- Amazon CEO Jeff Bezos, Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai and Apple CEO Tim Cook testified before Congress about how they use their market power to destroy their competitors.
- Unlike other tech hearings, this one had minimal exaggeration and politicians came prepared.
- The tech titans didn’t seem ready for that, and they admitted having done a lot of offensive things.
- This is an opinion column. The thoughts expressed are those of the author.
- Visit the Business Insider home page for more stories.
In the time since Amazon’s founder and CEO went from being another Silicon Valley executive to the world’s richest man, we’ve rarely seen him concerned. This is a man who challenged the tabloids to make fun of him. This is a man who employs a personal detective named Gavin de Bekker.
But on Wednesday we saw his worried face.
We saw it as Bezos testified before a subcommittee of the House Judiciary Committee, a committee within a committee, focused on enforcement of the antitrust law. He, along with Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai and Apple CEO Tim Cook were called to answer questions related to his power. These are the men who control how things get to you on the Internet: your applications, your messages, your ads, your news, your answers to questions and almost anything you can buy.
For the past year, this subcommittee has been investigating whether that dominance over distribution has led to the creation of small businesses in the United States, with decades of decline, if Facebook, Google, Apple and Amazon use their power to destroy potential competitors.
Given the historical nature and intense media focus at the meeting, lawmakers’ primary mission was to articulate their findings about the vast power these companies wield in ways that Americans can understand.
And Bezos showed us his worried face because, apart from the histrionics of some members, the committee members did exactly that.
“[The committee] it showed that these companies are gatekeepers engaged in anti-competitive practices and that their dominance is over monopoly power, not innovation, “said Matt Stoller, antitrust researcher and author of Goliath: Hundred Years’ War Between Monopoly Power and democracy.
It was the first time that men like Bezos, “masters of the universe,” according to Stoller, had to answer questions from informed and powerful people. And under pressure, they admitted a great deal of toxic behavior that their critics have been accusing them of for years.
When you rule the roads
For the most part, when Silicon Valley went to Washington, it was an embarrassment to our politicians. Geriatric senators ask basic questions about technology and CEOs on the bench are content with their best media training and answering paternalistic questions.
There was some of that at Wednesday’s hearing, primarily from rank member F. James Sensenbrenner, a Republican from Wisconsin. There was also a lot of boasting that conservatives were silenced on Facebook (they are not) and Google (not yet). But that was a minority of the minority.
For the most part, members of both parties asked well-thought-out and well-researched questions. And it seems CEOs weren’t ready for that. As Stoller pointed out, they had to admit to a myriad of grim business tactics.
- Members of both sides criticized Facebook for its strategy of buying, copying, or threatening competitors out of business, reading internal emails damning the company’s acquisition of Instagram.
- Bezos was speechless when asked why Amazon makes money from counterfeit products, nor was he able to answer any questions about Amazon’s protocol to ensure it doesn’t sell stolen products.
- Bezos twisted through Representative Pramila Jayapal’s questions about how Amazon misuses third-party vendor data to develop internal brands that compete with merchants who sell on its platform saying only, “I can’t answer that ask yes or no. “
- Subcommittee Chairman David Cicilline mentioned that outside of Amazon these outside vendors are called “partners.” Within Amazon they are called “internal competitors”.
- In the same way, Zuckerberg sweats through questions about his history of spying on competitors.
- Zuckerberg was unable to explain the fact that his company benefits from selling misinformation. Cicilline mentioned that despite committing to distribute only accurate information about the coronavirus, it took Facebook five hours and 20 million visits before deleting a video full of false claims about the pandemic. Amplifying that misinformation once it’s on the platform, Cicilline said it’s a “business decision.”
- Democratic Congressman Joe Neguse of Colorado pressured CEOs of Apple and Google, which control app stores, to promise they would not use the information they collect from apps in their stores to create competitors.
- Democrat Val Demmings of Florida put pressure on Pichai about the way Google monitors its customers, pooling data from all of its products (Gmail, maps, etc.) to sell targeted ads to them.
CEOs were trained by the media. They knew how to try to give long answers to run out of time. They knew how to evade. And they knew how to give no answers. Bezos, at one point, uttered the words “I don’t understand” and I couldn’t help but find the irony in that. Antitrust is complex. The way these companies build moats around them is so brilliant, and sometimes ruthless, that it’s hard to believe that Bezos could get lost after something. But in this audience, all four CEOs seemed lost.
Perhaps the most heartbreaking moment in the hearing was when Democratic Rep. Lucy McBath of Georgia played a recording of a small textbook vendor who was crushed by Amazon when her business grew large enough to compete with Bezos’.
“They never gave us a reason. Amazon didn’t even give us notice why we were being restricted. There was no warning, there was no plan.” And confronted with the recording, Bezos had no words of explanation.
Because we are here
Now he may be saying to himself, “But Linette, if we don’t have these great companies, how will we compete with the great companies in China and elsewhere?”
And I tell you, we cannot compete against anyone unless we are competing against ourselves, here in the United States. What these companies do when they crush their competitors (weakening them, or copying them, or burying their technology after an acquisition) entrench these companies. And the more ingrained they are, the less innovative they have to be.
Perhaps, for example, if there was a competitor on Facebook with a news source that did not sell lies and outrages, we could choose to go to that competitor, but we cannot buy Facebook Instagram and WhatsApp. Zuckerberg called it a “digital land grab”.
The United States economy is not intended to be a land grab for the rich and powerful. It is intended to be an equal playing field, where talented and dedicated people can innovate their path to success. Even more critical than that, our country is struggling with the kind of power that these companies can wield. When our antitrust laws were written in the 1890s and revised again in the 1930s, our leaders understood that once businesses became huge, they could capture politics and run this nation.
“We must not tolerate oppressive government or industrial oligarchy in the form of monopolies and cartels,” wrote Henry Wallace, vice president of Franklin Delano Roosevelt, in a 1944 essay on the dangers of fascism.
“As long as scientific research and ingenious ingenuity exceed our ability to design social mechanisms to raise 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 area of freedom of the United States to increase. “
There is a feeling in this country that freedom is diminishing, that power is in the hands of a few, and that their voices are more important than those of many. Even Congressman Sensenbrenner, the ranking member who seemed confused during an important part of the audience, asked the government to review the mergers that made these companies so dominant. He said everyone makes mistakes, and regulators probably made them there. Expect the report this subcommittee released on its findings to contain damning emails and other information on how these powerful people have amassed power and used it to make it virtually impossible for anyone else to compete.
It is time for the American people to understand why their sense that something is very wrong is valid and where it comes from, so that we can change it.
