Strong accusations of anticompetitive behaviour were put to the Big Tech bosses at the much-anticipated US Congress antitrust hearing.
Appearing remotely on video feeds, some of Big Tech’s biggest names responded to hours of questioning from US lawmakers yesterday (29 July) over alleged anticompetitive practices that could result in increased regulation in the future.
While it was an antitrust hearing, the questions were also very broad in scope, including claims of anti-conservative bias in their companies and whether they were doing enough to clamp down on the rise of online misinformation. Chair of the antitrust subcommittee, David Cicilline, said in the hearing that these companies have “monopoly power” over their markets.
“Some need to be broken up, all need to be properly regulated and held accountable,” he said. “This must end.”
The four CEOs present were Facebook’s Mark Zuckerberg, Apple’s Tim Cook, Google’s Sundar Pichai and Amazon’s Jeff Bezos. As detailed by The New York Times, Cook was questioned almost half as much as his peers and said very little prior to the last hour of the hearing. However, he was questioned on Apple’s App Store practices and particularly the percentage it takes from sales.
Zuckerberg, who received the most questions in the hearing, was largely asked about Facebook’s approach to acquisitions and whether it was actively working to copy core features of its competitors.
New York representative Jerry Nadler pointed to the acquisition of Instagram as an example of “the type of anticompetitive acquisition the antitrust laws were designed to prevent”. In his argument, he pointed to emails from Zuckerberg that appeared to show him call Instagram a potentially disruptive competitor prior to its acquisition by Facebook in 2012.
“This should never have happened in the first place. It should never have been permitted to happen. It cannot happen again,” Nadler said.
Washington state representative Pramila Jayapal also asked Zuckerberg whether his company had ever “threatened to clone the products of another company while also attempting to acquire that company”. Zuckerberg denied this was the case, despite Jayapal reading evidence from Instagram co-founder Kevin Systrom, who claimed he felt forced into selling the platform to Facebook.
Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google" pic.twitter.com/j45ctS6xhF
— House Judiciary Dems (@HouseJudiciary) July 29, 2020
Pichai, meanwhile, received one question less than Zuckerberg. The Google and Alphabet CEO was accused by Cicilline of creating a search engine that was a “walled garden”.
“The evidence seems very clear to me as Google became the gateway to the internet, it began to abuse its power and use its surveillance over the web traffic to identify competitive threats and crush them,” he said.
Pichai disagreed with these claims, saying that the majority of its search results do not carry ads and that it has a number of competitors in search, such as Amazon for e-commerce.
Pichai was also questioned on Google’s decision to cease activities with the US military, with two lawmakers asking why this was the case while it continues to operate an AI intelligence lab in China. Pichai denied that it was working with the Chinese military and said that it still works with the US military in various ways.
In his first ever appearance before the US Congress, Bezos was questioned a number of times on Amazon’s relationships with third-party sellers on its platform. Representative Lucy McBath claimed that sellers who spoke to the committee said their relationship with the company was built on “bullying, fear and panic”.
In response to Jayapal’s claim that Amazon employees mine seller data to produce competing products, Bezos said that the company has a policy in place to prevent that from happening but “can’t guarantee” that it has never been violated.
Meanwhile, Cicilline went on to compare Amazon to a drug dealer in its business tactics, a claim that Bezos strongly disagreed with. When asked by Cicilline whether it was fair that Amazon controls 75pc of all online marketplace sales, Bezos disagreed and said Amazon was just “the best one”.
Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google" pic.twitter.com/3wyh1bPIrh
— House Judiciary Dems (@HouseJudiciary) July 29, 2020
One of the big questions for Apple during the hearing was about its App Store policies, in particular its 2018 decision to remove a number of third-party parental-control apps not long after Apple introduced its own app. Cook said that the apps were pulled for privacy reasons.
After McBath produced an email from Apple executive Phil Schiller appearing to show him advising a parent to use Apple’s parental-control tool instead, Cook said he could not see the email on his screen remotely.
Cook was also questioned on Apple’s demands for a commission on virtual classes sold through Airbnb and ClassPass that have popped up since the pandemic. Responding to Nadler’s question of whether this was “pandemic profiteering”, Cook said it was still working with businesses that have had to change as a result of Covid-19 guidelines.
Representative Hank Johnson asked whether Apple gave special treatment to some companies, producing an email from 2014 that appeared to show Cook telling Baidu’s chief executive that it would be put on an “app review fast track”. Johnson also pointed to an agreement that allows Amazon avoid the 30pc commission fee for its video-streaming service in return for both companies’ products working together better.
“We have fierce competition at the developer side and the customer side,” Cook said. “It’s so competitive, I would describe it as a street fight for market share in the smartphone business.”