Now we know what Jeff Bezos' worried face looks like
AmazonCEO Jeff Bezos, Sundar Pichai, and AppleCEO Tim Cook all testified before Congress about how they use their market power to destroy competitors.
- Unlike other tech hearings, this one had minimal grandstanding and the politicians came prepared.
- The tech titans did not seem ready for that at all, and they admitted to doing a lot of offensive things.
- This is an
opinioncolumn. The thoughts expressed are those of the author.
In the time since Amazon founder and CEO went from being another Silicon Valley executive to the richest man in the world we have rarely seen him worried. This is a man who dared the tabloids to taunt him. This is a man who employs a personal detective named Gavin de Bekker.
But on Wednesday we saw his worried face.We saw it while Bezos testified before a subcommittee of the House Judiciary Committee — a committee within a committee — focused on antitrust enforcement. He — along with the Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai, and Apple CEO Tim Cook — were all called to answer questions related to their power. These are the men who control how things get to you on the internet — your apps, your messages, your ads, your news, your answers to questions, and just about anything you could buy.Advertisement
For the last year this subcommittee has been investigating whether or not that dominance over distribution has led to America's decades-low small business creation — whether Facebook, Google, Apple and Amazon use their power to destroy would-be competitors.
Given the historic nature and intense media focus on the meeting, the lawmakers' primary mission was to articulate its findings on the vast power these companies wield in ways that Americans can understand.And Bezos showed us his worried face because — histrionics from a few members aside — the members of the committee did just that.
"[The committee] showed that these companies are gatekeepers that they engage in anti-competitive practices and that their dominance is about monopoly power, not innovation," said Matt Stoller, an antitrust researcher and author of Goliath: Hundred Year War between Monopoly Power and Democracy.It was the first time men like Bezos, "masters of the universe" as Stoller put it, have had to answer questions from informed, powerful people. And under pressure, they admitted to a lot of the toxic behavior their critics have been accusing them of for years.
When you rule the roadsFor the most part, when Silicon Valley has gone to Washington it's been an embarrassment for our politicians. Geriatric Senators ask basic questions about technology and the CEOs in the hot seat restrain themselves using their best media training and paternalistic question answering.Advertisement
There was some of that at Wednesday's hearing, mostly from Ranking Member F. James Sensenbrenner, a Republican from Wisconsin. There was also some grandstanding about conservatives being silenced on Facebook (they are not) and Google (still not). But that was a minority of the minority.
For the most part, members from both parties asked thoughtful, well-researched questions. And it seems the CEOs were not prepared for that. As Stoller noted, they had to admit a myriad of shady business tactics.
- Members of both parties hammered Facebook for its strategy of buying, copying or threatening competitors out of business, reading damning internal emails from the company's acquisition of Instagram.
- Bezos was tongue tied when asked why Amazon makes money from counterfeit goods, nor could he answer any questions about Amazon's protocol for ensuring that it's not selling stolen goods.
- Bezos squirmed through questions from Representative Pramila Jayapal about how Amazon misuses third-party seller data to develop in-house brands that compete with merchants selling on his platform saying only, "I can't answer that question yes or no."
- Subcommittee Chair David Cicilline brought up that, outside Amazon these third-party sellers are called "partners." Inside Amazon they're called "internal competitors."
- Much in the same way, Zuckerberg sweat through questions about its history of spying on competitors.
- Zuckerberg could not explain away the fact that his company profits from peddling misinformation. Cicilline brought up that, despite committing to only distributing accurate information about the coronavirus, it took Facebook five hours and 20 million views before it took down a video full of false claims about the pandemic. Amplifying that misinformation once its on the platform, Cicilline said is a "business decision."
- Democratic Rep. Congressman Joe Neguse of Colorado pressed the CEOs of Apple and Google, both of which control app stores, to promise they would not use the information they collect from apps in their stores to build competitors.
- Democratic Rep. Val Demmings of Florida pressed Pichai about the way Google surveils its customers, bundling data from across all of its products (Gmail, maps, etc.) in order to sell them targeted ads
Perhaps the most gut-wrenching moment of the hearing was when Democratic Rep. Lucy McBath of Georgia played a recording of a small textbook seller who was crushed by Amazon when their business got big enough to compete with Bezos'.
"We were never given a reason. Amazon never even provided us with notice of why we were being restricted. There was no warning, there was no plan." And confronted with the recording Bezos had no words of explanation.
Why we are hereNow you may be saying to yourself: "But Linette, if we don't have these big companies, how will we compete with big companies from China and elsewhere?"Advertisement
And I tell you that we cannot compete against anyone unless we are competing against ourselves, here in the US. What these companies do when they crush their competitors — undercutting them, or copying them, or burying their technology after an acquisition — entrenches these companies. And the more entrenched they are, the less innovative they have to be.
Perhaps, for example, if there were competitor to Facebook with a newsfeed that didn't peddle lies and outrages we might be able to choose to go to that competitor, but we can't Facebook bought Instagram and WhatsApp. Zuckerberg called that a "digital land grab."The US economy is not intended to be a land grab for the rich and powerful. It is intended to be an equal playing field, where people with talent and dedication can innovate their way to success. Even more critical than that, our country is contending with the kind of power these companies can wield. When our antitrust laws were written back in the 1890s, and reviewed again in the 1930s, our leaders understood that once companies became huge they can capture
"We must not tolerate oppressive government or industrial oligarchy in the form of monopolies and cartels," Henry Wallace, Vice President to Franklin Delano Roosevelt, wrote in a 1944 essay on the dangers of fascism."As long as scientific research and inventive ingenuity outran our ability to devise social mechanisms to raise the living standards of the people, we may expect the liberal potential of the United States to increase. If this liberal potential is properly channeled, we may expect the area of freedom of the United States to increase." There is a sense in this country that liberty is decreasing, that power is in the hands of a few and that their voices matter more than those of the many. Even Congressman Sensenbrenner, the Ranking Member who seemed confused for a significant portion of the hearing, called on the government to review the mergers that made these companies so dominant. He said that everyone makes mistakes, and regulators likely made them there. Expect the report this subcommittee released on its findings to contain damning emails and other information about how these powerful people have hoarded power and used it to make it virtually impossible for anyone else to compete.Advertisement
It's time the American people understand why their sense that something is very wrong is valid, and where it's coming from, so we can change it.
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