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Four Big Takeaways from Historic Big Tech Anti-Trust Hearing
In the recent virtual hearing of US Congress, the conclusion that had been arrived at was that the world’s top four tech firms Amazon, Google, Facebook, and Apple have monopoly power and there is a need to ensure that the antitrust laws should work in the digital age.
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On Wednesday, July 29, the Chief Executives of the world’s top four tech firms Amazon, Google, Facebook, and Apple faced questions from the United States (US) Congress in a virtual hearing. The panel of politicians had conducted a year-long investigation and found these companies ‘wielding their power in disruptive, harmful ways’ and hence were accused of bridging anti-trust laws in the country.
What is anti-trust?
Trust signifies big businesses (like conglomerates) that began to form and encroach on small companies and thus bereft the market of a level playing field. Anti-trust are the regulations enacted by a government to counteract movement in that direction.
In the hearing, specifically, Amazon’s CEO Jeff Bezos was questioned on how the company’s e-commerce site uses competitive data from third-party sellers. Apple’s Tim Cook had to answer for the company App Store policies. On the other hand, Google CEO Sundar Pichai had to handle questioning on the company’s accused control over the search market and advertising. Facebook’s Mark Zuckerberg was accused of not having a fair business model for new and small companies. In addition, they were also questioned for having anti-conservative biases.
Here are four major takeaways from the hearing.
Mixed Statement on Chinese Government Stealing tech from US companies
There has been a persistent suspicion that the Chinese government steals tech from US companies. Addressing that, both Pichai and Cook said their companies’ data was never been stolen, to their first-hand knowledge. Though Pichai informed that in 2009 their company had suffered a cyber-attack.
Zuckerberg said it’s “well documented" that China steals tech from the US, while Bezos said he had heard reports of it, but hadn’t personally seen it.
Dominance Over the Internet
For Google, most of the questions revolved mostly around how the company had taken over the internet. Very specifically, Google’s dominance on news and cited data made people suspect that it is not fair to news publishers – how it uses user data, whether it steals data from competing companies and websites, etc.
Pichai acknowledged that google search facility is automated but there is a manual component involved in blacklisting a website, he said. "Google deeply cares about the privacy and security of our users," he said.
Third-Party Sellers from its Platform to Kill Small Businesses
Zuckerberg was facing a line inquiry with respect to several of the company’s internal emails that had interesting revelations. Amidst the hearing, an internal email was cited where Zuckerberg himself told Instagram’s co-founder Kevin Systrom that Facebook would build a copycat camera app, during the negotiations with Instagram. In fact, reportedly, the social media tycoon didn’t have an answer to a question about whether Facebook copied its competitors.
Similarly, Amazon was accused of having used data from third party sellers from its platform that was destructive to small businesses. In responses, Bezos said: "The company has a policy against using seller specific data to aid their private label business but he cannot guarantee that the policy has never been violated.”
Final Hearing: The Big Four have Monopoly Power
At the end of hours of grueling, Chairman of the hearing said that they had come to the conclusion that these four companies 'as they exist today have monopoly power’. Adding to that, it was stated that all of them were required to be properly regulated and held accountable. The chair’s statement said: “We need to ensure that the antitrust laws first were written more than a century ago work in the digital age. When these laws were written the monopolists were men named Rockefeller and Carnegie. Their controls of the marketplace allow them to do whatever it took to crush independent businesses and expand their own power. The names have changed, the stories are the same. Today the names are Zuckerberg, Cook, Pichai, and Bezos.”
In the end, the chairman strongly stated that these businesses do whatever it takes to crush independent businesses and expand their own power. “This must end”. Will it? Only time will tell.