Amazon CEO Jeff Bezos, Google CEO Sundar Pichai, Apple CEO Tim Cook and Facebook CEO Mark Zuckerberg testified before the House Judiciary Antirust Subcommittee as part of an antitrust probe. A historic hearing, as the CEOs faced questions about the power of the tech titans. Eventually the companies are expected to change.
The companies have a combined market value of about $5 trillion, or €4.3 trillion. Several governments and authorities accused Amazon, Google, Apple, and Facebook of abusing their market power. However, for the first time, the CEOs had to testify together. Before the antitrust hearing, the committee collected evidence for about a year, ultimately leading to a lot of questions.
David Cicilline, the chairman of the U.S. House of Representatives antitrust panel, said that the four CEOs had acknowledged concerning behaviour. “These companies, as they exist today, have monopoly power. Some need to be broken up, they all need to be properly regulated and held accountable.”
What exactly is going on at each company?
Amazon
According to some allegations, Amazon uses its position to collect inside information passing through its platform, to spot new products and launch competitive product. During the hearing, some concerns about the access and use of third-party seller data when making business decisions had to be answered. “I can’t answer that question yes or no. I can tell you that we have a policy against using seller-specific data to aid our business but I can’t guarantee you that that policy has never been violated,” Bezos replied.
The committee then cited a former Amazon employee, “there is a rule but there is nobody enforcing or spot checking. They just say do not help yourself to the data. It’s a candy shop, everyone can have access to anything they want.” According to Bezos, however, there are safeguards in place and people get trained on the policy. It is a voluntary policy: Amazon expects employees to follow that policy the same way it would with others. If Amazon finds that someone violates the policy, it will take account.
Google parent company Alphabet got accused of theft during the hearing. “Why does Google steal content from honest businesses?” Cicilline asked. The chairman argued that Google is stole reviews from Yelp and threatened to delist the review platform from search results if it objected. Pichai responded wanted to know the specifics of the accusation. “We conduct ourselves to the highest standards,” disagreeing with this allegation.
In addition, there are privacy concerns. Back in 2007, when Google acquired adtech platform DoubleClick, it promised to lawmakers and regulators it would not combine the browsing data with its account data. Merging the data would eventually lead to a very comprehensive understanding of the user. According to the committee, Google combined the data anyway, meaning Google violated the privacy of its users.
Pichai responded he reviews all the important decisions. He noted Google deeply cares about the privacy and security of its users. The committee replied by saying Google had to care about user privacy in 2007, but it no longer had to in 2016 as it gained enormous market power. “We today make it very easy for users to be in control of their data. We have simplified their settings, they can turn ads personalization on or off. We have combined most of the activity settings into three groupings. We remind users to go do a privacy check-up. One billion users have done so,” Pichai said.
Apple
Tim Cook had to defend policies and decisions, around Apple’s App Store. Lawmakers questioned the company’s commission structure, as according to allegations the company raises commissions on competitive products. CEO Cook strongly disagrees: “The competition for developers, they can write their apps for Android or Windows or Xbox or PlayStation. We have fierce competition at the developer side and the customer side, which is essentially so competitive I would describe it as a street fight.” According to Cook, 84%of App Store apps pay nothing in commissions. Only 16% pays.
Apple also got questioned over the removal of parental control apps, shortly after it released its own screen time solution. Many apps saw their updates rejected or their apps removed entirely. According to Cook, Apple was concerned about the privacy and safety of children, and the technology used by these apps was problematic. “The technology that was being used at that time was called MDM, and it had the ability to sort of take over the kid’s screen, and a third party could see it. So, we were worried about their safety”, claimed Cook.
Tip: Is Apple going to consolidate or innovate in end-user computing?
Finally, Facebook CEO Mark Zuckerberg took a series of questions about the acquisition of Instagram in 2012 and copying competitors. The Congress obtained emails confirming motivations fort the acquisition. Zuckerberg emailed Facebook Chief Financial Officer David Ebersman before acquiring Instagram, ultimately worrying that “Instagram can hurt us.” One of the reasons to do a deal was “to neutralise a potential competitor”. Zuckerberg also wrote COO Sheryl Sandberg: “prevent our competitors from getting footholds”. At the hearing, Zuckerberg responded that Instagram at the time Facebook purchased Instagram, it was a tiny photo-sharing app rather than a social media phenomenon.
The Congress also found proof Facebook might be copying competitors. Facebook “certainly adapted features that others have led in,” Zuckerberg said. The committee subsequently asked how many companies Facebook did copy, whether it is less than five or less than 50. “Congresswoman, I don’t know,” Zuckerberg replied.
When will tech titans change?
Cicilline states it is time for change. When that change will happen, and what exactly will change is still unclear. After all, the investigations will continue, and it is also a matter of politics. The political climate in the United States is very unclear as the presidential election will take place in November. Democrats and Republicans have their own opinions on the operations of the tech titans. The eventual change differs whether Donald Trump gets re-elected or Joe Biden will be president-elect.
The entire hearing can be viewed here.
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