• Tuesday, May 28, 2024
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Big Tech bosses told they have ‘too much power’

Big Tech bosses told they have ‘too much power’

Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg, Apple’s Tim Cook, and Sundar Pichai of Google’s parent company Alphabet were told their companies had “too much power” and were harming not just rivals but consumers.

The chief executives of four American tech groups faced accusations of behaving like “cyber barons” wielding their companies’ size to unfairly squash competition, as they sat for an unprecedented and at times uncomfortable grilling from lawmakers on Capitol Hill. Their testimonies were marked by apparent forgetfulness on key business decisions and promise to follow up with the committee with more detail.

Lawmakers pointed to internal emails and other evidence to zero in on Amazon’s treatment of third-party sellers on its platform — who compete in some cases with Amazon’s own products — and on Facebook’s acquisition of rival Instagram eight years ago — which eliminated a potential competitor — among a range of persistent antitrust questions.

“This is 11 years ago so you’re asking a lot of my memory,” Mr Bezos told one Democratic lawmaker when asked about Amazon’s strategy in acquiring the parent company of Diapers.com in 2010. Documents published by the committee suggest Amazon executives devised a “plan to win” against Diapers.com that involved aggressively undercutting prices.


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We have a policy against using seller-specific data to aid our private-label business. But I can’t guarantee you that policy has never been violated- Jeff Bezos, Amazon

David Cicilline, the Democratic chair of the antitrust subcommittee of the House judiciary committee, said the problems went beyond the companies themselves to the health of the broader American economy.
“Many of the practices used by these companies have harmful economic effects. They discourage entrepreneurship, destroy jobs, hike costs, and degrade quality. Simply put: they have too much power,” he said.

With the executives on video links to the House judiciary committee’s antitrust subcommittee, the high-stakes event was the first time all four chief executives have been involved in the same hearing. For Mr Bezos, it was the first time he had personally addressed Congress, 26 years after founding his company.
Under questioning from Pramila Jayapal, the Democrat from Washington, Amazon’s home state, Mr Bezos conceded the company may have used data about third-party sellers to inform business decisions about its own service or products.

Mr Zuckerberg

“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 policy has never been violated,” he said.

Ms Jayapal said a former Amazon employee had described seller data as being like a “candy shop, everyone can have access to anything they want”.

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In another particularly uncomfortable moment for the world’s richest man, Georgia congresswoman Lucy McBath played an audio recording of a third-party seller of textbooks, who said her business had been cut off from Amazon’s market without fair explanation.

“I say that’s not acceptable,” Mr Bezos said in response to the clip, adding: “But I do not think that’s systematically what’s going on.”

The subcommittee has for the past year been investigating an assortment of complaints about “Big Tech”, alongside similar probes from other agencies including the US Department of Justice and the Federal Trade Commission, as well as the European Commission.

The subcommittee does not have the authority to take any enforcement action against the companies. But it will seek to use its final report, due later this year, to inform possible changes to antitrust laws.
While concern over the power of Big Tech is considered a bipartisan issue, the two US political parties seemed through the hearing to be at odds on the nature of the threat. Republicans used the opportunity to rail against what they claim to be an anticonservative bias on the platforms.

“I’ll just cut to the chase, Big Tech’s out to get conservatives,” said Republican Jim Jordan, accusing the companies of censoring rightwing views.

Republican questioning

Other Republicans homed in on the reluctance Google has at times shown with working with the US military. Ken Buck referenced Google’s decision in 2018 to pull out of a competition to provide cloud computing services to the Pentagon — at the time, the company said the work could conflict with its values against developing weapons with artificial intelligence technology.

Mr Buck also accused the company of aiding China, a charge Mr Pichai denied.

One Republican, Jim Sensenbrenner, did issue a measured defence of the companies, arguing that current US antitrust laws were working well.

“Your companies are large. That’s not a problem. Your companies are successful. That’s not a problem either,” he said.

Amazon, as the dominant e-commerce retailer, and Apple, as custodian of its highly lucrative App Store, have for years faced claims they are onerous gatekeepers of their platforms — charging fees while favouring their own products in their respective marketplaces, utilising insights from data not available to outsiders.

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Facebook and Google’s parent Alphabet have been accused of using their dominant positions in social media and search to buy up smaller rivals in order to cement their position, as well as using the enormous reach of those networks to push consumers towards their own products, such as shopping services.
Of the quartet, Apple saw out the hearing with the least discomfort. Mr Cook resisted claims that the Apple App Store — now said to contain 1.7m apps — was “picking winners and losers” and favouring its own apps.

“If Apple is a gatekeeper, what we’ve done is open the gate wider,” he said.

Facebook and Instagram

The hearing shone an uncomfortable light on Mr Zuckerberg, with Democrats highlighting several internal emails from 2012 that showed him talking about buying other companies in the context of fending off competitive threats.

In one 2012 email thread between Mr Zuckerberg and David Ebersman, then Facebook’s chief financial officer, the two discussed Mr Zuckerberg’s motives for pursuing the acquisition of Instagram. Asked by Mr Ebersman whether his reasoning include “neutralising a potential competitor”, the Facebook chief said yes, along with integrating the two products to improve the service.

Less than an hour later, Mr Zuckerberg sent a follow-up email saying: “I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way.”

In a separate exchange that year with an unnamed employee, Mr Zuckerberg wrote: “We can likely always just buy any competitive start-ups, but it’ll be a while before we can buy Google,” Mr Zuckerberg said during the hearing that it sounded like he meant it as “a joke”.

The Facebook chief executive also noted that the Instagram acquisition was cleared by antitrust enforcers at the time.