Congress fumbles through antitrust hearing with big tech CEOs
The four horsemen of the techpocalypse – the CEOs of Amazon, Apple, Facebook, and Google – joined the US House of Representatives today for an antitrust hearing.
We watched every second of the more than five and a half hours of Congress’ grilling of some of the richest men in the world so you wouldn’t have to.
Let’s start with the ending. House Antitrust Committee Chairman David Cicilline closed today’s hearing with the following statement:
This hearing has made one fact clear to me: these companies as they exist today have monopoly power. Some need to be broken up, all need to be properly regulated and held accountable. We need to ensure the antitrust laws first written more than a century ago work in the digital age.
Now that we’ve got that bit of cogent observation out of the way, let’s get onto the good, the bad, and the GOP.
The hearing opened with a statement from Chairman Cicilline as well. It was at this point we noticed he was wearing an Apple watch.
His main point: “It is possible these companies will emerge from this crisis even more consolidated than before.” Cicilline stated that big tech’s business methodology was built to discourage entrepreneurship and hurt jobs, he continued “simply put, they have too much power.”
The hearing was organized so that committee members would each have five minutes to speak and then panel members would take turns asking questions. Due to the pandemic, Congresspersons were required to wear masks unless they had the floor. This would become a point of annoyance for Representative Jim Jordan of the GOP throughout the proceedings.
Republican Rep. Jim Sensenbrenner spoke up next. Did you know he owns some $98,000 in stocks of the four companies represented by their CEOs at the hearing? As the first GOP member to speak in the antitrust hearing he immediately turned the session into a referendum on right wing conspiracy theories concerning the alleged censorship of Conservative voices on social media.
Sensenbrenner did at least try to tie his blatant derailing of an antitrust hearing to consumer concerns, adding “conservatives are consumers too, and they need the protection of the antitrust laws.”
Next up was Rep. Jerry Nadler, a democrat who was attending the hearing remotely, as were all four big tech CEOs. He weighed in with the entire premise of Congress’ concerns over big tech’s antitrust activities:
It is effectively impossible to use the internet in one way or the other without using the services of these four companies.
Nadler went on to make the comparison between big tech founders and robber barons of the rail industry.
And then Jim Jordan got his five minutes. Apparently nobody told Mr. Jordan that this was an antitrust hearing because he wasn’t wasting a moment of his time discussing the bipartisan concerns surrounding the potential monopoly status of the four companies represented. Instead, he decided the proceedings should revolve around conspiracy theories. He began with:
I’ll just cut to the chase, big tech’s out to get conservatives. That’s not a suspicion, that’s not a hunch, that’s a fact.
He cites the downranking of Breitbart (just caught peddling COVID-19 misinformation in a press conference and The Federalist (an outlet that published an article saying people should have “chicken pox parties” for COVID-19) as examples of this bias and says “if it doesn’t end, there has to be consequences.”
Jordan then refused to cede the floor as Chairman Cicilline demanded order – someone actually yelled “put your mask on” several times before Jordan finally went quiet.
And then there was the eerie moment when four of the richest men on the planet raise there hands to swear in remotely via conference call to an official Congressional hearing.
The four tech CEOs, Google’s Sundar Pichai, Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, and Apple’s Tim Cook, all took a few moments to honor the late Congressman John Lewis and to wax nostalgic about all the good their companies do. And then it was time for questions. Here we’ll list the most interesting exchanges and moments throughout the entirety of the event.
Representative Cicilline kicked off the question portion with a doozy:
Cicilline: “Why does Google steal content from honest businesses?”
Pichai: “With respect, I disagree with that characterization… we see many businesses thrive -”
Cicilline: “Isn’t there a fundamental conflict of interest [between Google’s ad services and its website rankings]?
Pichai: “We’ve always focused on providing users with the most relevant content. We show ads for only a small subset of queries.”
Cicilline, referring to Google getting caught stealing reviews from Yelp: “The choice Google gave Yelp was let us steal your content or disappear from the web.”
Pichai: “I don’t believe that happens…”
Cicilline: “Did Google ever use its surveillance over web traffic to identify competitive threats?”
Pichai: “We’re really focused on improving our products.”
Congressman Jim Sensenbrenner took the helm next and, like his GOP counterpart Jim Jordan, immediately abandoned the notion that this was an antitrust hearing, and expounded on the conspiracy theory that big tech willfully silences Conservatives. Speaking to Facebook CEO Mark Zuckerberg, he asked:
After hearing Mr Jordan give a long line of censorship of conservative view points… Exactly what are your standards in, quote, ‘filtering out political speech that maybe some people out there don’t agree with?’
Zuckerberg: “Our goal is to offer a platform for all ideas.”
Sensenbrenner: “It was reported that Donald Trump Jr. got taken down for a period of time because he put something up, the efficacy of hydroxycholoroquine, now I wouldn’t take it myself, but there’s still a debate…”
Zuckerberg: First, to be clear I think what you might be referring to happened on Twitter… we do prohibit content that will lead to harm and stating that there’s a proven cure for COVID when there is in fact none might encourage someone to go take something that might have adverse effects, so we take that down. We do not take down discussions around trials of drugs or people who say they think something will work.
Sensenbrenner: “Wouldn’t that be up to someone else to say… here’s what the facts are?”
Zuckerberg: “We do not want to become the arbiters of truth… on specific claims, if someone is going to go out and say that hydroxycholoriquine is proven to cure COVID when in fact it has not been proven to cure COVID… we think that we should take that down. That could cause imminent risk of harm.”
Nadler then got his five minutes, which went like this:
Nadler: “You bought Instagram…”
Zuckerberg: “Yep.”
Nadler: “What did you mean when you [previous to purchasing it] described Instagram as a threat?”
Zuckerberg: “At the time, there was a small but growing field… in the space of mobile photos and camera apps they were a competitor, I’ve been clear about that.”
Nadler: “Merger and acquisitions that buy off potential competitors to neutralize competitors is against antitrust laws. In your own words you purchased Instagram to neutralize a competitive threat, if this was an illegal merger at the time of the transaction, why shouldn’t Instagram now be broken off into a separate company?”
Zuckerberg: “Well, congressman I think the FTC had all these documents and reviewed this and unanimously voted at the time not to challenge the acquisition. I think with hindsight it probably looks obvious that Instagram would have reached the scale that it has today, but at the time it wasn’t obvious… it was not a guarantee that Instagram was going to succeed.”
At the end of Nadler’s time, Cicilline took a moment to remind everyone that “the failures of the FTC in 2012 of course do not alleviate the antitrust challenges that the chairman described.”
Then it was time for Congressman Ken Buck who began with a message on how capitalism makes America great. He went on to echo other Republicans by saying, “I do not believe big is necessarily bad.” Buck then painted Google as a company in bed with the Chinese military and suggested that, after getting caught red handed stealing from music company Genius, that the company finds itself beyond reproach.
Buck: “Do you think that Google could get away with following China’s corporate espionage playbook [by stealing from Genius] if you didn’t have a monopolistic advantage in the market?”
Pichai: “Congressman, I want to be able to address the important concerns you raised. First of all we are proud to support the US government… we have a very limited presence in China. And with respect to music, we license content there. In fact we license content from other companies. So this is a dispute between Genius and other companies.”
Hank Johnson, a democrat from Georgia, took his five minutes to discuss Apple’s App Store, alleging it was a non-competitive walled-garden.
Johnson: “Apple is the sole decision maker as to whether an app is made available to Apple users.”
Cook: “Yes.”
Johnson: “We’ve heard concerns that rules governing the app store development process are not made available to app developers .. they’re made up as you go along.”
Cook: “We treat every developer the same, we have open and transparent rules.”
Johnson: “Some developers are favored over others, isn’t that correct?”
Cook: “That is not correct.”
Cook also responded to the allegation that the app market wasn’t a competitive on for Apple: “It’s so competitive, I’d describe it as a street fight in the mobile phone business.”
Then came Matt Gaetz, the Republican from Florida. As you can guess, his concerns were on everything but antitrust concerns.
Gaetz: “Project Maven… Did you weigh the input from your employees when making the decision to abandon that project with the US military?”
Pichai: “We are deeply committed to supporting the military and the US government. We do take our employees’ input into account.”
Gaetz: “Will you take the pledge that google will not adopt the bigoted anti-police policy that is requested in the most recent [employee] letter?”
Pichai: “We have a long track record of working with law enforcement when it is supported by due process and the law.”
Gaetz: “I understand the history, I”m asking about the future.”
Pichai: “We are committed to continuing to work with law enforcement in a way that’s consistent with due process and the law in the US.”
Gaetz: “Then why are you working with the Chinese military?”
Pichai: “We are not working with the Chinese military, it’s absolutely false.”
Congressman Jamie Raskin took the floor next. Despite being a Democrat, Raskin apparently lost the thread too and began riffing on the presidential elections instead of discussing antitrust concerns.
Raskin: “The proliferation of fake Facebook accounts was a key tool in the strategy of Russian interference in the election of 2016, American law enforcement, the Senate, and the House have all found that Vladmir Putin engaged in a sweeping and systematic campaign to undermine American democracy in 2016 and to work for a victory for Donald Trump… is there nothing that can be done about the use of Facebook to engender racial division?”
Zuckerberg: “Since 2016 there have been a lot of steps we’ve taken to protect the integrity of elections. We’ve hired more than 30,000 people to work on safety and security. We’ve built up the AI systems to find… harmful content including more than 50 different networks of coordinated inauthentic behavior, basically nation-states trying to interfere in elections.”
When Raskin was done asking about things not related to antitrust regulations, it was time for Congressman Kelly Armstrong to bring things back on track. Instead he grilled Pichai about privacy concerns related to the police use of location data. To be fair there were some concerns about GDPR, but those were a bit misplaced in the forum as well.
Just when all hope that Congress would hold themselves to the task of discussing antitrust issues seemed lost, Congresswoman Pramila Jayapal got her five minutes and saved the stream.
Jayapal: “Does Amazon ever access and use third-party seller data when making business decisions?”
Bezos: “I can’t answer that question yes or no. What I can tell you is we have a policy against using seller-specific data to aid our private label business. But I can’t guarantee you that that policy has never been violated.”
Jayapal: “Do category managers have access to non-public data about 3rd party businesses?”
Bezos: “Here’s what I can tell you: we do have certain safeguards in place, we train people on the policy and we expect people to follow that policy… the fact that we have a policy is voluntary… if we found that someone violated it we would take action.”
The respite from non-related issues was brief however, as GOP Congressman Steube, another Florida Republican, decided to veer off the rails again.
Stuebe, after telling a story about how he couldn’t find positive coverage of himself on Google:
I Googled [far-right website] ‘Gateway Pundit,’ it didn’t show up on the first page and it didn’t show up on the second page.
Stuebe: “Was there anything done at Google between a couple months ago and… you appearing today that’s changed your approach to silencing conservative websites?”
Pichai: “We approach our work with a deep sense of responsibility in a non-partisan way… I believe on our platforms, including YouTube, there are more conservative voices than ever before and we believe in freedom of expression.”
Stuebe: “What assurances can you give me that any bias among your employees isn’t influencing your spam folder algorithms?”
Pichai: “There’s nothing in the algorithm that has anything to do with political ideology.”
And, a couple of questioners later, Jim Jordan made his triumphant return to not discussing antitrust issues at the hearing:
Jordan: “Mr. Pichai is Google going to tailor its features to help Joe Biden in the 2020 election?”
Pichai: “We approach our work, you know we support both campaigns today we think political ads is an important part of free speech in democratic societies, you know we engage with campaigns according to law and we approach our work in a nonpartisan way.”
Jordan: “It was a yes or no question, can you assure Americans today you won’t help Joe Biden in the upcoming election?”
Pichai: “You know, we support work that campaigns do. We won’t do any work to tilt things one way or another, it’s against our core values. We’ll continue to conduct ourselves in a neutral way.”
Congresswoman Mary Scanlon had the mic next after Jordan and she sent a zinger his way:
I’ll direct our attention back to antitrust laws rather than fringe conspiracy theories…
This caused a bit of a hissy fit from Jordan. He once again had to be yelled at to put his mask back on and cede the floor. Tsk tsk.
Scanlon brought the hearing back around immediately by questioning Amazon about Diapers.com:
In 2009, your team viewed Diapers.com as Amazon’s largest and fastest growing competitor for diapers. One of Amazon’s top executives said that Diapers.com keeps the pressure on pricing on us, and strong competition from Diapers.com meant that amazon was having to work harder and harder so that customers didn’t pick Diapers.com over Amazon. And the customers we’re talking about were hard-working families, single parents with babies and young children.
Now because Diapers.com was so successful Amazon saw it as a threat…. in 2010 amazon hatched a plot to go after Diapers.com and take it out… in one month Amazon was willing to bleed over 200 million dollars in diaper profit losses. How much money was Amazon willing to lose in this campaign against Diapers.com?”
Bezos: “I don’t know the direct answer to your question.. what I can tell you is that the idea of using diapers and products like that to attract new customers with new families is a very traditional idea.”
Scanlon: “Your own docs make clear that the campaign against Diapers.com worked and within a few months it was struggling and that’s when Amazon bought it. After… Amazon cut promotions… and the steep discounts it used to lure customers away from Diapers.com and then increased the prices of diapers for new moms and dads. Mr. Bezos, did you personally sign off on the plan to raise prices after Amazon eliminated its competition?”
Bezos: “I don’t remember that at all. What I remember is that we match competitor prices. I believe we followed Diapers.com. I can also tell you after we -”
Scanlon, cutting Bezos off: “How would customers, especially single moms and families, how would they benefit by the prices being driven up now you’ve eliminated your competitor?”
Bezos: “Well, I don’t agree, with great respect, I don’t agree with the premise. At the same time you have to recognize in context, diapers is a very large product category sold in many, many places.”
Scanlon: “Right, but this is the online diaper market…. the evidence we’ve collected suggests that the predatory practices weren’t unique here.”
At this point in the hearing, things got a little dull. A few more congresspersons asked some softball questions, but things didn’t pick back up again until Congresswoman Jayapal got the mic back in round two of questioning.
Jayapal, to Zuckerberg: “Do you copy your competitors?”
Zuckerberg: “We’ve certainly adapted features that others had a lead in, as have others copied and adapted features that we lead in.”
Jayapal: “Has Facebook ever threatened to clone the products of another company while also attempting to acquire that company?”
Zuckerberg: “No.”
Jayapal: “Facebook was developing a product similar to Instagram prior to its acquisition… is that correct?”
Zuckerberg: “Yes.”
Jayapal: “Did you ever use this very similar ‘Facebook Camera’ product to threaten Instagram’s founder, Kevin Systrom?”
Zuckerberg: “I’m not sure what you would mean by ‘threaten.’ I think it was public that we were building a camera app at the time. That was a well-documented thing.”
Jayapal: “In a chat, you told Mr. Systrom that Facebook was quote ‘developing our own photo strategy so how we engage now will also determine how much we’re partners versus competitors down the line.’ And Instagram’s founder seemed to think that was a threat, he confided in an investor at the time that he feared you would go into quote ‘destroy mode’ if he didn’t sell Instagram to you. Were there any other companies that you used this same tactic with?”
Zuckerberg: “I want to respectfully disagree with your interpretation. It was clear that this was a space that we were going to compete in one way or another, I don’t view those conversations as a threat in any way.”
Jayapal: “Did you warn Evan Spiegel, the founder of Snapchat, that Facebook was in the process of cloning the features of his company while also attempting to buy Snapchat?”
Zuckerberg: I don’t remember those specific conversations, but that was also an area where it was very clear we were going to be building something. People want to be able to communicate privately, they want to be able to communicate with all their friends at once.”
Jayapal then used the rest of her time for what was clearly the hearing’s mic drop moment:
When the dominant platform threatens its potential rivals, that should not be a normal business practice. Facebook is a case study, in my opinion, in monopoly power because your company harvests and monetizes our data and then your company uses that data to spy on competitors and to copy and acquire and kill rivals.
You’ve used Facebook’s power to threaten smaller competitors, and to ensure that you always get your way. These tactics reinforce Facebook’s dominance, which you then use in increasingly destructive ways so Facebook’s very model makes it impossible for new companies to flourish separately, and that harms our democracy, it harms mom and pop stores, and it harms consumers.
Mr. Buck came back after that with the yet another on-topic argument, the GOP’s third by this point more than mid-way through the hearing:
PopSockets CEO and inventor David Barnett detailed how Amazon allowed counterfeit products to appear on Amazon’s marketplace ahead of PopSocket’s products. Mr. Barnett told CNBC that PopSockets found at least 1,000 counterfeit products for sale on Amazon’s marketplace which Amazon allegedly failed to remedy until PopSockets agreed to a nearly 2 million dollar marketing deal with Amazon.
Bezos would answer that concern later in the hearing because, unfortunately, Buck then decided to veer away from antitrust concerns and solicit promises from all four CEOs they’d “certify here today that your company does not use and will never use slave labor.” All four did so without hesitation.
Congressman Raskin put things back in order with a quick, razor-sharp question:
Does Amazon price the Echo device below cost?
Bezos: “Not its list price, but it’s often on promotion and sometimes when it’s on promotion it’s below cost, yes.”
Raskin went on to point out that Amazon’s pricing of the Echo effectively made it impossible for competitors to profit. Bezos responded by pointing out that he wants to get other smart assistants on Echo devices.
And then Gaetz was back to express his incredulity that fine Conservative news outlets were being downranked or censored by big tech. Here’s the outlets he mentioned specifically:
- The Gateway Pundit: An outlet known for posting outright hoaxes (it claimed Stoneman Douglas High School shooter Nikolas Cruz was a liberal Democrat; investigators later discovered he was a far-right Conservative).
- The Western Journal: A fake news site known for reporting hoaxes such as articles telling readers that California was going to ban the bible or that climate change is made up.
- American Spectator: Denies climate change, openly anti-Democrat.
- The Daily Caller: Founded by Tucker Carlson, publishes false articles about climate change and medical science.
- Breitbart: Fake news website that publishes right wing hoaxes and conspiracies.
And speaking of fake news, Congressman Stuebe’s second round of questioning was even less-related to antitrust issues than his first.
Stuebe: “How can doctors giving their opinion on… COVID-19.. violate YouTube’s guidelines?”
Pichai: “We believe in freedom of expression and there is a lot of debate on YouTube for effective ways to deal with COVID; during a pandemic we look to local health authorities — in this case it would be the CDC — to look for guidelines around misinformation; in this case it could cause harm in the real world. For example, if there are aspects of a video, and if it explicitly states something could be a proven cure and that doesn’t meet CDC guidelines, we would remove it.”
Next up, a pair of congressional inquisitors managed to stay on topic to ask Jeff Bezos some questions about counterfeits – “why isn’t Amazon responsible for stopping counterfeits on its platform?” – and whether Amazon engages in making knock-offs itself. Bezos gave a non-answer that simply agreed counterfeiting was a problem and said Amazon was dedicating resources to fixing it.
Normalcy wouldn’t last, because Jim Jordan returned and immediately gave his time to Congressman Gaetz.
Gaetz is all in on the alleged video evidence showing Facebook’s bias against Conservatives. The evidence comes from Project Veritas – a club of far-right conservative internet users who try to convince people who work for big tech to say bad things about Conservatives on camera. Check it out for yourself here on Project Veritas’ own website.
Gaetz to Zuckerberg: “The culture you lead within Facebook is one that disadvantages Conservatives and leads to content manipulation.”
Zuckerberg: “I’m somewhat familiar with the concerns that they’ve raised… we aim to be a platform for all ideas… I certainly do not want our platforms to be run in a way that has any ideological bias… when people raise concerns like that we do look into them… if the behavior that they cited was true then that would be unacceptable in our operation.”
Then Gaetz basically breaks Palmer Luckey’s NDA with Facebook by asking Zuckerberg why he fired Luckey. Zuckerberg didn’t answer, saying it wasn’t appropriate to discuss in public. Then Gaetz revealed that, due to the NDA, Luckey can only talk to government representatives about why he was fired, adding “and I’m a government representative.” This was a weird moment where it appeared Gaetz was trying to pull off a “gotcha.”
At this point, apparently, the Congresspersons were just going to talk about whatever came to mind, antitrust hearing be damned. Chairman Cicille decided it was time to talk about public safety and harmful content.
Cicille: “Do you agree that there are limits to harmful speech.. that are particularly important when it comes to the health and safety of the public?”
Zuckerberg: “I certainly do. And I actually think that our policies go further than just limiting those types of those things. “
Cicille: “You agree you have a responsibility to remove harmful lies from your platform, correct?”
Zuckerberg: “I think we have a responsibility to limit the spread of content that may be harmful.”
Cicille: “Doesn’t that suggest that with all of your policies in place, that your platform is so big that you can’t contain deadly content?”
Zuckerberg: “I don’t think so. I think we have, on COVID information in particular, a relatively good track record.”
Then, ugh, it was Gaetz again. Distancing himself even further from the antitrust aspects of the hearing, he ranted about the Southern Poverty Law Center (SPLC), An organization that researches hate and extremism in the US.
Gaetz says the SPLC traffics in hate because it declares some Catholic, Jewish, and Christian organizations “extremist” over their anti-LGBTQPIA+ views. Any organization dedicated to promoting the bigoted view that a government should not give a marriage license to non-heterosexual couples is usually considered an extremist hate group by the SPLC. That’s also why Dr. Ben Carson, a member of Congress, is on the list as well – this will be relevant soon.
Mr Stuebe makes another appearance to ask all four CEOs if they think China steals from US companies. Zuckerberg’s response, in context, made me laugh.
Stuebe: “Do you believe that the Chinese government steals technology from US companies?”
Cook (I’d forgotten Tim Cook was there by this point): “I don’t know of specific cases where we have been stolen from.”
Pichai: “I have no first-hand knowledge of any information stolen from Google.”
Zuckerberg: “I think it’s well-documented that the Chinese government steals technology from American companies.”
Bezos: “I have heard many reports of it.”
And then, I kid you not, Stuebe yielded the floor to Gaetz again.
Gaetz, to Zuckerberg: “What is a digital land grab?”
Yes, you read that right. Gaetz asked a question related to antitrust. Zuckerberg gave a non-answer, but let the record show that it happened. It wouldn’t last long. Two speakers later and Gaetz gets yet another turn.
Gaetz, to Jeff Bezos: “You don’t believe Dr. Ben Carson is an extremist do you?”
Bezos: “No Sir, I don’t.”
Pichai responds the same way.
The next interesting portion of the hearing wouldn’t come until Jim Jordan spoke again a few congresspersons later. He went on a long, wayward rant about cancel culture and the First Amendment that hilariously had nothing to do with people being canceled of the First Amendment.
He cited Drew Brees and James Harden, two athletes who’d been criticizedby fans over recent statements they’d made. These men were not canceled, they remain millionaire athletes with legions of adoring fans. They also did not have their First Amendment infringed upon because they weren’t arrested, fined, censored, or prohibited from making their statements.
The final point of interest, and perhaps the best question of the whole 5 ½ hour long crapfest was Congresswoman Lucy McBath getting Jeff Bezos to admit that Amazon probably sells stolen goods.
McBath: “Are stolen goods sold on Amazon?”
Bezos: “Not to the best of my knowledge. There’s over a million sellers on Amazon so I’m sure that it has happened.”
After that and the aforementioned closing comments, the hearing was thankfully over.
