Jul 22, 2020 - Technology

DC's assault on tech will crest at CEO hearing

Illustration of a gavel smashing app icons.

Illustration: Annelise Capossela/Axios

Lawmakers' Monday grilling of the CEOs of Facebook, Apple, Amazon and Google will culminate a years-in-the-making transformation in the relationship between Washington and Silicon Valley from cooperation to confrontation.

The big picture: The proceedings will focus on questions of monopolistic behavior, but the event will be fueled by a longer list of beefs from both parties about misinformation, censorship, consumer privacy, China and more.

Why it matters: Mark Zuckerberg, Tim Cook, Jeff Bezos and Sundar Pichai will be forced to answer questions about their businesses as the world watches.

  • It’s the most high-profile antitrust hearing since the feds went after Bill Gates and Microsoft in the 1990s, and it happens as state attorneys general, the Department of Justice and the Federal Trade Commission circle the companies as well.

1. The antitrust agenda

Lawmakers plan to drill down with each CEO on ways their companies may have acted to limit competition.

  • Facebook: The social network’s snapping up of WhatsApp and Instagram has drawn questions over whether the acquisitions were aimed at squelching potential competitors. Committee staff have also sought details on any efforts by Facebook to cut off companies from its social graph.
  • Google: The search giant’s ad-tech business has drawn the attention of the Justice Department, with publishers complaining about the stranglehold Google has on digital advertising dollars and online advertising competitors saying they are shut out. The company also faces complaints that it gives itself an advantage in search results, and the committee has sought details on how Google’s algorithm ranks Google content or services against those of competitors.
  • Amazon: Bezos will be grilled over whether the company uses data from third-party sellers to develop its own competing products. The committee demanded Bezos testify after a Wall Street Journal report appeared to contradict previous testimony from an Amazon lawyer who said the company doesn’t use individual third-party sellers' data to develop products that competed directly with the sellers. Amazon has also faced questions from committee staff on how it ranks products, including its own.
  • Apple: The European Union last month announced antitrust investigations into Apple for forcing app developers to use its proprietary system to offer in-app subscriptions and for blocking developers from informing users of ways they can pay for in-app content that don't go through Apple. Committee staff also have questioned Apple on the removal or restriction of screen-time and parental control apps from its App Store.

2. Misinformation

Since the 2016 election, tech platforms, especially Facebook, have struggled with how to address misinformation about everything from voting to vaccines, balancing efforts to remove false information against freedom of speech.

  • With the 2020 election coming up, lawmakers — especially Democrats — are sure to press the platforms on how they’re controlling misinformation on both paid advertisements and people’s posts online.

3. Content moderation

Lawmakers, along with President Trump, have been calling into question whether tech companies that host third-party content should continue to be protected under Section 230 of the Communications Decency Act for years now.

  • Members of Congress and presidential candidates on both sides of the aisle have called for changes to the law, and it’s become a cudgel for grievances against tech.
  • Expect Democrats to ask why Section 230 should stand if tech companies can’t control hate speech on their platforms — and for Republicans to accuse the companies of using the law to perpetuate bias against conservatives.

4. China

The Trump administration has taken a hard line against China, going so far recently as to threaten to ban Chinese-owned video app TikTok.

  • At the same time, Attorney General Bill Barr has criticized Apple for what he sees as acquiescing to the Chinese government by taking down apps in its App Store and manufacturing many of its phones in China.
  • Facebook does not operate in China, and Google has been criticized for considering establishing a censored search engine there.

5. Privacy

Central to many lawmakers’ distrust of the tech giants is how they collect, share and use consumers’ data.

  • That data allowed Google and Facebook to become digital advertising heavyweights, prompting calls for regulation of data collection and targeted advertising.

The bottom line: Washington once turned to the tech industry for ideas, economic growth, and signs of hope that the U.S. could innovate its way past its problems. Today, the capital is instead viewing tech as a generator of countless problems and threats demanding government action.

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