- Apple, Amazon, Alphabet, Facebook CEOs testify before Congress
- Hearing focused on whether new laws are needed to prevent anticompetitive behavior
- Questions likely to cover acquisitions, advantage of owning marketplaces
- Tech lobbying spend has surged to record levels in recent years
More than 20 years after Bill Gates testified before Congress about whether Microsoft was a monopoly, chief executives Jeff Bezos, Tim Cook, Mark Zuckerberg, and Sundar Pichai will together take questions from lawmakers at a similar hearing starting at noon ET. Titled, "Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google," the hearing is being held by the House subcommittee on Antitrust, Commercial, and Administrative Law. All four firms, which represent a fifth of the S&P 500's market cap, will also all announce earnings tomorrow. Stream the hearing live here, if you like antitrust drama.
It promises to be different from recent tech hearings. The bipartisan investigation began in June last year, and the aim is to determine whether existing laws are sufficient to keep the digital marketplace competitive. Executives will be questioned about the evidence collected in scores of interviews and documents, and what they say can be used in future antitrust probes and bills. Plus, it's Bezos' first time at a congressional hearing.
Here's a brief breakdown of what each company can expect and what they plan to say:
- Amazon: In April, The Wall Street Journal reported employees used sales info from third-party sellers before developing private merchandise. Expect this to be a top concern. Also not doing enough against counterfeit products and winning price wars. Prepared remarks focus on Amazon helping the U.S. economy and businesses, and Bezos' success from humble roots.
- Apple: Again, it controls the App Store on which it markets its own apps. It also takes a 30% cut from developers. Apple is facing pressure on this front in the EU and it's likely to come up here. Prepared remarks focus on how Apple doesn't have dominant market share in any market.
- Facebook: Neutralizing competition through acquisitions like Instagram and WhatsApp. Also buying GIF-provider Giphy, which is integrated with competitors like Twitter. Prepared remarks focus on how FB improved apps it bought and helped provide better services for people and advertisers, and competition from China.
- Alphabet: Search engine dominance and pushing its own results and reviews ahead of competitors. Allowing companies to buy advertising space that appears directly above competitors. Acquisitions like Nest, Waze and DoubleClick. Prepared remarks focus on competing platforms where people get information, helping small businesses during pandemic.
Big Tech knows regulations are coming, they can't claim to not be utilities anymore. Lobbying data displays just how fearful they are. Facebook, also facing accusations of curbing free speech and not doing enough to stop hate or misinformation, spent $4.8 million in Q2 2020, following a record $5 million in Q1, according to OpenSecrets. Tech companies also bankroll and heavily influence the powerful Global Antitrust Institute (GAI) which recommends a hands-off approach to antitrust law in international seminars.
If you're wondering why Congress may think this is necessary, try and imagine a day without using services or products from those four companies. What are your viable alternatives and are they good enough? Do we expect the U.S. government to be as hard on these firms as the EU currently is and passing legislation to break them up? Not yet, anyway. Plus, the timing couldn't possibly be better for the companies. Amid the pandemic they've helped entertain, educate, feed, console, and soothe consumers and public opinion has softened from last year when they were public enemy #1 for people on the right and left. Growing surveillance also increases their importance and interlinks them with government even more.
Today lays the groundwork for more antitrust activity and may bolster probes currently underway. It's the start, not the end.