Heat goes on Big Tech: Facebook, Google, Apple and Amazon chiefs grilled by US Congress

US politicians are grilling America’s tech chiefs in an unprecedented hearing hailed as Silicon Valley’s “Big Tobacco moment”.

The chief executives of Amazon, Apple, Facebook and Google are facing tough questioning from a Congressional committee in a heavily politicised and combative session that has moved far beyond the scope of alleged anti-competitive practices.

Among the biggest revelations so far came from leaked documents showing that Facebook bought rival app Instagram to “neutralise” its threat, believing that the sale would make it too big for any rivals to catch up.

Democrats accuse the companies of dominating markets, crushing smaller competitors and unfairly exploiting user data to enrich themselves. Republicans argue that they are using their power to silence right-wing voices and undermine democracy.

Zuckerberg doesn’t remember

Facebook CEO Mark Zuckerberg was asked about whether he ever threatened Evan Spiegel, the founder and chief executive of Snapchat, told the hearing he did not remember “the specific conversations”.

Instagram founder Kevin Systrom felt so intimidated by Zuckerberg’s overtures that he feared Facebook would ruin him if he refused to sell the app, documents have revealed.

According to Washington State representative Pramila Jayapal, the young entrepreneur confided in an investor in 2012 that he feared Zuckerberg would go into “destroy mode”.

Jayapal quoted Zuckerberg as telling Systrom that “how we engage now will also determine how much we’re partners versus competitors down the line”.

Zuckerberg froze a little, and then said: “I don’t view those statements as a threat in any way”.

He confirms that he bought Instagram, in part, because it was a competitor, something he has said several times in the past.

Congress says this is exactly the kind of anti-competitive move the law is supposed to prohibit.

Facebook bought Instagram for $1 billion in 2012.

Zuckerberg played on the ideals of the American dream, saying: “Facebook is a successful company now, but we got there the American way: we started with nothing and provided better products that people find valuable.”

Earlier, opening the hearing, chairman David Cicilline said the Covid-19 pandemic was entrenching big companies’ power at the expense of “mom and pop” businesses.

“Our founders would not bow before a king, nor should we bow before the emperors of the online economy,” he said.

Republican Jim Jordan said big tech was “out to get” conservatives, citing Twitter’s decisions to add fact-checks and labels hiding President Donald Trump’s tweets and Google-owned YouTube’s decision to remove content that conflicts with the advice of the World Health Organisation, which he said “shills for China”.

“We love the fact that these are American companies but what’s not great is censoring people, censoring conservatives and trying to impact elections,” he said.

Amazon under fire

Amazon CEO Jeff Bezos, under bruising questioning from Representative Kelly Armstrong said Amazon only uses “aggregate” data from rival vendors – merged until only broad trends are visible – although the Wall Street Journal has reported that in one case, involving a car boot organiser, only two companies were included in the data – and one of them accounted for 99 per cent of sales.

Bezos said Amazon was conducting an internal investigation on the use of third party data and ” trying to understand some of the anecdotes that we saw in the Wall Street Journal”.

Asked why Amazon refuses to take any liability for the proliferation of counterfeit products on the platform, alleged monopoly abuse – including skewing its smart speaker Alexa towards its own products – taking ideas from smaller companies under the guise of potential investment or acquisition, and forcing vendors to pay for adverts in exchange for cracking down on imitation products Bezos said “that is unacceptable, if those are the facts”.

He denied stealing technology, but said: “It wouldn’t surprise me if Alexa promoted our own products”.

Data from analytics firm eMarketer shows Amazon controlling about 37 per cent of US retail e-commerce, far more than anyone else – their nearest rival is eBay, which has 5.1 per cent.

Cicilline and Lucy McGrath read out fiery quotes from Amazon sellers who spoke to the committee:

• “We’re stuck. We don’t have a choice but to sell through Amazon.”

• “They’re not a great partner but we have to go through them.”

• “Amazon strings you along for a while because it feels so good to get that paycheck every week. In the past, for lack of a better term, we called it ‘Amazon heroin’, because you just kept going, and you had to get your next fix, your next cheque, but at the end of the day you find out that this person who was seemingly benefiting you make you feel good was just ultimately going to be your downfall.”

Bezos’ response was firm but unconvincing: “I completely disagree with that characterisation,” he said, arguing that it had been a risky decision to let other companies sell on Amazon at all.

Bias in the spam folder?

Republican Greg Steube claimed “conservative bias” was making his emails disappear.

“I never had a problem with my campaign emails being marked as spam or going to junk folders and suddenly I get elected to Congress and my parents who have a Gmail account aren’t getting my campaign emails,” Steube said.

“This appears to only be happening to conservative Republicans.”

Google’s Sundar Pichai assured: “There’s nothing in the algorithm which has anything to do with political ideology,” he says.

Tim Cook: ‘It’s a street fight’

A common complaint about Apple is the power it wields over what appears on people’s iPhones.

Apple has control over which apps are marketed to Apple users, and therefore has a lot of control over who prospers.

App developers have raised concerns that the rules governing the App Store review process are patchy, and sometimes unfair. Developers say they have no choice but to go along with the changes, or they must leave the App Store. This is particularly problematic for smaller app developers.

But Apple CEO Tim Cook said there was plenty of competition for developers, pointing to Android or Windows or Xbox or PlayStation.

“It’s so competitive I would describe it as a street fight for market share in the smartphone business.”

The committee launched an investigation into digital markets just over a year ago, looking at whether there were competition issues and if the current antitrust laws were equipped to deal with them.

– Telegraph Media Group

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