Alphabet, Amazon, Apple and Facebook are too big and powerful. Yeah, Yeah. Same old, same old
- Capitol Hill hearing has a bit of a pop at the CEOs of Alphabet, Amazon, Apple and Facebook - sort of
- Yet again, far too little, far too late
- "Emperors" of the online economy let off the hook once more
- Macbeth had it right: An event "full of sound and fury, signifying nothing”
Yesterday in Washington DC the CEOs of four huge and hugely powerful companies -- Jeff Bezos of Amazon, Tim Cook of Apple, Sundar Pichai of Alphabet (he is simultaneously the CEO of Google) and Mark Zuckerberg of Facebook -- dialled-in and virtually faced something of an inquisition by members of Antitrust Subcommittee of the House of Representatives, both Democrat and Republican alike. Torquemada would have done a lot better in a far shorter time.
For a while though it seemed possible, even likely, that the event would be substantive, or at least more substantive than previous similar hearings have been. In the first minutes the Subcommittee's chairman, David Cicilline, the Democrat Representative for Rhode Island's First Congressional District, told Bezos, Cook, Pichai and Zuckerberg that their respective companies are too big, too powerful and evidently determined to snuff out competition. He said, "Our founders [the "Founding Fathers" who, in the 1770s united the Thirteen Colonies in the Revolutionary War against the British and set out the governmental and legislative framework of what was to become the United States of America] would not bow before a king. Nor should we bow before the emperors of the online economy."
It was a good start and Cicilline's instant hostility took the emperors by surprise and caused Zuckerberg to rock-back and wriggle uncomfortably on his (for once invisible) booster seat. Periods of intensive and questioning followed but, as on previous occasions, advantages were not pressed home and some questions became long-drawn-out meandering monologues during which Subcommittee members exercised their egos and took to grandstanding and playing to the virtual gallery of their own partizan supporters. Mind you, the well-schooled Emperors also waffled and obfuscated as hard and as often as they could. As the six-hour hearing ground on focus was lost as the hot air swirled and opportunities were squandered. Anyone might think that there is an election in the offing.
However, David Cicilline continued as he had begun and told Pichai that Google routinely commandeers the content of small businesses and presents them on its own pages. He cited as an example the case of Yelp where Yelp reviews postings were intercepted and posted on Google's own website. When Yelp complained Google threatened to delist it altogether. Cicilline told Pichai that Google is "economically catastrophic" for other online enterprises and that it has "stolen content to build its own business".as well as surveilling web traffic "to identify competitive threats."
He added, "Our documents show that Google evolved from a turnstile to the rest of the web to a walled garden that increasingly keeps users within its sights. The evidence seems very clear to me that as Google became the gateway to the internet, it began to abuse its power." Pichai could not and did not respond coherently to the blunt question "Why does Google steal content from honest businesses" so he waffled, mumbled and prevaricated until he ran out of steam and simply stopped talking. Pichai also claimed that he "doesn't recall" examples of his company's theft of content belonging to other companies. The curse of selective amnesia strikes again.
Pichai also frequently used the "I don't recall" excuse as a way to explain away clear examples of Google's theft of content belonging to other companies. Indeed, Google was caught bang-to-rights scraping content from the song lyrics site Genius. Seeking to catch Google in the act, developers at Genius put apostrophes and semi-colons throughout song lyrics to spell "REDHANDED" in Morse code, Exactly the same word appeared on the pages Google had somehow "appropriated".
Amazon was accused of "misleading" the Subcommittee having previously testified that it does not use data from third-party companies to increase the sales of its own stuff. Jeff Bezos, was making his first appearance before Congress, and was confronted with public evidence adduced by the impressive Pramila Jayapal, the Democrat representative for Washington State's 7th congressional district who was fully in command of her brief, showing that Google does exactly what it swore it does not do.
Bezos suddenly found that he was having trouble coping with his video feed which gave him a bit of time to come up with an answer (technology can be a bit of a bugger can't it eh, Jeff?) which was, “What I can tell you is we have a policy against using seller-specific data to aid our private label business, but I can’t guarantee you that policy has never been violated.” Heavens to Betsy and steady on Mr. B! That's almost an admission.
Thereafter Bezos came over all "Aw Shucks" and bashfully folksy, as if the world's richest man had been watching an episode of "The Beverly Hillbillies" between questions. Wrapping himself in the flag he burbled on about his mother being "a 17-year-old high school student” and his father "a Cuban immigrant." He said “Amazon’s success was anything but pre-ordained" and it is all down to honest hard work and the American Way.
Nothing whatsoever was made of the investigation by the Wall Street Journal newspaper which reported that Amazon executives gained access to seller data and used them to determine best selling items. This practice, apparently as well-known as it is well-used within the company, is euphemistically known as "going over the fence" as in violating security, breaking and entering and stealing data for competitive advantage.
For a better idea of Bezos's real attitude look no further that the statement he posted online before the hearing. He wrote, "When you look in the mirror, assess the criticism, and still believe you're doing the right thing, no force in the world should be able to move you." There we have it. Then there's the other giveaway that whilst, in public, Amazon likes to smarmily enthuse about the wonderful relationships it has with "partners and customers", inside Amazon they are categorised as "internal competitors". That says it all, in black and white. Not that Bezos gave a hoot.
Tim Cook of Apple didn't face as many questions as the other three and those he did get related mainly to the myriad of complaints that have been made over the years about the App Store and the way Apple treats companies that it deems to have developed products and services that compete with its own. Apple takes "commission" of up to 30 per cent on in-app sales and subscriptions. Despite the rapacious fee, companies wanting to sell their wares (Spotify being particularly vocal here) say they have no choice other than to pay up or not have their products on the App Store at all.
However, on the production of documentary evidence showing that Apple exec "Fast" Eddy Cue had proposed, online, that the fee be increased. Cook's response was that Apple means no harm to developers, and stressed that "We do not retaliate or bully people. It is strongly against our company culture."
This will come as welcome, if unexpected news to Spotify people and they will be glad to hear it, as will tens of thousands of smaller developers. In his pre-hearing posting Tim Crook actually went so far as to claim that Apple does not have a dominant position in any market and faces perpetually fierce competition. That's because it's all a matter of how statistics are sliced and diced rather than any objective reality.
Mark Zuckerberg, took refuge in what Dr Samuel Johnstone called "the last refuge of a scoundrel" and used good old patriotism to justify the repeated failings and broken promises of his company. He said "Facebook is a proudly American company" that "got here the American way. We started with nothing and provided better products that people find valuable. As I understand our laws, companies aren’t bad just because they are big."
No, but they are bad if they ride roughshod over solemn promises to protect data and privacy and deliberately and continually seek to damage and nullify the competition they claim to champion. To add insult to injury and without a hint of irony or the faintest blush on his boyish complexion Zuckerberg added, "Our story would not have been possible without US laws that encourage competition and innovation."
Pressed in particular on Facebook's acquisition of rival photo-sharing app outfit Instagram in 2012 and the internal company papers and emails showing that the company bought it solely to nullify a competitive threat. Democrat congressman Jerry Nadler, representing the 10th Congressional district of New York City told Zuckerberg that Facebook's actions were exactly the type of anticompetitive acquisition the antitrust laws were designed to prevent."
Facebook emails show that Zuckerberg claimed Instagram could "meaningfully hurt us." Nadler told him, “Mergers and acquisitions that buy off potential competitive threats violate antitrust laws. In your own words, you purchased Instagram to neutralize a competitive threat. You called it a "land grab". It was all water off a Zuck's back. He said Facebook was committed to developing Instagram as an independent entity and helped it to "build-up its infrastructure and security." The emasculation and neutralisation of a competitor must have been entirely coincidental then.
A worthless waste of time
So what did we learn and what will be the result of yesterday's six-hours of remote video theatre? The answer is, "not much." The hearing was a disappointment. The structure was cumbersome. It had to be virtual, and the very mechanics of that allowed the four men, being questioned in their own offices, to shilly-shally, obfuscate and claim the collective forgetfulness of a group of billionaires who have been drinking far too much of their own Kool-Aid for far to long. Who knows who was holding up coaching and cue cards off-shot throughout the performances? The CEOs got away with it again, and they know they did. Now everything will revert to business as usual until the next spasm of righteous indignation forces yet another inconsequential hearing.
Members of the Subcommittee were given five minutes to put their frequently rambling, self-serving questions while those answering them sat silent and then either waffled back or claimed they either didn't know anything, or if they ever had, they had forgotten it since. Precise questions, when they did obtrude into the grandstanding, were answered (or rather non-answered) in the vaguest possible way. Then a pinpoint follow-up was answered by evasion, claims that the questions were not understood and the usual worthless promises to "look into the matter and get back to you". And so it goes every time.
For years now US legislators have been talking about revising and introducing new antitrust laws as well as beefing up regulation, but nothing ever happens. It won't happen this time either because there's no real will to do anything. It's all too cosy. Politicians in general are not prepared to upset the apple cart and perhaps lose the donations they get from lobbyists and Republicans don't like antitrust laws anyway. Then there's the endless play of elections and pandering to interest groups with lots of money and agendas they want politicians to follow and promote.
There's a presidential election on November 3. Nothing will happen until many months, perhaps years, after a new administration is in place, be that Republican or Democrat. As they say in the popular press. "This one will run and run". Unless, Donald Trump, whose visceral hatred of social media and other tech companies is so very evident that it must be central to his being, actually does something.
Prior to yesterday's hearing he tweeted. "If Congress doesn’t bring fairness to Big Tech, which they should have done years ago, I will do it myself with Executive Orders. In Washington, it has been ALL TALK and NO ACTION for years, and the people of our Country are sick and tired of it!" We'll see. He has a few other things to worry about at the moment.
And, finally, the glacial pace of change where regulation and control of social media and Internet companies are concerned means the examination of the abysmal state of competition in the US telecoms market is further away than ever, even though the problem should have been addressed fifteen years ago.
If you have the stomach, you can watch the proceedings on You Tube. They are marginally more entertaining than "Empire", the 1964 black-and-white silent film by Andy Warhol which consists of slow motion footage of an unchanging view of the Empire State Building. It lasts eight hours and five minutes. The Congressional Subcommittee Antitrust hearing is mercifully shorter, by a good two hours. On that basis I can heartily recommend it.
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