July 30, 2020 – Several of the companies featured in Wednesday’s blockbuster big tech hearing need to be broken up, House Judiciary Antitrust Subcommittee Chairman David Cicilline, D-R.I., said at the conclusion of the nearly six-hour hearing.
“This hearing has made one fact clear to me: These companies as they exist today have monopoly power,” he said, speaking of Amazon, Apple, Facebook and Google. “Some need to be broken up. This must end.”
And – even if breakup of any of these four companies is a way off, or ultimately unlikely to happen – regulation of areas of data usage and privacy appears much more likely.
The long-awaited meeting had no shortage of loaded questions, contentiousness, and fiery theatrics.
The hearing remotely brought together CEOs from four of the world’s most powerful internet companies. Representatives grilled the executives on alleged anti-competitive practices.
Yet the Judiciary Committee hearing room was largely empty, save for around a dozen reporters following social distancing guidelines. Yet from the earliest moments of the hearing, it was clear that the CEOs were in for an impassioned interrogation.
Chairman Cicilline began by noting that a conflict exists between Google’s mission to provide relevant information to those searching for it and its interest in keeping users on its platform and affiliated sites for as long as possible.
Similar lines of questioning ran throughout the day, spanning topics from the development requirements of Apple’s App Store to Amazon’s prioritization of so-called “essential products.”
At times, the lines of questioning gained a greater urgency.
Human rights in China, and in America
Rep. Ken Buck, R-Colo., mentioned several times the plight of the Uighur Muslims in China’s Xinjiang region, drawing ties between Google’s activities in China and the human rights abuses found there. Rep. Matt Gaetz, R-Florida, similarly hit Google for such alleged misdeeds. Rep. Jordan said that the World Health Organization “obviously shills for China.”
Their comments contribute to an increasingly contentious governmental relationship with China.
“Cultural war” issues in America also factored into the discussion.
Rep. Kelly Armstrong noted that law enforcement requests for “geofence warrants” – which compel tech companies to hand over individuals’ private data to police bodies – had risen exponentially. Such policies have been objects of concern in the wake of increased protests surrounding the death of George Floyd.
The CEOs attempted to downplay the roles their companies play in the global technology arena. They did just that.
Steve Cook of Apple said that Apple did not control a majority of the market share in any of their product categories, Mark Zuckerberg of Facebook said that Apple had a more widely-used messaging service, and Jeff Bezos of Amazon said that Amazon did not do several of its services as well as the other companies featured.
However, if their goal was to convince the congressmen that their companies were not sufficiently powerful to perform the misdeeds of which they were accused, the representatives did not seem convinced.
Are changes to the antitrust laws necessary?
No member of Congress made a clear case that changes were necessary to the United States’ antitrust laws. Indeed, Rep. James Sensenbrenner, R-Wisconsin, said that there is no need for change in that area.
Sensenbrenner instead endorsed utilizing the laws on the books. Still, member of Congress criticized the Federal Trade Commission’s past merger approvals.
With no innovative legislative solutions resulting from Congress and no real admittance of anti-competitive practices from big tech CEOs, their appearance before lawmakers turned out to be less promising than many viewers may have hoped.
The hearing failed to produce any legislative proposal to break up tech monopolies, failed to fully address the impacts these businesses have on consumers, and got sidetracked over concerns on content moderation, foreign influence, and free speech.
Members of Congress were prepared with legitimate evidence of anti-competitive business practices, but failed to offer a solution to creating more competitive environments.
Election interference claims against Google
Reps. Jim Jordan and Greg Steube said that they were concerned about electoral interference and alleged anti-conservative bias at Google and Facebook.
Jordan inquired of Google’s Sundar Pichai whether he and his company would conspire to sway the election in favor of Joe Biden. Steube said that he heard multiple reports of his congressional office’s emails getting lost in the spam folders of those in his district that had long expressed interest in supporting him.
However, there was inter-representative conflict as well.
When Jordan raised concerns of electoral interference at Google, Rep. Mary Gay Scanlon, D-Penn. said he was dealing in “fringe conspiracy theories.”
This exchange devolved into Cicilline shouting and attempting to gavel Jordan back into order, with Jordan shouting back and Rep. Jamie Raskin yelling at Jordan to “Put on your mask!”
But while the hearing was long on drama, it was relatively short on commitments from the executives. The CEOs pledged to further ethnic inclusion and equity in their companies, but said that they would follow up with the individual representatives’ offices about matters that may have proven too risky to speak about publicly.
Editor’s Note: Reporter Jericho Casper contributed to this story.
CES 2022: Patreon Policy Director Says Antitrust Regulators Need More Resources
To find the best way to regulate technology, antitrust regulators need more tools to maintain fairness in the digital economy.
LAS VEGAS, January 7, 2021 – The head of Patreon’s global policy team said federal regulators need more resources to stay informed about technology trends.
Laurent Crenshaw told CES 2022 participants Friday that Congress should provide tools for agencies like the Federal Trade Commission to enforce consumer protection standards.
“I’m not going to say that big tech needs to be broken up, but there should be appropriate resources for federal regulators to understand the digital marketplace,” he said. “We’re are still living in a world that is dominated by big actors, and we’re debating about whether to even give federal regulators the power to understand how the marketplace is moving toward digital.”
Crenshaw of Patreon said that more resources were necessary at the FTC in order to understand the digital marketplace. Patreon is a membership platform that provides a subscription service for creators to offer their followers.
Such resources would empower the agency to place appropriate safeguards for smaller technology innovators. “So in 10 [or] 20 years, it’s not just the replacements of the current Google, Apple, or Facebook, but something entirely new,” he said.
Panelists echoed Crenshaw’s point that consumer welfare should guide competition policy. Tyler Grimm, chief counsel for policy and strategy in the House Judiciary Committee, said that antitrust should bend to the consumer welfare standard. “Antitrust should leave in its wake a better economy,” he said.
LeGeyt Appointed President and CEO of National Association of Broadcasters
LeGeyt was the organization’s executive vice president of government relations and COO.
WASHINGTON, January 4, 2022 – The National Association of Broadcasters has appointed Curtis LeGeyt to serve as president and CEO, replacing Gordon Smith.
“It is an honor to lead this great organization and advocate for the local television and radio broadcasters that inform, entertain and serve their communities every day,” said LeGeyt in a statement. “I am grateful to our Board of Directors for placing its trust in me and look forward to working alongside them, the entire NAB team and our members to ensure a vibrant future for broadcasting.”
LeGeyt was previously the executive vice president of government relations and chief operating officer of NAB. He holds a JD from Cornell Law School.
“We are excited to now have Curtis at the helm to guide the organization into its next chapter. He is a proven leader and skilled fighter on behalf of broadcasters, and we are thrilled to have him serve as our voice in Washington and around the world,” said David Santrella, NAB joint board of directors chairman and CEO of Salem Media Group.
The previous president and CEO, Gordon Smith, served in this role for 12 years. Smith will remain with the NAB, albeit in an “advisory and advocacy” capacity. During his tenure, NAB took a hardline on big technology companies, condemning them as a threat to small TV and radio stations that make up local media, and called for citizens to voice their concerns to legislators.
Jason Boyce: Washington Cannot Let Amazon Water Down Consumer Protection Legislation
It is in Amazon’s interest to twist the arm of lawmakers and prevent protections against internet scams.
The holiday season is a reminder that with more Americans than ever heading online to do their shopping, lawmakers must continue taking action to prevent consumers from falling prey to internet scammers. That is why it was welcome news when Amazon recently reversed course on its longstanding opposition to bipartisan consumer protection legislation in Congress that would require third-party online marketplaces to verify independent sellers, with the goal of reducing counterfeits and stolen goods from these platforms.
But while Amazon’s public change of heart seemingly paves the way for the eventual passage of the bill, known as the INFORM Consumers Act, lawmakers must ensure that the retail giant and other tech companies do not work behind the scenes to water down the legislation and render it toothless. Counterfeits pose great harm to consumers and small third-party sellers, and Congress must pass strong, comprehensive enforcement mechanisms to adequately protect both groups.
Amazon’s decision to endorse INFORM was certainly a surprise. Just this summer, Amazon launched an aggressive lobbying campaign to kill a more robust version of the legislation. But while Amazon ostensibly supports the current bill, it has reportedly unleashed its lobbyists in the Beltway to weaken it. While lawmakers such as Sen. Dick Durbin, D-Ill., one of the bill’s co-sponsors, say they refuse to let this happen, they should remain on high alert.
This is because we have seen Amazon’s playbook for publicly supporting legislation while simultaneously working to weaken it behind the scenes. For instance, Amazon CEO Jeff Bezos won praise earlier this year when he embraced President Joe Biden’s plan to raise the corporate tax rate. But behind the scenes, the company enlisted an army of lobbyists to maintain the research and development tax credit, which has been estimated to save the company hundreds of millions of dollars a year. As I have said before, Bezos’s support for a corporate tax hike is meaningless if the company can continue to engage in egregious tax avoidance schemes.
And it is not just Amazon; other Big Tech companies have resorted to similar “two-faced” tactics to weaken legislation. In April, an investigation by The Markup uncovered how some of the country’s most powerful technology companies, including Facebook and Google, advocated for mostly toothless privacy protection legislation in statehouses across the country — all with the intention of preempting state lawmakers from taking stronger action in the future.
Now with the prospect of a comprehensive consumer protection measure being signed into law, Congress must resist Amazon’s arm twisting. Counterfeits are far too serious of a threat, and watered-down legislation will fall short of creating the bold transparency measures that are desperately needed. Online counterfeiters have been known to peddle toys and children’s products, putting those most vulnerable in grave danger. These products fail to go through robust safety testing, meaning there is potential for serious health consequences.
But what many may not realize is the impact that counterfeits have on third-party sellers. As someone who works with Amazon sellers every day, I know exactly how legitimate businesses suffer when criminals sell fakes at below the market value. Small businesses are doing everything they can to fight these criminals — even if it means spending hundreds of thousands of dollars to do so.
Many of those selling fakes from the comfort of their own homes and hurting American businesses are overseas. According to the Department of Homeland Security, a staggering 85 percent of contraband items seized by U.S. Customs and Border Protection came from Hong Kong and China. Nonetheless, Amazon’s marketplace has become a hub for China-based sellers.
Amazon has no problem touting all of the measures it has taken to clean up its third-party marketplace. But, as I have explained, it is a common tactic of Amazon’s PR department to just share the numerator — and not the denominator. Thus, the $700 million it invests to fight fraud is pennies in the bucket when you consider that Amazon’s worldwide gross merchandise volume is estimated to be $490 billion.
It is critical that Congress advances the INFORM Consumers Act as it stands today. While I welcome Amazon’s endorsement of the common-sense measure — along with the other third-party marketplaces that recognize the benefits it would bring to e-commerce shopping — I can only hope it is sincere. Working behind the scenes to weaken this bill will be devastating to the millions of shoppers and sellers who have come to depend on Amazon’s third-party marketplace.
Jason Boyce is the author of “The Amazon Jungle” and founder of Amazon managed services agency, Avenue7Media. Previously, Boyce was an 18-year Top-200 Amazon seller. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to email@example.com. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
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