Top Tech Bosses Face Congress
After lawmakers collected hundreds of hours of interviews and obtained more than 1.3 million documents about Amazon, Apple, Facebook and Google, their chief executives will testify before Congress at 1 p.m. on Wednesday to defend their powerful businesses.
The captains of the New Gilded Age — Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook and Sundar Pichai of Google — will appear together before Congress for the first time to justify their business practices. Members of the House judiciary’s antitrust subcommittee have investigated the internet giants for more than a year on accusations that they have stifled rivals and harmed consumers. The exact contents of the documents they’ve collected are unknown, although they are said to include documents related to some of the companies’ acquisitions and internal communications among top executives.
It is set to be a bizarre spectacle, with four men who run companies worth nearly $5 trillion combined — and who include two of the world’s richest individuals — primed to argue that their businesses are not really that powerful after all.
And it will be a first in another way: Mr. Zuckerberg, Mr. Pichai, Mr. Bezos and Mr. Cook will all be testifying via videoconference, rather than rising side-by-side for a swearing-in at a witness table in Washington.
At the hearing, the 15 members of the antitrust subcommittee will have five minutes for each question. Representative David Cicilline, Democrat of Rhode Island and the chairman of the subcommittee, will control the number of rounds of questioning, potentially stretching the hearing into the evening.
The antitrust issues facing Apple, Facebook, Google and Amazon are complex and vastly different.
Amazon is accused of abusing its role as both a retailer and a platform hosting third-party sellers on its marketplace. Apple has been accused of unfairly using its clout over its App Store to block rivals and to force apps to pay high commissions. Rivals have said Facebook has a monopoly in social networking. Alphabet, the parent company of Google, is dealing with multiple antitrust allegations because of Google’s dominance in online advertising, search and smartphone software.
Democrats may also veer off the topic of antitrust and bring up concerns about misinformation on social media. Some Republicans are expected to sidetrack discussion with their concerns of liberal bias at the Silicon Valley companies and accusations that conservative voices are censored.
Jeff Bezos, Amazon’s chief executive, has a couple of unique distinctions among the chief executives set to testify on Wednesday: He has never faced Congress before, and he is by far the world’s richest person.
Those two facts may put him under a particularly intense spotlight at the hearing, giving lawmakers the first chance to force him to publicly respond to a range of criticisms. Some will probably hew close to antitrust law, but others may veer to a broader critique of the disparity between his wealth — now hovering around $180 billion — and the pay and working conditions of the labor making at or around $15 an hour that forms Amazon’s logistical advantage.
Mr. Bezos has never been particularly open to the press and has not faced tough public questioning for years. He has held just a few brief sessions about Amazon with journalists recently, and public question-and-answer sessions have hardly included fierce critics. In one, he sat opposite his brother, and in another, he was with the private equity titan David Rubenstein.
In prepared testimony for the hearing, Mr. Bezos presented himself as an American success story, raised by a plucky young mother and adopted at four by his father, a Cuban immigrant. He said he took a risk to start Amazon, using seed funding from his parents.
“Amazon’s success was anything but preordained,” he said.
While he said he invited scrutiny, Mr. Bezos also said, “Unlike many other countries around the world, this great nation we live in supports and does not stigmatize entrepreneurial risk-taking.”
Mr. Bezos did not address his own wealth head on, but he did say that 80 percent of Amazon’s shares are held by outsiders, including pension funds and mutual funds for retirement, that he said have benefited from the rise in the company’s share price.
While Mr. Bezos has a growing presence in Washington, he has let his top deputies do the day-to-day work of lobbying and influencing lawmakers to its lobbying and communications team, which has grown to more than 800 people globally. Amazon also spent $16.8 million on federal lobbying last year.
Congressional hearings usually involve witnesses appearing in dark suits, with their entourages sitting behind them and lawmakers questioning them from above as phalanxes of photographers snap pictures and videographers stream the proceedings from a cavernous room at the Capitol.
Not this time.
The C.E.O.s of Amazon, Apple, Facebook and Google are all appearing on Wednesday before a House subcommittee virtually because of the coronavirus pandemic. Remotely beaming into the hearing adds a wrinkle of digital complexity, with any note-passing from aides and underlings most likely happening off-camera.
And while many of the tech giants make their own video-calling software, none will be using their own tools. Instead, they will all be joining via Cisco’s Webex videoconferencing service.
Webex has been the go-to service for Congress since the pandemic began. It has been certified by the House’s administration committee for being secure and meeting “business and technical requirements,” a House administration spokesman, Peter Whippy, said.
In that time, Webex has been used for more than 100 congressional hearings, said Jean Rosauer, Webex’s head of government sector. Cisco added that it had experienced more than triple its normal volume of virtual meetings through Webex in recent months.
“Congressional hearings — such as the upcoming House Judiciary Committee hearing — have traditions, policies and procedures, and we had to ensure those could be conducted virtually and securely,” Ms. Rosauer said in a statement. She added that Cisco was “incredibly proud” to play a role in keeping Congress connected.
Many competitors to Google, Facebook, Apple and Amazon have been busy talking to House lawmakers for months about those companies’ power. And some deliberately spoke out this week to position themselves for how they would be portrayed in the hearing and to influence the questioning.
TikTok, the Chinese-owned video app, issued a statement from its chief executive, Kevin Mayer, on Wednesday morning. In it, he addressed how the app — which Facebook is likely to cite in the hearing as an example of how competition in social networking is thriving — has been dealing with scrutiny because of its Chinese ownership.
“We have received even more scrutiny due to the company’s Chinese origins,” Mr. Mayer said in the statement. “We accept this and embrace the challenge of giving peace of mind through greater transparency and accountability. We believe it is essential to show users, advertisers, creators and regulators that we are responsible and committed members of the American community that follows U.S. laws.”
He also pointed to Facebook’s willingness to launch “copycat products,” like Reels, a TikTok look-alike. Facebook has had a history of emulating competing products.
“Let’s focus our energies on fair and open competition in service of our consumers, rather than maligning attacks by our competitor — namely Facebook — disguised as patriotism and designed to put an end to our very presence in the U.S.,” Mr. Mayer said.
Other tech companies also seized on the hearing to air their thoughts. Tim Sweeney, chief executive of Epic Games, the Cary, N.C.-based maker of the hit game Fortnite, lashed out at Apple and Google for price gouging and unfair policies in what he called their “app store monopolies.”
“Both stores significantly obstruct competition,” Mr. Sweeney said in an interview on Tuesday. He particularly criticized Apple’s 30 percent fee on payments for digital goods, which he said made it difficult for smaller players to offer artists a better deal.
Apple has said the 30 percent commission it takes from many apps in its App Store is a standard fee. Mr. Sweeney called that argument “silly nonsense.” Epic’s version of an app store charges its developers a 12 percent fee.
Mr. Sweeney, who began programming on an Apple II Plus computer in 1982 and founded Epic nine years later, said he felt a responsibility to speak out. “Every tech company that does business in this world is going to have to live with the power we give these other companies,” he said.
Members of Congress have been mocked for asking ridiculous questions in technology hearings like these. That might happen again today, but it won’t be entirely their fault.
These big tech companies intentionally make themselves hard to understand.
Few people outside these companies can truly examine how Amazon influences prices of products we buy on its site or at other retailers; or assess fears that Google funnels people to its own websites, Apple steers people to its own apps or Facebook peers into what we do online to squash its rivals. All of this is, by design, shrouded in secrecy and mystery.
Big Tech shouldn’t want it to stay that way. Even companies like Facebook and Google are asking for more government guidance and rules around thorny topics like protecting elections and preventing hate speech on their sites. That means that the public and the tech companies have a vested interest in making these fact-finding sessions as productive as possible.
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The tech industry is an engine of innovation, job creation and American economic prowess. Competition is flourishing, and just a click away. Sure, we do well, but consumers are the big winners.
That was the gist of Bill Gates’s testimony before a Senate panel more than two decades ago. And it’s a safe bet the same themes will feature prominently when the leaders of Amazon, Apple, Facebook and Google testify on Wednesday.
There are differences, but this week’s appearance by tech executives is reminiscent of the congressional grilling Microsoft’s chief faced 22 years ago.
In 1998, the spotlight was squarely on Mr. Gates, co-founder of Microsoft, the tech behemoth of the personal computer era. This time, the leaders of four big technology companies will be in the dock, appearing remotely because of a pandemic.
Today, more issues are in play. In the late 1990s, the concern was that Microsoft would use its dominance in the PC market to stifle internet upstarts. The sheer market muscle of today’s tech giants is a worry, but so is the role they play broadly in commerce and communication, influencing public opinion and politics.
When Mr. Gates testified, a formal investigation of Microsoft by federal regulators and dozens of states was well underway. The same is true now for Google and Facebook, while Amazon and Apple are also facing antitrust scrutiny.
There can be gotcha moments. Under pointed questioning, Mr. Gates rhetorically bobbed and weaved, refusing to use the M-word: monopoly.
But when Jim Barksdale, head of Netscape, the internet company most in Microsoft’s sights, testified that day, he asked the spectators to raise their hands if they used a PC.
About three-quarters of the room did. Then, how many of them used Microsoft’s Windows operating system? Almost the same number of hands flew up again.
“That,” Mr. Barksdale said, “is a monopoly.”
The tech giants are under investigation from numerous federal and state antitrust officials, as well as by the lawmakers holding today’s hearing.
The Justice Department’s investigation of Google appears to be the furthest along. The agency is expected to soon announce a case against Google, focusing on alleged antitrust violations in online advertising.
The Federal Trade Commission is preparing to depose Mark Zuckerberg, the chief executive of Facebook, and other top executives at the company for its investigation of the social network. That inquiry appears to focus on whether Facebook illegally maintained a monopoly in social networking by killing off competition through its acquisitions of Instagram and WhatsApp. That investigation may not wrap up before the end of the year.
Other investigations are moving forward, but not as swiftly as the Google investigation. The Justice Department is also investigating Apple’s power over the app store, along with state attorneys general. The agency has Facebook under review as well, looking at the company’s position in online advertising. But that investigation appears to be moving slowly.
State investigators have been looking into whether Amazon abuses its power over sellers on the tech giant’s site. The F.T.C. is also investigating Amazon, but that appears to be moving slowly.