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AMAZON.COM, INC.

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Big Tech to Appear Before Congress on Wednesday

07/28/2020 | 03:15pm EDT

By Ryan Tracy, John D. McKinnon and Emily Glazer

Big Tech will come under the glare of a national spotlight Wednesday, as four of its leaders face questions from members of Congress aiming to rein in what they believe is excessive power in the hands of a few giant companies.

The chief executives -- Amazon.com Inc.'s Jeff Bezos, Apple Inc.'s Tim Cook, Facebook Inc.'s Mark Zuckerberg and Google's Sundar Pichai -- are set to appear before the House Antitrust Subcommittee investigating the market dominance of online platforms.

Their testimony could help build public pressure for government action, especially if the back-and-forth with lawmakers raises new concerns about the way the big technology companies operate.

"These platforms have been allowed to run wild and free from really any constraints," Rep. David Cicilline (D., R.I.), the subcommittee chairman, said in an interview. "The responsibility we have is to make clear what the impacts are of the lack of competition in the digital marketplace."

For the CEOs, it is a chance to make the case that their success derives not from monopoly power, but from their ability to meet consumer needs.

The four companies declined to comment ahead of the hearing. In the past, they have defended themselves against complaints of market dominance by pointing out that they invest in platforms that help small businesses; face stiff competition, including from one another; and help the economy by employing large U.S. workforces.

All the CEOs except Mr. Bezos have previously appeared before Congress. While it isn't uncommon for executives from an industry to testify together -- big bank leaders did so last year -- it is rarer for a congressional inquiry to come at the zenith of an industry's success. As of Monday, the four companies and Microsoft Corp. represented the five most valuable U.S. companies.

Democrats have generally been most critical of the market power of big technology companies, but some Republicans have also expressed concerns -- including whether existing antitrust laws are outdated in the internet age.

In dealing with rival companies, some tech giants often act in a predatory fashion, said Rep. Ken Buck (R., Colo.). "They are doing it in a way that's designed to reduce competition," Mr. Buck said in an interview. "As it appears to me now, there's a need for action and for updating the law."

Other Republicans on the subcommittee are more likely to focus on what they view as anticonservative bias among some of the platforms, a charge the companies generally dispute.

Despite the hearing's topic, lawmakers can ask whatever they wish. Both parties have criticized how the companies regulate content on their platforms, with Republicans often charging censorship and many Democrats worried about foreign election interference.

The format of Wednesday's hearing could work to the advantage of the witnesses. They will testify simultaneously rather than individually -- an outcome the companies sought -- which could blunt sustained pressure on one witness.

It will also occur via video-chat because of the coronavirus pandemic. Instead of a crowded hearing room, the CEOs will testify from a place of their choosing.

At the same time, the hearing comes with the companies under scrutiny by one or more of the authorities empowered to enforce antitrust laws: the Justice Department, Federal Trade Commission and state attorneys general. The subcommittee has been running its own yearlong probe and lawmakers have more than one million documents gathered from the companies and their competitors, including the executives' own emails, congressional aides say.

All that could make the questioning feel more like an interrogation. Rep. Pramila Jayapal (D., Wash.), who sits on the panel, said members have spent hours in briefings about the companies and might conduct dry runs practicing their questions.

Staffers have told outsiders the hearing could last five hours or more, with each lawmaker having multiple opportunities to ask questions. "We don't want anyone to feel left out," Ms. Jayapal quipped.

The CEOs' preparations have included speaking with lawmakers, as is typical for high-profile hearings. Mr. Cicilline said last week that he had conversations scheduled with Messrs. Zuckerberg, Cook and Pichai.

Matt Perault, a Duke University professor who testified before the subcommittee last year while working at Facebook, recalled preparing with hours of talking-point briefings and mock interrogations. He remembered receiving this advice: "It's basically impossible to win. You're trying not to lose."

Mr. Zuckerberg views the stakes for the hearing as high for himself and for Facebook, and has been preparing with a tight circle of confidants and congressional experts, according to people familiar with the efforts. Among the concerns, these people said, are questions about the potential divestiture of prime assets Instagram and WhatsApp, and about the perception that Facebook lacks the ability to govern its sizable platforms.

Facebook faces multiple antitrust probes focusing in part on its acquisition of potential rivals. None of the investigations appears to be on a fast track, although the FTC is laying the groundwork for depositions of company executives.

Amazon's retail opponents have been lobbying lawmakers to ask Mr. Bezos about counterfeit products, competition with third-party sellers on the Amazon marketplace, and other issues. Mr. Bezos has never previously testified before Congress, and Amazon initially resisted agreeing to let him do so, according to people familiar with the matter.

The company relented after senior lawmakers publicly demanded he testify, citing a Wall Street Journal report in April that Amazon employees used data from the platform's sellers to develop competing products.

The FTC and some U.S. states have met with Amazon critics to discuss its market power, according to people familiar with the matter, but neither the company nor the regulators have disclosed a formal investigation.

The antitrust probes into Alphabet Inc.'s Google are the most advanced, with the Justice Department expected to file suit this summer. Investigators have focused on the company's dominance of online advertising and search, both topics likely to come up Wednesday.

Apple also resisted personal testimony by Mr. Cook, according to a person familiar with the matter. He has sought to distinguish Apple by emphasizing that its business model is less reliant on consumers' personal data.

The Justice Department is probing Apple's App Store practices, people familiar with the matter have said. Rivals say the company acts anticompetitively in the store, extracting unfair payments and favoring its own products. Last week, Apple promoted a study concluding the fees app developers pay are in line with those charged elsewhere.

Earlier public hearings offer clues about evidence lawmakers might use to put the CEOs on the spot. At a January congressional hearing with smaller companies, the founder of mobile-phone accessory maker PopSockets LLC said he had evidence of Amazon bullying third-party sellers.

Columbia University law professor Timothy Wu, who has called for breaking up Facebook, urged the lawmakers last summer to subpoena Mr. Zuckerberg's emails discussing the 2012 acquisition of Instagram -- a request that was among those sent to the company months later.

--Brent Kendall contributed to this article.

Write to Ryan Tracy at ryan.tracy@wsj.com, John D. McKinnon at john.mckinnon@wsj.com and Emily Glazer at emily.glazer@wsj.com

 

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