On Wednesday, July 29, the US Congress questioned the owners and executives of the largest
What ever happened?
For more than a year, Congress has been investigatingagainst major tech giants Facebook, Google, Amazon and Apple over whether they abused their dominant market position.
Any move by one of these companies could have a profound and lasting impact on hundreds of millions of people.
David Cicilline, Chairman, Antitrust Subcommittee, House Judiciary Committee
Since June, the subcommittee has been holding hearings withsmaller competitors who have confirmed the alleged monopoly practices of these de facto Internet titans. Now, all four tech titans will appear together to answer questions based on the committee's findings.
Apple, Facebook, Google and Amazon have long been accused ofthe fact that they occupy too much market share and impede competition. Opponents of their dominance believe that these companies are "too big to fail" - that is, they are in a position where their bankruptcy would have catastrophic consequences for the economy as a whole, and the government will bail them out to prevent these consequences.
What was the interrogation about?
The hearing was opened by David Cichilline, ChairmanAntitrust Subcommittee of the Judiciary Committee of the US House of Representatives. He stated that all four IT giants are collecting data from other companies to maintain their position in the market and buying, copying or destroying potential competitors. According to him, all platforms abuse control, spreading their influence.
As Cicilline explained, despite significantdifferences between companies, they are united by similar behavior in competitive markets: they are a "bottleneck" in the main distribution channels, as a result of which they can, for example, extract valuable data from their users.
Their ability to dictate conditions, destroy entiresectors and instill fear similar to the powers of the private government. Our founders did not bow to kings. Now we don't have to bow down to the emperors of the online economy.
David Cicilline, Chairman of the Antitrust Subcommittee of the US House Judiciary Committee
Cicilline called Facebook, Amazon, Google and Apple private government.
Google again pointed to too closecooperation with China. Such accusations have already sounded against the company earlier, in 2019. They were addressed by General and Chairman of the Joint Chiefs of Staff Joseph Dunford. During the current meeting, one of the congressmen recalled: Google has an artificial intelligence center in the PRC, and the Chinese Academy of Sciences has published information about the cooperation of the American corporation with many local universities, which "receive millions of dollars from the Chinese military." The congressman suggested that such cooperation could be viewed as treason to the United States. A representative of Google, in turn, assured that the company does not cooperate with the Chinese military and continues projects with the military in the United States.
Sundar Pichai, CEO of the companyAlphabet and the owner of Google and YouTube, in his opening remarks, emphasized that Google makes many free and useful products that people use and on which many other companies build their business.
Among other accusations, the company noted:that Google uses data to stifle competition, sets very low advertising rates to those who used to buy it from the media in order to deprive the media of revenue. At the same time, it sells it at a high price to small companies that desperately need this advertising, thus, according to the committee, the company makes money from advertising.
And also manipulates the string with the output resultssearch engine. Pichai responded that the company does not manually interfere with search engine results, but at the same time Google has a blacklist of sites that people block. Some of the results may be hidden by hand, but this is done to comply with the law, he said.
Several congressmen consider the problem to beIt's a fact that Facebook has absorbed its big competitors - Instagram and WhatsApp. One of the speakers quoted Mark Zuckerberg's email to employees, in which he indicated that a little more and the company would be able to buy Google.
The head was reminded that the company allegedlyallowed Russia to interfere in the elections. It also promotes racism and anti-Semitism, said Congressman Jamie Raskin. Zuckerberg responded that the company has developed "really sophisticated" AI systems to avoid this.
Also during the hearing, fragments of old letters and messages from the head of Facebook Mark Zuckerberg, in which he discussed the possibility of eliminating competitors, were released, writes The Verge.
In February 2012, Zuckerberg invited the company's CFO David Ebersman to discuss the purchase of smaller market participants, including Path and Instagram, the publication points out.
These companies have just appeared, but brands are already onhearing, and if they grow up, they can seriously harm us. Given our assessment and Facebook's vulnerability on mobile platforms, do you think we should buy one or both?
Mark Zuckerberg, head of Facebook
As the congressman concluded, when the dominantthe platform threatens its potential competitors, this should not be normal business practice. Facebook collects and monetizes data about users and then uses it to spy on competitors, copy developments and destroy competitors. You use Facebook's power to destroy smaller competitors and prevent new independent companies from blossoming.
- Amazon
Amazon was accused of too aggressive competition. The company controls 70% of online sales in the United States. One of the congressmen showed a slide from an internal Amazon presentation listing the company's competitors and indicating that "prices need to be aligned with established competitors, no matter how much it costs."
The main complaint against the company was basedon a WSJ investigation, which stated that Amazon analyzes data on sales through the marketplace and launches its analogues based on them, which it gives priority to. Bezos said he could not answer whether his company uses such data or not.
Another congressman saw a conflict of interest inthat Amazon promotes its own products, similar to those offered by third-party marketplace sellers. Bezos countered that the consumer decides what and from whom to buy. In addition, the company's policy is not to use the data it collects about platform sellers when promoting Amazon-branded products.
Evidence collected shows Amazoninterested only in increasing the monopoly position in the e-commerce market. Amazon is the operator of the platform, while promoting its own products on that platform is fundamentally non-competitive behavior, and Congressmen must take action.
Congress Representative
- Apple
The company had complaints of a slightly different kind, since Apple does not have a dominant share in any of the markets in which it operates.
However, congressmen were confused that the App Storedecides which applications will be available to users. They also noted that the company can change the rules of the platform at its own discretion, without coordination with the developers, and in addition, it collects user data through its own payment system, which third-party developers are required to use in their applications.
Congressmen showed the vice president's letterApple Eddie Cue, in which he considered raising the commission for applications in the App Store from 30 to 40% in the first year. Cook said the company would never do that.
Apple was also accused ofthe company appointed two employees to help the Chinese Baidu deal with the bureaucracy in the App Store and the fact that Apple allows some companies to make applications bypassing its own rules. Tim Cook replied that he did not know about the help of the Chinese company and that everyone in the App Store works on equal terms.
Why were the responses from company representatives similar?
The Times has calculated which arguments are most oftenused Zuckerberg, Bezos, Cook and Pichai during the meeting. The main argument was that the representatives' companies "are not so big (we are not that big)". The head of Google has mentioned 11 times how important the company is to America (we are good for America). By comparison, Bezos used the same argument only three times, Cook six times, Zuckerberg four times. According to the publication's calculations, Cook 13 times voiced the thesis that Apple's actions are not something that Congressmen should worry about, and translated the conversation, for example, on the growing technological potential of China.
What will happen next?
There is no direct threat of congressional investigation.companies with any consequences, but based on its results, the antimonopoly subcommittee should issue a detailed report with information on how exactly the IT giants are circumventing the provisions of the antimonopoly legislation.
This document can form the basis of investigations,which the US Federal Trade Commission is already pursuing against Facebook and Amazon, and a lawsuit that the Justice Department is preparing against Alphabet Inc. In relation to Apple in the US, no other investigations have yet been launched, apart from what is being conducted by Congress.
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