By Ryan Tracy, John D. McKinnon and Emily Glazer
Big Tech will come under the glare of a national spotlight
Wednesday, as four of its leaders face questions from members of
Congress aiming to rein in what they believe is excessive power in
the hands of a few giant companies.
The chief executives -- Amazon.com Inc.'s Jeff Bezos, Apple
Inc.'s Tim Cook, Facebook Inc.'s Mark Zuckerberg and Google's
Sundar Pichai -- are set to appear before the House Antitrust
Subcommittee investigating the market dominance of online
platforms.
Their testimony could help build public pressure for government
action, especially if the back-and-forth with lawmakers raises new
concerns about the way the big technology companies operate.
"These platforms have been allowed to run wild and free from
really any constraints," Rep. David Cicilline (D., R.I.), the
subcommittee chairman, said in an interview. "The responsibility we
have is to make clear what the impacts are of the lack of
competition in the digital marketplace."
For the CEOs, it is a chance to make the case that their success
derives not from monopoly power, but from their ability to meet
consumer needs.
In statements released late Tuesday, Mr. Bezos, Mr. Zuckerberg
and Mr. Pichai, who is also CEO of Google's parent Alphabet Inc.,
emphasized the competition their companies face, as well as their
contributions to the U.S. economy.
"Although people around the world use our products, Facebook is
a proudly American company," Mr. Zuckerberg said. "We believe in
values -- democracy, competition, inclusion and free expression --
that the American economy was built on."
Mr. Bezos cited his own upbringing, saying it taught him grit
and self-reliance, and cited competition Amazon faces from
retailers in the U.S. and globally.
Mr. Pichai underscored Google's numerous contributions to
helping make consumers and small businesses more efficient and
competitive, particularly during the coronavirus pandemic.
Mr. Cook is set to tell lawmakers Apple is "a uniquely American
company" that "does not have a dominant market share in any market
where we do business."
All the CEOs except Mr. Bezos have previously appeared before
Congress. While it isn't uncommon for executives from an industry
to testify together -- big bank leaders did so last year -- it is
rarer for a congressional inquiry to come at such a high point in
an industry's success. As of Monday, the four companies and
Microsoft Corp. represented the five most valuable U.S.
companies.
Democrats have generally been most critical of the market power
of big technology companies, but some Republicans have also
expressed concerns -- including whether existing antitrust laws are
outdated in the internet age.
In dealing with rival companies, some tech giants often act in a
predatory fashion, said Rep. Ken Buck (R., Colo.). "They are doing
it in a way that's designed to reduce competition," Mr. Buck said
in an interview. "As it appears to me now, there's a need for
action and for updating the law."
Other Republicans on the subcommittee are more likely to focus
on what they view as anticonservative bias among some of the
platforms, a charge the companies generally dispute.
Despite the hearing's topic, lawmakers can ask whatever they
wish. Both parties have criticized how the companies regulate
content on their platforms, with Republicans often charging
censorship and many Democrats worried about foreign election
interference.
The format of Wednesday's hearing could work to the advantage of
the witnesses. The executives will testify simultaneously rather
than individually -- an outcome the companies sought -- which could
blunt sustained pressure on any one witness.
It will also occur via video-chat because of the coronavirus
pandemic. Instead of a crowded hearing room, the CEOs will testify
from a place of their choosing.
At the same time, the hearing comes with the companies under
scrutiny by one or more of the authorities empowered to enforce
antitrust laws: the Justice Department, Federal Trade Commission
and state attorneys general. The subcommittee has been running its
own yearlong probe and lawmakers have more than one million
documents gathered from the companies and their competitors,
including the executives' own emails, congressional aides say.
All that could make the questioning feel more like an
interrogation. Rep. Pramila Jayapal (D., Wash.), who sits on the
panel, said members have spent hours in briefings about the
companies and might conduct dry runs practicing their
questions.
Staffers have told outsiders the hearing could last five hours
or more, with each lawmaker having multiple opportunities to ask
questions. "We don't want anyone to feel left out," Ms. Jayapal
quipped.
The CEOs' preparations have included speaking with lawmakers, as
is typical for high-profile hearings. Mr. Cicilline said last week
he had conversations scheduled with Messrs. Zuckerberg, Cook and
Pichai.
Matt Perault, a Duke University professor who testified before
the subcommittee last year while working at Facebook, recalled
preparing with hours of talking-point briefings and mock
interrogations. He remembered receiving this advice: "It's
basically impossible to win. You're trying not to lose."
Mr. Zuckerberg views the stakes for the hearing as high for
himself and for Facebook, and has been preparing with a tight
circle of confidants and congressional experts, according to people
familiar with the efforts. Among the concerns, these people said,
are questions about the potential divestiture of prime assets
Instagram and WhatsApp, and about the perception that Facebook
lacks the ability to govern its sizable platforms.
Facebook faces multiple antitrust probes focusing in part on its
acquisition of potential rivals. None of the investigations appears
to be on a fast track, although the FTC is laying the groundwork
for depositions of company executives.
Amazon's retail opponents have been lobbying lawmakers to ask
Mr. Bezos about counterfeit products, competition with third-party
sellers on the Amazon marketplace, and other issues. Amazon
initially resisted agreeing to let Mr. Bezos testify before
Congress, according to people familiar with the matter. The company
relented after senior lawmakers publicly demanded he testify,
citing a Wall Street Journal report in April that Amazon employees
used data from the platform's sellers to develop competing
products.
The FTC and some U.S. states have met with Amazon critics to
discuss its market power, according to people familiar with the
matter, but neither the company nor the regulators have disclosed a
formal investigation.
The antitrust probes into Google are the most advanced, with the
Justice Department expected to file suit this summer. Investigators
have focused on the company's dominance of online advertising and
search, both topics likely to come up Wednesday.
Apple also resisted personal testimony by Mr. Cook, according to
a person familiar with the matter. He has sought to distinguish
Apple by emphasizing that its business model is less reliant on
consumers' personal data.
The Justice Department is probing Apple's App Store practices,
people familiar with the matter have said. Rivals say the company
acts anticompetitively in the store, extracting unfair payments and
favoring its own products. Last week, Apple promoted a study
concluding the fees app developers pay are in line with those
charged elsewhere.
Earlier public hearings offer clues about evidence lawmakers
might use to put the CEOs on the spot. At a January congressional
hearing with smaller companies, the founder of mobile-phone
accessory maker PopSockets LLC said he had evidence of Amazon
bullying third-party sellers.
Columbia University law professor Timothy Wu, who has called for
breaking up Facebook, urged the lawmakers last summer to subpoena
Mr. Zuckerberg's emails discussing the 2012 acquisition of
Instagram -- a request that was among those sent to the company
months later.
--Brent Kendall contributed to this article.
Write to Ryan Tracy at ryan.tracy@wsj.com, John D. McKinnon at
john.mckinnon@wsj.com and Emily Glazer at emily.glazer@wsj.com
(END) Dow Jones Newswires
July 28, 2020 21:50 ET (01:50 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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