Skip to main content

Update on U.S. House Subcommittee’s Hearing with Big Tech CEO’s

On Capitol Hill and across the U.S., the U.S. House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law held a virtual hearing on July 29, 2020 with the CEOs of the four largest tech companies in the world: Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook, and Sundar Pichai of Google. The hearing was held as part of the Subcommittee’s antitrust investigation into digital markets and whether these companies have stifled competition and harmed consumers. The Subcommittee’s investigation is not the only investigation into these tech giants – the Department of Justice, Federal Trade Commission, and a consortium of State Attorneys General are all pursuing investigations into these tech giants for anticompetitive behavior.

One highlight of the hearing was Representative Jerry Nadler’s questioning of Facebook’s approach to purchasing competitions in order to dominate the social media market. Rep. Nadler focused on Facebook’s acquisition of Instagram in 2012, noting that this deal is “exactly the type of anticompetitive acquisition that the antitrust laws were designed to prevent.”[1] While this merger was not challenged in 2012 by the U.S. Government, the Federal Trade Commission has been re-reviewing the acquisition as part of its investigation into Facebook’s dominance in the social media market.[2]

Google was not left without harsh questioning. Subcommittee Chairman David Cicilline started the hearing by focusing on accusations that Google steals content from small businesses, including accusations that Google stole restaurant reviews from Yelp. Apple CEO Tim Cook had the least amount of questions, but still had to face tough questions regarding Apple’s App Store failure to have a level playing field with the 30% fees Apple traditionally charges apps to be hosted on the App Store. For instance, it has been reported that Apple cut those fees in half in order to get Amazon’s Prime Video application on its App store.[3]  

But the biggest shock of the hearing may have been Amazon CEO Jeff Bezos’s seeming admission that Amazon’s policies allow it to use private data on third-party sellers to develop its own products. The Wall Street Journal has reported that Amazon uses data about independent sellers on the platform to develop and sell competing products, in contrast to the company’s long-stated position that it does not.[4] This behavior has also caught the attention of European Union regulators, as the European Commission is planning to file formal antitrust charges against Amazon for its use of seller data to create competing products.[5]

When asked by Representative Kelly Armstrong whether Amazon uses aggregate data for third-party products even when there are only two sellers of a product, Mr. Bezos answered “yes, sir.” In light of this exchange, an Amazon spokesperson disputed that Mr. Bezos’s comments were an admission of improperly using seller data.[6]

Ultimately, the Subcommittee’s hearing was surprisingly pointed and direct at times. Through the use of evidence gathered in the year-long investigation, many Subcommittee members were able to ask tough questions of the four tech CEOs. As tech reporter Casey Newton of The Verge poignantly noted, “in an age where these tech CEOs can feel all but untouchable, Wednesday showed us the beginnings of accountability.”[7] This hearing is another step forward in the myriad investigations - both in the U.S. and abroad - into these four companies’ dominance both on digital markets and in our lives. 

Footnotes

[1] Irina Ivanova and Aimee Picchi, Tech CEOs face lawmaker questions about their market dominance, CBS NEWS (updated July 30, 2020 6:40 AM), https://www.cbsnews.com/live-updates/google-facebook-amazon-apple-antitrust-subcommittee-house-judiciary/.

[2] Brent Kendall, John D. McKinnon, and Deepa Seetharaman, FTC Antitrust Probe of Facebook Scrutinizes Its Acquisitions, WALL STREET JOURNAL (updated Aug. 1, 2019 6:17 PM) https://www.wsj.com/articles/ftc-antitrust-probe-of-facebook-scrutinizes-its-acquisitions-11564683965.

[3] Mark Gurman, Apple Halved App Store Fee to Get Amazon Prime Video on Devices, BLOOMBERG (updated July 29, 2020, 9:16 PM), https://www.bloomberg.com/news/articles/2020-07-29/apple-considered-taking-40-cut-from-subscriptions-emails-show.

[4] Dana Mattioli, Amazon Scooped Up Data From Its Own Sellers to Launch Competing Products, WALL STREET JOURNAL (updated Apr. 23, 2020 9:51 PM), https://www.wsj.com/articles/amazon-scooped-up-data-from-its-own-sellers-to-launch-competing-products-11587650015.

[5] Valentina Pop and Sam Schechner Amazon to Face Antitrust Charges From EU Over Treatment of Third Party Sellers, WALL STREET JOURNAL (updated June 11, 2020 5:21 PM), https://www.wsj.com/articles/amazon-to-face-antitrust-charges-from-eu-over-treatment-of-third-party-sellers-11591871818.

[6] Supra Note 1.

[7] Casey Newton, The tech antitrust hearing was good, actually, THE VERGE (July 30, 2020), https://www.theverge.com/interface/2020/7/30/21346575/tech-antitrust-hearing-recap-bezos-zuckerberg-cook-pichai.

Related Lawyers: Theodore F. DiSalvo
Related Practice Areas: Antitrust / Competition

Related Lawyers