It was a long four hours of razor-sharp questions, bizarre diatribes about politicians’ fathers’ spam folders and Jeff Bezos accidentally muting himself.
But unlike many Big Tech hearings in the United States Congress, which sometimes produce more heat than light, we learned a lot from the unprecedented simultaneous interrogation of Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Google’s Sundar Pichai and Apple’s Tim Cook.
Together, the four men represented more money than the entire GDP of Japan, and twice the market capitalisation of FTSE 100 companies. Here are the highlights.
Tech bosses think ‘cancel culture’ is a problem
It may not be related to monopolies, but we did learn that all the tech bosses are worried about “cancel culture”.
Cancel culture was recently summed up in a letter in American publication Harper’s, which was signed by 150 intellectuals including Salman Rushdie, Martin Amis, Garry Kasparov and Margaret Atwood.
It warned that “the free exchange of information and ideas, the lifeblood of a liberal society, is daily becoming more constricted” and that “an intolerance of opposing views, a vogue for public shaming and ostracism” is eroding free speech.
Big Tech bosses are typically squeamish about claiming a side publicly, for fear of being cancelled themselves. But when Republican Jim Jordan asked Apple chief executive Tim Cook about the issue, Cook said: “If you are talking about where somebody with a different point of view talks and they are cancelled, I do not think that is good”.
Bezos agreed, declaring that social media was a “nuance destruction machine”. Zuckerberg, the king of social media itself, piped up that he had become “very worried about some of the forces of illiberalism I see in this country that are pushing against freedom of expression”.
Zuckerberg wanted to ‘neutralise’ Instagram
In the hearing’s most explosive revelation, Democratic representatives produced internal documents from Facebook’s negotiations with Instagram in 2012 that appeared to confirm his critics’ case against him.
Asked about his motivation for pursuing the deal, Zuckerberg confirmed that it was mostly (in his colleague’s words) to “neutralise a competitor”. He went on:
“Once someone wins at a specific mechanic, it’s difficult for others to supplant them without doing something different…
“What we’re really buying is time. Buying Instagram, Path, Foursquare etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again.
“Within that time, if we incorporate the social mechanics they were using, those new products won’t get much traction since we’ll already have their mechanics deployed at scale.”
In other words: Facebook is so big that nobody else can challenge it within its specific arena. And if other apps invent a new arena, Facebook can gobble it up in order to stay unbeatable. (About an hour later, Zuckerberg followed up with an email clarifying that he didn’t want “to prevent them from competing with us in any way”).
Zuckerberg accordingly pressed hard for a sale, insistently pushing past Systrom’s initial refusal. In another document, he notes that Facebook is developing its own photo features, saying that Systrom should “thoughtfully” consider whether they should be “partners vs competitors” (Zuckerberg told the hearing he did not remember this as a threat).
The tactic worked. A chat log shows Systrom privately worrying whether Zuckerberg will go into “destroy mode”, which might mean cutting off Instagram’s access to Facebook’s services in order to strangle it. Systrom concludes: “I don’t think we’ll ever escape the wrath of Mark. It just depends on how we avoid it.”
Bezos doesn’t really get how Amazon works
Time and time again, Jeff Bezos struggled to answer questions about how his company operates behind the scenes.
He was unable to confirm whether sellers were verified using their name and address, or if Amazon kept a phone number of sellers to police the marketplace for stolen or dangerous goods.
The leader could not give a “yes or no” answer to a question about whether Amazon uses third party seller data to advantage its private label brand – claims which were made in a Wall Street Journal investigation.
“What I can tell you is, we have a policy against using seller specific data to aid our private label business,” he said. “But I can’t guarantee you that that policy has never been violated.”
It’s wild that Jeff Bezos doesn’t have better answers about Amazon employee use of third-party seller data. House witnesses and @WSJ have documented this. pic.twitter.com/hwpvEMMw69
— Jonathan Capriel (@CaprielWBJ) July 29, 2020
Faced with claims that vendors were forced to pay for Amazon adverts in exchange for removing counterfeits, and that Alexa is programmed to promote Amazon’s products above other, Bezos, again, played dumb. “That is unacceptable, if those are the facts,” he said.
But these claims have been around for several months. One presumes Washington Post owner Bezos reads the news.
Political squabbling took centre stage
Watching the committee ask its questions was like watching two parallel hearings happening at the same time. The Democratic and Republican sides of the aisle operate in entirely different universes, with priorities and demands that often pull directly against each other.
A frequent theme of the Republican side, picked up by congressmen Jim Jordan and Matt Gaetz, was the common belief that the companies are biased against conservatives. The connection of those questions to competition, ostensibly the issue at hand, is unclear.
Meanwhile their Democratic colleagues accused them of having a “persecution complex” and urged the companies to do more to crack down on the very content he was criticising them for removing, which they argue constitutes disinformation and propaganda.
A deeper divide also lies in the belief from the Republican lawmakers that attempts to regulate businesses in this way are inappropriate and an unnecessary check on American innovation. The real threat, they argue, comes from China and from the unfair liberal influence they believe is controlling these powerful companies.
There’s a common belief that action is required, but while the two sides are so far apart that they are not even discussing the same issues, there seems little prospect that the political will exists to make any significant moves against the companies for stifling competition.
The ‘cyber barons’ have terrible memories
It’s amazing how those little things can slip your mind. Who among us hasn’t forgotten the date of a party, the type of battery we needed to buy, or whether or not we used our dominant position in a market to suppress fair competition?
Fear not: this hearing proved that the “cyber barons” are as absent-minded as the rest of us.
Was it fair for Apple to pressure book publishers to join its services? “I can’t see the email, so I don’t know the context of it,” said Cook. Maybe the app was too glitchy, he suggested.
Did Mark Zuckerberg ever threaten Snapchat founder Evan Spiegel in any way while attempting to buy his company? “I don’t remember the specific conversations,” said the Facebook chief (the two men had a famously passive-aggressive exchange).
How about reports that Amazon had used information from investment discussions with smaller companies to copy their products? “I read that article but I didn’t remember that piece… I don’t know the specifics of the situation,” said Jeff Bezos.
Google locking in advertising customers? “I’m not aware of that specific issue.” Facebook spying on children? “I’m not familiar with that.” Amazon exempting its own products from the coronavirus delivery squeeze? “I don’t know the answer to that question”.
It was a remarkable performance for men running some of the world’s most powerful companies, particularly for Zuckerberg and Bezos, who are famously hands-on and personally built their own companies from scratch. At points, Pichai and Zuckerberg had to go back and correct themselves: yes, they did remember certain massive scandals.
So perhaps there really is hope for us all to become the next Jeff Bezos. Where were those car keys again?