Big Tech CEOs Appear Before Congressional Antitrust Committee

Posted on July 30, 2020 by Paul Thurrott in Amazon, Apple, Google, Social with 21 Comments

Yesterday, Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg, and Google’s Sundar Pichai all testified, virtually, before a House Judiciary Committee hearing to try and explain why their respective market power shouldn’t be reined in. The hearing lasted 6 hours and only produced a few surprising moments. In fact, what didn’t happen was the most outrageous moment of the day: No one grilled Cook on his firm’s egregious and anti-competitive app store policies.

I won’t bore you with the stupid, as it should come as no surprise that the mostly elderly congresspeople who attended the hearing clearly don’t understand technology and often came off as clueless uncles asking their nephews about how email works at a Thanksgiving get-together. But there are a few points worth mentioning.

First, as The New York Times points out, each of the CEOs wore surprisingly similar outfits that came off more as costumes than their normal clothing. This was clearly done to make the men less threatening and different to the suit-wearing crowd in D.C. and should be seen as the political theater it was.

Second, Apple Tim Cook came off with the lightest grilling by far: He was questioned only 7 times, compared to 16 for Pichai and Zuckerberg and 13 for Bezos. He was asked 35 questions overall, compared to 62 for Zuckerberg, 61 for Pichai, and 59 for Bezos. Put another way, Cook only spent one-third as much time defending his company’s incredible business practices as did his competitors.

The biggest gaff of the day came from Bezos, who surprisingly conceded that Amazon almost certainly uses data from third-party sellers to determine which products it should make and sell itself.

“I can’t guarantee you that that policy has never been violated,” he said. “We continue to look into that very carefully. I’m not yet satisfied that we’ve gotten to the bottom of it, and we’re going to keep looking at it.”

Zuckerberg didn’t come off very well either. When asked whether his firm purchased Instagram specifically so that it could remove a competitor from the market, he conceded that it did.

“I’ve been clear that Instagram was a competitor in the space of mobile photo sharing,” he said. “By having them join us, they certainly went from being a competitor in the space of being a mobile camera to an app that we could help grow and to help get more people to be able to use.”

Never asked to justify his company’s app store, which charges an incredible 15 to 30 percent vig on all in-app purchases and subscriptions and doesn’t offer competitors a way to use competing online stores or payment systems, Apple’s Mr. Cook was mostly asked some softball questions. He claimed that Apple, the world’s largest tech firm, wasn’t dominant in any market in which it competed, and that it had kicked third-party screen-time monitoring apps out of the store because it cared about kids’ privacy, and not because Apple began offering a competing solution.

Mr. Pichai offered up a similar defense of Google, noting that companies wishing to advertise online have plenty of other choices. He had a harder time dealing with the bizarre partisan complaints brought by Republicans than he did with actual business practices concerns.

That said, I will give some credit to representative David Cicilline, who complained that Facebook does too little to stop the spread of misinformation on its network.

“The problem is Facebook is profiting off and amplifying disinformation that harms others because it’s profitable. This isn’t a [free] speech issue,” he said. “It’s about Facebook’s business model that prioritizes engagement. It brings the most likes or it brings the most activity, which of course brings a great profit. The more engagement you create, the more money you make on advertising.”

Bingo.

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