Congress grills tech CEOs in wide-ranging hearing on monopoly, political bias, China and more
Congress grills tech CEOs
in a wide-ranging hearing on monopoly,
political bias, China and more
The chiefs of four of the biggest tech companies in the world — Amazon, Apple, Facebook, and Google — faced lawmakers Wednesday for a hearing on digital competition that could have a cataclysmic impact on an industry largely unhindered by regulators.
The grilling of tech titans Jeff Bezos, Tim Cook, Mark Zuckerberg, and Sundar Pichai (the companies’ respective CEOs), was done by the House Judiciary Antitrust Subcommittee as part of its ongoing, yearlong investigation into competition in the digital market.
The approximately 5-hour hearing’s line of questioning was sharply divided down party lines. GOP congress members mostly took the CEOs to task for what most of them perceived as an effort to silence conservative voices online. Rep. Greg Steube, R-Fla. accused Google’s CEO of suppressing conservative sites because he could not Google a right-leaning article he was searching for and because he no longer received an email after he was elected to Congress.
Rep. Jim Jordan accused Google of “helping” Hilary Clinton in 2016 and demanded that each CEO make a commitment “to not help Joe Biden” in 2020.
Meanwhile, most Democrat members of the committee pummeled the CEOs with questions about monopolizing their markets, concerns over data privacy, and other antitrust issues.
Here is a rundown on the hearing. All times Eastern.
6:16 p.m: Did Amazon use pandemic to sell more of its own products?, congresswoman asks Bezos
Rep. Mary Scanlon says, when the pandemic hit, “Amazon said it was going to delay shipment of nonessential products.” She accused the e-commerce giant of applying that policy selectively and asked why “Amazon devices like Fire TV, Echo speakers and Ring doorbells” were deemed essential during the pandemic.
“There was no playbook for this; demand went through the roof,” Bezos responded. “Our goal was to limit to essential supplies but I am sure we did not do that perfectly,” he said.
6:05 p.m.: Jim Jordan asks tech CEOs about ‘cancel culture’
Rep. Jim Jordan said the “cancel culture mob is dangerous.” He went on to ask each CEO what their thoughts were on “cancel culture,.”
Tim Cook: “I think it’s good for people to hear different people, different points of view.”
Zuckerberg: “I believe strongly in free expression. I’m very worried about some forces in this country that I see pushing against free expression.
Bezos: “I am concerned in general about that.” Bezosa called social media a “destruction machine.”
5:56: Democrat congressman calls out GOP peers on their line of questioning, doesn’t understand ‘the whining’
Taking a brief respite from questioning the tech CEOs, Rep. Raskin, D-Md., took some of his Republican colleagues to task for their questions during the hearing. “Top-performing links/posts on Facebook … are right-wing sites,” Raskin said. “If Facebook is trying to repress conservative speech they are doing a terrible job. I don’t understand the whining.” Raskin said the recent removal by Twitter of Trump’s tweets was about spreading false information about public health and that he didn’t understand his colleagues’ line of questioning.
5:15 p.m.: Cook questioned over App Store
Rep. Lucy Kay McBath, D-Ga. came out swinging at Cook over Apple’s App Store, asking him directly if Apple has “the power to exclude apps from the App Store.”
“If you look at the history of this, congresswoman, we’ve increased the number of apps from 500 to 1.7 million so there is a very wide gate for the App Store,” Cook responded. “And there is fierce competition for developers and we want every app we can on the platform.”
McBath countered by saying, “Apple can exclude apps from the App Store in fact it has.”
She cited a 2016 incident when Apple introduced its own ScreenTime app and simultaneously removed other parental control apps that monitored children’s screen time.
Cook said the other apps were removed for privacy concerns, but McBath noted that they came right back to the store approximately six months later after multiple complaints and were asked to make almost no changes to their privacy settings.
“The timing of the removal seems very coincidental,” McBath said.
5:00 p.m.: Rep. Scanlon questions Pichai over YouTube
Rep. Scanlon pushed Pichai over Google’s acquisition of YouTube, which Pichai said was before his time and he could not offer an explanation for why the company paid “30 times its original bid.”
“Google is now by far the top online site where Americans watch videos including children’s videos and as I’m sure you’re aware federal law prevents companies from collecting data on children under 13,” Scanlon said. Yet last year, she added, the FTC found Google spent years knowingly collecting data on children under 13 on YouTube.
Pichai said that as a parent, they take these concerns “very seriously” and have invested heavily to make sure they are following all regulations.
“I’m more concerned that you’re investing rigorously in luring in advertisers like toymakers Mattel and Hasbro by telling them that Youtube is the No. 1 website regularly visited by kids, that sounds like you are targeting the kids, targeting advertisers to bring them on board,” she said.
Pichai said he wasn’t familiar with the reports she was referencing, but that his office would follow up with hers.
4:00 p.m.: Rep. Nadler presses Facebook and Google over journalism dominance
“The news and journalism industry in this country is in economic free fall,” Nadler said. “Tens of thousands of journalists have been laid off in recent years.”
The reason journalism is in free fall is that Google and Facebook now capture the vast majority of digital ad revenue,” he added. “Although news publishers produce valuable content, it is Google and Facebook that increasingly profit off their content.”
Nadler brought up an incident when Facebook reported high and quickly growing rates of video viewership, and “based on these metrics, news publishers fired hundreds of journalists choosing to boost their video.” It was later revealed that Facebook inflated these numbers.
Zuckerberg said he did not know the numbers were inflated, “and we regret that mistake.”
“I certainly know how important it that the metrics we report are accurate,” he added.
Nadler asked Zuckerberg what he would say to the journalists who have “lost their jobs because of Facebook’s deception.”
“I disagree with that characterization,” the tech CEO said.
Nadler concluded by calling it a “very dangerous situation.”
3:50 p.m.: ‘We have adapted features,’ Zuckerberg replies when asked about copying competitors
Rep. Pramila Jayapal, D-W.A., accused the social media CEO of “copying other apps that could prevent our competitors from gaining other footholds,” citing what she said was a plan disclosed by Facebook executives as per a Wall Street Journal report.
She said that Facebook threatened the Snapchat CEO that it was building a clone of the Snapchat app. Jayapal asked point-blank: “Do you copy your competitors?”
Zuckerberg answered, “We have adapted features” but said that he did not agree with the premise that they copied competitors.
Rep. Cicilline took aim at Amazon’s marketplace and allegations from a Wall Street Journal report that the company rips off products from third-party sellers.
Cicilline also noted that “Amazon controls as much as 75% of all online marketplace sales,” asking Bezos, “Isn’t it true that small businesses have no real option but to rely on Amazon to connect with customers and make online sales?”
Bezos argued that “I believe there are a lot of options,” but “Amazon is the best one.”
Cicilline then pressed Bezos as to whether Amazon refers to third-party sellers as “internal competitors.”
“In some ways, we are competing, and they’re also competing with each other,” Bezos said.
The congressman said that during their yearlong investigation, “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 items and drive them out of business.”
“Isn’t it an inherent conflict of interest for Amazon to produce and sell products on its platform that competes directly with third-party sellers particularly [when] you, Amazon, set the rules of the game?” he added.
Bezos argued that it is best for the customers, and “consumers are the ones ultimately making the decision.” He said they have a policy against using “individual seller data to compete with our private label products” and they are looking into whether that is being upheld as a result of the Wall Street Journal article.
Cicilline concluded by saying their evidence shows “Amazon is only interested in exploiting its monopoly power over the commercial market place to further expand and protect this power.”
“This investigation makes clear that Amazon’s dual role as a platform operator and competing seller on that platform is fundamentally anti-competitive and Congress must take action,” he said.
3:15 p.m.: Rep. Jordan demands Google not help Joe Biden in 2020
In a fiery tirade, Rep. Jordan accused Google of trying to “help Clinton” in 2016 and asked the company’s CEO to not help Joe Biden in 2020.
“According to your multicultural marketing executive” the company “tried to help Clinton,” Jordan said, and asked for assurance that Google “would not try and help Joe Biden in 2020.”
Pinchai told Jordan “you have my commitment” that Google will act in a non-partisan manner.
The exchange took a heated turn with Rep. Mary Gay Scanlon, D-P.A., said ““I’d like to redirect your attention to antitrust laws rather than fringe conspiracy theories.”
Jordan was then admonished by other members of the committee for running over his allotted time and refusing to put back on his mask at one point after his questioning.
3:04 p.m.: Congressman presses Pichai over why he could not find a conservative article via Google
In a bizarre exchange gaining traction online, Rep. Greg Steube, R-Fla. asked Pinchai why he was unable to Google to find a conservative article he had wanted to read and instead had to type the website’s address.
Steube also mentioned that since he was elected to Congress, his emails have been going into his spam folder. He asked Pinchai if there was some effort to silence conservative voices, a common theme among questioning by Republicans during the hearing.
Pinchai said that Google approaches its work in a “non-partisan way” and that “on our platform, there are more conservative voices than ever before. He also told Steube he would have to look into this specific issue to see what had happened when he tried to Google his article and asked that Pichai follow up with his office.
2:15 p.m.: Zuckerberg questioned over Facebook’s acquisition of Instagram
Zuckerberg faced tough questioning from Nadler over Facebook’s acquisition of Instagram in 2012, which Nadler says was part of Facebook’s attempt to suppress competition.
“I’ve always been clear that we viewed Instagram both as a competitor and as a complement to our services,” Zuckerberg said.
Nadler questioned Zuckerberg on reports that he previously viewed Instagram as a “threat” to Facebook prior to the acquisition, and that he purchased Instagram to neutralize a competitor.
“I’ve been clear that Instagram was a competitor in the space of mobile photo-sharing, there were a lot of others at the time,” he said. “It was a subset of the overall space of connecting that we exist in and by having them join us they certainly went from being a competitor in the space of being a mobile camera to an app that we could help grow.”
Nadler pressed Zuckerberg as to why Instagram should not be broken off into a separate company if it was acquired to suppress a threat of competition. Zuckerberg argued that the FTC reviewed the documents and voted not to challenge the acquisition at the time.
“With hindsight it probably looks obvious that Instagram would reach the scale it has today, but at the time it was far from obvious,” Zuckerberg said, saying there was no guarantee Instagram would succeed.
Nadler concludes by doubling down, saying Facebook “saw Instagram as a threat that could potentially siphon business away from Facebook, so rather than compete with it Facebook bought it.”
“This is exactly the type of anticompetitive acquisition that the antitrust laws were designed to prevent,” “This should never have happened in the first place … and it cannot happen again.”
2:05 p.m.: Zuckerberg pressed over hydroxychloroquine incident on Twitter
Jim Sensenbrenner, R-W.I., used his time to question Zuckerberg over the separate controversy, involving Twitter, Donald Trump Jr., and hydroxychloroquine. While Twitter’s CEO was not present at the hearing, Zuckerberg defended his competitor’s action and said social media companies should not be the “arbiters of truth.”
“It was reported that Donald Trump Jr. got taken down for a period of time because he put something up — the efficacy of hydroxychloroquine,” Sensenbrenner said. “Now, I wouldn’t take it myself, but they’re still is a debate on whether it is effective either in treating or preventing COVID-19 and I think that this is a legitimate matter of discussion, and it would be up to a patient and their doctor to determine whether hydroxychloroquine was the correct medication, you know, given the circumstances.”
Zuckerberg noted that “I think what you might be referring to happened on Twitter, so it’s hard for me to speak to that, but I can talk to our policies about this.”
“We do prohibit content that will lead to imminent risk of 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 could have some adverse effects so we do take that down,” Zuckerberg said.
Sensenbrenner argued that “wouldn’t that be up to somebody else, you know, to say okay what somebody posted on this really isn’t true and here’s what the facts are. Rather than having Twitter or Facebook take it down?”
Zuckerberg said he agreed with Sensenbrenner that, “we do not want to become the arbiters of truth. I think that that would be a bad position for us to be in and not, not what we should be doing.”
Finally, Zuckerberg argued, however, that if something could cause harm they think it should be taken down.
“But on specific claims, if someone is going to go out and say that, that hydroxychloroquine has proven to cure COVID when in fact it has not been proven to cure COVID and that that statement could lead people to take a drug, that in some cases, some of the data suggests that might be harmful to people, we think that we should take that down,” he said. “That could cause an imminent risk of harm.”
1:55 p.m.: Zuckerberg says ‘we compete hard’
“The tech industry is an American success story,” Zuckerberg said in his opening remarks. “Our industry is one of the ways that America shares its values with the world and one of its greatest economic and cultural exports.”
He says Facebook has helped many small businesses stay afloat amid the COVID-19 crisis.
“Our services are about connection and our business model is advertising, we face intense competition in both,” he said, adding that for every dollar spent on advertising in the U.S., “less than 10 cents is spent with us.”
“New companies are created all the time all over the world and history shows that if we don’t keep innovating someone will replace every company here today. That change can often happen faster than you expect,” Zuckerberg said. “We compete hard. We compete fairly. We try to be the best. That’s what I was taught matters in this country. And when we succeed, it’s because we deliver great experiences that people love.”
Ultimately, Zuckerberg said he doesn’t believe “private companies should be making so many decisions about these issues by themselves” and argued for new regulation for the internet.
1:50 p.m.: Tim Cook says Apple faces fierce competition
In his prepared remarks, Cook described Apple’s origin and said the company’s success “is only possible in this country.”
He also argued that the “smartphone market is fiercely competitive, and companies like Samsung, LG, Huawei, and Google have built very successful smartphone businesses offering different approaches.”
Cook said Apple does not have a dominant market share in any market where “we do business,” including iPhone or “any product” category.
He also defended the App Store, saying for a vast majority of apps on the App Store, developers keep 100% of the money they make.
He also said that they have never raised the commission or added a single fee to the App Store since it debuted more than a decade ago.
Cook concluded by saying that he supports competition as a great virtue that promotes innovation.
“I’m here today because scrutiny is reasonable and appropriate. We approach this process with respect and humility, but we make no concession on the facts,” Cook said. “If Apple is the gatekeeper, what we’ve done is open the gate wider. We want to get every app we can on the store, not keep them off.”
1:45: Pichai defends Google Ads, and says other tools have helped small business
Pichai defended how Google Ads and other tools have helped small businesses in his opening statement.
“Online has been a lifeline for so many businesses, especially during the global pandemic,” Pichai said in his prepared remarks. “Nearly one-third of small business owners say that without digital tools they would have had to close all or part of their business during COVID.”
Pichai also noted Google’s massive investments in research and development. He added that competition drives their innovation.
“New competitors emerge every day and today users have more access to information than ever before,” he said. “Competition drives us to innovate and it also leads to better products, lower choices and more choice for everyone.”
He concluded that they are committed to working with lawmakers to “protect consumers, maintain America’s competitive technological edge in the world, and ensure that every American has access to the incredible opportunities that technology creates.”
Bezos described Amazon’s early days and its rise to success. He also defends the company’s place in the e-commerce world and its impact on the economy.
He said there are 1.7 million small and medium-sized businesses around the world selling in Amazon’s stores, and more than 200,000 entrepreneurs worldwide surpassed $100,000 in sales in Amazon stores in 2019.
According to his estimates, third-party businesses selling in Amazon’s stores have created over 2.2 million new jobs around the world.
Bezos said he “walked away from a steady job on Wall Street into a Seattle garage” to found Amazon, fully “understanding that it might not work.”
“It feels like just yesterday I was driving the packages to the post office myself dreaming that one day we might afford a forklift. Customer obsession has driven our success, and I take it as an article of faith the customers notice when you do the right thing,” Bezos added. “You earn trust slowly over time by doing hard things well, delivering on time, offering everyday low prices, making promises and keeping them.”
Finally, the CEO expressed confidence in his business, saying, “I believe Amazon should be scrutinized.”
“We should scrutinize all large institutions, whether they’re companies, government agencies, or nonprofits,” Bezos said. “Our responsibility is to make sure we pass such scrutiny with flying colors.”
1:35 p.m.: Bezos, Cook, Zuckerberg, and Pichai are sworn-in virtually
Via a WebEx video software, the four big tech CEOs virtually swore-in for their testimonies. Then, Bezos kicked off with his remarks.
1:30 p.m.: Jordan says ‘Big tech is out to get conservatives’
“I’ll just cut to the chase, big tech is out to get conservatives,” Rep. Jim Jordan, R-Ohio, said in his opening remarks. “That’s not a suspicion, that’s not a hunch, that’s a fact.”
Jordan cited a litany of what he considered as examples from over the years, ranging from Google not promoting and Facebook “suppressing” conservative views.
“We love the fact that these are American companies,” he added. “What’s not great is censoring conservatives and trying to win elections, and if it doesn’t end, there has to be consequences.”
1:20 p.m.: Nadler slams ‘concentration of power’
“Today it is effectively impossible to use the internet without using in one way or another the service of these four companies,” House Judiciary Committee Chairman Jerrold Nadler, D-N.Y., said in his opening remarks.
“I have long believed with Thomas Jefferson and Louis Brandeis that concentration of power in any form, especially concentration of economic or political power is dangerous to a democratic society,” he added.
Nadler said their concentration of power is why these companies, and the existing U.S. antitrust laws, must be further scrutinized.
1:10 p.m.: Cicillin kicks off hearing with opening remarks
Antitrust Subcommittee Chairman David Cicilline, D-R.I., kicked off the hearing with opening remarks, saying the “purpose of today’s hearing is to examine the dominance of Amazon, Apple, Facebook and Google.”
“Prior to the COVID-19 pandemic, these corporations already stood out as titans in our economy, in the wake of COVID-19, however they’re likely to emerge stronger and more powerful than ever before,” he added.
“As American families shift more of their workshopping and communication online, these giants stand to profit. Locally owned business, meanwhile, Mom and Pop stores on Main Street face an economic crisis unlike any in recent history,” Cicilline said. “As hard as it is to believe it is possible that our economy will emerge from this crisis even more concentrated and consolidated than before.”
He argued that the dominance of the four tech giants is thus hurting the U.S. economy as a whole.
12:25 p.m.: Hearing delayed slightly as the room is being cleaned
The highly anticipated hearing, which was scheduled to start at noon, is off to a delayed start Wednesday as the room is being cleaned.
Wednesday’s hearing is taking place in the same room where Attorney General William Barr testified for five hours Tuesday. Tuesday’s hearing was attended by Congressman Louie Gohmert, a Texas Republican who has tested positive for the coronavirus, a source told ABC News Wednesday.
Despite the delay, a few masked-up lawmakers have already taken their positions on the dais including Rep. Matt Gaetz, R-Fla., Rep. Jim Jordan, R-Ohio, and Rep. Mike Johnson, R-La.
12:07 p.m.: Trump calls for action from Congress on Twitter ahead of the hearing
President Donald Trump shared some thoughts via Twitter ahead of the hearing, writing, “If Congress doesn’t bring fairness to Big Tech, which they should have done years ago, I will do it myself with Executive Orders.”
He continued: “In Washington, it has been ALL TALK and NO ACTION for years, and the people of our Country are sick and tired of it!”
5 a.m.: CEOs release their opening remarks, here is what is expected today
Lawmakers have said Wednesday’s hearing will be a part of the House Judiciary Antitrust Subcommittee’s ongoing, year-long investigation into competition in the digital market.
“Given the central role these corporations play in the lives of the American people, it is critical that their CEOs are forthcoming,” House Judiciary Committee Chairman Jerrold Nadler, D-N.Y., and Antitrust Subcommittee Chairman David Cicilline, D-R.I., said in a joint statement earlier this month announcing the hearing.
“As we have said from the start, their testimony is essential for us to complete this investigation,” the statement added.
The subcommittee has been investigating the industry dominance of a small number of digital platforms and the “adequacy of existing antitrust laws and enforcement” since last June, Nadler and Cicilline said.
Notably, this will be the first time Amazon’s CEO Bezos — the richest man in the world according to Forbes’ real-time data on billionaires — will be in the hot seat testifying before Congress. Amazon has also been at the fore of the subcommittee’s investigation. Lawmakers are expected to ask about, among other things, reports that Amazon used sensitive business information from third-party sellers on its platforms, according to a statement.
Apple’s App Store has also been the subject of antitrust scrutiny, and last month officials in the European Union officially launched an investigation on whether the distribution of apps on its store potentially violates EU competition rules.
Facebook’s power and reach have been the subject of multiple past congressional hearings, and many of the key points raised in the past will likely come up again especially as the 2020 presidential election nears and the social media giant has pledged it won’t make the same mistakes it did in 2016.
Google’s dominance in the online advertising world is also expected to come up, amid mounting media reports that a Department of Justice antitrust suit against Google over its ad businesses could be forthcoming.
The hearing, which will be live-streamed, is scheduled to start at noon and the guests are expected to appear virtually as a result of the coronavirus pandemic.