Prepared testimony emphasizes start-up roots and presence of competition
The main takeaways from the prepared testimony of the four tech giants testifying before Congress Wednesday (July 29) is that their companies are quintessentially American success stories, companies that took risks and failed as well as succeeded and in the process innovated and built businesses that provided jobs and new opportunities.
The bottom line: They are big because they are successful rather than being successful because they are big. That message comes as policymakers try to wrap their arms around companies with market caps the size of small countries and at least the appearance of dominance in areas like search and the social media connections that are only becoming more vital in a time of pandemic.
Apple CEO Tim Cook called his company “uniquely American” and a success only possible in this country. He said the facts are that the company produces great products that people choose, and keep choosing, over others, and that “Apple does not have a dominant market share in any market where we do business.”
Amazon CEO Jeff Bezos talked about his adopted father who came to this country from Cuba with a jacket made of cleaning cloths sewn by his mother. Together they seeded Amazon with most of their life savings.
Bezos positioned the online behemoth as still with the mindset of a “Day One” startup and that its success hinges on the small and medium-sized businesses that use its platform. “It’s not a coincidence that Amazon was born in this country,” he said. “More than any other place on Earth, new companies can start, grow, and thrive here in the U.S. ”
And while the country is in the midst of a global pandemic and a racial reckoning, he said the rest of the world “would love even the tiniest sip of the elixir we have here in the U.S.” and that immigrants like his father “see what a treasure this country is.”
“I’m proud that we stand for American values like giving every person a voice and expanding access to opportunity,” Facebook CEO Mark Zuckerberg said. “Our story would not have been possible without U.S. laws that encourage competition and innovation.”
Alphabet (Google) CEO Sundar Pichai said Google is in a long tradition of American innovation, “building products that are helpful to American users in moments big and small.” He talked about small businesses using Google to grow.
As to whether Google is dominant, he said: “Google operates in highly competitive and dynamic global markets, in which prices are free or falling, and products are constantly improving….People have more ways to search for information than ever before — and increasingly this is happening outside the context of only a search engine.” he asserted.
Pichai said tech’s ability to expand access to opportunity was more than a business philosophy to him. “I didn’t have much access to a computer growing up in India. So you can imagine my amazement when I arrived in the U.S. for graduate school and saw an entire lab of computers I could use whenever I wanted.”Accessing the internet for the first time in that computer lab set me on a path to bring technology to as many people as possible. It’s what inspired me to join Google 16 years ago. And it’s what led me to help create Google’s first browser, Chrome… not because I thought the world needed another browser, but because a beer browser could open up the web to more people. I couldn’t have imagined then that, eleven years later, so many people would experience the web through Chrome, for free.”
The hearing is about whether Big Tech is using its mammoth scale anticompetitively, or whether it got that way through anticompetitive foreclosure at the speed of Moore’s Law, a speed antitrust law may not be able to keep up with.
Zuckerberg positioned his company as awash in competition. “At Facebook, we compete hard because we’re up against other smart and innovative companies that are determined to win,” he said. He says the company’s services “create a lot of value in people’s lives, and our business model means we can offer them for free…and “although people around the world use our products, Facebook is a proudly American company,” he said.
He made the point that what is now big was once small. “Many of our products were new concepts when we introduced them, and they have served as models for other companies and apps that have used and iterated on our ideas — including features like News Feed ranking and the Like button that have become foundational to many competitive services.”
As to how Facebook got big. “Like many companies, we’ve both built our own products from the ground up, and we’ve moved others forward through mergers and acquisitions,” he said. He suggested that Instagram and WhatsApp have become successful “as part of our family of apps” and because of its “lower-cost infrastructure.”
One of the key antitrust issues is whether Big Tech has bought out future competitors before those purchases raise antitrust concerns, and whether the result was pro-consumer because, as Zuckerberg suggested, Facebook was able to nurture the saplings to treehood, or whether an Instagram and WhatsApp would have grown on their own to compete with Facebook and others.
Zuckerberg is clearly in the former camp. He said flatly that WhatsApp’s development of voice and video calling ” came about as a result of our acquisition of those companies, and would not have happened had we not made those acquisitions.”
As to whether their plucky start-ups turned giants should be regulated, Cook and Bezos would concede scrutiny but did not go further, at least in their prepared remarks, while Zuckerberg essentially said regulation would be helpful.
Bezos suggests D.C. should case a wider net when it comes to that scrutiny: “I believe Amazon should be scrutinized. We should scrutinize all large institutions, whether they’re companies, government agencies, or non-profits. Our responsibility is to make sure we pass such scrutiny with flying colors.”
Cook said he came to the hearing “because scrutiny is reasonable and appropriate. “we approach this process with respect and humility,” he said. “But we make no concession on the facts.”
Pichai said that the company was “committed to partnering with lawmakers, including the members of this Committee, to protect consumers, maintain America’s competitive technological edge in the world, and ensure that every American has access to the incredible opportunities that technology creates.”
Zuckerberg echoed a call for regulation he has made in D.C. before: “I understand that people have concerns about the size and perceived power that tech companies have. Ultimately, I believe companies shouldn’t be making so many judgments about important issues like harmful content, privacy, and election integrity on their own. That’s why I’ve called for a more active role for governments and regulators and updated rules for the internet.”