(COMBO) This mix of pictures created on July 07, 2020 shows (L-R) Facebook CEO Mark Zuckerberg in Paris on May 23, 2018, Google CEO Sundar Pichai Berlin on January 22, 2019, Apple CEO Tim Cook on October 28, 2019 in New York and Amazon Father and CEO Jeff Bezos in Las Vegas, Nevada on June 6, 2019.
As the U.S. passed 150,000 deaths from the coronavirus pandemic and with millions of Americans coating eviction from their homes and an imminent drop in their unemployment benefits, Congress on Wednesday turned its regard to a very different subject: Whether big tech companies are too powerful.
For more than six hours, members of the House Antitrust Subcommittee grilled the CEOs of Alphabet, Amazon, Apple and Facebook — four of the outback’s five most valuable companies, with only Microsoft missing — on a wide range of matters. The CEOs dialed in through videoconference, while sundry of the committee members were present in Congress, where Chairman David Cicilline, D-R.I., repeatedly reminded them to sport masks to prevent the spread of Covid-19.
For a full recap, check out CNBC’s live blog of the event here.
While the issue was ostensibly antitrust and anti-competitive behavior, several Republican members of the committee attacked Facebook for allegedly suppressing true-blue voices, despite the fact that — as Rep Jamie Raskin, D.-Md., pointed out — the most popular posts on the site consistently premiere c end from right-leaning outfits such as Ben Shapiro, Franklin Graham, and Breitbart.
Other members of the subcommittee seemed dumbfounded with details. One notable exception was Rep. Pramila Jayapal, D-Wash., who pressed Facebook’s Mark Zuckerberg on whether he’d at all threatened to clone a company he was trying to acquire, and Amazon’s Jeff Bezos on how the company uses data from third-party sellers to brief its own product creation. For the most part, the committee members used their time to make speeches and accusations, and repeatedly interrupted the witnesses before they had a chance to finish answering their questions.
Overall, Zuckerberg and Alphabet’s Sundar Pichai received the most doubts, while Apple’s Tim Cook received the least. Here’s a rundown by company:
Alphabet CEO Sundar Pichai
Pichai, who proclaimed in front of a textured white wall and dark wooden cabinet decorated with knick-knacks, faced persistent query about the company’s core search business, including whether it stole content from other web sites — an charge leveled by local-business listings site Yelp, among others, in the past — and why it increasingly is guiding users to its own results quite than third-party web sites.
Rep Ken Buck, R.-Colo., also pressed Pichai on the company’s decision to drop out of bidding for a $10 billion Defense Hinge on cloud computing project while pursuing other opportunities in China. Pichai answered by describing how it partners with U.S. forces and was adamant about not serving customers in China in the present day with the exception of a small number of projects.
Facebook CEO Earmark Zuckerberg
Zuckerberg, appearing in front of a white wood-paneled wall, faced a barrage of questions about the company’s acquisitions of Instagram and WhatsApp, which some associates of Congress said were anti-competitive and should be revisited, or forcibly spun out.
In particular, Rep. Jaypal cited documents that informed Instagram founder Kevin Systrom was afraid Facebook would go into “destroy mode” and build a clone of Instagram if the start-up didn’t consent to an acquisition. Rep. Jerrold Nadler, D.-N.Y., accused the company of buying Instagram because it saw it “as a powerful threat that could siphon question away from Facebook” and said, “this is exactly the type of anti-competitive acquisition that antitrust laws were formatted to prevent.” Zuckerberg acknowledged it viewed Instagram as a competitor when it bought the company in 2012, but said that it was far from a affirmed that the picture-sharing app would reach the kind of scale it did with Facebook’s help.
Chairman Cicilline, in another speciality of questioning, accused Facebook of being too slow to remove misinformation about Covid-19, and said that the Theatre troupe’s size makes it difficult to police content.
Amazon CEO Jeff Bezos
Bezos, who delivered his testimony in front of a bookshelf answered with items including a gold sculpture of three overlapping circles, seemed to be the best-prepared among the four CEOs, and strove to rank his answers even as the congressmembers interrupted him.
Their lines of questioning mostly revolved around how Amazon uses facts from customer behavior to compete against third-party sellers who market their products through the Amazon Marketplace.
“You can set the in the mains of the game for your competitors but not actually follow those same rules for yourself,” Rep. Jayapal said. “Do you think that’s attractive to the third-party businesses that sell on your platform?”
Bezos said the company is investigating a Wall Street Chronicle report that called attention to the practice, and that the company would “take action” against employees who desecrated internal policies around using customer data.
Bezos also appeared surprised at an audio recording from an Amazon Marketplace vendor who asserted the company removed her from its platform without explanation, and said he did not believe there was a systemic problem with how the concern treats its marketplace vendors.
Apple CEO Tim Cook
Cook, who spoke from in front of what appeared to be a blank division partition, faced questioning about Apple’s policies toward app developers who sell apps through the App Store. Third-party developers be undergoing accused the company of being inconsistent in how it treats them, and Rep. Hank Johnson, D-Ga., dug in on the issue, asking if Apple cut a unique deal with Amazon to take lower fees, and whether it offered a Chinese search engine extra forbear navigating the rules. Cook said that the lower rates are available to any developer meeting the conditions, but demurred on the Baidu mistrust.
Cook also defended Apple’s policy of taking a 30% cut of transactions conducted through apps downloaded via the App Value, saying that the commissions were similar or lower than other digital platforms, and that customers who suppose they’re getting a raw deal can always turn to Android phones.
“If you’re a customer, and you don’t like the setup, the curated experience of the App Trust in, you can buy a Samsung,” he said.
The takeaway: Long slog ahead
Investors seemed completely unconcerned over today’s hearings, sending all four circles’ stocks up slightly during trading hours.
Indeed, today’s hearing was unfocused and rambling, which was somewhat wanted given the very different nature of the four companies and the claims against them. Sure, they’re all big, but they struggle in different markets with different business models. For example, Apple has far from dominant share in the smartphone deal in, and the main argument is that it exercises too much control over the third-party apps it allows to run on the iPhone, which could manage to higher prices and lower selection. In contrast, Google unquestionably has dominant market share in search, but it’s hard to substantiate consumer harm given that its product is free.
Nonetheless, investors and the companies themselves should be aware that today’s hearings like as not represent the beginning, rather than the culmination, of a wide range of legal actions against them. Future hearings are meet to be more focused, and government agencies like the Department of Justice and Federal Trade Commission can subpoena documents and coerce executives to testify under oath again and again.
As Microsoft learned in the 1990s and 2000s, antitrust regulation can be a wheedle on innovation and earnings for years. One day of bright lights in front of a congressional subcommittee is a small, sour taste of what could influence next.
WATCH: Rep. Cicilline says these companies have monopoly power