The leaders of Amazon, Apple, Facebook and Google took a brutal political lashing Wednesday as Democrats and Republicans confronted the executives for wielding their market power to crush competitors and amass data, customers and sky-high profits.
The rare interrogation played out over the course of a nearly six-hour hearing, with lawmakers on the House’s top antitrust subcommittee coming armed with millions of documents, hundreds of hours of interviews and in some cases the once-private messages of Silicon Valley’s elite chiefs. They said it showed some in the tech sector had become too big and powerful, threatening rivals, consumers and, in some cases, even democracy itself.
“Our founders would not bow before a king. Nor should we bow before the emperors of the online economy,” said Rep. David N. Cicilline (D-R.I.).
Cicilline, the chairman of the antitrust panel, opened a congressional investigation of Amazon, Apple, Facebook and Google last year, aiming to explore whether the tech industry’s most influential quartet of companies had attained their status through potentially anti-competitive means. In response, the four chief executives — Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai — took the witness stand to fiercely defend their businesses Wednesday as rags-to-riches success stories, made possible only through American ingenuity and the sustained support of their ever-growing customer bases.
But lawmakers repeatedly presented a different vision at their hearing, one in which Silicon Valley’s myriad advancements in commerce, consumer electronics, communication and a vast array of online services had come at an immense cost to the people who use those tools and the companies that seek to compete against the tech giants.
In exchanges likely to have lasting resonance, Democrats repeatedly confronted Facebook’s Zuckerberg with his own past emails. Rep. Jerrold Nadler (D-N.Y.), the top lawmaker on the House Judiciary Committee, brought up a 2012 message in which Zuckerberg apparently said he sought to acquire Instagram, which at the time was a rival photo-sharing app, out of fear that it could “meaningfully hurt us.” Later, Rep. Joe Neguse (D-Colo.) pointed to other Facebook communications that described the company’s acquisition strategy generally as “a land grab.”
“Mergers and acquisitions that buy off potential competitive threats violate the antitrust laws,” Nadler charged. “In your own words, you purchased Instagram to neutralize a competitive threat.”
“We compete hard. We compete fairly. We try to be the best,” Zuckerberg said earlier in the hearing.
Amazon, meanwhile, faced withering scrutiny over allegations it may have misled the committee. The e-commerce giant previously told lawmakers it does not tap data from third-party sellers to boost sales of its own products. But Democratic Rep. Pramila Jayapal (Wash.) brought up public reports that indicated to the contrary, prompting Bezos — delivering his first-ever testimony to Congress — to offer a striking admission of potential fault.
“What I can tell you is we have a policy against using seller-specific data to aid our private label business,” he said. “But I can’t guarantee you that policy has never been violated.”
For all four executives, the afternoon offered an abundance of additional uncomfortable clashes, laying bare the broad, bipartisan frustrations with the way Silicon Valley puts users’ privacy at risk, polices content online and hurts competitors, including small businesses that have told lawmakers they cannot hope to compete with these tech giants. On several occasions, lawmakers cut off or talked over the tech executives when they offered vague or long answers, seeking to hold them to account for the evidence investigators had gathered from their probe.
Republicans, meanwhile, largely used their time during the hearing to attack some tech companies for engaging in perceived political censorship against conservatives, a charge that the industry vehemently denies.
“We all think the free market is great. We think competition is great. We love the fact that these are American companies,” said Rep. Jim Jordan (Ohio), the top Republican on the House Judiciary Committee. “But what’s not great is censoring people, censoring conservators and trying to impact elections. And if it doesn’t end, there has to be consequences.”
Despite scattered outbursts of political theater, the hearing could carry immense weight at a time when Amazon, Apple, Facebook and Google have lost support among both political parties — while also facing a slew of investigations around the world. In the United States, the Department of Justice may file an antitrust lawsuit against Google as soon as this summer, The Washington Post has previously reported, with cases against other companies potentially further on the horizon.
Cicilline, for his part, is expected to issue a report in August outlining the case for updating federal competition rules that would give regulators more power to probe and penalize the industry. The fruits of his investigation could offer Congress one of the first major actions it can take if it aims to rein in big tech.
Amazon, Facebook and Google turn to deep network of political allies to battle back antitrust probes
The four companies’ leaders began Wednesday by raising their right hands and taking the customary oath to deliver truthful testimony from the west coast. Videoconferencing software helped beam the typically made-for-television moment into a sparsely attended, windowless congressional committee room thousands of miles away from the country’s tech heartland.
Each of the tech executives took great pains to stress their contributions to the U.S. economy. Amazon described itself as one of the most popular consumer brands, where consumers can get their goods quickly and cheaply. Apple said it had enabled a wildly popular ecosystem of apps and widely prized, high-end phones to match. Facebook said it had stood for free expression and speech against a rising tide of international censorship, pointing to new competitors including TikTok. And Google said its tools made it possible for people to find information and businesses worldwide to grow.
Quickly, though, Democrats on the House’s top antitrust committee sought to unspool the circumstances behind the four tech giants’ successes.
Some lawmakers specifically accused Google of weaponizing its popular search engine to put rivals at a disadvantage. Cicilline specifically charged Google had “stolen content to build your own business,” citing its practice of culling and displaying information at the top of users’ search results.
Google historically has said its approach to search helps people find the answers they need or the products they’re looking for. In the case of Yelp, though, Cicilline questioned Google’s motives, stressing the search giant had stolen its restaurant reviews and threatened to “delist” the site when it complained. Cicilline also accused Google of monitoring web traffic to “identify competitive threats.”
“Our documents show that Google evolved from a turnstile to the rest of the web to a walled garden that increasingly keeps users within its sights,” he said.
Pichai, for his part, disputed the characterization that Google had stolen content and put rivals at a disadvantage. “Today, we support 1.4 million small businesses supporting over $385 billion in their core economic activity,” he said. “We see many businesses thrive, particularly even during the pandemic.”
Texas attorney general, Google’s new competition cop, says everything is ‘on the table’
Cook, the head of Apple, received fewer questions than his counterparts. But several lawmakers peppered him with questions about the way the company handles its App Store — and the companies that have developed competing products or services that Apple also offers.
Some lawmakers repeatedly raised the company’s policy to take up to a 30 percent commission on in-app sales and subscriptions, a fee that has chafed prominent companies including Spotify, who fear they have no choice but to surrender critical revenue to Apple. The iPhone giant maintains the fee essentially funds the entire app ecosystem, and Cook at one point Wednesday told lawmakers the company has not raised its rates since it opened the store in 2008.
But lawmakers later produced a document showing one of Apple’s executives, Eddy Cue, in 2011 had proposed requiring developers to pay more. They posted it online, while in the hearing, Cook generally stressed Apple had no desire to harm developers.
“We do not retaliate or bully people,” he said. “It is strongly against our company culture.”
The Post’s Robin Givhan’s take on the virtual hearing
At Wednesday’s hearing, subcommittee members gave soliloquies while the CEOs sometimes could barely get a word in — even when the audio wasn’t delayed.
The CEOs of the biggest tech companies in the United States spoke of their companies’ modest beginnings, of achieving the American Dream and of the unique wonders of capitalism. Because they didn’t march into the wood-paneled committee room with its high ceiling and leather chairs where they would have been swarmed by a phalanx of photographers and trailed by a clutch of attorneys, the men seemed less consequential than they actually are.
Technology, which has brought them outsize wealth and influence, had the effect of making them appear small and, ultimately, more human. Each was just a lone man in a room talking into a microphone and dealing with audio delay. And even a tech wizard like Jeff Bezos, who owns The Washington Post, sometimes forgot to unmute himself.
Google’s Sundar Pichai was the sleekest of the lot in both appearance and setting. He wore an elegant charcoal suit and matching tie and was well-framed behind a desk that sat in an office that looked like it had been inspired by the West Elm catalogue. He sat with perfect posture, and when he spoke, his gestures were emotive but not frantic. He tended to steeple his fingers as he attempted to answer the House Judiciary subcommittee members’ meandering questions that teetered between privacy issues and conspiracy theories.
Amazon’s Bezos sat in front of a wall of honey-colored shelves with a distinctly mid-century modern feel; Tim Cook of Apple was backed by a low row of green house plants; and Facebook’s Mark Zuckerberg had a plain white background that glowed so brightly it looked as though he were delivering his testimony from the interior of a nuclear reactor.
Cicilline accuses all four tech companies of having monopoly power
Cicilline said that all four companies that testified today are monopolies at the conclusion of a more than five-hour grilling of some of the top technology titans.
“These companies, as they exist today, all have monopoly power,” he said during closing statements. “Some need to be broken up.”
He also suggested that all of the companies need to be regulated. He compared the four chief executives who testified to the modern day versions of Gilded Age tycoons.
“Their control of the marketplace allows them to do whatever it takes to crush independent businesses and expand their own power.”
While speaking to reporters after the hearing, he added that the companies are clearly violating antitrust laws. He said Wednesday’s hearing confirmed evidence that the committee collected in its year-long probe into the companies’ power.
“They’re engaged in behavior that’s anticompetitive, which favors their own products and services, which monetizes and weaponizes data, which compromises the privacy of their users and which creates a competitive disadvantage for companies attempting to enter the marketplace,” he said.
Cook denies copying apps on its platform
In response to a question from Neguse, Cook denied that Apple uses data on its App Store to create competing apps of its own. “We would never steal somebody’s IP,” Cook said.
Apple continues the practice to this day, something generally accepted as normal in the software development industry. As Steve Jobs once said: “We have always been shameless about stealing great ideas.”
Amazon chief executive Jeff Bezos said profits were not as important as getting essential items to customers and protecting its warehouse workers as the coronavirus first raged.
Rep. Mary Gay Scanlon (D-Pa.) questioned Bezos on Amazon’s decision to delay shipment of nonessential products in March, noting that the committee heard from “several employees” that Amazon continued to ship nonessential items like hammocks, fish tanks and pool floaties. She asked Bezos if the company designated Amazon devices such as its Fire TV, Echo speakers and Ring doorbell as essential.
Bezos said he didn’t know the answer.
“What I can tell you is that we had there was no playbook for this,” Bezos said. “We moved very quickly. Demand went through the roof, was like having a holiday selling season but in March, and we had to make a lot of decisions very rapidly.”
And Bezos said profit wasn’t a factor in making those decisions.
“We were working to achieve two objectives. One was to get essential products to customers, and the second was to keep our front-line employees safe,” Bezos said. “We were not focused on profitability that time.”
‘Of course we care’ about advertisers, Zuckerberg says of the advertising boycott
In an exchange with Jayapal, Zuckerberg appeared to grow a bit frustrated with a question about the advertiser boycott Facebook is facing. The lawmaker pointed to a report that Zuckerberg was flippant about the impact of the boycott. She asked whether he was saying he didn’t care about it.
“No, Congresswoman, of course we care” about the advertising boycott, he said. But he said the company would not let advertisers dictate the company’s content policies.
Facebook has conceded to some of the demands of the boycott, including hiring a high-level senior executive dedicated to civil rights, but the organizers say the company has much further to go.
Pichai says he doesn’t know how big Google’s ad share is
Rep. Pramila Jayapal (D-Wash.) dug into Google’s advertising business during the last round of questions in the hearing, kicking it off by asking CEO Pichai what share of the ad exchange market Google controls.
Pichai said he didn’t know.
“I’m not exactly familiar, I’ve seen various reports, but you know, we are a popular choice,” he said.
Jayapal went on to show a report outlining how Google controls a majority of both sell-side advertising and buy-side. Lawmakers have expressed concern about Google’s dominance in the ad market because the company controls a platform for advertisers to buy ad space as well as many of the websites where those ads appear.
Cook denies ‘profiteering’ during pandemic
Congressman Nadler accused Cook of profiteering as the novel coronavirus spread around the world by forcing commissions on companies that have had to switch to digital models during a pandemic that has forced much of the business world online.
Cook denied that accusation. “We would never do that,” Cook said, acknowledging two cases in which companies have complained about Apple’s behavior. Cook said Apple was working with those companies on a solution.
Nadler accused Apple of changing its policies about commissions, or changing the way it enforces those policies, to extract more revenue out of developers. He pointed to the email app Hey, which has complained publicly and testified in front of the House Judiciary Committee, about Apple’s alleged behavior.
But Cook denied any change in policy or behavior. He acknowledged that Apple may have made errors in the past due to the high number of apps submitted to the store.
Zuckerberg said it is ‘well documented’ the Chinese government steals from U.S. companies
Three of the tech CEOs walked carefully around a question from Rep. Greg Steube (R-Fla.), but Facebook’s Zuckerberg addressed it head on.
“Do you believe the Chinese government steals technology from U.S. companies?” Steube asked.
Pichai and Cook both said first they were not aware of the Chinese government stealing from Google and Apple, respectively. Zuckerberg spoke more generally.
“I think it’s well documented that the Chinese government steals technology from U.S. companies,” the Facebook CEO said.
Several lawmaker questions have revolved around concerns about Chinese ties, especially targeted toward Google CEO Pichai. The U.S. government is facing escalating tensions with the country, and tech has often been caught in the center because of manufacturing plants and business partners in China.
The question also revealed a downfall of holding the hearing virtually. When it was Bezos’s turn to answer, his words were silent.
“Mr. Bezos, I believe you’re on mute,” the lawmakers reminded him.
Facebook is accused of digital ‘surveillance’ against its competitors
Rep. Hank Johnson (D-Ga.) asked Zuckerberg about tools that Facebook uses to get insights into the competition.
He mentioned Facebook’s 2013 acquisition of an Israeli security app called Onavo Protect, which the company used to gain visibility into how consumers were using many apps that were installed on their phones. That helped Facebook monitor potential competitors and pounce on fast-growing new businesses.
The use of Onavo led to the acquisition of WhatsApp for $19 billion in 2014, The Washington Post reported.
The Onavo service offered consumers a virtual private network that disguises the traffic of smartphone users as they browse the Internet and use apps. But while it advertised itself to users as a way to “keep you and your data safe,” Facebook was able, on the back end, to glean detailed insights about what consumers were doing when they were not using Facebook’s own apps, which include Messenger, WhatsApp and Instagram.
Moreover, Onavo’s terms of service did not make it clear to users that the app enabled its owner, Facebook, to collect their information for that purpose, and the fact that the app was owned by Facebook was not easily findable on the terms of service, The Post previously reported.
Before Facebook acquired Onavo, the venture capital community used it to monitor fast-growing companies that might be worth investing in. Facebook shut down that access when it bought Onavo, which it shuttered last year.
Johnson asked Zuckerberg about acquiring WhatsApp. Zuckerberg said there were many reasons for the acquisition.
Cook confronted with internal document in Screen Time controversy
Apple executive Phil Schiller, who oversees the Apple App Store, promoted Apple’s Screen Time app to customers who complained to the company about the removal competing services, according to a document cited by Rep. Lucy McBath (D-Ga.).
Cook again defended the company’s decision to remove kids’ tracking apps, claiming it was for privacy reasons, but McBath questioned the timing. “If Apple wasn’t attempting to harm competitors and help its own app, why did Phil Schiller promote the Screen Time app to customers who complained about the removal?” she asked.
McBath pointed out that the apps were allowed back on the platform six months later. “This is fundamentally unfair,” she said. Apple “stifles the innovation that is the lifeblood of our economy,” she said.
Zuckerberg is accused of bias against conservatives over and over
Zuckerberg was asked by Rep. Matt Gaetz (R-Fla.) about specific incidents in which the lawmaker alleged that Facebook executives may have used the service to downplay conservative viewpoints.
He cited an investigation by the right-leaning Project Veritas organization that showed interviews with content moderators for Facebook who claimed that the company censored content from people who wear “Make America Great Again” hats.
Zuckerberg said that the company aims “to be a platform for all ideas” and that he does not want Facebook to be ideologically biased.
Gaetz asked whether content moderators and other employees were ever fired because of their policies, and specifically why right-leaning Palmer Luckey, a top executive and creator of the Oculus virtual reality headset, was fired.
The Wall Street Journal reported that his politics were a reason for his being pushed out. Gaetz also referenced documents that he claimed suggested that Luckey was instructed to suppress his political beliefs.
Zuckerberg said that he would not comment on Luckey but that if anyone was fired for political beliefs it would be inappropriate and that mistakes happen in large companies.
Bezos pushes back on assertion that e-commerce is a relevant market to investigate
Bezos turned to a frequent refrain from company executives that Congress should look broadly at all retail sales as it considers antitrust regulation.
That’s important because it diffuses Amazon’s power in retail sales. The company accounts for roughly 4 percent of overall retail sales in the United States, a market that includes restaurants, bars and gas stations, noted Rep. Joe Neguse (D-Colo.). The lawmaker suggested a better market to focus on is U.S. e-commerce sales, a market in which Amazon holds a roughly 38 percent share.
Bezos pushed back on the distinction.
“I don’t accept that e-commerce is a different market, but it is a different channel,” Bezos said.
Defining the market so broadly, of course, means Amazon can’t be so powerful to merit antitrust action.
Pichai says YouTube is ‘investing rigorously’ in child safety
Pichai said Google is “investing rigorously” in child safety in response to concerns that the company’s streaming site YouTube improperly collected personal information about children.
Rep. Mary Gay Scanlon (D-Pa.) asked Pichai if the company is working with advertisers to target ads to children on YouTube. The federal government severely restricts the amount of information Internet companies can collect on minors.
Google reached a $170 million settlement with the Federal Trade Commission last year after an investigation into allegations YouTube violated federal data privacy laws about children.
“This is an area we take it very seriously. I am a parent, too,” Pichai told Congress on Wednesday.
Scanlon also asked Pichai about negotiations to buy YouTube in 2006, but Pichai sidestepped most of the questions by noting it was before he took over as CEO in 2015.
Cook grilled on getting rid of competitors to its in-house kid tracker
Rep. Val Demings (D-Fla.) also grilled Cook over its much-criticized decision to get rid of apps that allow parents to track their children.
Cook said the apps “placed kids’ data at risk, so we were worried about the safety of kids,” he said. That’s because the apps used “mobile device management,” a corporate tool for tracking employees.
Demings pointed out that Apple allowed an app created by the government of Saudi Arabia to remain on the app store. “Apple kicks one out that was helping parents but keeps the one that is owned by a powerful government,” Demings pointed out.
Cook said he wasn’t aware of the Saudi app but offered to get back to her office.
Demings pointed out that Apple’s removal of the kids trackers coincided with the launch of its own competing technology, called Screen Time.
Does Facebook pick winners and losers?
Rep. Val Demings (D-Fla.), a potential vice presidential candidate for Joe Biden, asked several questions about an internal 2012 email in which Zuckerberg said he would enforce the company’s policies about giving developers access to data more forcefully against competitors than other companies.
The issue raises the question of whether Facebook abused its power as a platform that different apps could use to access information about its user base.
Previously, reports suggested that Facebook used it data as a bargaining chip to hurt competitors.
Zuckerberg said those policies were in the past.
Google confirms it has other ways to collect user data as it phases out some cookies
Pichai confirmed the company collects information from users for personalized ads, but he insisted that phasing out third-party cookies was a move to promote user privacy and not stifle competition.
Google said earlier this year that it would phase out third-party cookies, or small pieces of data that track users across the Web.
“This is an area where we are focused on user privacy,” Pichai said Wednesday. But Rep. Kelly Armstrong (R-N.D.) asked if this simply hurts those third-party marketers but not Google because the tech giant can still collect user data elsewhere.
Pichai insisted the company decided to phase out cookies, as other browsers have already done, because users do not like them. He noted Google collects information about users from Search and other services to inform personalized ads.
Bezos commits to reporting back to committee on internal probe into data use to compete with sellers
Jeff Bezos committed to providing the subcommittee looking into antitrust concerns the results of an internal investigation into allegations that the company is improperly using data to compete with merchants who sell on its site.
The issue of Amazon’s use of data on the sales of products to compete with sellers in the marketplace was a repeated theme during the hearing. Citing an investigation by the Wall Street Journal, Rep. Kelly Armstrong (R-N.D.) pressed Bezos about the development of Amazon’s private-label products using data it collects on the sale of similar items on its platform by third-party merchants.
“We’re basically trying to understand some of the anecdotes that we saw in that Wall Street Journal article,” said Bezos, who is the owner of The Washington Post.
He added the company would get back to the committee with the results of that investigation.
Cicilline says long-awaited antitrust report is coming in about a month
Cicilline told reporters that a long-awaited report on the findings of the investigation into tech’s power could be published as early as late August.
The report will be the culmination of the more than year-long probe into the tech companies’ power, and it will include findings from multiple hearings — including Wednesday’s with chief executives.
The long-awaited report was expected earlier this year, but the investigation was delayed due to the coronavirus.
It will be a critical signal of where Congress will go next in regulating the tech industry. It’s very unlikely that Congress would make meaningful reforms to antitrust law in 2020, especially as legislators are distracted by an election and responding to the pandemic.
During the break: Let’s rate the tech executives’ rooms
Pichai is the big winner in one way at today’s hearing. The Google CEO’s video background and lighting is impeccable.
Unable to attend in person, the executives had to choose settings for their video feeds that said, “I’m taking this seriously and not living a rich, lavish lifestyle.” Professional but nothing flashy or fun appears to be the agreed upon aesthetic.
We asked Claude Taylor who runs the Room Rater Twitter account to share his own thoughts on the setups: “These guys need to loosen it up a bit. Add something personal. The rooms tended to be a bit antiseptic,” Taylor said.
Pichai, he agreed, earned a solid 9/10 for the composition and perfect vase and plant placement. The Google head sat at a plain wooden desk in front of white zigzag abstract art and some carefully placed plants, vases and books with the titles obscured.
Cook walked away with a 7/10, dinged for a lack of art and depth, but saved by his copious leafy plant friends. Bezos went dark, with a massive wooden bookcase peppered with tchotchkes and a few actual books. Taylor recommended he invest in a better ring light, and suggests one made by Yesker listed on Amazon.
Unfortunately for Zuckerberg, his background got the lowest score of 2/10 for what Taylor described as a “hostage video.” The CEO appeared either in front of a white barn door-style wall or vertical blinds, with nary a book or decorative object in sight. His camera also seemed to be the most wide-angle of the bunch, distorting the size of his head.
Bezos counters claims of counterfeit sales by encouraging lawmakers to boost penalties for fakes
Pressed on the proliferation of fake goods on Amazon’s marketplace, Bezos said Congress should enact tougher laws targeting counterfeiters.
Bezos said the company works to do that. But he countered that Congress should address the issue, too.
“I would encourage this body to pass stricter penalties for counterfeiters and to increase law enforcement resources to go after counterfeiters,” Bezos testified.
Johnson asked Bezos if Amazon benefits financially from the sale of counterfeit items. Bezos said those financial gains are short-term, suggesting that customers who purchased fakes would be discouraged from continuing to shop on Amazon.
“I would much rather lose a sale then lose a customer,” Bezos said.
Apple executive once considered increasing commissions for developers
According to a document posted on Twitter by the House Judiciary subcommittee, Apple executive Eddy Cue once considered raising subscription fees for apps on Apple’s App Store to 40 percent from the current 30 percent for the first year.
When asked Wednesday whether Apple would ever increase its commissions, Cook responded resolutely, stating the company has never once increased subscriptions fees. But the document, apparently gathered by the committee in its investigation, suggests that has not always been the consensus view inside the top ranks of Apple.
“I think we may be leaving money on the table if we just asked for about 30% of the first year of the sub,” Cue wrote in the 2011 email obtained by the committee.
Pichai says Search is automated, but blacklist is manual
Pichai admitted there is a small part of Google’s search results that can be changed manually, though only to comply with law.
Matt Gaetz (R-Fla.) brought up previous testimony from Pichai, where the executive said the company does not manually intervene in search results. Gaetz pointed out reports that Google has a so-called “blacklist” for websites that blocks them from appearing on search results.
That’s true, Pichai said, but only to block websites that are unlawful, such as those containing violent extremism.
“We have to do that to comply with law,” Pichai said. Otherwise, he said, search results are controlled by algorithms.
Pichai also confirmed to Rep. Jerry Nadler (D-N.Y.) that the company does use data it collects from users to inform its products.
The executive told Greg Steube (R-Fla.) that the company follows national guidelines, including CDC guidelines, to keep misinformation off the site. YouTube was one of several social media sites that removed a video with misleading information about a covid-19 treatment earlier this week.
Bezos acknowledges Amazon sometimes promotes its own products over rivals
Under questioning from Rep. Jamie Raskin (D-Md.), Amazon chief executive Jeff Bezos acknowledged that Amazon does use its platform to promote its own products over rivals that do not have that same ability.
Raskin cited an example that Amazon’s voice-activated Echo speakers prompt users to buy Amazon’s private-label batteries when they might be shopping for other brands. Amazon has previously introduced features that pitch its own private-label brands right before customers add rival products to their shopping carts.
Bezos said he did not know if the Alexa voice service was “trained” to hawk Amazon’s homegrown products.
“I’m sure there are cases where we do promote our own products,” Bezos said. “There’s a course of common practice in business. And so it wouldn’t surprise me if Alexis sometimes does promote our own products.”
Tech heads pledge not to use ‘slave labor’
In response to a question from Rep. Ken Buck (R-Colo.), all four CEOs pledged to avoid using “slave labor.”
Cook is perhaps the most familiar with the issue. Apple manufactures many of its products in China, where human rights groups and nonprofits have raised questions about labor practices, not just in factories that assemble Apple’s products but in factories that make the tiny components that go into those products.
When Buck asked all four of the CEOs to pledge to stop using that type of labor, Cook said, “We would terminate a supplier relationship if it were found.”
Every year, Apple publishes a transparency report about human rights at its suppliers, and the company usually responds quickly when concerns are raised. Still, new allegations seem to pop up regularly (including in March, when Apple and other companies were implicated in labor by enslaved people), and some wonder whether it’s really possible for a company like Apple to make its products without some human rights violations somewhere in the supply chain.
Lawmakers are bringing the receipts as they press Bezos
Lawmakers are focusing in on Amazon chief Jeff Bezos during his first Capitol Hill testimony.
And they’re presenting extensive evidence based on documents they obtained from the company, as well as interviews with sellers on its platform to build a compelling case that the giant has abused its power.
Rep. David N. Cicilline (D-R.I.), the chair of the House Judiciary antitrust subcommittee, pressed Bezos on internal communications obtained by the committee, in which Amazon employees referred to third-party sellers on the platform as “internal competitors.” The company had referred to these companies as “partners” in its testimony before the committee.
Meanwhile, Rep. Lucy McBath (D-Ga.) pressed Bezos using a recording of a bookseller on the platform who said Amazon’s restrictive business practices put her business in jeopardy and left her fearing for her ability to feed her family.
Rep. Pramila Jayapal (D-Wash.) cited interviews the committee conducted with former Amazon employees, supporting media reports that the company uses data from third-party sellers to bolster its own products. Bezos said the company’s investigation of the matter remains ongoing.
The questioning underscores how lawmakers are better prepared for this hearing than previous showdowns with tech executives. They are leveraging the hundreds of hours of interviews, previous hearings and more than 1 million documents they amassed to pin down the executives.
Amazon accused of using its financial might to thwart rivals in its marketplace
Rep. Ken Buck (R-Colo.) joined the chorus of lawmakers accusing Amazon of treating its third-party merchants unfairly.
“We’ve heard from a number of companies that Amazon uses proprietary data from third-party companies to launch its own private label products, meets with start-ups to discuss investing in the product, and then uses the proprietary data from these meetings to create its own private label products,” Buck said.
But Buck didn’t let Bezos address the point. In January, the committee held a hearing in Buck’s district in which it heard testimony from the chief executive of PopSockets, who accused Amazon of allowing counterfeit products to appear higher in search results on its marketplace. He went on to criticize Amazon more broadly for allowing counterfeit items, something that has plagued the company for years.
“I’m also concerned that given Amazon’s allowance of counterfeit goods and them on its marketplace, especially counterfeit goods from China, that Amazon’s marketplace may be knowingly or unknowingly furthering China’s use of forced and labor conditions,” Buck said.
Zuckerberg’s own words come back to haunt him — again
In an exchange with Rep. Pramila Jayapal (D-Wash.), Zuckerberg didn’t answer a direct question about whether he copied competitors.
And once again, Facebook’s internal documents came back to haunt him.
Jayapal unearthed emails and records in which Zuckerberg told the founder of Instagram, in the process of negotiations to acquire the photo-sharing service in 2012, that he was building a copycat camera service. The Instagram founder confided in an investor at the time that he feared Zuckerberg would “go into destroy mode” if he didn’t sell Instagram to him.
“Facebook’s very model makes it hard for new companies to flourish,” she said.
Zuckerberg said he didn’t recall some of the exchanges she was referring to.
Facebook has copied key features of other services such as Snapchat.
Top Republican says he doesn’t think it’s time for Congress to change antitrust laws
Rep. F. James Sensenbrenner Jr. (R-Wis.), the top Republican on the antitrust subcommittee, says he doesn’t think Congress needs to update its antitrust laws after more than year of investigation into the tech industry’s power.
Instead, he thinks that it’s time to take a closer look at whether regulators, including the Justice Department and Federal Trade Commission, are enforcing existing laws effectively.
“I think the law is good and we don’t need to throw them in the wastebasket,” he said.
His remarks show that while this committee began this as a bipartisan investigation, partisan fault lines are emerging. Democrats have been presenting evidence, such as executive communications and interviews with third-party sellers, that they’re arguing underscore abuses of power in the tech industry. The Democratic-led committee is expected to compile a report, based on testimony they gather today and through document requests to the companies.
Bezos challenged on Amazon’s dealings with third-party merchants on its marketplace
Cicilline and Rep. Lucy McBath (D-Ga.) pressed Bezos over the company’s power to compete against the third-party merchants who sell in its marketplace.
“We have heard so many heartbreaking stories of small businesses who sunk significant time and resources into building a business and selling on Amazon, only to have Amazon poach their best-selling items and drive them out of business,” Cicilline said.
Both he and McBath brought up examples of sellers who accused Amazon of stealing their ideas or suspending their selling accounts. In one instance, Cicilline quoted a seller describing the relationship it had with the marketplace as “Amazon heroin, because you just kept going, and you had to get your next fix, your next check.”
“I have great respect for you in this committee, but I completely disagree with that characterization,” Bezos replied.
McBath confronted Bezos with a seller who was restricted, she alleged, because it competed against Amazon in textbook sales. And when the seller tried to get answers, she heard nothing from the company.
“Do you think this is an acceptable way to treat someone that you described as both a partner and a customer?” McBath asked.
Bezos said that it was not but that he was unaware of the specific case. “I appreciate that you showed me that anecdote, and I would like to talk to her,” Bezos said. “It does not at all, to me, seem like the right way to treat her.”
Unearthed Zuckerberg emails show he aspired to buy Google
Lawmakers continued pressing Facebook on its acquisitions, with Rep. Joe Neguse (D-Colo.) highlighting internal emails from Zuckerberg and other executives saying that Facebook aimed to buy Google and describing the company’s acquisition strategy as “a land grab.”
The exchange highlighted how some of the most interesting parts of antitrust hearings are unearthed documents detailing a CEO’s own mind-set and words. Experts say a CEO’s mind-set can be key evidence in an antitrust case.
Companies burned by Big Tech plead for Congress to regulate Apple, Amazon, Facebook and Google
Zuckerberg said the email — in which he said that he would one day be able to buy any competitors but that it would take some time to buy the behemoth Google — was probably “a joke.”
Facebook spokesman Andy Stone said that the CFO was referring to comments made about Facebook by others.
Neguse noted that he did not think it was a joke and added that many of Facebook’s competitors a decade ago, including Myspace, no longer exist.
Zuckerberg reiterated that the social media landscape was very competitive.
Bezos pressed on using Amazon’s ability to withstand long losses to compete with rivals
Rep. Mary Gay Scanlon (D-Pa.) pressed Bezos on Amazon’s ability to withstand long periods of losses to defeat competitors that don’t have the financial wherewithal to match the strategy.
She brought up Amazon’s acquisition of Quidsi, whose Diapers.com site competed against Amazon. Scanlon said the committee’s work uncovered plans by Amazon “to bleed over $200 million in diaper profit losses” to weaken Quidsi. The strategy, she said, worked, as Quidsi ultimately agreed to be acquired by Amazon in 2010 for around $500 million.
Bezos replied that the acquisition was a long time ago and that he couldn’t recall specifics.
“This is going back in time, I think maybe 10 or eleven years or so,” Bezos said.
Bezos and Scanlon talked over each other as the lawmaker tried to make points in her allotted time.
“You said that Amazon focuses excessively on customers,” Scanlon said. “So how would customers, especially single moms, new families, how would they benefit when the prices were driven up by the fact that you eliminated your main competitor?”
Bezos replied that he didn’t agree with the premise.
“Diapers is a very large product category sold in many, many places,” Bezos said.
Lawmakers weigh in with conservative-bias accusations against Google
Google CEO Sundar Pichai once again defended his company’s search tool against claims from Republicans that it is biased against conservatives.
Rep. Greg Steube (R-Fla.) told Pichai that he Googled the name of a conservative news site this year and couldn’t find the website, but when he tried to do so again Wednesday morning, he found it. He suggested that was because Pichai and Google fixed the problem before testifying.
Pichai said he would look into the specific issue but said: “We approach our work with a deep sense of responsibility in a nonpartisan way.”
Steube also said he is having issues with emails going to his spam folder, something he thinks might be politically motivated.
“There’s nothing in the algorithm which has anything to do with political ideology,” Pichai said.
Lawmakers are still interrupting chief executives, even in videoconferencing hearing
Lawmakers might not be able to grill the tech chief executives in person.
But they’re still skillfully interrupting the chief executives when they feel like they are trying to run out the clock during their limited five-minute rounds of questions.
Mary Gay Scanlon (D-Pa.) repeatedly cut Bezos off during a line of questioning about how Amazon may have leveraged its dominance to squash competition to a diaper retailer.
“I’m sorry Mr. Bezos, I need to press on here,” Scanlon said.
Republicans have been, as well. Rep. Jim Jordan (R-Ohio) aggressively yelled during a tense grilling of Pichai, which focused on the lawmaker’s concerns that tech companies are biased against conservatives. The companies have denied those allegations.
Lawmakers’ questioning underscores how personal tech’s power is for politicians
The lawmakers’ lines of questioning are exposing how deeply dependent they are on the giant tech platforms they’re questioning.
The major antitrust hearing, which comes just months before the critical 2020 election, has delved into issues that could have a major impact on politicians’ chances of reelection, especially during a pandemic where more and more campaigning is occurring online.
Take the recent line of questioning from Rep. Greg Steube (R-Fla.). He pressed Alphabet chief executive Sundar Pichai on why his campaign emails were being directed to users’ spam inboxes. Rep. Jim Jordan (Ohio), the House Judiciary Committee’s top Republican, began pressing Pichai on whether he would ensure the company’s features weren’t tailored to support Joe Biden in the upcoming election. In both instances, lawmakers were attempting to bolster unproven claims that companies are biased against conservatives.
Meanwhile, Democrats have used time with Facebook chief executive Mark Zuckerberg to press him on Russian interference that aimed to divide Americans during the 2016 election.
Cook denies Apple treats some developers differently
In response to a question from Rep. Hank Johnson (D-Ga.), Apple CEO Tim Cook denied that his company treats some developers on its platform differently. Johnson alleged that Apple has assigned two employees specifically to help Baidu, a Chinese tech company often described as the Google of China, navigate the red tape and bureaucracy in the App Store. Cook said he wasn’t aware of that.
The uneven application of App Store rules has been a constant complaint from developers on the Apple platform. And Cook didn’t address the fact that Apple allows companies with special licenses to create apps that would otherwise run afoul of Apple rules on the App Store.
Johnson also accused Apple of collecting customer data from the Apple payments system, which Apple requires all developers who collect payments on the platform to use. Cook did not deny this but also did not directly answer the question.
Cook also denied that Apple retaliates against developers or bullies people who go against it. This is a constant fear of developers who have disagreements with Apple.
Google faces concerns it collects too much data
Rep. Val Demings (D-Fla.) questioned Google CEO Sundar Pichai about the company combining user data from its services with that from DoubleClick, an advertising company that Google bought in 2007.
Google had originally told Congress it would not combine the data, Demings said, but then it did in 2016.
Pichai confirmed that he signs off on all major decisions at the company, including the decision to combine the data.
“Practically, this decision meant that your company would now combine all of my data on Google, my search history, my information from Google maps, information from my email, my Gmail, as well as my personal identity with the record of almost all of the websites I visited,” Demings said. “That is absolutely staggering.”
Bezos won’t guarantee that Amazon hasn’t used proprietary data to compete with sellers
Amazon chief executive Jeff Bezos testified that he couldn’t confirm that the company didn’t use data it collects regarding sales of products in its marketplace to launch its own private-label products.
Bezos didn’t face a single question for nearly two hours after the hearing started until Rep. Pramila Jayapal (D-Wash.) grilled him. Jayapal, who represents the Seattle area where many Amazon employees work, pressed Bezos on whether Amazon ever used third-party seller data to make business decisions. (Bezos owns The Washington Post.)
“What I can tell you is we have a policy against using seller-specific data to aid our private label business,” Bezos replied. “But I can’t guarantee you that policy has never been violated.”
Jayapal pressed the point, asking Bezos more directly if Amazon reviews sales data on third-party sellers and their products to create new products. Again, Bezos didn’t deny the allegation.
“We continue to look into that very carefully,” Bezos replied. “I’m not yet satisfied that we’ve gotten to the bottom of it. ”
Jayapal noted that, during a hearing a year ago, an Amazon attorney testified the company didn’t use such data.
“Now hearing you say, well, you’re not so sure that that’s going on,” Jayapal said. “And the issue that we’re concerned with here is, is very simple. You have access to data that far exceeds the sellers on your platforms with whom you compete.”
Pichai reiterates claims that Google respects user privacy
Pichai told Congress Google is in full compliance with Europe’s General Data Protection Regulation (GDPR) privacy law, as Rep. Kelly Armstrong (R-N.D.) grilled him on data privacy concerns. Armstrong said GDPR has helped entrench large companies such as Google and been harmful for small businesses.
“We deeply care about the privacy and security of our users,” Pichai said. Google has been a main target of digital privacy advocates, who say Google collects far too much personal information on its users and uses it to bolster its dominant ad business.
Pichai repeated a common Google talking point that advertising prices have fallen, as Google helps increase competition. Google’s advertising business is thought to be a main focal point of the antitrust investigations into the company.
Is this still an antitrust hearing?
Today’s blockbuster tech hearing is supposed to be focused on the size and power of the tech giants.
But lawmakers are using their limited time with the chief executives in the hot seat to press executives on a host of other contentious issues, ranging from how they moderate politicians’ content to their business ties in China.
The questions have come from Democrats and Republicans alike. In a recent round of questioning, Rep. Jamie B. Raskin (D-Md.) pressed Facebook chief executive Mark Zuckerberg on the company’s struggles to address misinformation on its platform. He also asked about the recent ad boycott led by civil rights leaders.
Meanwhile, two Republican lawmakers also questioned Google CEO Sundar Pichai on the company’s ties with China and its contracts with the United States, suggesting the company is too close with China. The questions tread ground familiar to Pichai’s testimony before Congress in December 2018, where he confirmed, as he did today, that the company is not working with the Chinese military.
Rep. Matt Gaetz (R-Fla.) accused Google of pulling out of the Project Maven project with the U.S. military based on pushback from employees who did not want Google engaged in drone warfare. Pichai said the company considers many factors, employee feedback being one of them.
Pichai also noted that the company works with the U.S. government on many projects, including cybersecurity.
Other topics that have come up include the company’s work with law enforcement and accusations that some social media firms are politically biased against Republicans. Companies have denied that allegation, and there has been scant evidence to support it.
Zuckerberg is taken to task for his foresight in seeing Instagram as potential competition
From the get-go, Zuckerberg received fierce questioning about the company’s 2012 purchase of the photo-sharing platform Instagram, which Rep. Jerry Nadler (D-N.Y.) said was “exactly the type of acquisition that antitrust laws were designed to prevent.”
Nadler said that documents Zuckerberg provided to lawmakers revealed that the goal of purchasing Instagram was to “neutralize the competition.”
In effect, Nadler was taking Zuckerberg to task for his foresight. Very few people would have considered Instagram, which had roughly a dozen employees and fewer than 100 million users at the time, a threat to Facebook, which was about to go public with more than 800 million users. And Facebook wasn’t even seen as a platform for image-sharing.
The question of whether Zuckerberg’s decision counts in hindsight as harmfully anti-competitive raises bigger questions about some of the most common business practices in Silicon Valley.
Rep F. James Sensenbrenner Jr. (Wis.), the top Republican on the subcommittee, also questioned Zuckerberg about a video involving a doctor who has touted misinformation discussing the anti-malaria drug hydroxychloroquine, and asked whether the company had censored President Trump in removing it. Zuckerberg pointed out that Trump retweeted the video on Twitter, not on Facebook.
The charm and glitches of a virtual hearing
Lined up in little boxes on a giant TV mounted on the wall, the four executives all raised their right hands at the same time to be sworn in, mumbling their agreement at the same time. Due to the pandemic, the CEOs were attending remotely, over a competitor’s video chat app, Webex. Instead of being stuck at a table with nothing but water, notepads and a flank of video cameras around them, they were able to stream from their home bases.
Fittingly, even CEOs of the world’s most powerful technology company were not immune to teleconferencing issues. During their opening statements, Jeff Bezos, Sundar Pichai, Tim Cook, and especially Mark Zuckerberg, all suffered from slight audio delays that caused their words to be out of sync with their lips. The audio quality was clear, and the video quality high enough to see their faces clearly most of the time.
Inside the hearing, where many lawmakers and media were attending in person, with masks and social distancing, the CEOs appeared on multiple screens. The largest was on the back wall, under the U.S. eagle seal, sandwiched between two clocks counting down each speaker’s time limit.
After Bezos read part of his opening statement, the people behind the scenes figured out how to make a single speaker fill the screen so it was less like watching sentient postage stamps talk. Cook, who recently did an Apple product announcement entirely over video, seemed the most at home in the medium, speaking confidently and warmly to the camera for his intro.
When it was not their turn to talk the executives passed the time doing what normal people do on long video calls: sipped water and snacked.
Cicilline says Google uses services to ‘crush’ competitors
David N. Cicilline, chairman of the House Judiciary antitrust subcommittee, used his first round of questioning of Big Tech CEOs to call out Google’s dominance in search and how much it controls basic navigation of the Internet.
Cicilline’s decision to direct his first questions to Google CEO Sundar Pichai was a surprise, as many were expecting the leader of the antitrust investigation to try to pin down Bezos during his first appearance in Congress.
Cicilline’s questioning could cast fresh light on long-running tensions between companies and the search giant. Google has faced antitrust scrutiny from regulators in both the United States and Europe. The Washington Post has previously reported that the Justice Department could bring antitrust charges against the company as early as this summer.
Cicilline told Pichai he has heard from many small businesses that Google “steals content” from smaller websites, to keep people on Google’s own sites.
“I disagree with the characterization of that statement,” Pichai said.
Cicilline passionately laid out concerns that Google has created a “walled garden” by cribbing information from other’s sites and putting it into its own products to capture even more Web traffic, and therefore making more money from ads.
“We have always focused on providing users the most relevant information,” Pichai said.
Cicilline concluded his questioning of Pichai with a summary of his concerns, casting doubt that Pichai’s responses budged his opinion at all.
“The evidence seems very clear to me: As Google became the gateway to the Internet, it began to abuse its power,” Cicilline said. “It used its surveillance over Web traffic to begin to identify competitive threats and crush them. It has dampened innovation and new business growth, and it 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.”.
Tim Cook tells lawmakers Apple is not dominant in smartphones