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Amazon, Apple, Facebook and Google Respond and Deflect Manifold Criticism by House Judiciary Panel

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Screenshot of Rep. David Cicilline from the webcast

July 30, 2020 — Wednesday’s House Judiciary Antitrust subcommittee hearing marked the first time four tech CEOs appeared before Congress, and the first time Amazon’s head, Jeff Bezos, spoke to U.S. legislators, albeit remotely.

Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai also dialed in through video conference, while most of the committee members were present in Congress, for the sixth hearing in the subcommittee’s year-long investigation into the tech companies’ business practices.

Representatives grilled the tech CEOs on their allegedly anticompetitive businesses practices.

The CEOs largely contended that size and conglomeration benefits end-users, by making technology easier to deploy.

Screenshot of Amazon CEO Jeff Bezos participating in the hearing remotely

But the majority of members on the subcommittee said that these corporations stifle choice and oppress the next generation of entrepreneurs. They claimed that big tech companies hold dangerous power and stifle competition. They criticized the heads of each of the four companies, calling them “gatekeepers of the digital economy.”

Accusations against the ‘big four’ add up

Each of the four CEOs were accused of stealing ideas, buying up their competitors and utilizing consumer data to expand at a near exponential rate.

“Each platform uses data to protect its power,” said Rep. James Sensenbrenner, R-Wis., asserting that “tech companies abuse their control over current technology to extend their control.”

Yet the CEOs mustered their way through the nearly six-hour long questioning session, mostly managing to not admit to the ways in which their business practices might stifle competition.

The CEOs avoided giving direct answers to the Representatives’ questions, often saying that they were unaware of the situations being referenced or claiming that their words were being taken out of context.

The companies’ heads continued to refute the idea that they lead monopolies, arguing that they have competition both outside of the tech sector and globally.

Screenshot of Facebook CEO Mark Zuckerberg participating in the hearing remotely

“When Google bought YouTube, they were able to compete against cable operators,” Zuckerberg said. “When Amazon acquired Whole Foods, they were able to compete against Kroger.”

Below are snapshots of the interactions involving each of the four big tech companies.

Amazon and third-party sellers

Amazon, which dominates 70 percent of the online market space, was accused of stifling third-party sellers by Rep. Lucy McBath, D-Ga.

According to McBath, third-party sellers often use the words “bullying, fear and panic” to describe their relationships with Amazon.

McBath cited one third-party seller who said, “we’re stuck and we don’t have a choice,” claiming that selling on Amazon, while unfortunate, was their only viable option.

Screenshot of Rep. Lucy McBath from the webcast

In response, members of Congress demanded Amazon be more transparent with their use of third-party data.

Rep. Joe Neguse, D-Colo., accused Amazon Web Services of purposely stifling competitors, citing instances in which the company identified startups with promising technology and copied their designs.

Rep. Jamie Raskin, D-Md., criticized Amazon for undercutting the prices of their smart home products in order to sell more than the competitors listed on their site.

The company was further criticized for promoting the sale of its own products during the pandemic, after vowing it would only sell essential products.

Facebook and its Instagram acquisition

Facebook, the largest global social networking service, which accrued $18 billion in revenue last year alone, was grilled over its 2012 Instagram acquisition.

Rep. Pramila Jayapal, D-Wash., read a testament from Instagram’s founder, saying he felt pressured to sell the company to Zuckerberg.

Zuckeberg argued back that, at the time of the acquisition, it was “not obvious that Instagram would have reached the scale” it has achieved today.

Rep. Jerrold Nadler, D-N.Y., cited evidence that Facebook saw Instagram as a threat and bought it to avoid competition.

In retrospect, members of Congress called the 2012 merger approval a failure on the part of the Federal Trade Commission.

Rep. Val Demings, D-Fla., criticized the platform for restricting the access of its competitors to Facebook, citing a case in which Facebook restricted Pinterest’s use of the site in 2012.

Screenshot of Rep. Val Demings from the webcast

Members referenced when Facebook stole Snapchat’s “stories” feature, rendering the competitor nearly obsolete, after Snapchat refused to be bought out by the company.

Yet Zuckerberg reacted with surprise when Congressmembers referred to Facebook as a monopoly, saying, “Monopoly? We face a lot of competitors in everything we do.”

Neguse pushed back, citing evidence that Facebook accounted for 95 percent of all social media use in the U.S., as early as 2012.

Google’s efforts to privilege its own products

Google, the search engine which captures 90 percent of online searches, was ridiculed by Congressmembers for being a walled garden, stealing content and privileging its own sites.

Members of Congress referenced two incidents of Google stealing from competitors: restaurant reviews from Yelp and music lyrics from Genius.

When Yelp spoke out against the incident, Google responded by threatening to delist Yelp from its website entirely.

“Isn’t that anti-competitive?,” questioned Rep. David Cicilline, D-R.I.

Pichai responded, maintaining that Google does not steal content.

Demings questioned Pichai on his 2016 decision to combine data sets that Google promised Congress it would keep separate, insinuating that Pichai no longer cared about the legal binding after gaining “exponential” power.

When questioned by members about Google’s ad revenue, Pichai revealed, in a near whisper, that it accounts for around $100 billion of the company’s overall returns.

Apple’s gatekeeper role as guardian of the App Store

Apple, which profits from over 100 million iPhone users in the U.S. alone, was accused by Representatives of picking and choosing what apps are marketed to users.

What Cook referred to as a “seamless integration of software and hardware,” others saw as Apple having the power to exclude apps that compete with the company.

Screenshot of Apple CEO Tim Cook participating in the hearing remotely

Apple is sole decision maker in the rules governing the app store.

One member noted that Apple made screen time apps obsolete by automatically installing iPhones with a similar function in iOS 13.

In response, Cook maintained that, “the app store is accessible” and that “Apple does not have a dominant share in any sector in which they do business.”

See additional story on the hearing.

Big Tech

Proposed Antitrust Legislation Not the Way to Regulate Big Tech, Panelists Say

Legislation currently before Congress will hurt American tech’s global competitiveness, event hears.

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Screenshot from the Foreign Policy event on Thursday

WASHINGTON, June 29, 2022 – Critics at a Foreign Policy magazine event blasted the efforts of the Federal Trade Commission and lawmakers to crack down on Big Tech, saying legislative efforts could impact America’s global competitiveness in the tech industry.

On Thursday, panelists were divided on how Washington should approach antitrust legislation proposals, referencing six antitrust bills introduced to Congress in June 2021 that target big tech companies. Those bills – including the American Choice and Innovation Online Act, H.R. 3816, Platform Competition and Opportunity Act, H.R. 3826, Ending Platform Monopolies Act, H.R. 3825, Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act, H.R. 3849, Merger Filing Fee Modernization Act, H.R. 3843, and State Antitrust Enforcement Venue Act, H.R. 3460 – aim to rein in the power of Big Tech through anticompetitive measures, new merger and acquisition review, and providing government enforcers more power to break-up or separate big businesses.

Sean Heather, senior vice president of international regulatory affairs and antitrust from the U.S. Chamber of Congress, criticized current antitrust laws saying it will hurt U.S. competition in the global world. He said “the answer is not to do it through antitrust” or implementing “sweeping judgement” that puts all businesses under one rubric. Instead, he suggested “targeted legislation” that would address individual issues of each business.

Clete Willems, from the Atlantic Council’s geoeconomics center, said that many of the proposed antitrust laws are ineffective. He stated a major flaw of these bills is that they penalize big technology companies because of their size, instead of for abuses of market power in common business practices.

Willems said that the bills simply ban “big tech companies because they are big but are not tying it to abuse of market power. That to me illustrates the fundamental problem with this agenda.”

Some panelists echoed flaws presented by Robert Atkinson, president of the Information Technology and Innovation Foundation in April, saying that antitrust regulation could hamper U.S. competition in the tech world or negatively hurt customers, as FTC Commissioner Noah Phillips said in May.

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Antitrust

‘Time is Now’ for Separate Big Tech Regulatory Agency, Public Interest Group Says

‘We need to recognize that absolutely the time is now. It is neither too soon nor too late.’

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Photo of Harold Feld, senior vice president at Public Knowledge

WASHINGTON, June 21, 2022 – Public Knowledge, non-profit public interest group, further advocated Thursday support for the Digital Platform Commission Act introduced in the Senate in May that would create a new federal agency designed to regulate digital platforms on an ongoing basis.

“We need to recognize that absolutely the time is now. It is neither too soon nor too late,” said Harold Feld, senior vice president at Public Knowledge.

The DPCA, introduced by Senator Michael Bennet, D-CO., and Representative Peter Welch, D-VT., would, if adopted, create a new federal agency designed to “provide comprehensive, sector-specific regulation of digital platforms to protect consumers, promote competition, and defend the public interest.”

The independent body would conduct hearings, research and investigations all while promoting competition and establishing rules with appropriate penalties.

Public Knowledge primarily focuses on competition in the digital marketplace. It champions for open internet and has openly advocated for antitrust legislation that would limit Big Tech action in favor of fair competition in the digital marketspace.

Feld published a book in 2019 titled, “The Case for the Digital Platform Act: Breakups, Starfish Problems and Tech Regulation.” In it, Feld explains the need for a separate government agency to regulate digital platforms.

Digital regulation is new but has rapidly become critical to the economy, continued Feld. As such, it is necessary for the government to create a completely new agency in order to provide the proper oversight.

In the past, Congress empowered independent bodies with effective tools and expert teams when it lacked expertise to oversee complex sectors of the economy but there is no such body for digital platforms, said Feld.

“The reality is that [Congress] can’t keep up,” said Welch. This comes at a time when antitrust action continues to pile up in Congress, sparking debate across all sides of the issue.

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Big Tech

Young American Views on Social Media Regulation Shaped by Use, Panelists Discuss

A March Gallup and Knight study found young Americans are less concerned about hurtful online discourse.

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Photo of Gallup Event

WASHINGTON, June 13, 2022 – Panelists at a Gallup event on Wednesday said young American’s use of social media primarily as an entertainment source shapes their views on tech regulation.

The view comes after a March study by Gallup and Knight said that young Americans aged 18 to 34 are less likely to stay within partisan boundaries about tech regulation. The study of 10,000 adults sought to compile American views on internet regulation and found that young adults are less likely to be very concerned about hurtful discourse online than adults 55 and older.

The report outlined a dichotomy between older and younger generations, with the report indicating that younger Americans are more motivated to participate in “traditional” civic behaviors like attending protests or donating to social causes as a result of social media than their older counterparts.

The older generation, on the other hand, generally use social media as a news source, the report claimed.

The study comes amid debate about what types of antitrust action needs to be taken by Washington on big tech companies with respect to content management. Some Americans are concerned that social media platforms allow for the spread of misinformation and hate speech. The study was conducted to better understand how U.S. citizens view regulation of online content and the responsibility for the internet’s governance.

The study developed six broad sample groups. One of these groups was “the unfazed digital natives,” characterizing 19 percent of the population. This group was the youngest of segments and favored, regardless of party affiliation, “individual responsibility and a hands-off approach by the government. Nevertheless, they support some degree of content moderation by social media companies.”

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