After an understandable delay, a change of venue, and no small amount of prodding, four of the most recognizable business magnates in the U.S. are set to explain to lawmakers just how, exactly, they became so powerful. Yes, it’s a big deal, and not just because it will be Jeff Bezos’s first time being personally grilled by Congress.
Mark Zuckerberg (Facebook), Tim Cook (Apple), and Sundar Pichai (Alphabet/Google) have all previously answered for their infractions, real or imagined, in the past, before a variety of governmental bodies. Some of those hearings have been pure political theater; others have led to hefty if inadequately punitive fines. The purpose of Wednesday’s hearing, however, is to determine if these four companies, worth a combined total of some $5 trillion—and ostensibly tech giants generally—have grown too big, too fast, and to the detriment of smaller rivals and consumers.
How did we get here?
Investigations into potential antitrust enforcement against Amazon, Google, Facebook, and Apple began over a year ago. Announced by David N. Cicilline, a Rhode Island Democrat and head of the House’s Antitrust Subcommittee, on June 3, 2019, the purpose of the inquiry wasn’t merely to determine if Big Tech had been engaging in anti-competitive behavior, but to suss out “whether existing antitrust laws, competition policies, and current enforcement levels are adequate to address these issues.” (In this writer’s humble opinion: no, they are not.)
Between then and now, Cicilline’s investigation has gathered some 1.3 million supporting documents and reams of testimony, some of which is believed to be made public for the first time during the hearing. According to the Washington Post, “lawmakers plan to produce a report in coming months that some party leaders expect will find the industry has skirted federal competition laws.”
Is Jack Dorsey going to be there?
What? No.
But Jim Jordan wrote that letter
Per Cicilline’s spokesperson: no. Although Republicans are almost guaranteed to bring up supposed bias against conservatives on social media as a distraction from the antitrust issues at hand. (Rep. Matt Gaetz, a committee member and pseudo-father to a large adult son, sent a letter to the Justice Department on Monday demanding a criminal investigation into Zuckerberg for allegedly lying to Congress in 2018 about anti-conservative content moderation, so buckle up for him yammering about that.) Did you have other questions? I do have other things to do today.
OK, OK. How are these rich guys going to wriggle out of this one?
Fair enough, their track record of facing meaningful consequences is less than ideal...
We can’t predict the future, and we don’t have opening statements from these CEOs just yet. However, sources told Bloomberg they believe Zuckerberg’s gambit will hinge on an appeal to xenophobia, essentially arguing that any weakening of U.S. tech companies will necessarily strengthen the position of Chinese ones.
Historically, tech giants often claimed to be an engine of innovation and economic growth for the country and will likely continue to flaunt those alleged bona fides, though those arguments ring more hollow every year the tech industry has ossified into the same few monopolies.
What kind of dirt does the Committee have on these guys, anyway?
Glad you asked! As mentioned, some of it is likely to come out day-of, but reporting suggests at least some of the offensive will focus on the propensity for tech giants to buy up or steal features from smaller upstarts. Take Facebook, for example, which used its financial advantage to purchase Instagram for $1 billion 2012 (last year the app raked in around $20 billion in ad revenue). It then deployed the second strategy of “borrowing” features to enhance Instagram, such as impermanent “stories” and face filters, from Snapchat, which had famously turned down purchase offers from Facebook, twice.
Amazon, too, has been accused repeatedly of reverse engineering rivals and integrating copycat products into the cloud suite of their web hosting, Amazon Web Services. Likewise, it’s been claimed the company uses the sales data from its ecommerce arm to inform which products it makes competing white-label versions of, under brands like Amazon Basics.
Not to mention the billions of dollars in less-familiar acquisitions these companies have made to buy up promising back-end tech or to “acqui-hire” talent. According to Crunchbase, those acquisition numbers are:
Seems hard to argue that buying up 500+ companies wouldn’t have some sort of impact on competition...
And that’s not even considering strategic investments, partnerships, and the myriad other ways these companies make themselves unavoidable.
What about Apple and Google?
Google is expected to face scrutiny about the iron grip it holds on advertising and search—an antitrust concern already shared by 50 attorneys general who are pursuing a case to that end. Apple is likely to answer for rent-seeking practices surrounding its App Store, a walled garden that currently takes a 30% cut of revenues from developers, while being the only way to install new software onto iOS devices.
Again, a lot of this is informed speculation and more is likely to come to light during the hearing itself.
Why isn’t Microsoft going to be there?
Honestly, I’m not sure, and neither is anyone else. Brad Smith, Microsoft’s president, gave testimony to the Antitrust Committee, according to reporting from The Information, some of which involved the company’s concerns about Apple. But for whatever reason, Microsoft managed to dodge this particular bullet.
Should I know anything about who’s doing the questioning?
Governance only really works if you participate in it actively. But to your point—here’s the members of the House Antitrust Committee.
- David Cicilline (D-RI, Chair)
- Joe Neguse (D-CO, Vice Chair)
- Hank Johnson (D-GA)
- Jamie Raskin (D-MD)
- Pramila Jayapal (D-WA)
- Val Demings (D-FL)
- Mary Gay Scanlon (D-PA)
- Lucy McBath (D-GA)
- Jim Sensenbrenner (R-WI, Ranking Member)
- Matt Gaetz (R-FL)
- Ken Buck (R-CO)
- Kelly Armstrong (R-ND)
- Greg Steube (R-FL)
Worryingly, as Business Insider pointed out last week, Sensenbrenner owns stock in all four companies, at a combined value of over $98,000. This, for reasons inconceivable to me, is somehow not illegal. And at this time, it doesn’t appear Sensenbrenner intends to recuse himself from the hearing.
Yikes. But wait, they’re not going to all pile into a big room in DC, right? Last I heard there was still a pandemic.
We should be so lucky. Nope, the hearing will be conducted over teleconferencing software. This year doesn’t provide much hope in the best possible outcomes, but if all goes well, the virtual hearing will result in fewer bloviating interruptions, and at least one SCOTUS-style gaffe.
My bet is on Bezos forgetting to mute while loudly watching porn.
It’s your money. I can’t tell you what to do with it.
At least let a cat or a baby wander into frame. Literally anything. I’m so starved for dopamine.
Do you want to find out how to watch it or not?
Yeah, fine...
Don’t sound too excited.
Here’s the YouTube stream. It’s scheduled to start at 9am Pacific/12am Eastern, Wednesday, July 29.
I feel tired now
Me too.