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Jeff Bezos gives evidence to antitrust committee

Google, Amazon, Facebook and Apple CEOs defend themselves during antitrust hearing

Image credit: Graeme Jennings/Pool via REUTERS

In a historic hearing, the CEOs of Google, Amazon, Facebook and Apple testified to the US House of Representatives as part of an antitrust investigation focusing on tech companies.

The House Committee on the Judiciary’s Antitrust Subcommittee brought the four 'GAFA' CEOs (Google’s Sundar Pichai, Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg, and Apple’s Tim Cook) to testify together for the first time, albeit via Webex rather than in person. The hearing also marked Bezos's first time testifying before Congress.

GAFA CEOs appear via Webex during congressional hearing

U.S. House Judiciary Committee via REUTERS

Image credit: U.S. House Judiciary Committee via REUTERS

The subcommittee has been investigating alleged anti-competitive behaviour by online platforms for over a year, collecting 1.3 million pages of evidence from the companies and submissions from more than 100 other companies. The latest hearing, which focuses on the market dominance of the GAFA companies, is the sixth so far.

In his opening remarks, House Antitrust Chair David Cicilline said that the subcommittee has identified common issues with all four companies’ behaviour: they act as gatekeepers to markets; use their control over digital infrastructure to identify and target competitors; and “abuse their control” over technologies to reinforce their power.

“Because these companies are so central to our modern life their business practices and decisions have an outsize effect on our economy and our democracy,” he said. “Simply put, they have too much power." He criticised the extreme economic and political influence they wield as “power by private government”.

Representatives from all four companies argued that they provide valuable services and exist in competitive marketplaces, while appealing to representatives’ patriotism by identifying their companies as proudly American. In his opening statement, Zuckerberg said that Facebook’s fundamental values are aligned with American values, hinting that rapidly growing Chinese tech companies would not sit so comfortably with these values.

Cicilline accused Google of stealing content from other companies’ websites (e.g., by scraping reviews from Yelp) and wielding its dominance to threaten to hide these companies from its top search results. Pichai rejected this accusation, but conceded that Google surveils the web for competitive threats.

“As Google became the gateway to the internet it began to abuse its power, it used its surveillance over web traffic to identify competitive threats and crush them. It has dampened innovation and new business growth and has dramatically increased the price of accessing users on the internet, virtually ensuring that any business that wants to be found on the web must pay Google a tax,” Cicilline said.

A considerable amount of attention was paid to the companies’ habits of identifying competitors and then defusing them through acquisition, copying, or ousting.

Judiciary Committee Chair Jerrold Nadler and several other representatives questioned Facebook on its acquisition of Instagram after the photo-sharing app was identified as a competitor (although this is considered by many to be a clear violation of antitrust regulations, the acquisition was permitted by the FTC). Representative Pramila Jayapal described this as a “case study in monopoly power”.

Zuckerberg argued that most people did not consider Instagram a competitor at the time and it was never guaranteed that it would have grown to the size it has under Facebook.

Another issue which attracted sustained scrutiny was Amazon’s treatment of third-party sellers, which Amazon had described as “partners and colleagues”. Several representatives recounted examples of Amazon monitoring competitors both on and off Amazon Marketplace and taking action to undermine them, in one case agreeing to bleed over $200m in a single month to undercut the prices on diapers.com.

Representative Lucy McBath accused Amazon of having a “bullying” relationship with third-party sellers, and Cicilline read testimony from a third-party seller who compared Amazon to a drug dealer. Representative Jayapal – who represents the Washington district in which Amazon was founded – criticised Amazon for setting the rules for the very platform it competes on, and asked Bezos if Amazon accesses and uses independent seller data to inform business decisions. Bezos admitted that he “can’t guarantee” that the policy banning the practice had been adhered to.

In a separate line of questioning, Representative Kelly Armstrong forced Bezos to concede that Amazon’s definition of acceptable “aggregate” data (data which can be used to inform business decisions) include datasets including as few as two sellers.

Cicilline concluded: “Amazon’s dual role as platform operator and competing seller on that platform is fundamentally anticompetitive and Congress must take action.”

Other issues raised by representatives included: Apple’s alleged gatekeeping of the App Store; the impact of online platforms on independent journalism; Google’s dominance in the online advertising market; the proliferation of disinformation (including state-backed disinformation) on Facebook; and the relationship between Google and Chinese entities such as Tsinghua University. Apple escaped the hearing comparatively unscathed, with representatives neglecting to question Cook for lengthy periods of time.

The CEOs appeared well-prepared, deflecting or politely disagreeing with most difficult questions. As a result, the much-anticipated hearing was conducted with minimal drama, despite some firm lines of questioning and the occasional outburst from apoplectic congressmen.

In an odd but not entirely unexpected deviation from the subject at hand, six Republican representatives used significant portions of their time to accuse Google and Facebook of anti-conservative bias.

Matt Gaetz accused Facebook of hiring anti-conservative content moderators; ranking member of the Judiciary Committee Jim Jordan demanded that Pichai promise not to tailor Google to support Biden in this year’s presidential election; and Greg Steube accused Google of lowering the profile of far-right misinformation website Gateway Pundit in its search results and assigning his campaign emails to a “junk folder”, forcing Pichai to explain that a recent version of Gmail prioritises 'Primary' mail from personal contacts. Ranking member Jim Sensenbrenner demanded that Zuckerberg justify censoring a post from Donald Trump Jr supporting a debunked Covid-19 cure; Zuckerberg explained this had occurred on Twitter.

President Donald Trump took umbrage against social media companies after Twitter recently began to label some of his tweets as inaccurate or as incitements to violence. Trump has threatened to strip internet companies of their legal protections under Section 230 of the Communications Decency Act. Trump tweeted before the hearing that if Congress failed to “bring fairness to Big Tech”, he would take action himself through executive orders.

Sensenbrenner concluded after a round of questioning that current antitrust laws do not need to be changed, but enforcement must improve, giving as an example the FTC’s approval of Facebook’s acquisition of Instagram. Sensenbrenner argued that splitting up GAFA-like giants would hurt consumers.

Congress does not have the authority to impose penalties on the tech companies at the centre of this inquiry for their alleged transgressions. However, the publication of a report laying out shortcomings in existing antitrust legislation could shape future legislation and add fuel to ongoing state, federal, and international investigations into the behaviour of these four companies.

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