- Jeff Bezos, CEO of Amazon, Mark Zuckerberg, CEO of Facebook, Sundar Pichai, CEO of Google, and Tim Cook, CEO of Apple, testified before Congress how they use their market power to destroy competitors.
- In contrast to other technical hearings, this was only minimally outstanding and the politicians were prepared.
- The tech titans didn't seem ready for it at all, and they admitted to doing a lot of insulting things.
- This is a column of opinion. The thoughts expressed are those of the author.
- You can find more stories on the Business Insider homepage.
In the time since the founder and CEO of Amazon became another richest man in the world from another Silicon Valley manager, we have rarely seen him worry. This is a man who dared to mock the tabloids. This is a man who employs a personal detective named Gavin de Bekker.
But on Wednesday we saw his worried face.
We saw it when Bezos testified before a subcommittee of the House Justice Committee – a committee within a committee – that dealt with the enforcement of antitrust law. He was asked – along with Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai and Apple CEO Tim Cook – to answer questions about their power. These are the men who control how things get to you on the internet – your apps, your messages, your ads, your messages, your answers to questions, and pretty much anything you can buy.
Over the past year, this subcommittee has examined whether or not this dominance over distribution has led to America decades of small business creation – whether Facebook, Google, Apple and Amazon use their power to destroy potential competitors.
Given the historical nature and intense focus of the media on the meeting, the main task of the legislature was to articulate his knowledge of the enormous power these companies exercise in a way that Americans can understand.
And Bezos showed us his worried face because – apart from a few members – the members of the committee did just that.
"(The committee) has shown that these companies are goalkeepers who practice anti-competitive practices and that their dominance is about monopoly power, not innovation," said Matt Stoller, a cartel researcher and author of Goliath: Hundred Years' War between Monopoly Power and Democracy.
It was the first time that men like Bezos, "master of the universe," as Stoller put it, had to answer questions from informed, powerful people. And under pressure, they admitted that many critics have been accusing them of their toxic behavior for years.
If you rule the streets
When Silicon Valley went to Washington, it was mostly embarrassing for our politicians. Ask geriatric senators Basic questions about technology and the CEOs in the hot seat are holding back on their best media training and paternalistic answering questions.
There were some of them at the hearing on Wednesday, mainly from ranking member F. James Sensenbrenner, a Wisconsin Republican. It was also great that conservatives were silenced on Facebook (they aren't) and Google (still not). But that was a minority of the minority.
For the most part, members of both parties asked thoughtful, well-researched questions. And apparently the CEOs weren't prepared for it. As Stoller noted, they had to admit a variety of shady business tactics.
- Members of both parties pounded Facebook on its strategy to buy, copy, or threaten competitors from the store. read damn internal emails from the company's takeover of Instagram.
- Bezos was speechless when asked why Amazon made money from counterfeit goods, and he couldn't answer questions about Amazon's log to ensure that no stolen goods were sold.
- Bezos, when asked by representative Pramila Jayapal about how Amazon misuses third-party seller data to develop private labels that compete with retailers who sell on its platform, just said, "I can't answer yes or no to this question. "
- Subcommittee chair David Cicilline argued that these third parties outside of Amazon are referred to as "partners". Within Amazon, they are called "internal competitors".
- Similarly, Zuckerberg sweated by asking about his history of competitor espionage.
- Zuckerberg could not explain that his company benefits from the disclosure of misinformation. Cicilline argued that it was necessary to only provide accurate information about the coronavirus Facebook five hours and 20 million views before turning off a video full of false claims about the pandemic. Cicilline reinforced this misinformation once it was on the platform, saying it was a "business decision".
- Democratic Congressman Joe Neguse from Colorado urged Apple and Google CEOs, who control both app stores, to promise that they would not use the information they collect from apps in their stores to build competitors.
- Florida Democratic MP Val Demmings expressed Pichai the way Google monitors its customers and bundles data from all products (Gmail, cards, etc.) to sell them targeted ads
The CEOs were media trained. They knew they had to try to give long answers to run out of time. They knew how to avoid them. And they knew how not to give answers. Bezos once said the words "I don't understand" and I couldn't help but find the irony in it. Antitrust law is complex. The way these companies build ditches around them is so brilliant and sometimes ruthless that it's hard to believe that Bezos could get lost after anything. But in that hearing, all four CEOs looked lost.
Perhaps the worst moment of the hearing was when Democratic MP Lucy McBath from Georgia played a recording of a small textbook seller who was put down by Amazon when their business grew large enough to compete with Bezos.
"We never gave a reason. Amazon never told us why we were restricted. There was no warning, there was no plan." And faced with the recording, Bezos had no explanatory words.
(embed) https://www.youtube.com/watch?v=nZE5Rp4MHc4 (/ embed)
Why we are here
Now you may be saying, "But Linette, if we don't have these big companies, how are we going to compete with big companies from China and elsewhere?"
And I'm telling you that here in the United States, we cannot compete against anyone unless we compete against ourselves. What these companies do when they destroy their competitors – undercut them, or copying them or burying their technology after an acquisition – anchors these companies. And the firmer they are, the less innovative they have to be.
For example, if there was a Facebook competitor with a newsfeed that doesn't spread lies and crimes, we might choose to go to that competitor, but we can't buy Instagram and WhatsApp. Zuckerberg called this a "digital land grab".
The US economy is not supposed to be a land grab for the rich and powerful. It should be an equal playing field on which people with talent and commitment can innovate their way to success. Even more critical is that our country is competing with the power that these companies can exercise. When our antitrust laws were written in the 1890s and re-examined in the 1930s, our leaders understood that once businesses grow, they can take over politics and rule this nation.
"We must not tolerate a repressive government or industrial oligarchy in the form of monopolies and cartels," wrote Henry Wallace, vice president of Franklin Delano Roosevelt, in 1944 in an essay on the dangers of fascism.
"As long as scientific research and ingenuity exceed our ability to develop social mechanisms to improve people's living standards, we can expect the liberal potential of the United States to increase. If this liberal potential is properly channeled, we can expect the area of freedom of the United States. "
The feeling in this country is that freedom is diminishing, that power is in the hands of a few, and that their voices are more important than that of many. Even Congressman Sensenbrenner, who seemed confused for a significant portion of the hearing, urged the government to review the mergers that made these companies so dominant. He said everyone makes mistakes and the regulators probably made them there. Expect the report this subcommittee published on its results to contain damned emails and other information about how these powerful people hoarded and used power to make it practically impossible to participate in others.
It is time for Americans to understand why their feeling that something is very wrong is valid and where it comes from so that we can change it.