EDITOR'S NOTE: As of 4 p.m. July 24, 2020 Monday's first-of-its-kind congressional hearing with the CEOs of Amazon, Apple, Facebook and Google was been officially postponed due to a conflict with the memorial services for the late Rep. John Lewis, the House Judiciary Committee confirmed Friday. How to watch Congressional Hearing: Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google Who: Tim Cook, Mark Zuckerberg, Sundar Pichai, Jeff Bezos Date: Originally, Monday, July 27 / Rescheduled for Wednesday, July 29 Time: 12:00 p.m. ET Stream: on YouTube of course!
As CEO of DCN I have the privilege of addressing the executive leaders from our membership at our annual Next: Summit. This past January, my remarks were titled “2020 Vision.” When I look back at my presentation just six months later, it is astounding to me how little we knew about what 2020 would bring.
However, my first slide had a close-up of the eyes of the CEOs of the four companies who have most benefited from the growth of our industry: Google, Facebook, Apple, and Amazon. On Wednesday – halfway through this tumultuous year – we will hear from them directly. “The 4 Horsemen of the Techopolypse” – as Kara Swisher called them in The New York Times – will testify under oath before Congress for the first time, on antitrust matters, an area where they face the most risk to their massive businesses.
Two of the companies, Google and Facebook, are already under highly sensitive antitrust investigations by nearly every state, federal, and international regulator of note. And Apple is being investigated by EU antitrust regulators. So, this is the public accountability portion of the show. Get the popcorn ready, because this is going to be one to watch.
There is a well-paved road of industry concerns around these four companies. Like many topics these days, they tend to gravitate towards specific concerns of the left or the right. For serious experts, though, antitrust becomes a critical focal point because nearly every one of the grievances is a symptom of too much power and too much control over the design, delivery, data and dollars that fund the media ecosystem. This hearing offers an unprecedented opportunity to discuss these issues with the chief executive at each of these organizations. And while it is clear that everyone involved in these antitrust investigations has become far more knowledgeable on the issues in play here over the past few years, we can’t afford to waste a moment.
Having closely studied prior global testimonies for these companies, I am optimistic the committee will be confined to lawmakers focused on antitrust. But I’ve been thinking a lot about the way these lines of inquiry usually go. And while there are absolute must-ask questions for each of these companies, there are also those that should be avoided. I call the latter group “rabbit hole” and “sand trap” questions.
The trouble with rabbit holes is that – while the question may well be a good one – the answer is likely to be complex, unwieldy, and take the inquiry places that will confuse many and clarify little. As for the sand traps, these are the types of questions that the PR and lobbying machines at these companies adore. They lend themselves to unrelenting spin and little actual insight. And critically for this hearing, they will do little to illuminate the issue of antitrust.
Targeted questions and unwanted detours
Here’s my list of burning questions that must be addressed, along with likely rabbit holes and sand traps to be avoided.
What to Watch For – Apple
Tim Cook, CEO
Rabbit hole: Security
Whether it be backdoors for law enforcement, data access by China, or app security, this discussion won’t get anywhere; it leads to a false choice between security and privacy. Consumers deserve both. Period.
Sand trap: Privacy
Tim Cook, on behalf of Apple, has been a unique and powerful voice carrying the torch for the human right to privacy. This is good and favors them significantly, most notably in contrast to the practices of Google and Facebook. However, it is important to remember that Apple doesn’t have an advertising business. So, it is happy to criticize the core asset of Google and Facebook.
What to Watch For – Google
Sundar Pichai, CEO
Burning question: Advertising marketplace
All parties – the UK, Australia, France, the Department of Justice and State AGs – seem to be focusing antitrust investigations on Google’s advertising systems. This includes its vast data collection across its dominant search, operating system, browser and its many adtech acquisitions. An expert economist described it as a “walled garden” yet across the open web. Remember this every time Google champions the “open web” and the small publishers all while taking half of the revenue for itself.
Rabbit hole: Censorship
Republicans would love to nail Google for bias in its search engine. I’m empathetic because all searchers should readily find their trusted news sources in search results. Algorithmic bias is an issue of concern. And censorship is a troubling topic. However, these are complex issues that cannot be adequately addressed in this context. The short answer is that you need competition to provide alternatives, as I testified to Senate Judiciary last year.
Sand trap: Revenue share confusion
In previous testimony and in press reports, there has been significant debate around the “ad tech tax” or the percentage taken by Google whether it be 70/30 or 30/70. Don’t go there. It’s a time suck. Google has powerful spinners working on obfuscating their dominance here.
What to Watch For – Facebook
Mark Zuckerberg, CEO
Burning question: Data collection
As the German courts concluded, Facebook uses its data collection across the web and its own apps to dominate social media. Copious research and leaked documents have shown how Facebook has used this access to data to cut out competition and control markets. Facebook has created an advertising marketplace fueled by its massive data and has turned away from addressing issues of quality of the experiences around it, harming both publishers and advertisers.
Rabbit hole: Content moderation
Don’t get me wrong, the push for Facebook to better moderate its content is incredibly important. But the solution isn’t simply tighter enforcement and arguably outside the scope of this hearing. Mark Zuckerberg will point to EU audits on Facebook policing hate speech and their tens of thousands of “moderators.” Put simply, if Instagram and Facebook were two different competing companies, the incentives to act on issues such as harassed journalists like Maria Ressa, boycotting advertisers or persecuted people, would be much higher.
Sand trap: Censorship
Zuckerberg would love to have a partisan debate in which Facebook carries the torch of free expression and he cloaks himself in love for the First Amendment. The real conversation Facebook wants to avoid is its algorithmic amplification decisions which provide velocity and reach to the content and advertising on Facebook’s platforms, regardless of its potential harm and without any liability for it. However, this issue is better suited for a hearing on CDA 230. In the context of antitrust, alternative and competitive social platform choices for consumers and advertisers will only drive more quality.
What to Watch For – Amazon
Jeff Bezos, CEO
Burning question: Platform privilege
Did Amazon lie under oath to the committee? Do they use data from retailers to inform their own product decisions as WSJ reported? Do they unfairly control prices and exclude competition? Lawmakers want to know, and Congress should find out.
Rabbit hole: Getting personal
Anything related to Bezos’s ownership of Washington Post or personal life. It’s his first time testifying and let’s hope this hearing stays on topic.
Sand trap: Pandemic savior
Amazon, more than any company represented, has a critical role in supply chains and is vitally important during the pandemic. While they are certainly the fox in the hen house, they’ll happily talk about how they benefit online small businesses (even launch an entire association to do it!) The fact is that local businesses are struggling mightily during the pandemic while Jeff Bezos is reported to be closing in on $200B as the wealthiest man on the planet. His fortune grew a record $13B on a single day last week – during a global pandemic. That pretty much tells you what need to know about who benefits the most. So, why even go there?
There is so much that we’d all love to see uncovered in the interrogation of these powerful tech CEOs. But this hearing is focused on antitrust. And frankly, there are so many issues with these companies that would be addressed, or at least alleviated, if their unrelenting market dominance was diminished. It is critical that this questioning stay on point and avoid rabbit holes and sand traps. It is clear that each of these companies has been allowed to benefit from rules that were intended to foster capitalism and innovation – strong American principles that everyone can still get behind. As Scott Galloway has consistently pointed out, real competition is the basis for both of these.
It is time for change.