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House panel grills Bezos, Zuckerberg and other tech chiefs over antitrust concerns

Amazon Founder and CEO Jeff Bezos speaks to the media in 2019. Later today Bezos will testify before congress. (Eric Baradat/AFP via Getty Images/TNS)

Several titans of Big Tech appeared virtually before members of Congress on Wednesday, as the House antitrust subcommittee continued its investigation of concentration across the digital realm.

The chief executives of four of the most prominent technology firms in the world — Google’s Sundar Pichai, Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg and Apple’s Tim Cook — were prepared for questions about their business practices and market dominance. Though their companies represent new-age innovations, including search engines, smartphones and social media, the criticisms they face bring to mind those lodged by “trustbusters” against late 19th-century industrial barons.

Since last June, the House Judiciary Committee’s subcommittee on antitrust issues has been investigating “the dominance of a small number of digital platforms and the adequacy of existing antitrust laws and enforcement,” as a joint statement from committee Chairman Jerrold Nadler, D-N.Y., and subcommittee Chairman David Cicilline, D-R.I., put it. The panel is one of several fronts on which the tech industry is battling against the prospect of government regulations.

 

As the hearing was about to get underway, President Donald Trump expressed some conservatives’ separate complaint that the large social media firms are biased against them in censoring users on the political right, which the companies deny. He told reporters as he left for a fundraising trip to Texas, “We’re going to be watching the hearings today very closely, because there is no question that what the big tech companies are doing is very bad.” Once on Air Force One, he repeated his displeasure in a tweet.

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Critics of the technology giants also welcomed the scrutiny in a conference call with reporters Tuesday. The hearing “comes on the heels of a yearlong investigation that is looking deeply into the market power and the business models and the conduct of these four corporations,” said Sarah Miller, co-chair of the advocacy group Freedom From Facebook & Google. “And that is something that has not really been done in decades.”

The subcommittee members could go beyond the topic of antitrust regulation and digital monopolies. The four companies are implicated in a host of other issues — including labor practices, domestic surveillance and online censorship — some of which have become increasingly contentious in an election year that has had both parties taking shots at Big Tech.

When Zuckerberg testified before the Senate Judiciary and Commerce committees in 2018, for instance, the discussion touched not only on data privacy — the focus of the hearing — but also on disinformation, political bias and even the basics of Facebook’s business model.

The scope of the House hearing could easily expand because the four CEOs lead radically different companies. With all four being questioned at once — and remotely given the pandemic — some have worried that the committee members won’t be able to question the witnesses as aggressively or in as much depth as they otherwise might.

“The weirdness of the hearing is that we’ll have all these four CEOs together,” Fordham Law School associate professor Zephyr Teachout said on the press call. “I think of the great 1950s hearings into the mob … having the heads of four families all lined up together on a livestream, all answering questions at the same time.”

All four companies face complaints of monopolistic behavior, though the practices in dispute vary greatly.

Facebook is criticized for its acquisitions of other social media and messaging firms, expanding laterally with strategic purchases of platforms including Instagram, WhatsApp and Giphy. It’s also drawn fire for practices viewed as unfairly targeting competing platforms, such as copying core features of photo-messaging app Snapchat or preventing users of a short-lived video app, Vine, from using Facebook data to find their friends.

Zuckerberg defended the Instagram and WhatsApp acquisitions in his prepared statement in advance of the hearing, and cited Facebook’s improvements to each platform’s infrastructure and features. “Our acquisitions have helped drive innovation for people who use our own products and services and for the broader start-up community,” he said in his statement.

He also reiterated his past calls for more active government regulation of the tech sector while arguing that Facebook’s size has benefits in addressing issues “from election security to building more privacy-protective products.”

Google and Amazon are under scrutiny for their roles in specific online marketplaces — Google with its various digital advertising services and Amazon with its massive shopping platform, where it also sells its own goods in competition with third-party retailers.

Amazon’s Bezos, in his prepared statement, recalled at length Amazon’s humble origins — and his own — as a preface to justifying the mammoth company that it has become. “I love garage entrepreneurs — I was one,” he said in the statement. “But, just like the world needs small companies, it also needs large ones. There are things small companies simply can’t do. I don’t care how good an entrepreneur you are, you’re not going to build an all-fiber Boeing 787 in your garage.”

Pichai, meanwhile, used his own statement to tell a series of anecdotes about small businesses that have benefitted from Google’s advertising technology and argued that Google faces stiff competition within the online ad and information-search industries.

The swipes at Apple are more narrow, concerning the company’s dual role in both selling hardware such as iPhones and operating the marketplace for software for the devices. In May 2019, the Supreme Court cleared the way for lawsuits against Apple for compelling its users to buy apps through its App Store, and taking a 30% commission in the process.

Cook defended the App Store in his statement, emphasizing that the platform improved on earlier software-distribution systems like shipping CDs or physical stores. “After beginning with 500 apps, today the App Store hosts more than 1.7 million — only 60 of which are Apple software,” Cook’s statement said. “Clearly, if Apple is a gatekeeper, what we have done is open the gate wider.”

Notably absent from the proceedings is Microsoft. The company and CEO Satya Nadella have escaped some of the “techlash” of recent years. However, the messaging platform Slack recently filed an antitrust complaint in Europe over Microsoft’s competing platform Teams, and hasn’t ruled out pursuing action in the United States.

Europe has aggressively regulated tech platforms. The European Union launched antitrust investigations into Apple’s Apple Pay platform and App Store in June, has also targeted Amazon and Facebook, and hit Google with a $2.6 billion antitrust fine.

“U.S. antitrust authorities need to consider whether these or other digital service companies are protected by barriers constructed by anti-competitive behavior, and take appropriate remedial action where required,” wrote Marc Jarsulic, chief economist at the liberal Center for American Progress.

As concern has grown among Democrats and Republicans about the power and scale of the tech giants, the House Judiciary Committee has not been the only governmental body hinting at aggressive regulations of the industries.

Earlier this year, the Federal Trade Commission issued orders to all four companies as well as Microsoft for information on their acquisitions of start-ups between 2010 and 2019, suggesting concern that the tech giants bought up potential competitors early to keep the playing field clear.

Last summer the Department of Justice began another antitrust investigation, citing widespread concerns about reduced competition and innovation in the online “search, social media, and some retail services” sectors. And state attorneys general across the country also have opened joint investigations into potentially monopolistic behavior at Google and Facebook specifically.

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© 2020 Los Angeles Times

Distributed by Tribune Content Agency, LLC.