Day: 29 July 2020

Antitrust Finally Gets Its Hearing ⇥ getrevue.co

Casey Newton, the Interface:

And yet for everything there is to criticize about today’s hearing, I came away from it mostly heartened. For the first time in half a century, Congress is taking its role as antitrust regulator seriously, and has undertaken a 13-month investigation that has so far produced 1.3 million documents laden with evidence. Members of the subcommittee have largely come to believe, as I do, that tech companies have grown too powerful and are in need of regulation. Wednesday offered them a chance to show us what they have found so far — and to hint at where they might be going next.

Newton’s is the most optimistic take I’ve seen yet — including my own — with less attention given to Congressional poseurs. I admire that.

You can read a portion of the internal documents uncovered by investigators on the House Judiciary website. One thing I noticed as I was reading through them is how easy it is to become entranced by this dialogue. It’s no wonder that many executives find themselves unable to step out of this bubble.

Ben Thompson’s Questions for Tech Company CEOs ⇥ stratechery.com

Another good piece written before Wednesday’s antitrust hearing, from Ben Thompson:

To that end, I thought it would be interesting to think about what questions I would ask each of the CEOs were I on the committee — and to be clear, not all of these questions are being antagonistic (to take one example, I actually believe that Apple is justified in not allowing side-loading); I do think they deserve greater scrutiny though. […]

The fact that Apple and Google have more questions than Amazon and Facebook is not an accident: as I detailed in that article they have much more significant antitrust issues. It will be interesting to see if that fact is recognized by the committee. I am also interested to what extent these CEOs address each other; if any one CEO does make statements about another company, I would bet on Tim Cook attempting to raise questions about privacy and data collection, and thus focus more attention on Google and Facebook. Remember, though, this is the antitrust subcommittee — I hope committee members stay focused on competition issues.

I love Thompson’s optimism here, but this panned out almost exactly opposite of how he was hoping. Apple faced the least number of questions; Facebook and Google were each questioned more than twice as often. And, no, it did not stay focused on competition.

Despite Virtual Testimony From Tech Company CEOs, It Was In-Person Congressmen Who Departed From Reality ⇥ washingtonpost.com

Robin Givhan, Washington Post:

The hearing was billed as an investigation into online competition. And much of the evidence laid out before Bezos, who owns The Washington Post, speaks to ruthless business practices. Zuckerberg still doesn’t quite grasp the impact of Facebook on civic life. And most of those on the subcommittee weren’t really up to the task of questioning Cook on Apple’s business practices. Still, the voices of small-business owners whose livelihoods had been upended by Amazon were at least piped into the room.

Too many of the Republicans were focused on playing put upon and abused. They seemed more interested in Trump Jr.’s Twitter habit and throwing out accusations of anti-Americanism at the only executive of color testifying. Stifled competition and bullied employees were side notes. The event was virtual, but the disgrace was real. The titans were diminished, but far too many of the subcommittee members were the ones who looked small.

An absolutely perfect summary of an excruciating four hour grandstanding session.

Big Tech’s Power Comes Under Fire at Congressional Antitrust Hearing

Ryan Tracy, Wall Street Journal:

The chief executives of Amazon.com Inc., Facebook Inc., Apple Inc. and Alphabet Inc.’s Google faced relentless criticism at a congressional hearing Wednesday, with Democrats and Republicans alike challenging their business practices.

[…]

The hearing was marked by lawmakers interrupting witnesses before they finished their responses. Mr. Bezos’ video feed went out early in the session, causing Mr. Cicilline to call a recess. At the outset, instead of asking the witnesses to stand and swear to tell the truth, Mr. Cicilline had a different request: “Unmute your microphones and raise your right hands.”

This was ostensibly a hearing about antitrust violations and anti-competitive behaviour, but Republicans by and large used it as an opportunity to accuse Google and Facebook, primarily, of being biased against American conservatives. For example, here’s Florida man Greg Steube recapping some of his questioning on Twitter:

When I confronted Google’s CEO about conservative censorship, he dodged the question.

His company allows videos of violence but blocks videos of medical doctors discussing a medication to treat COVID-19. We need answers and accountability.

It is a symptom of a jaundiced political environment that medical efficacy is being used by people like Rep. Steube as a wedge in his culture war conspiracy theories. It is also completely bananas that he equates minimizing harm from the spread of unproven coronavirus miracle cures with silencing conservative voices.

Rene Ritchie:

At what point does it sink in for Zuckerberg and Pachai that the anti-trust hearings — and fates of their companies — now rest, in part, with people their own algorithms, in part, helped indoctrinate into the cockamamie conspiracy theories now being weaponized against them?

Axios reporter Sara Fischer:

Tech execs always get a free pass from being pressed on serious, substantive issues when they go to The Hill because conservatives, who should care deeply about fair competition, are too distracted by unproven allegations of political censorship.

My problem is not with conservatism more generally, or even necessarily Republicans. It is with a handful of morons — Rep. Steube, Rep. Jordan, Rep. Gaetz, and Rep. Sensenbrenner — who wasted their entire questioning by soapboxing these plainly false theories. A useful public service would be to create a copy of this hearing without their bad faith questioning and, in Rep. Jordan’s case, frequent interruptions. Their presence was an embarrassment that only served to feed the most cynical of people who believe that regulation is inherently bad.

Happily, most of the Democrats on the Judiciary Antitrust Subcommittee stayed on topic and repeatedly dug into these companies’ business models, acquisition strategies, and anticompetitive practices. The Verge apparently received under embargo internal Facebook emails discussing a potential acquisition of Instagram. The story, by Casey Newton and Nilay Patel, was published concurrent with Rep. Nadler’s questioning:

It’s a combination of neutralizing a competitor and improving Facebook, Zuckerberg said in a reply. “There are network effect around social products and a finite number of different social mechanics to invent. Once someone wins at a specific mechanic, it’s difficult for others to supplant them without doing something different.”

Zuckerberg continued: “One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, 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.”

Forty-five minutes later, Zuckerberg sent a carefully worded clarification to his earlier, looser remarks.

“I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way,” he wrote.

Nice save.

Tim Cook’s opening remarks, meanwhile, stuck to Apple’s current antitrust messaging, flaws and all. Rob Pegoraro, Forbes:

Cook has a stronger case with mobile apps. Installing apps on early handheld organizers was not so easy, requiring a download to a computer and then a transfer to the gadget. But by the mid 2000s, Palm OS handhelds and smartphones hosted a thriving market for third-party software.

Apple first ignored that precedent: A year before the iOS App Store’s debut, Steve Jobs told developers to content themselves with shipping web apps for the iPhone.

“The App Store certainly added efficiency and greater breadth, which I wouldn’t argue with—but that’s a function of improving technology,” emailed Mark Vena, an analyst with Moor Insights & Strategy (his firm also posts on Forbes).

The App Store’s exclusivity over native iOS app distribution rarely came up during today’s hearing, and Cook deftly sidestepped questions about Apple’s control over the market. At one point, when asked about control, he noted that Apple does not control web apps. That’s entirely true, but I cannot recall anyone pressing Cook on whether that’s a fair comparison. Web apps and native apps do not have all of the same capabilities,1 and there is no other avenue by which native apps may be installed on the most popular smartphone model in the United States, the most popular tablet in the United States, the most popular watch in the United States, or an Apple TV.

I wish it were not so easy for Cook to deflect.

Peter Kafka of Vox nailed it before the hearing began:

Some of you already know that congressional hearings are just that — a chance to hear from citizens and government officials. At a minimum, they are a place to get public answers on the record, like the grilling US Attorney General William Barr received from the House Judiciary Committee on Tuesday over everything from his handling of the Mueller investigation to his use of federal troops to quell protests in Washington, DC, and Portland, Oregon.

And sometimes, like in Wednesday’s case, they can also be high-profile bits of theater.

Aside from the theatre, gotcha moments, and wild conspiracy theories, what this hearing demonstrated is that insipid antitrust enforcement has failed the American consumer for decades. I’m Canadian — the biggest tech companies in the world are mostly American, but I feel the side effects of a lack of regulatory responsibility.

  1. I have previously argued that this is a good thing, and I stand by that. ↥︎

A Preview of Wednesday’s Big Tech Antitrust Hearing ⇥ om.co

Om Malik:

The big tech is going through the great American ritual — the making of stars, the praise of the stars, and then the tearing down of the stars. We do it to our celebrities. We do it to our sports stars. And we do it to our technology companies. It is not a judgment on the cause or the punishment. I am merely pointing out the pattern of our media-saturated society. We may not manufacture a lot of things in America, but we produce new heroes and newer villains quite well in America.

At some point, we sour on the success we once celebrated. That is why we have this constant need for new heroes. Frankly, we could use some new heroes in technology. It is hard to romanticize the big tech. It was not always that way.

Kevin Roose:

Gotta love the ultra-earnest people who are like “I hope Congress delves into neo-Brandeisian antitrust theory during tomorrow’s Big Tech hearing.” We will be lucky if we escape without Alex Jones zoombombing in a Captain Shadowban costume.

I don’t know that I agree with Malik’s assertion that it is entirely a waste of time to bring CEOs of four of the biggest tech companies to Washington — metaphorically, if not literally — to answer questions. But he’s right: it’s a manufactured event. Everyone there is wholly aware that they are on camera, so expect the usual grandstanding and loaded questions from those with ulterior motives, mixed with tech support complaints. Maybe we will learn something from the handful of representatives who are genuinely inquisitive and attentive.

Testimony from the four CEOs is available on Congress’ website. Of them, only Sundar Pichai’s matches his company’s branding. Jeff Bezos’ is typeset in Calibri, while Mark Zuckerberg and Tim Cook chose Times. For some reason, Cook’s is a scanned copy of a printed document.