- [Kelly] On Wednesday,
lawmakers squared off
with the chief executives
of the tech industries
four most powerful players,
Amazon's Jeff Bezos, Apple's Tim Cook,
Facebook's Mark Zuckerberg,
and Google Sundar Pichai.
Since last June, the
house judiciary committee
has been engaged in a
sweeping investigation
of each of the four companies,
honing in on how they stifle competition
in the tech industry.
These companies have
been consolidating power
for a long time,
and now, Congress is getting
ready to do something about it.
- Open markets are predicated on the idea
that if a company harms
people, consumers, workers,
and business partners will
choose another option.
We're here today because that
choice is no longer possible.
The purpose of today's hearing
is to examine the dominance of Amazon,
Apple, Facebook and Google.
- [Kelly] For years,
antitrust experts have
been building the case
against big techs
questionable acquisitions,
predatory pricing, and copycat behaviors.
The CEO's had to face those
arguments head-on on Wednesday.
- Amazon runs the largest
online marketplace in America,
capturing 70% of all
online marketplace sales.
Despite a litany of privacy scandals
and record-breaking fines,
Facebook continues to
enjoy booming profits,
$18 billion last year alone.
Google is the world's
largest online search engine,
capturing more than
90% of searches online.
- [Kelly] These are four
very different companies,
but the committee use Wednesday's hearing
to show how similar they were
when responding to competitors.
In particular, the committee looked at how
each company controls distribution,
surveys nascent companies,
and how they use their market dominance
to suppress competition.
- We used to have a policy
that restricted competitors
from using our platform.
- Okay Mr. Zuckerberg, these examples
and supporting documents strongly suggests
that Facebook does weaponize its policy
to undermine competitors.
- Is it true that Amazon
refers to third party sellers
as internal competitors?
- We've interviewed many small businesses
and they use the words like
bullying, fear and panic
to describe their
relationship with Amazon.
- That's an enormous amount of power.
- [Kelly] The committee
argued that companies
like Facebook and Google
control how information is disseminated.
The same goes for Apple and Amazon,
but when it comes to their
app stores and marketplaces.
- Apple is the sole decision maker
as to whether an app is
made available to app users
through the Apple store.
Isn't that correct?
- If it's a native app? Yes, sir.
If it's a weapon, no.
- Throughout our investigation,
we've heard concerns that rules governing
the app store review process
are not available to the app developers.
The rules are made up as you go.
They are upper trevally
interpreted and enforced,
and are subject to change
whenever Apple sees fit to change.
And developers have no choice,
but to go along with the changes
or they must leave the app store.
That's an enormous amount of power.
Mr. Cook, does Apple not treat
all app developers equally?
- Sir, we treat every developer the same,
because we care so deeply about privacy
and security and quality.
We do look at every app before it goes on,
but those rules apply evenly to everyone.
- [Kelly] Surveillance is key
to the committee's investigation.
Throughout the hearing,
lawmakers argue that
each company has used its
dominance in the tech industry
to keep a watchful eye
on their competitors.
Google face tough questions from lawmakers
who fear that its dominance in search
allows it to monitor the
web traffic of competitors.
This information could
result in the company
ranking competitors
lower in search results.
- In 2010, Google stole
restaurant reviews from Yelp
to bootstrap its own rival
local search business.
- Mr. Pichai, do you
know how Google responded
when Yelp asked you to stop
stealing their reviews?
Well, I'll tell you,
our investigation shows
that Google's response
was to threaten to delist Yelp entirely.
In other words, the choice
Google gave you up was,
let us steal your content
or effectively disappear from the web.
Mr. Pichai, isn't that anti-competitive?
- Congressmen, you know,
when I run the company,
I'm really focused on
giving users what they want.
We conduct ourselves to
the highest standard,
happy to engage, understand the specifics
and answer your questions further.
- [Kelly] You can make the same argument
for Facebook buying Instagram,
Amazon buying Ring,
or Apple using the app store
to fend off competing software.
Has Facebook ever threatened
to clone the products of another company
while also attempting
to acquire that company?
- Congresswoman, not that I would recall.
- And I'd like to just remind
you that you are under oath
and there are quotes from
Facebook's own documents.
Prior to acquiring Instagram,
Facebook began developing
a similar product called
Facebook Camera, correct?
- Congresswoman, that's correct.
- Did you ever use this very
similar Facebook camera product
to threaten Instagram's
founder, Kevin Systrom?
- Congresswoman, I'm not sure
what you would mean by threatened.
I think it was public that
we were building a camera app
at the time, that was a
well-documented thing.
- In a chat you told Mr.
Systrom that Facebook was
"Developing our own photo strategy.
So, how we engage now will also determine
how much we're partners versus
competitors down the line."
Instagram's founders seem
to think that was a threat.
He confided in an investor at the time
that he feared you would go into
"Destroy mode" if he didn't
sell Instagram to you.
- Congresswoman, I wanna
respectfully disagree
with the characterization.
I think it was that this was a space
that we were going to compete
in one way or another.
I don't view those conversations
as a threat in any way.
- I'm just using the documents
and the testimony that the committee
has collected from others.
Did you warn Evan Spiegel,
the founder of Snapchat,
that Facebook was in
the process of cloning
the features of his company,
while also attempting to buy Snapchat?
- Congresswoman, I don't remember
those specific conversations,
but that was also an area
where it was very clear
that we were going to
be building something.
- [Kelly] Finally, the committee honed in
on how each platform
allegedly abuses its control
over current technologies
to strengthen their market dominance.
Lawmakers argued that
through self preferencing
and predatory pricing,
these platforms have made it difficult
for small businesses and
competitors to succeed.
And in one case we heard
from one Amazon bookseller
who was blocked by selling
books for no apparent reason.
- We were a top book seller on Amazon.com,
and we worked day-and-night very hard
towards growing our business
and maintaining a
five-star feedback rating.
Most importantly, this business
feeds a total of 14 people.
And as we grew, we were
shrinking Amazon's market share
in the textbooks category.
So now, in retaliation
Amazon started restricting
us from selling.
They started with a few
titles in early 2019,
and within six months,
Amazon systematically blocked us
from selling the full textbook category.
We haven't sold a single
book from the past 10 months,
or probably more.
We were never given a reason.
Amazon didn't even
provide us with a notice
as to why we were being restricted.
There was no warning. There was no plan.
- She told us that they sent
more than 500 separate
communications to Amazon,
including to you Mr.
Bezos, over the past year.
There was not a single
meaningful response.
Do you think this is an acceptable way
to treat someone that you described
as both a partner and customer?
- No, congresswoman. And I
would like to talk to her.
It does not at all to me
seem like the right way to treat her.
- [Kelly] Wednesday's hearing
was really just the beginning.
In a few weeks, the committee
will publish a final report,
detailing how large tech firms
allegedly violate antitrust laws,
and what they can do
to fix these problems.
By this fall, Chairman
Ciciline and company
will release that report,
and the real work will begin.
Thinking about how Congress
wants to regulate these companies,
or if any of them should be broken up.
- We need to ensure the
antitrust laws first written
more than a century go
work in the digital age.
When these laws were
written in Minneapolis
were men named Rockefeller and Carnegie.
Their controls in marketplace
allowed them to do
whatever it took to crush
independent businesses
and expand their own power.
The names have changed,
but the story is the same.
And without objection,
this hearing is adjourned.
