The chiefs of four of the biggest tech companies in the world — Amazon, Apple, Facebook and Google — will face lawmakers Wednesday for a hearing on digital competition that could have cataclysmic impacts 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), will be done by the House Judiciary Antitrust Subcommittee as part of its ongoing, year-long investigation into competition in the digital market.
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 compliment 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 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 there 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 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.
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.