Jul 17, 2019 - Technology

Big Tech rehearses monopoly defense before House

Four of the biggest companies in tech defended themselves Tuesday from charges they’ve become monopolies, choking small business and hurting consumers in the process.

Why it matters: The hearing in the House Judiciary Committee’s antitrust subcommittee previewed how Facebook, Amazon, Google and Apple will make their case should regulators come knocking with the threat of lawsuits or breakups.

The bottom line: Of all four companies, lawmakers seemed especially concerned about Amazon and Facebook, and relatively unconcerned about Apple.

Lawmakers' questions underscored the wide number — and variety — of competition questions facing the tech giants.

Amazon: Associate general counsel Nate Sutton said the retail giant didn't use individual third-party sellers' data to develop products that competed directly with the sellers, one of many questions he got about whether the company privileges its own products.

  • "You’re saying you don’t use that in any way to promote Amazon products," subcommittee chairman David Cicilline (D-R.I.) asked about the company's vast trove of sales data. "I’d remind you, sir, you’re under oath.”

Facebook: Head of global policy development Matt Perault argued that it wasn't strategically using acquisitions to zero out competitors, even as Rep. Joe Neguse (D-Colo.) said that the company's ownership of four of the top communications apps in the world was "a monopoly, or at least monopoly power."

Google: Cicilline questioned director of economic policy Adam Cohen about its strong hold over search.

Apple: Vice president Kyle Andeer disputed the idea that the iPhone manufacturer was acting anti-competitively by taking a cut of developer revenue in some cases.

What we're hearing: Rivals and critics of the major tech companies have spent recent weeks pressing their case on Capitol Hill.

  • Apple competitor Spotify and Walmart-backed trade group the Retail Industry Leaders Association, an Amazon antagonist, were among those who submitted materials to the committee before the hearing.

Yelp CEO Jeremy Stoppelman and Spotify representatives met with staff and members of Congress to advance their arguments during recent meetings in Congress.

  • Facebook co-founder Chris Hughes, who has called for breaking up the social giant, was part of an expert roundtable for members of the Judiciary Committee's subcommittee last week, and also met with at least one lawmaker in the Senate.

The big picture: Concerns about monopoly have entered the political mainstream, including in the Democratic presidential primary.

  • The Justice Department and the Federal Trade Commission recently decided which would handle antitrust concerns about each company: Justice took Google and Apple, the FTC took Facebook and Amazon.
  • Regulators in Europe have pursued cases against several of the companies, or may take them up in the future.

What's next: The Judiciary Committee's investigation into the tech giants continues, while DOJ and the FTC have the option of opening formal investigations.

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