Four of the nation’s largest tech companies sought to reassure skeptical lawmakers over their market power as the House ramps up its antitrust investigation into Silicon Valley.
Executives
from Apple, Amazon, Facebook and Google testified before the House Judiciary
Committee’s antitrust subcommittee Tuesday in a hearing examining the effect
that their size has had on small businesses and their ability to innovate.
Each
insisted that their platforms help smaller businesses reach customers and that
they face stiff competition.
Amazon —
the largest of the four, with a market cap just shy of $1 trillion — pointed to
an “ever-broadening array of competitors” that they face in the retail market
and touted their efforts to help third-party sellers on their platforms.
But Nate
Sutton, Amazon’s associate general counsel, was forced to repeatedly insist to
incredulous lawmakers that the company does not use the consumer data it
collects to give its own products an advantage over those of third-party sellers.
Rep.
David Cicilline (D-R.I.), who as chairman of the subpanel is leading the
antitrust investigation, forcefully pressed Sutton about Amazon’s conduct
toward those vendors.
“Amazon
is a trillion-dollar company that runs an online platform with real-time data
on millions of purchases and billions in commerce and can manipulate algorithms
on its platform and favor its own products,” he said
Reminding
Sutton that he was under oath, Cicilline asked, “So you collect all of this
data of the most popular products and where they’re selling, and you’re saying
you don’t use that in any way to change an algorithm to support the sales of
Amazon-branded products?”
“Our
algorithm such as the buy box is aimed to predict what customers want to buy,
and we apply the same criteria whether you’re a third-party seller or Amazon to
that because we want customers to make the right purchase regardless of whether
it's a seller or Amazon,” Sutton responded.
Matt
Perault, Facebook’s head of global policy development, similarly said that the
company does not research social media trends in order to find and buy out
potential competitors to maintain its dominance, despite a 2017 Wall Street
Journal story that reported it had used a surveillance app that tracked user
behavior to influence its acquisitions.
He also
told the panel that the social network is not a monopoly, but Rep. Joseph
Neguse (D-Colo.) pointed to the popularity of its platform and of several
services it owns including Instagram, WhatsApp and Facebook Messenger.
“So you
can understand skepticism because when a company owns four of the largest six
entities measured by active users in the world in that industry, we have a word
for that and that’s monopoly — or at least monopoly power,” Neguse said.
Google’s
director of economic policy, Adam Cohen, also insisted that it faced
competition in the internet search industry from the privacy upstart
DuckDuckGo, Microsoft’s Bing and Yahoo. And he said that users turn to other
platforms when searching for things like retail products and travel
arrangements.
For its
part, Apple faced questions about the fees it charges apps on its App Store.
Spotify,
which competes with Apple Music and has filed an antitrust complaint against
the iPhone maker in Europe, pressed its case with the committee in a letter
arguing that Apple stifles competition by “essentially acting as both a player
and referee to deliberately disadvantage other app developers.”
But
lawmakers were skeptical of the defenses.
"By
virtue of controlling essential infrastructure, these companies appear to have
the ability to control access to markets," said House Judiciary Committee
Chairman Jerrold Nadler (D-N.Y.).
"In
some basic ways, the problem is not unlike what we faced 130 years ago, when
railroads transformed American life — both enabling farmers and producers to
access new markets, but also creating a key chokehold that the railroad
monopolies could exploit," he said.
But
Cicilline, who has become one of the most outspoken tech critics in Congress,
also criticized U.S. antitrust enforcers — specifically the Department of
Justice and Federal Trade Commission — for not challenging the tech giants during
their years of explosive growth.
“In the
two decades since the Justice Department filed its landmark monopolization case
against Microsoft, there has not been a single complaint filed by either agency
alleging anti-competitive conduct in this market,” he said. “Together, these
enforcement decisions have created a de facto immunity for online platforms.”
**Video:
https://thehill.com/policy/technology/453390-tech-giants-on-defensive-at-antitrust-hearing