Democrats and Republicans in Congress came out swinging against Amazon, Apple, Facebook and Google on Wednesday, needling the tech giants’ top executives for their size, power and approach to a wide array of issues, including the content they allow online.
Rep. David Cicilline (D-R.I.), the chairman of the House’s top antitrust subcommittee, opened the wide-ranging hearing by stressing that lawmakers’ year-long investigation into the industry had informed his growing belief that the country’s largest technology companies have
“wielded their power in disruptive, harmful ways,” risking not only competition but the future of democracy itself.
Republicans, meanwhile, have sought to shift the focus of the hearing to allegations that major Silicon Valley companies censor conservatives online, levying charges of political bias that many experts have said is unsubstantiated — and social-media companies denied.
Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai each began the hearing by standing, raising their right hand and swearing an oath to tell the truth, all over video-conferencing software due to the coronavirus. (Bezos also owns The Washington Post.)
Each of the tech executives sought to tell their own versions of a rags-to-riches story, stressing their importance to U.S. consumers and the American economy as a whole. And all four tech companies emphasized they face healthy competition in advertising, search, shopping and social networking. “We compete hard, we compete fairly, we compete to be the best,” Zuckerberg said.
At times, lawmakers have raised some tech executives’ past emails to raise questions about whether they sought to stifle rivals. With Facebook, for example, Rep. Jerold Nadler (D-N.Y.) pointed to 2012 messages in which Zuckerberg apparently said the company purchased Instagram, a photo app, to neutralize it.
The hearing is supposed to inform lawmakers’ efforts to rethink federal antitrust laws, perhaps making it easier for the federal government to probe and penalize tech giants and other large businesses. The inquiry coincides with a federal and state law-enforcement probes targeting Amazon, Apple, Facebook and Google. A lawsuit against Google, in particular, could come as soon as this summer.
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
Amazon CEO Jeff Bezos testifies before the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law during a hearing on “Online Platforms and Market Power” in the Rayburn House office Building on Capitol Hill, in Washington, U.S., July 29, 2020. Mandel Ngan/Pool via REUTERS (Pool/Reuters)
The subcommittee chairman Rep. David N. Cicilline (D-R.I.) and Rep. Lucy McBath (D-Ga.) pressed Amazon chief executive Jeff Bezos over its 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 text book 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 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.
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.”
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.
Bezos replied that he didn’t agree with the premise.
Lawmakers weigh in with conservative-bias accusations against Google
Google CEO Sundar Pichai testifies before a House Judiciary subcommittee. (Pool/Reuters)
Google CEO Sundar Pichai once again defended his company’s search tool against claims from Republicans that it is biassed 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 video conferencing 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.”
By Rachel Lerman
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.”
By Jay Greene
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.
By Rachel Lerman
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.
By Cat Zakrzewski
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.
By Elizabeth Dwoskin
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.
By Heather Kelly
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.”
By Rachel Lerman and Cat Zakrzewski
Tim Cook tells lawmakers Apple is not dominant in smartphones
Tim Cook’s opening statement largely followed the testimony that he posted Tuesday night. According to Cook, Apple is no a monopoly. Google, in fact, owns the dominant operating system around the world, and that’s Android.
Cook took credit for inspiring and growing the massive market for mobile software. He even used the “It just works” line to describe Apple products.
But Cook ignored what everyone knows: Apple’s is dominant in a couple of important ways. Its App Store is crucial for developers, forcing them to go by Apple’s rules and, until recently, stay mum about the company’s aggressive encroachment on their businesses. And Apple locks in its customers. Its business strategy is designed to make the use of alternatives painful. Anyone who’s ever bought an Apple product has experienced this.
The first two questions went to Google and Facebook. It’s unclear how much Apple will be targeted with questions during the hearing.
By Reed Albergotti
Pichai keeps focus on opportunity that Google provides
Google CEO Sundar Pichai kicked off his prepared testimony by going slightly off-script. He offered a word of remembrance for the late congressman John Lewis, the civil rights leader and longtime lawmaker who died this month.
The Big Tech hearing was rescheduled so legislators could attend Lewis’s memorial services Monday.
Pichai, the soft-spoken CEO of Google and its parent company, Alphabet, calmly walked through his personal story of growing up in India and being impressed and inspired by easily accessible computers when he moved to the United States for graduate school.
He emphasized that Google is focused on giving people access to technology, to services that can give individuals and small businesses a leg up.
“Google aims to build products that increase access to opportunity for everyone,” Pichai said.
Google is being investigated not just by the federal government but also by a coalition of states and occasionally by the European Union for its tremendous size and dominant position in digital advertising and Web search. Lawmakers are increasingly focusing on what Google’s size means for its competitors, sidestepping Google’s argument that it is beneficial for users
By Rachel Lerman
Bezos testifies customers ensure that Amazon does ‘the right thing’
Amazon chief executive Jeff Bezos noted in his opening statement that consumers press Amazon to do what’s best for them as he rebuts lawmaker claims that the company’s clout stifles competition.
“Customer obsession has driven our success, and I take it as an article of faith,” Bezos said as he read from his opening statement. “The customers notice when you do the right thing. You earn trust slowly over time by doing hard things well, delivering on time, offering everyday low prices, making promises and keeping them, and making principled decisions even when they are unpopular.”
(Bezos owns The Washington Post.)
Sitting in an office, wearing a tie and jacket, Bezos went on to wrap his success, and Amazon’s, in the promise of American opportunity. He talked about Amazon’s earliest days, when he dreamed about how “one day we might afford a forklift.” And he crowed about how Amazon now offers 1.7 million small and medium-size businesses the opportunity to sell their goods on Amazon.
“With all of our faults and problems, the rest of the world would love even the tiniest sip of the elixir we have here in the U.S.,” Bezos said.
By Jay Greene
Republicans tee up anti-conservative bias accusations in opening remarks
It did not take long for Republican lawmakers to change the focus to alleged bias against conservatives, an accusation that politicians and conservative pundits have been lobbing at the tech companies for years without convincing evidence.
“I’ll cut right to the chase: Big tech is out to get conservatives,” Rep. Jim Jordan (Ohio), the Judiciary Committee’s top Republican, said in his opening remarks.
Jordan pointed to claims that Google was censoring Breitbart and other conservative news sites and that Amazon video streaming company Twitch suspended President Trump’s account. In fact, Twitch temporarily suspended the Trump 2020 campaign’s account for violating its policies on hateful conduct. The account has since been restored.
Jordan noted he invited Twitter to join the hearing, which would presumably have made the hearing’s focus even more centered on alleged conservative bias. Twitter, which is significantly smaller than the other companies, was not invited to the meeting by Democrats leading the panel. Twitter has so far labeled five of Trump’s tweets with warning labels for running up against its rules. On Tuesday, it suspended Donald Trump Jr. for tweeting a misleading video with misinformation about a coronavirus treatment. Trump Jr. was required to delete the tweet.
“If it doesn’t end, there have to be consequences,” Jordan said, signaling regulation could be coming to the industry.
Democrats have worried that such accusations would distract from antitrust issues at today’s hearing. Partisan fighting broke out over Jordan’s attempt to have Mike Johnson, the top Republican on the Constitution subcommittee, participate in the proceedings. He does not sit on the antitrust panel so Democratic lawmakers objected, sparking a back and forth between the two parties. Cicilline had to bring down his gavel to call order to the room.
F. James Sensenbrenner Jr. (R-Wis.), the top Republican on the subcommittee, raised the issue in his own testimony minutes before Jordan, signaling this could be a line of questioning for many members on the committee.
“Conservatives are consumers too, and they need the protection of antitrust laws,” he said.
By Rachel Lerman and Cat Zakrzewski
Amazon antitrust critic at subcommittee chair’s side