Antitrust Hearings, a summary

More than five hours after they commenced, the historic hearings of the biggest tech companies in the world over antitrust concerns have come to an end. Here are some highlights from the long day:

• Apple, Google, Facebook, and Amazon were represented by their CEOs at the hearing.
• Lawmakers cited “millions” of pages of evidence from years of antitrust investigations into these companies. Throughout the hearing, they brought up information gleaned from internal documents and conversations with anonymous sources in side the tech companies.
• Democratic lawmakers remained largely focused on antitrust issues, including market share and anti-competitive business practices while Republican lawmakers often zeroed in on perceived biases against conservatives on big tech platforms.
• Facebook faced most intensive criticism over its acquisition of Instagram.
• Apple faced most intensive criticism over its App store and whether it blocks competitors from using it.
• Google faced most intensive criticism over its advertising policies and its treatment of competitors.
• Amazon faced most intensive criticism over how it treats third-party brands on its site and whether it collects information from them and uses it to develop competing products (a practice that was reported on in April by the Wall Street Journal).
• Representative Cicilline closed the hearing with a dramatic statement that seemed to suggest legislative action would be coming for the companies who participated today. “These companies as they exist today have monopoly power,” he said. “Some need to be broken up, all need to be properly regulated and held accountable.”

Whew boy, we are done! The hearing closed with a powerful statement from Rep. Cicilline on his conclusions from the antitrust investigations.

“These companies, as they exist today, have monopoly power,” he said. “This must end.”

Here is a video of the emotional testimony played in today’s antitrust hearing, in which a book seller explains how her small business was throttled by Amazon.

Representative Jayapal has some pointed questions for Pichai about Google’s dominance in the advertising space. She laid out the data showing Google controls up to 90% of the market.

“The problem is that Google controls all of these entities, so it’s running the marketplace,” she said. “It’s acting on the buy side and the sell side at the same time, which is a major conflict of interest.”

In another bizarre diatribe suggesting anti-conservative bias, Rep. Jordan said many people are experiencing a “cancel culture” mob online in which they are “canceled” or intensely criticized for their beliefs.

He cited the resignation of writer Bari Weiss from the New York Times over her views on the topic.

So, here are the various executives’ views on “cancel culture” because these are the strange times we live in today.

Bezos: “It appears to me that social media is a nuance destruction machine and I don’t think that’s helpful for a democracy.”

Cook: “If you’re talking about where somebody with a different point of view talks about it and they’re canceled. I don’t think that’s good. I think it’s good for people to hear different points of view and decide for themselves.”

Zuckerberg: “I believe strongly suppression giving people a voice is an important part of what our services do and I am worried about some of the forces I see pushing against free expression. I think that this is one of the fundamental democratic traditions that we have in our country.”

Pichai: “We take pride in the fact that across all platforms including YouTube, there are more diverse voices than ever before. I’m concerned about not just conservatives getting attacked, I’m concerned when anyone gets attacked for expressing a viewpoint.”

Representative Gaetz keeps asking pointed questions about perceived anti-conservative bias among tech companies.

He claims the Southern Poverty Law Center, an anti-hate group, is a hate group and asks Bezos why Amazon is partnering with them.

After being repeatedly badgered over it, Bezos caves and says he would “like to partner with a better source if we could get it,” all but denouncing the Southern Poverty Law Center.

Representative Greg Steube asked each executive to answer whether they believe China steals technology from US firms. Answers varied.

Representative Cicilline goes head to head with Zuckerberg over Facebook’s handling of hate speech and misinformation.

He said Facebook’s dominance is “not just harmful to our economy and competition but it’s harmful to the founding principles of our democracy” because of these issues.

Cicilline cited specific examples, particularly that the top ten most shared articles on Facebook in 2020 were rife with misinformation and propaganda - particularly relating to coronavirus.

“Don’t you agree that these articles are viewed by millions on your platform cost lives?” Cicilline asks.

Representative Lucy McBath of Georgia asks Tim Cook whether Apple has the power to exclude apps from the App Store.

She shows the examples of Apple’s proprietary Screen Time apps overtaking parental control apps in the app store. When the app was introduced, Apple removed a number of competitors on the app store due to alleged privacy violations.

“The timing of the removal seems very coincidental if Apple wasn’t attempting to harm competitors in order to help its own product,” she said.

She also cited the example of Random House Books, which said it wanted to build its own book app but found Apple blocked it from being released in the store. Meanwhile it had tried to pressure the publisher to join Apple’s proprietary app iBook. McBath concludes:

Our evidence suggests that your company has used its power to harm your rivals and boost your own business. This is fundamentally unfair harms small businesses that rely on you to reach customers and stifles innovation. that is the lifeblood of our economy, ultimately, reduces the competition and choices that are made available to consumers.

Representative Gaetz is back with another line of questioning insinuating anti-conservative bias from Facebook.

That’s all I will say about that as the argument was fairly hard to follow.

Representative Val Denings of Florida asks Zuckerberg about other ways Facebook has gone after large competitors.

She cited Facebook blocking Pinterest from using its technology to share content. Zuckerberg essentially admits to it - a key distinction in the antitrust debate.

We are back after a brief recess.

Representative Kelly Armstrong of North Dakota asks Bezos about Digital Millennium Copyright Act (DMCA) complaints relating to music used on Twitch. It has been reported that Twitch users have been blindsided by requests to remove music from their videos.

Bezos acts as though he is completely unaware of the problem and, potentially, how Twitch even works.

Hank Johnson of Georgia asks Bezos about counterfeit products on Amazon, saying the company tries to avoid responsibility for third party sellers on its platform while also putting the cost burden on these third parties to police the site.

Bezos said Amazon does a lot to prevent counterfeiting, and has invested hundreds of millions of dollars in systems to detect counterfit products.

The hearing will take a brief recess now.

Representative Jerry Nadler addresses the issues Facebook and Google have caused in the media industry.

“Facebook and Google have greatly threatened journalism in the United States. Reporters have been fired, local newspapers have been shut down,” he said. “This is a very dangerous situation.”

Specifically he asked Zuckerberg about accusations Facebook overstated the success of videos posted to its social network, leading many media companies to beef up their video teams. When the inflated numbers never came to fruition, the pivot cost hundreds journalists their jobs.

“Do you realize the harm this caused journalists across the country?” he asked.

Zuckerberg claimed he did not know these numbers were inflated. “We regret the mistake”, he said.

Representative Jamie Raskin of Maryland goes in on Bezos over Amazon’s market share in the smart home space, specifically given the ubiquity of its smart speaker Alexa.

He said Alexa is often heavily discounted and suggests it is pushed on consumers as a means to continue pushing Amazon products long term. Raskin notes that when he asks Alexa to buy batteries, the assistant first suggests Amazon-brand batteries. Raskin asks: Alexa trained to favor Amazon products?

“I don’t know if it’s been trained in that way,” Bezos said. “I’m sure there are cases where we do promote our own products is of course a common practice in business so it wouldn’t surprise me if Alexa sometimes does promote our own products.”

Raskin also noted Amazon’s continued acquisition of other market shares. He reads an email Bezos sent to staff when buying smart doorbell Ring:

“We’re buying market position not technology, and that market position and momentum is very valuable.” Ring now has more than 1,000 partnerships with local police forces.

Representative Jayapal returns to intensive questioning of Zuckerberg over anticompetitive practices including acquiring competitors or threatening them.

She cited Instagram’s acquisition as an example, reading evidence gathered that Instagram founder Kevin Systrom said he was afraid of Zuckerberg and how Facebook would respond if he declined to sell the platform. Jayapal’s closing comment was a zinger:

Facebook is a case study, in my opinion, in monopoly power. Because your company harvests and monetizes our data, then your company uses that data to spy on competitors and to copy, acquire, and kill rivals. You’ve used Facebook’s power to threaten smaller competitors and to ensure that you always get your way. Facebook’s very model makes it impossible for new companies to flourish separately, and that harms our democracy, it has harms mom and pop businesses and it harms consumers.

Representative Lucy McBath of Georgia in her questioning played a recording from a book seller who sold books on Amazon and felt her sales were throttled by Amazon. In the recording, she pleads with Bezos to help her company.

Many advocates for small businesses praised the tactic, noting that it is rare to see Bezos confronted with the impact of his business.

Bezos was also faced with criticisms that third party sellers have extreme difficulty contacting anyone at the company when they have problems selling on the platform.

One seller quoted even compared Amazon to a drug dealer, saying “because you just kept going and you had to get your next fix, but at end of the day you find out that this person was seemingly benefitting is ultimately going to be your downfall.”

In fact, there is a whole industry dedicated to helping these sellers when Amazon will not.

Representative Joe Neguse asks Zuckerberg about Facebook’s acquisitions of other companies and competitors, citing the purchases of Instagram and Whatsapp as examples.

He asked Zuckerberg about an email he sent that was discovered in the investigation, in which Zuckerberg wrote: “I can just buy any competitive startup - but it’ll be a while before we can buy Google.”

“I don’t recall specifically, but it sounds like a joke,” Zuckerberg said.

Neguse said Facebook’s market share in the last several years is “not a joke.” The company has used that power to “either purchase or replicate the competition”.

“Facebook, Facebook Messenger, WhatsApp, and Instagram, are the most now downloaded apps of the last decade, and your company sir owns them all,” he said. “We have a word for that, and that word is ‘monopoly.’”

A verbal scuffle breaks out on the floor when Representative Mary Gay Scanlon opened her questioning with a sharp criticism of Steube and other Republicans.

“I’d like to redirect your attention to antitrust law rather than fringe conspiracy theories,” she said.

She again questioned Amazon over its strategies to overtake competitors, using an example of diaper sales as an example.

In a strange exchange, yet another congress member has targeted the tech executives over supposed anti-conservative bias.

Representative Greg Steube asked Sundar Pichai why his campaign emails are being sorted into the Spam inbox on his parents’ Gmail accounts. He claimed it was an anti-conservative conspiracy.

“This is appears to only be happening to conservative Republicans,” he said. “I don’t see anything in the news or anything in the press or members on the other side of the aisle talking about their campaign emails getting thrown in junk folders in Gmail - so my question is is why is this only happening to Republicans?” he asked.

Pichai said “there is nothing in the algorithm that has to do with political ideology”.

A report from the Markup published in February found many political candidates - both conservative and progressive - find that Google’s algorithm sends their emails to Spam or to other inboxes.

Upon return from the recess, finally a question for Bezos. Rep. Pramila Jayapal asks if Amazon accesses data from third parties to sell its own brands, asking Bezos for “a yes or no” answer.

Bezos gives a rambling response, declining to deny or confirm the allegation.

Jayapal notes that an April 2020 investigation from the Wall Street Journal found evidence that Amazon does engage in such anticompetitive practices. Amazon has access to data that “far exceeds” the sellers on the platform with whom it competes, the report found.

“So you can set the rules of the game for your competitors, but not actually follow those same rules for yourself,” she said. “Do you think that’s fair to the mom and pop third party businesses who are trying to sell on your platform?”

Another flashpoint in the first hours of the hearing - and one that arguably does not have to do with antitrust - was questions from Matt Gaetz of Florida regarding whether Google will continue to work with police despite backlash.

Pichai said Google has no plans to end police contracts. “Congressman, we are committed to continuing to work with law enforcement,” he said.

The hearing calls a ten minute recess to address technical issues - apparently related to Amazon’s feed. Maybe that’s why Bezos hasn’t been asked much yet.

Now Zuckerberg is being asked about the Cambridge Analytica scandal and hate speech on the platform.

He is asked about the recent boycott of Facebook by advertisers over hate speech.

“We’re very focused on fighting against hate speech and our commitments to those issues and fighting them go back years before this recent movement,” he said. “Since 2016, the defenses that the company is built out to help secure elections in the US and around the world.”

Apple CEO Tim Cook is addressed by Representative Hank Johnson of Georgia, who asks how Apple can so closely control its App Store without participating in anti-competitive behavior.

He said during the antitrust investigation Congress members heard concerns that rules governing the App Store review process are not available to the app developers.

“The rules are made up as you go and subject to change - and Apple expects developers to go along with the changes or leave the app store,” Johnson said. “That’s an enormous amount of power.”

Cook repeated his claims that the App Store is not a monopoly because it does not charge the vast majority of apps to list there. He said 84% of apps are not charged anything and Apple has not increased commissions on apps since 2008.

In the first few hours of testimony, Jeff Bezos has not yet been asked a single question. Poor Jeff!

Rep. Ken Buck of Colorado opens his questioning with a grand statement: “Capitalism is the greatest tool for freedom the world has ever seen,” he says, apropos of nothing.

He then criticizes Google for withdrawing from a $10bn Pentagon contract because it “does not align” with Google’s values while working on government projects in China, like the controversial project Dragonfly- a search engine that would work with the Chinese government.

“What values do Google and communist China have in common?” he asked executive Sundar Pichai.

Representative Sensenbrenner launches again into his concerns about anti-conservative bias on social platforms, asking Zuckerberg why conservatives are “censored” on Facebook.

“Conservatives are consumers too,” he said.

He specifically asked Zuckerberg why Donald Trump Jr. was removed from the platform for sharing a video containing false information this week. Zuckerberg politely explained to the representative that it was Twitter that limited Trump’s account for posting the video.

The video in question was, however, removed from Facebook though no accounts sharing it were censored. Sensenbrenner asked Zuckerberg why the video, which made baseless claims about coronavirus, was removed. He said people should be allowed to share posts that hail hydroxychloroquine as a “cure” for coronavirus even though the drug has not been found to be an effective treatment.

Zuckerberg said the video violates Facebook’s safety policies, which “prohibit content that will lead to imminent risk of harm”.

“Stating that there is a proven cure for Covid when there is in fact not might encourage someone to go take something that could have some adverse effect, so we do take that down,” he said.

Zuckerberg, as he often does in Congressional hearings or when faced with criticism about accuracy on Facebook repeated his go-to line: “We do not want to be the arbiters of truth,” he said.

Finally Mark Zuckerberg provides his opening statement, attempting to set Facebook apart from the other companies on the stand today.

He said acquiring other companies like Instagram is not monopoly behavior.

“Facebook stands for set of basic principles, giving people voice and economic opportunity, keeping people safe upholding democratic traditions like freedom of expression and voting and enabling an open and competitive marketplace,” he said.

Read Zuckerberg’s full testimony here.

Tim Cook up next, arguing Apple does “not have a dominant market share” in any market where it does business. He addresses recent criticism that the rules surrounding Apple’s App Store unfairly charges companies to list apps.

“After beginning with 500 apps, today the App Store hosts more than 1.7 million – only 60 of which are Apple software,” Cook’s he said. “Clearly, if Apple is a gatekeeper, what we have done is open the gate wider. We want to get every app we can on the store, not keep them off.”

Read his full testimony here.

Sundar Pichai of Alphabet is up next. He highlighted free tools used by teachers during the pandemic and said this “would not be possible without the long tradition of American innovation”.

He also mentioned Android as a platform that allows innovation of others. Pichai’s full testimony is here.

Following a tussle between Jordan and Cicilline, the tech executives were sworn in via video chat before giving their testimonies.

Bezos was up first, talking about his background with an immigrant father and a teenaged mother. He talked about using his parents’ life savings to start Amazon out of his garage in 1994.

“Unlike many other countries around the world, this great nation we live in supports and does not stigmatize entrepreneurial risk-taking,” he said.

He notes Amazon’s minimum wage is $15 an hour – double the national minimum wage, and that Amazon has invested “more than $270bn in the US over the last decade”.

Bezos stresses that Amazon has plenty of competition – including Walmart, which is twice Amazon’s size.

You can read the full testimony submitted by Bezos here.

Republican Jim Jordan of Ohio launched into a tirade about alleged discrimination of technology platforms against conservatives.

“I’ll just cut to the chase, Big Tech is out to get conservatives - that is a suspicion, not a hunch,” he said, before listing alleged examples of anti-conservative bias on social media platforms, including the removal of right wing news website Breitbart, donations from Google employees to then presidential candidate Hillary Clinton in 2016, and Twitter removing posts from Donald Trump calling for violence against protestors.

Jordan also became agitated when discussing unfounded reports of being “shadowbanned” by Twitter, in which he claims the platform demoted his tweets to make them less visible in the feeds.

It is unclear how much of this stems from Jordan’s personal beef with Twitter and how much is genuinely related to an antitrust hearing.

Now Republican representative Jim Sensenbrenner of Wisconsin is providing additional opening statements. He echoed many of Cicilline’s sentiments, saying the pandemic has underscored Americans’ reliance on these tech companies and with that dominance comes “increased scrutiny”.

He also put forward claims often repeated by Republican lawmakers – including Donald Trump – that big tech has an anti-conservative bias. Sensenbrenner said he is concerned “market dominance in the digital space is ripe for abuse, particularly when it comes to free speech.”

“Reports that dissenting views – often conservative views – are targeted or censored is seriously troubling,” he said. “Conservatives are consumers too.”

And we’re off! The hearing has started as of 1.10 pm EST.

House antitrust chair David Cicilline kicks off the hearing explaining the intensive antitrust investigations and information gathering that leading up to the hearing, stressing that the effort has been bipartisan “from the beginning.”

The investigation of these companies included “millions of pages of evidence” from the firms and submissions of “more than 100 market participants,” he said. There were also five hearings held to examine the effects these companies have on the market, as well as 17 briefings and roundtables with 35 experts and stakeholders.

The CEOs will be “appearing” in Congress today remotely, using Cisco’s Webex videoconferencing platform, according to the New York Times.

Three of the four companies represented on Wednesday - Apple, Facebook, and Google - have their own video-calling software, none of which will be used in the hearing.

Webex has been the standard videoconferencing tool used by Congress since remote work began due to the coronavirus pandemic. It has been certified for security by the House’s administration committee.

Donald Trump tweeted ahead of the hearing on Wednesday threatening to take action if “Congress doesn’t bring fairness” to big tech.

The president has frequently criticized tech companies, especially as Twitter and Facebook have made recent attempts to fact check the president and remove false statements from his account.

The hearing has been delayed until 1 pm EST/10 am PST.