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Updated at 3:59 p.m. ET
Are Facebook, Google, Amazon and Apple “emperors of the online economy” that stifle competition and hurt consumers? Not surprisingly, the tech giants’ chief executives told Congress: absolutely not. The concern that too much power is concentrated in too few companies is unfounded, they said Wednesday.
CEO vows Google won’t play favorites in 2020 election
Google CEO Sundar Pichai faced a barrage of questions from Rep. Jim Jordan. The Ohio Republican said he’s concerned that Google will tailor its search engine to give a leg up to presumed Democratic presidential nominee Joe Biden over President Trump in searches related to the November election.
When Jordan asked Pichai for a promise to Americans that Google will not favor Biden in the 2020 election, Pichai said “we don’t do any work to politically tilt anything one way or another.”
Jordan persisted with the same question.
Pichai, eventually, agreed to make a commitment that Google will not tilt its features to help Biden and that the search engine will not be used to silence conservatives.
“Yeah, you have my commitment. It’s always been true and we’ll continue to conduct ourselves in a neutral way,” Pichai said.
It’s a line of inquiry that is far afield from the purpose of the hearing, noted Pennsylvania Democrat Mary Gay Scanlon, saying she’d like to turn the focus back to antitrust, rather than “fringe conspiracy theories.”
This incited Jordan, who interrupted Scanlon, launching a screaming match between Jordan and Democratic leadership about following the rules of the hearing.
“When someone comes after my motives for asking questions,” shouted Jordan, “I should get a chance to respond.”
— Bobby Allyn
Does Amazon use sellers’ data to help itself?
The first inquiry for Amazon CEO Jeff Bezos finally arrived from Rep. Pramila Jayapal, D-Wash., some two hours into the hearing. In detailed substantive questions, she zeroed in on the subcommittee’s central concern about Amazon: Does the company use the data it collects from other sellers on the platform for its benefit?
“I can’t answer that question yes or no,” Bezos said, explaining that Amazon had “certain safeguards” including a policy against this kind of use of seller-specific data. However, he said he could not “guarantee that the policy has not been violated.”
Committee lawmakers have previously accused Amazon of “lack of candor” about how it might be using other sellers’ data to boost its own business. Critics have made the case, for example, that Amazon employees may have used such data to create the retailer’s own private-label products, which Bezos told lawmakers the company was still investigating.
“You can set the rules for your competitors but not actually follow the rules yourself,” Jayapal said. “You have access to data that your competitors do not have,” she continued, adding that if Amazon was “continuously monitoring” such data to make sure that other sellers “are never going to get big enough that they can compete with you — that is the concern that the committee has.”
Google’s Pichai is pressed on being “the gateway to the Internet”
Subcommittee Chairman Cicilline spent all of his first 5-minute block of questions on Google — the company at most immediate risk of actual antitrust action. The Department of Justice is reportedly preparing to sue the company over its advertising business, and could be joined by state attorneys general who have also been investigating Google.
Cicilline pressed CEO Sundar Pichai on whether Google’s business model presents a conflict of interest, because it has an incentive to give search results that keep users on its own site rather than anywhere else on the Internet.
“As Google became the gateway to the Internet, it began to abuse its power,” Cicilline said.
Pichai responded that Google “always focuses on providing users the most relevant information.” Cicilline appeared annoyed at Pichai’s answers, cutting him off several times to move to another question.
Still waiting for questions for Jeff Bezos
Over an hour-and-a-half into the hearing, Jeff Bezos — appearing in Congress for the first time, whose company employs a million workers and has over 150 million paying subscribers — has yet to receive a single question.
His presence was slated to become a powerful accomplishment of the House Judiciary Committee, but the questioning so far has left him muted on the live video feed, reaching for some snacks.
The hearing, meanwhile, is taking a 10-minute break to fix a technical problem “with one of our witnesses.”
Did Facebook buy Instagram to neutralize a competitor?
Judiciary Committee Chairman Jerry Nadler, D-N.Y., pressed Facebook’s Zuckerberg on exactly why his company bought Instagram for $1 billion back in 2012. That’s a key part of competition questions facing the social media giant. Critics accuse Facebook of buying or copying rivals — like Instagram and WhatsApp — to squash competition.
Nadler said in its investigation, the committee got documents from Facebook in which Zuckerberg discussed “neutralizing a competitor” as a reason to pursue Instagram.
Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/b14sEfZkBJ
— House Judiciary Dems (@HouseJudiciary) July 29, 2020
“Facebook saw Instagram as a threat that could potentially siphon business away from Facebook. And so rather than compete with it, Facebook bought it,” Nadler said.
Zuckerberg points out that the Federal Trade Commission okayed the merger at the time. “With hindsight it probably looks obvious that Instagram would have reached the scale that it has today, but at the time it was far from obvious,” he said.
Cicilline interjected to say that the “failures” of the FTC in 2012 do not mean it was not a violation of antitrust law.
Panel chairman: Under coronavirus, big tech “likely to emerge stronger and more powerful”
Up first is Rhode Island Democrat David Cicilline, chairman of the antitrust subcommittee that’s holding this hearing. He is the driving force behind the year-long investigation of big tech.
In his opening remarks, he describes the dominance of each company: Amazon in online shopping, Apple in smartphones and apps, Facebook in social media and Google in search and ads. And he points out that thanks to the coronavirus pandemic, all four “are likely to emerge stronger and more powerful than ever before.”
“As American families shift more of their work, shopping, and communication online, these giants stand to profit. Locally owned businesses, meanwhile —mom and pop stores on Main Street — face an economic crisis unlike any in recent history,” Cicilline said.
House antitrust chair Cicilline notes through-lines uniting the four different tech giants:
-“bottleneck for a key channel of distribution”
-use “control over digital infrastructure to surveil other companies”
-“abuse … control over current technologies to extend their power”
— Alina Selyukh (@alinaselyukh) July 29, 2020
The committee’s investigation has turned up a pattern among the tech giants, he said. They control access to information and marketplaces, use that control to “surveil” rivals and protect their power, and favor their own businesses.
“Simply put: They have too much power,” Cicilline said. For consumers, he said, this is reminiscent of previous American monopolies: railroads, oil and telephone companies, and even another tech giant — Microsoft.
“This investigation also goes to the heart of whether we, as a people, govern ourselves, or whether we let ourselves be governed by private monopolies,” he said. “Our founders would not bow before a king. Nor should we bow before the emperors of the online economy.”
Republican Jim Jordan: “Big Tech is out to get conservatives”
Wednesday’s hearing is supposed to be about Big Tech’s power and market dominance. But Republicans are already trying to make it about something else: accusations that online platforms are biased against conservatives.
“Big Tech is out to get conservatives,” said Rep. Jim Jordan, R-Ohio, in his fiery opening statement.
Jordan then rapidly read aloud headlines making claims that conservative-leaning publications and voices have been suppressed or censored on Facebook and Google.
He also mentioned Twitter, even though it is not part of the hearing. Jordan said conservative members of Congress were “shadow banned” on Twitter. He said Twitter’s CEO Jack Dorsey said it was a glitch.
“If I had a nickel for every time I heard it was just a glitch, I wouldn’t be as wealthy as our witnesses, but I’d be doing right,” Jordan said.
“We all think the free market is great. We think competition is great. We love the fact that these are American companies. But what’s not great is censoring people, censoring conservatives and trying to impact election,” Jordan said. “”If it doesn’t end, there has to be consequences.”
Before Jordan’s remarks, Wisconsin Republican Jim Sensenbrenner also mentioned the belief, strongly contested by large tech companies, that conservatives do not get a fair shake by the online platforms, calling reports of conservative censorship troubling.
“Conservatives are consumers, too, and they need the protection of antitrust laws,” Sensenbrenner said.
The hearing erupted in chaos after Jordan asked that Rep. Mike Johnson of the House Judiciary’s Constitution subcommittee be allowed to participate in the hearing. The request was denied.
Jordan then repeatedly interrupted antitrust subcommittee Chairman David Cicilline, who was attempting to introduce Amazon CEO Jeff Bezos.
“We’re talking about peoples’ liberties here,” Jordan said over Cicilline.
“Put your mask on,” Jordan was told.
Trump tweets: ‘Bring fairness to Big Tech’
The hearing has gotten underway, after an hour-long delay. First up, we will get opening statements from the top members of the committee and the four CEOs. Then lawmakers will each get five minutes to question Jeff Bezos, Tim Cook, Sundar Pichai and Mark Zuckerberg. All four will be joining remotely, via video.
The focus of the hearing, and the committee’s investigation, is competition — but expect lawmakers to be unable to resist bringing up other complaints about tech companies, from election security and the spread of misinformation to alleged anti-conservative bias.
That’s also the message coming from the White House, where President Trump has repeatedly accused tech companies of treating him unfairly. Shortly after noon, he tweeted: “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!”
Our original story by Bobby Allyn continues:
Amid a time of rising tensions with China, some of the powerful CEOs will suggest that too much regulation could provide an opportunity for Chinese tech firms to gain a global toehold, according to opening remarks from the tech leaders released by the House Judiciary antitrust subcommittee.
“We believe in values — democracy, competition, inclusion and free expression — that the American economy was built on,” Facebook’s Mark Zuckerberg will tell lawmakers, according to his prepared opening statement. “China is building its own version of the internet focused on very different ideas, and they are exporting their vision to other countries.”
Amazon’s Jeff Bezos, the world’s richest person who will be making his first-ever appearance in front of Congress, will bring in his personal story of being adopted by an immigrant father when he was 4 years old and spending his summers on his grandparents’ ranch in Texas, saying his upbringing instilled in him a work ethic that has helped Amazon prosper.
Amazon’s rise to becoming the largest online retailer, Bezos will say, is an achievement only made possible in America. But Walmart, he will point out, is still twice the size of Amazon.
“We did not start out as the largest marketplace — eBay was many times our size. It was only by focusing on supporting sellers and giving them the best tools we could invent that we were able to succeed and eventually surpass eBay,” Bezos says in his released testimony.
Google’s Sundar Pichai will steer attention to the other ways people navigate the online world, even though 90% of Internet searches happen on Google.
“People have more ways to search for information than ever before — and increasingly this is happening outside the context of only a search engine,” Pichai plans to tell the House panel. “You can ask Alexa a question from your kitchen; read your news on Twitter; ask friends for information via WhatsApp; and get recommendations on Snapchat or Pinterest.”
Apple’s Tim Cook will echo the appeals to patriotism raised among the other tech CEOs by touting how Apple’s strength, becoming the most valuable company in the world, represents success “only possible in this country.”
He will also join the other tech leaders by arguing that Apple has plenty of competition.
“The smartphone market is fiercely competitive, and companies like Samsung, LG, Huawei and Google have built very successful smartphone businesses offering different approaches,” Cook will say in his opening statement to lawmakers.
Whether members of the House Judiciary Committee’s antitrust subcommittee buy these arguments over the course of what is set to be an hourslong spectacle is another matter.
And it remains to be seen if the public will gain new insight into the tech companies, and whether lawmakers can pin down answers from the typically cautious technology executives.
The CEOs will be testifying via video at the same time, rather than one by one, a format seen as taking the heat off any individual executive and something the companies requested.
While the hearing centers on questions around market dominance, lawmakers are free to pepper the executives with questions about any topic.
The anything-goes format will likely divert the hearing away from antitrust and delve into issues like perceived anti-conservative bias on social media platforms, a common Republican refrain. And Democrats, often raising concern about foreign election meddling, may inquire about possible efforts to influence the vote online ahead of the November election.
More on-topic probing could involve issues like acquisitions that have grown the reach of Big Tech.
For instance, Facebook has acquired nearly 90 companies, including Instagram, WhatsApp and more recently, Giphy, a tool for creating animated images.
How ever it goes, one thing is certain: It will be a day for the history books.
The hearing is the first time all four technology leaders have testified together, as scrutiny over the companies’ nearly $5 trillion market power draws intensifying scrutiny in Washington.
The CEOs will be on the defensive as House lawmakers grill them about whether the business empire each company has created has resulted in monopoly-like dominance that distorts the marketplace in their favor.
After enjoying more than a decade virtually free of federal regulation, House lawmakers are expected to make the case that it’s time for the technology behemoths to be held to account.
The hearing caps a more than year-long House investigation into the Big Tech companies, which has probed whether the industry leaders box out competition, discourage innovation and pose larger threats to society and American democracy.
If Washington can keep the bipartisan focus on Silicon Valley, the hearing could set the stage for historic regulations, but the tech CEOs will be making the case to lawmakers that laws aimed at reining in the scale and power of each company are not necessary, contending that competition among rivals has not been squashed and that consumers have benefited from the technology sector’s success.
“You earn trust slowly, over time, by doing hard things well — delivering on time; offering everyday low prices; making promises and keeping them; making principled decisions, even when they’re unpopular,” Bezos will tell the subcommittee.
Unpopular among the four tech giants: the argument that the power each company has amassed over the years is being abused and needs to be held accountable by Washington.