By Peter Reap, J.D., LL.M.
The CEO’s provided testimony and faced questions on a wide range of issues touching on acquisitions, privacy, market power, and presidential elections.
The CEOs of Amazon (Jeff Bezos), Apple (Tim Cook), Google/Alphabet (Sundar Pichai), and Facebook (Mark Zuckerberg) delivered summaries of prepared remarks to and answered questions posited by members House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law. The prepared remarks only referenced the antitrust nature of the hearing’s purpose as expressed in its title—Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google—in a very general sense, however, the CEO’s faced pointed questioning about a wide range of topics, including antitrust, acquisitions and mergers, privacy, presidential elections and free speech, and consumer protection. With the limited timeframe (five minutes) allowed members for their individual questioning frequently resulting in CEOs struggling to provide any sort of responsive answer before being interrupted by the questioner.
Introductory remarks. Before each of the CEOs presented five minute summaries of their prepared remarks, introductory remarks were provided by the subcommittee’s leaders: Judiciary Committee Chairman Jerrold Nadler (D-N.Y.), Antitrust Subcommittee Chairman David N. Cicilline (D-R.I.), Subcommittee Ranking Member F. James Sensenbrenner (R-Wis.), and House Judiciary Committee Ranking Member Jim Jordan (R., Ohio).
In his opening remarks, Cicilline told the CEOs that their companies "have too much power" and that their "dominance is killing the small businesses, manufacturing and overall dynamism that are the engines of the American economy." According to Cicilline, "many of the practices used by these companies have harmful economic effects. They discourage entrepreneurship, destroy jobs, hike costs, and degrade quality."
Ranking Member Sensenbrenner was less direct in his opening statement. He reiterated the mantra that "being big is not inherently bad." Sensenbrenner said, however, that he hoped to leave the hearing having "a complete picture of how the companies use their size, success, and power and what it means to the American consumer."
"We must ensure that our existing antitrust laws are applied to meet the needs of our country and its consumers," said Sensenbrenner. He noted, however, that "market dominance in the digital space is ripe for abuse, particularly when it comes to free speech." The ranking member pointed out that he was troubled by suppression of conservative views by the likes of Google's You Tube and Facebook. "Conservatives are consumers too and they need the protection of the antitrust laws," said Sensenbrenner. Rep. Jordan reiterated those concerns about suppression of conservative views. "Big Tech is out to get conservatives, that is a fact," Jordan observed. He then detailed a list of examples of the "censorship" of conservative opinions by Facebook and other companies.
The hearing was marked by partisan squabbles. Cicilline said in his introductory remarks that the subcommittee's probe of the tech sector has been a "bi-partisan effort from the start." Colleagues on both sides of the aisle worked together, according to Cicilline. However, that bipartisan cooperation didn't appear to extend to the hearing. For instance, at two separate points during the hearing, Jordan was shouted down and yelled at to "put on your mask" in compliance with the subcommittee’s rules after he was told he had exceeded the allotted time.
Cicilline questioning of Pichai. Typical of much of the afternoon’s questioning, Cicilline was prepared with a series of questions that seemed ambitious, when considering the initial 5 minute per questioner timeframe. He began by presenting a short example and asking Pichai: "Why does Google steal content from honest businesses?" Pichai of course disagreed with that characterization as he attempted to answer but Cicilline moved quickly onto questions about other examples and topics. He closed by stating his view that Google is increasingly a "walled garden" that keeps directing users to Google websites even when Google does not have the most relevant information and even if it is economically catastrophic for many small businesses. He said the evidence was clear that "as Google became the gateway to the Internet it began to abuse its power to identify competitors’ strengths and crush them, dampening innovation and business growth and leading to increased costs for all Internet users."
Nadler questioning of Zuckerberg. Nadler began his questioning of Zuckerberg by stating that Facebook bought Instagram rather than compete with it, "this is exactly the kind of conduct the antitrust laws were designed to prevent." Zuckerberg responded that the acquisition of Instagram was "wildly successful," but no one at the time of the acquisition viewed Instagram as a social media competitor of Facebook, only as a mobile photos and mobile cameras competitor. Nadler did not seem to buy that, pressing the issue by asking how the acquisition "neutralized a competitor." Nadler said that mergers and acquisitions that neutralize competitive threats violate the antitrust laws and asked, so why should we not undo the acquisition of Instagram? Zuckerberg responded by restating that Instagram was viewed as competitive to Facebook’s main business—social media, and that even at the time of the acquisition, the FTC voted not to challenge it.
Questioning continued from other members, with issues raised about Google’s market power and its unwillingness to cooperate with the U.S. military on projects but aiding the Chinese military; interference with past and present presidential elections; data privacy; Googles’ acquisition of Internet advertising giant DoubleClick; and Amazon’s alleged initiation of a price war in order to undermine competitor Diapers.com in order to undermine it before purchasing it and raising the prices for diapers.
MainStory: TopStory AcquisitionsMergers Antitrust Advertising Privacy GCNNews
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