July 30, 2020

Tech CEOs

“Congressional lawmakers finally got a chance Wednesday to grill the CEOs of Big Tech… legislators questioned Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Sundar Pichai of Google and Tim Cook of Apple at a hearing of the House Judiciary subcommittee on antitrust.” AP News

See past issues

From the Left

The left calls for the regulation of tech companies to counter their anti-competitive practices.

Apple has a monopoly in the closed-system device market; it controls the consumer value chain, from the physical device technology, to the pre-installed iOS operating system, to the core mobile applications and services that run atop it all -- and there is no other closed-system provider that does it so compellingly. This stranglehold, and the capacity to collect large amounts of personal and proprietary information across it, has meant Apple has consistently been able to give its own products a position of privilege in contexts like the App Store -- allegations similar to those that Amazon has had to deal with. This necessarily diminishes any chance for competition in the iOS app market -- let alone the overall closed-system market.”
Dipayan Ghosh, CNN

“Some Amazon sellers have complained over the years that as Amazon’s market share in US online commerce has increased — to about 40 percent today, which is about seven times more than the next competitor — the company has squeezed and otherwise harmed them in new and different ways… Amazon collected 30 percent in fees on average in 2019 from a given sale that a seller made. That number was up from 19 percent five years earlier, according to the ILSR estimates. Some sellers have said Amazon’s cut is even higher than that.”
Jason Del Rey, Vox

“Lawmakers offered example after example of the companies appearing to use their market power to distort the competitive landscape, and the answers offered by the CEOs were singularly unsatisfying. Bezos, for instance, acknowledged that Amazon used data aggregated from other sellers on its platform to develop competing products. Alphabet’s Sundar Pichai struggled to explain what his company’s data policies were and whether it adjusted its search engine to favor its own products and harm competitors…

“One potential hurdle for Big Tech’s critics is that U.S. antitrust law is uniquely focused on preventing harm to consumers, not to competitors. And because many of the products and services that Big Tech companies offer are free to use, it isn’t automatically clear how consumers are harmed when the companies compete unfairly. That’s an issue for Congress to explore.”
Editorial Board, Los Angeles Times

“What should regulators do? First, they should ban the blatant anticompetitive practice of paying for platform placement. Bernstein estimates Google pays Apple more than $7 billion annually to make its search engine the default option on iOS devices. For a startup or competitor that may have better products, these types of large payments can obviously impede fair competition…

“Second, Google’s extensive use of scraping content off external websites should be restricted. Web publishers need all direct traffic they can get to survive. For Google to keep users on its own website by taking and serving up proprietary content from other companies is unjust. And finally, the internet giant shouldn’t be allowed to favor its own services in search results if competitors offer a verifiably better product. Sure, managing this process won’t be easy, so I recommend the establishment of a third-party arbitration process.”
Tae Kim, Bloomberg

“Lawmakers and the public should be concerned about the surveillance networks by which Facebook and Google—which dominate the digital-advertising market—track users, build data profiles on them, and serve them customized ads. But millions of rural Americans cannot access the internet to begin with, in part because telecom companies harass, fight, and induce state legislatures to pass laws restricting municipal broadband…

“Amazon’s rapidly expanding e-commerce empire—and the potential consequences for Main Streets and municipal tax bases across the country—is definitely worth worrying about. But among the other forces squeezing out small retailers are dollar stores, a market segment dominated by two firms that together have about six times more outlets in America than Walmart… And just as Amazon sometimes undercuts the smaller third-party sellers that use its platform, Big Agriculture competes directly with smaller suppliers… To focus the discussion of monopoly on the tech sector is to minimize the scope of a problem long in the making.”
David Dayen, The Atlantic

Regarding accusations of bias, “While it is true that tech employees do often have liberal leanings, there is little to suggest that these companies’ products, algorithms, and policies are designed to tilt the political scales. If anything, digital platforms are biased toward emotional and sensational content that will get the most clicks and drive ad dollars. And Republicans’ suspicion would seem to elide the fact that conservative figures and publications dominate the rankings for the most-engaged pages on Facebook.”
Aaron Mak, Slate

From the Right

The right is generally skeptical of regulating or breaking up the tech companies.

The right is generally skeptical of regulating or breaking up the tech companies.

“Everyone seems to hate America’s giant tech companies these days—except the hundreds of millions of people who use their products… Politicians talk about antitrust law as if it’s a finely tuned instrument, but it can easily backfire. A classic example is the way Amazon cajoled Barack Obama’s antitrust officials to bring a case against Apple for trying to compete in e-books. Justice won its case after the Supreme Court declined to take Apple’s appeal, but the result has been to make Amazon’s e-book dominance more secure…

“The market usually does the best job of countering monopolies. Too often government intervention reinforces monopolies. Antitrust law since the work of Robert Bork and Yale Brozen in the 1970s has rightly focused not on size but consumer harm. The burden is on the critics of Big Tech to prove genuine damage, and then propose solutions that don’t do more harm than good.”
Editorial Board, Wall Street Journal

“So what if Facebook doesn't actually fulfill the Justice Department's definition of a monopoly? Mark Zuckerberg may have created the site from scratch in his dorm room only to create nearly 50,000 jobs and more than half a trillion dollars in the company's market cap, but he lets Breitbart post too much or too little, depending on which side of the aisle you sit…

“Antitrust action, in a practical sense, would likely focus on Facebook's acquisitions, most notably Instagram and WhatsApp… But Facebook, as a singular social media website, wouldn't be meaningfully changed, even if the company lost brand value and suffered a diminished market cap… This isn't about antitrust concerns, and it never was. Both halves of the crusade are simply led by career politicians who have never created a job or a dollar of GDP in their lives, and thus, they feel entitled to dictate how an entrepreneur runs his own company.”
Tiana Lowe, Washington Examiner

Some, however, argue that “House members cited detailed examples of Big Tech business practices they said contravene competition and the cornerstones of antitrust law… The leaders of the tech giants were sometimes evasive as they gave canned responses, shoulder shrugs and feigned unfamiliarity with specific situations. Some of these responses were hard to believe. You would expect the heads of the companies to be aware of the problems raised by lawmakers…

“Nothing in the testimony or responses of the CEOs reflected any semblance of retreat from their current positions or remorse for their practices. Even in the face of irrefutable evidence, it’s clear that the leaders of Big Tech will continue to delay, deny, deflect and deceive governmental efforts to change their behavior.”
Adonis Huffman, Fox News

“Today would have been the perfect time to get answers on [tech companies’] cooperation with the Chinese government… [but] Google CEO Sundar Pichai faced about as much time answering questions about China as he did about why campaign emails get sent to spam folders. Facebook CEO Mark Zuckerberg was asked why Twitter censored Donald Trump Jr…

“It took three hours before all four CEOs were asked about Chinese slave labor by Rep. Ken Buck, a Republican from Colorado. Apple, in particular, has been tied to the forced labor of Uighur Muslims in China. The issue wasn’t pressed further than Cook declaring forced labor to be ‘abhorrent.’…

“With the CCP’s expanding influence over our technology, particularly with Google and Apple, this should have been the real question of the day. But Congress blew it, as always, because campaign videos and point scoring are more important than the slow creep of an oppressive communist regime into American technology and business.”
Zachary Faria, Washington Examiner

“The last time Congress did something like this, in 2018, Sen. Roger Wicker of Mississippi (R.) asked Mark Zuckerberg if he knew that companies can actually sometimes track what websites you visit on this dang ole internet thing… Congress doesn't understand the internet or big tech, much less have any idea what it would mean to regulate it effectively. The proof of this is that Wednesday's hearing is happening in the first place…

“It is not entirely clear why these four companies are being grouped together for the purpose of interrogation. What, apart from the fact that they are all large and powerful corporations, do Facebook, Google, Apple, and Amazon have in common? As far as I am aware, the focus of the hearing will not be the offshoring of profits, which is the only thing these companies really share (along with virtually every other wealthy corporation or individual technically based in the United States).”
Matthew Walther, The Week

A libertarian's take

“If lawmakers were serious about applying antitrust powers to big tech companies, they'd have to demonstrate that consumers are being actively harmed by anti-competitive behavior. Instead, it quickly became apparent that the real purpose of the hearing was political power… It's almost as if partisans are using the threat of antitrust action to try to force tech firms to take sides. Antitrust laws, it's important to note, do not allow Congress to break up a company because some lawmakers disagree with its politics…

“Tech firms should not be immune to criticism, of course, and that's particularly true if they boost or suppress particular businesses or viewpoints. But those are not remotely close to being antitrust issues—and, in most cases, they aren't issues that require government action at all. Indeed, the fact that Apple, Amazon, Facebook, and Google have become successful is an indication that consumers find value in those businesses. Apple CEO Tim Cook noted that customers give the iPhone a 99 percent satisfaction rating. What was the last government program to be nearly as beloved?... Instead of trying to break up big tech firms on specious antitrust grounds, maybe Congress should learn from them.”
Eric Boehm, Reason

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