, the CEOs’ prepared remarks, which were published Tuesday night, provide strikingly similar defenses of their organizations. The CEOs said their companies face many competitors, create American jobs and benefit small businesses and consumers.
Bezos offered a defense of massive companies, saying they are uniquely able to do big, complex tasks. “I don’t care how good an entrepreneur you are,” he wrote, “you’re not going to build an all-fiber Boeing 787 in your garage.”
And even with Facebook’s current dominance, Zuckerberg wrote that he expects another service will eventually become more popular. “I’ve long believed that the nature of our industry is that someday a product will replace Facebook,” he said. “I want us to be the ones that build it, because if we don’t, someone else will.”
Few Congress members offered sympathetic views about these huge companies. But Republican Rep. James Sensenbrenner, who during past hearings has warned against punishing success, said Congress is bad at picking winners and losers and should instead leave it to the market to decide. He added that it didn’t seem to be in the best interest of customers to break up a company like Amazon and force shoppers to jump to different websites to buy groceries or textbooks or toys.
The event, delayed by about an hour because an earlier hearing ran long, was a rare public interrogation of Big Tech’s most influential leaders at a point of great upheaval. The pandemic has changed how many Americans live, forcing them to lean on the companies to work and shop from home, as well as communicate with loved ones.
The committee worries the four companies have become so powerful that they can stifle competition, force smaller firms to work with them on their terms, and prevent innovation by acquiring or copying rivals. The committee could recommend new regulations of Big Tech or, in an unlikely outcome, breaking up the companies.
The committee isn’t alone in its concerns. President Trump, who has repeatedly claimed Silicon Valley stifles conservative voices, tweeted that he would take action to curb Big Tech’s power if Congress didn’t.
“If Congress doesn’t bring fairness to Big Tech, which they should have done years ago, I will do it myself with Executive Orders,” Trump tweeted.
Trump has already issued an executive order that is widely seen to target Twitter, which isn’t testifying at the hearing, and threatened to ban TikTok, a popular Chinese video app. (On Wednesday, Steve Mnuchin, the treasury secretary, said TikTok was under a national security review.)
By any measure, the power of the four companies, which are worth roughly $5 trillion combined, is vast. Facebook, the world’s largest social network, has roughly the same number of users as the populations of the two largest countries, China and India, combined. Amazon controls 38% of US online sales, more than six times the size of Walmart’s US web business, its nearest competitor. Apple’s App Store is the only way for most developers to get their software onto the huge iPhone and iPad customer base, and Apple takes a cut of those installations. Google has a lock on search, processing about 90% of all web searches around the world.
The tech leaders and their companies also represent staggering personal wealth. Bezos is the world’s richest man with a personal fortune estimated at $181 billion. Zuckerberg is the fourth wealthiest, with $86 billion. Though not testifying, Google co-founders Larry Page and Sergey Brin are $68 and $66 billion each.