Editorial: Lawmakers just raked Big Tech CEOs over the coals
Amazon Chief Executive Jeff Bezos, the wealthiest man in the United States, made his first appearance ever before a congressional committee Wednesday. It did not go well.
The hearing, held by a House Judiciary Committee panel, featured almost five hours of sharp criticism by lawmakers of shockingly anti-competitive practices allegedly deployed by Amazon and three other dominant technology companies — Alphabet, Facebook and Apple. Although Republicans at the hearing seemed more concerned about instances of alleged bias against conservatives, members from both parties hammered Bezos and his counterparts for seeming to use their positions as gatekeepers of crucial platforms to advance their own interests, harm competitors and abuse the public.
The panel has been gathering information for more than a year about the companies’ possible violations of U.S. antitrust law. The hearing gave the four leaders the chance to rebut evidence the panel collected from internal company documents and testimony from their competitors and customers. They were not persuasive.
The four companies’ products and services overlap, but each has a near-chokehold over one or more multibillion-dollar markets. Amazon is responsible for about 40% of e-commerce in the United States and holds a similar lead in the market for hosting internet-based services. Alphabet’s Google handles more then 90% of the world’s internet searches, and its YouTube user-generated video platform is the most popular in the United States. Facebook is the world’s largest social network and, along with Google, dominates online advertising. Apple doesn’t corner the market on any products or services, but the only way to sell software and services to the roughly 1 billion iPhones and iPads in use worldwide is to pass through Apple’s App Store.
The CEOs insisted that they face rigorous competition and are focused on delivering the best possible products and experiences for consumers. But lawmakers offered example after example of the companies appearing to use their market power to distort the competitive landscape, and the answers offered by the CEOs were singularly unsatisfying. Bezos, for instance, acknowledged that Amazon used data aggregated from other sellers on its platform to develop competing products. Alphabet’s Sundar Pichai struggled to explain what his company’s data policies were and whether it adjusted its search engine to favor its own products and harm competitors.
Apple’s Tim Cook sought to defend the company’s practice of demanding 30% of the revenue app developers collect from their sales as an enormous discount from the software distribution costs of yore, as opposed to a toll that it forced developers to pay. And Facebook’s Mark Zuckerberg had to admit that yes, his company has a history of buying up companies that it perceived as threats to its business.
(Several Republicans on the panel honed in on complaints of anti-conservative bias, but bizarrely focused on Facebook’s decision to remove a video that dangerously touted hydroxychloroquine as a “cure” for COVID-19 that removed the need for wearing a mask — after it had garnered 20 million views. “If Facebook is out there trying to repress conservative speech,” said Rep. Jamie Raskin (D-Md.), “they’re doing a terrible job at it.”)
One potential hurdle for Big Tech’s critics is that U.S. antitrust law is uniquely focused on preventing harm to consumers, not to competitors. And because many of the products and services that Big Tech companies offer are free to use, it isn’t automatically clear how consumers are harmed when the companies compete unfairly. That’s an issue for Congress to explore.
In the meantime, though, the panel is assembling a powerful case for regulators to pursue. The Federal Trade Commission and the Justice Department have launched investigations into multiple Big Tech companies, as have many state attorneys general. If Wednesday’s hearing is any guide, the companies have much to answer for.
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