The four companies had to answer questions to determine whether they may simply be too big
The CEOs of some of the world's biggest tech companies, Apple, Google, Facebook and Amazon faced off with the US Congress on Wednesday and were told they have "too much power", spread fake news and are a danger to the American economy.
Amazon's Jeff Bezos, Facebook’s Mark Zuckerberg, Google’s Sundar Pichai and Tim Cook of Apple were grilled for over five hours in a joint appearance by video by a House of Representatives panel.
The hearing was called to focus on whether the companies abuse their dominant positions in the market. It comes as lawmakers consider new tough regulations.
"Simply put, they have too much power," said Representative David Cicilline, a Democrat from Rhode Island who chairs the panel conducting a year-long investigation into the business practices of the four companies.
Cicilline said the hearing made clear that the firms "have monopoly power -- some need to be broken up, all need to be properly regulated and held accountable".
He added the coronavirus outbreak had strengthened them even further: "They are likely to emerge (from the pandemic) stronger and more powerful than ever before."
"With big power comes big responsibilities, and these companies like any other companies have to play by the rules. And I think that message was drawn very clearly yesterday," Pinar Akman, Director of the Centre for Business Law and Practice at the University of Leeds, told Euronews.
But there was also an evident divide among the lawmakers carrying out the grilling: Republicans mainly took issue at what they perceive as anti-conservative bias from tech giants, while Democrats seemed more concerned about the impact of big tech on small competitors.
"Competition laws are there not to protect small competitors, but to ensure that effective competition of markets delivers benefits to consumers: lower prices, more innovation, a higher range of products, more choice and so on," Akman said.
"And what was missing from the hearings was really a discussion of the harms or benefits to consumers that the companies these CEOs represent generate."
CEOs answer accusations of stifling competition and political bias
The executives did provide bursts of data showing how competitive their markets are, and the value of their innovation and essential services to consumers. But they sometimes struggled to answer pointed questions about their business practices.
They also confronted a range of other concerns about alleged political bias, their effect on US democracy and their role in China.
Among the toughest questions for Google and Amazon involved accusations that they used their dominant platforms to scoop up data about competitors in a way that gave them an unfair advantage.
Bezos said in his first testimony to Congress that he could not guarantee that the company had not accessed seller data to make competing products, an allegation that the company and its executives have previously denied.
Regulators in the US and Europe have scrutinised Amazon’s relationship with the businesses that sell on its site and whether the online shopping giant has been using data from the sellers to create its own private-label products.
“We have a policy against using seller specific data to aid our private label business,” Bezos said in a response to a question from US Representative Pramila Jayapal, a Washington Democrat. “But I can’t guarantee to you that policy hasn’t been violated.”
Pichai's opening remarks touted Google's value to mom-and-pop businesses in Bristol, Rhode Island and Pewaukee, Wisconsin, in the home districts of the antitrust panel's Democratic chairman, Rhode Island Rep. David Cicilline, and its ranking Republican, Rep. James Sensenbrenner of Wisconsin.
But the Google executive struggled as Cicilline accused the company of leveraging its dominant search engine to steal ideas and information from other websites and manipulating its results to drive people to its own digital services to boost its profits.
Pichai repeatedly deflected Cicilline’s attacks by asserting that Google tries to provide the most helpful and relevant information to the hundreds of millions of people who use its search engine each day in an effort to keep them coming back instead of defecting to a rival service, such as Microsoft’s Bing.
Zuckerberg was put on the defensive with regards to the social network’s role as a conduit for Russian interference in the 2016 presidential election. Lawmakers then deployed the company's internal documents against Zuckerberg, asserting that Facebook has gobbled up rivals to squelch competition.
Trump threatens executive orders on Big Tech
As Democrats largely focused on market competition, several Republicans aired longstanding grievances that the tech companies are censoring conservative voices and questioned their business activities in China. “Big Tech is out to get conservatives,” said Representative Jim Jordan of Ohio.
In a tweet before the hearing, President Donald Trump challenged Congress to crack down on the companies, which he has accused, without evidence, of bias against him and conservatives in general.
“If Congress doesn't bring fairness to Big Tech, which they should have done years ago, I will do it myself with Executive Orders," Trump tweeted.
Executive orders are more limited in scope than laws passed by Congress, though they too have the force of law. But presidents can't use executive orders to alter federal statutes. That takes congressional action.
Trump's Justice Department has urged Congress to roll back long-held legal protections for online platforms such as Facebook, Google and Twitter. The proposed changes would strip some of the bedrock protections that have generally shielded the companies from legal responsibility for what people post on their platforms.
The four tech CEOs command corporations with gold-plated brands, millions or even billions of customers, and a combined value greater than the entire German economy. One of them, Bezos, is the world’s richest individual; Zuckerberg is the fourth-ranked billionaire.
Critics have questioned whether the companies stifle competition and innovation, raise prices for consumers and pose a danger to society.
In its bipartisan investigation, the Judiciary subcommittee collected testimony from mid-level executives of the four firms, competitors and legal experts, and pored over more than a million internal documents from the companies. A key question: whether existing competition policies and century-old antitrust laws are adequate for overseeing the tech giants, or if new legislation and enforcement funding are needed.
Cicilline has called the four companies monopolies, although he says breaking them up should be a last resort. While forced breakups may appear unlikely, the wide scrutiny of Big Tech points toward possible new restrictions on its power.
Cicilline also said that in the wake of the coronavirus pandemic, “these giants stand to profit” and become even more powerful as millions shift more of their work and commerce online.
The companies face legal and political offensives on multiplying fronts, from Congress, the Trump administration, federal and state regulators and European watchdogs. The Justice Department and the Federal Trade Commission have been investigating the four companies’ practices
No strangers to anti-trust accusations
Just last year, the European Commission fined Google €1.49 billion for abusive practices in online advertising.
The EU's antitrust chief Margrethe Vestager said in 2019 Google had illegally misused "its dominant position for the brokering of online search adverts and shielded itself from competitive pressure by imposing anti-contractual restrictions on third-party websites.
"This is illegal under EU antitrust rules. The misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate - and consumers the benefits of competition.”
In April 2018, Zuckerberg made his debut before the Senate in a five-hour hearing before a joint session of the Commerce and Judiciary committees.
He not only answered questions about the Cambridge Analytica scandal but also had to defend his company against monopoly power accusations. When asked about his biggest competitor in 2018, Zuckerberg said he could not name one.