This week, Congress scrutinizes the Four's alleged monopolistic practices

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jserraglio
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This week, Congress scrutinizes the Four's alleged monopolistic practices

Post by jserraglio » Mon Jul 27, 2020 1:29 pm

I am reading Scott Galloway's book The Four (2017) which lays out the good and ill done by Amazon, Apple, Facebook and Google. Facebook gets most of Galloway's criticism and I agree with a lot of it. Certain aspects of FB's behavior border on malpractice.

WASHINGTON POST

Congress brought the country’s big banks to heel after the financial crisis, cowed a tobacco industry for imperiling public health and forced airline leaders to atone for years of treating their passengers poorly.
Now, lawmakers are set to turn their attention to technology, channeling long-simmering frustrations with Amazon, Apple, Facebook and Google into a high-profile hearing some Democrats and Republicans hope will usher in sweeping changes throughout Silicon Valley.
On Wednesday, the industry’s four most powerful chief executives are set to appear, swear an oath and submit to a grilling from House lawmakers who have been probing the Web’s most recognizable names to determine whether they have become too big and powerful. The focus is antitrust, and the extent to which a quartet of digital behemoths — representing a nearly $5 trillion slice of the U.S. economy — has harmed competition, consumers and the country writ large.
The congressional inquiry has been more than a year in the making. Lawmakers have amassed 1.3 million documents, conducted hundreds of hours of interviews and held five other hearings featuring the industry’s friends and foes. Led by Rep. David N. Cicilline (D-R.I.), the lawmakers plan to produce a report in coming months that some party leaders expect will find the industry has skirted federal competition laws because the protections haven’t kept pace with the digital age.
In recent decades, similar high-profile interrogations have yielded some of the country’s most important reforms, including safeguards to spare the economy from another financial collapse and rules to protect drivers, smokers, workers and countless others from a combination of corporate missteps and lax regulation.
It remains to be seen whether an increasingly divided Congress can bring the same potency to bear against tech, remedying a long litany of past mistakes — both in Silicon Valley’s practices and Washington’s oversight of them.
“It’s very clear to me there are very serious problems that must be addressed, and it’s very clear to me these large technology platforms are not going to regulate themselves,” Cicilline said in an interview. “The responsibility falls to Congress to do that.”
Amazon, Apple, Facebook and Google declined requests for comment. (Amazon chief executive Jeff Bezos owns The Washington Post.)
The hearing Wednesday will feature Bezos, as well as chief executives Tim Cook of Apple, Mark Zuckerberg of Facebook and Sundar Pichai of Alphabet, which owns Google. All but Bezos have testified before Congress in the past, but they will do so this time under unique circumstances. The coronavirus will keep those leaders on the West Coast, answering questions over videoconferencing software in what is perhaps a fitting coda to an investigation that has explored the myriad ways technology has transformed the world — for good and bad.
The four tech giants often assert they are responsible for decades of U.S. economic gains and a bevy of digital apps and other tools that help people communicate, shop and travel more easily than ever before. But that meteoric growth has come at times with immense costs: The data they collect puts users’ privacy at risk, the services they offer can harm the very workers they employ, and the content they permit online carries the potential to destabilize democracy.
Those ills prompted Cicilline and his Democratic and Republican colleagues to embark on a wide-ranging investigation in June 2019, seeking to probe whether the tech industry’s missteps are a consequence of its unrivaled size. Taking aim at Amazon, Apple, Facebook and Google, Cicilline at the time articulated a belief the “Internet is broken” and it poses a real danger to the people who use it and the new businesses that seek to take root there.
Some of the evidence lawmakers have amassed is set to be furnished publicly for the first time Wednesday. Rep. Pramila Jayapal (D-Wash.), one of the panel members who will question the companies, said a few of the documents evince a “copy-acquire-kill” strategy on the part of big tech companies to buy or suppress potential rivals. The Democratic lawmaker said the committee has seen some “very specific language from top-level executives about that,” but she declined to offer specifics.
“We need to move very quickly, as a Congress, to reassert our authority into regulation of these tech companies and [their] anticompetitive practices,” she said.
Some Republicans, meanwhile, plan to revive their concerns that major social media sites exhibit political bias. Party leaders have ratcheted up their attacks in recent weeks after Facebook and Twitter began taking action against President Trump for his incendiary posts. But GOP critics often have provided scant evidence of their bias allegations, which tech giants fiercely deny and Democrats have decried as a distraction.
“If a platform is dominant in the marketplace and is discriminating against a particular political point of view, [then] anti-competitive behavior coupled with bias is concerning,” said Rep. Ken Buck (R-Colo.), a member of the antitrust panel.
The congressional scrutiny comes as Apple, Amazon, Facebook and Google are already facing a bevy of law-enforcement probes around the world, including in the United States, which could result in major changes to their practices or their potential breakup. The Justice Department is expected to file an antitrust lawsuit against Google as soon as this summer, The Washington Post previously reported.
“This is the big moment for the [companies] to really show that what they’re doing is pro-innovation and pro-consumer,” said Robert Atkinson, the president of the Information Technology and Innovation Foundation, which counts some of those companies’ officials on its board of directors.
“If they don’t do that well, and if the members push back enough, you could see it as a turning point where from now on it’s going to be much harder slogging for the industry going forward,” Atkinson said.
With Amazon, the concern is the company’s domination of e-commerce — and the extent to which the tech giant, as both a marketplace for goods and a seller in its own right, gives its products an unfair advantage over those from its competitors. Amazon has maintained it does not harness data from third-party sellers to give its kitchen wares, clothes and other goods a boost. But recent, public reports have raised doubts about its past claims and primed Democrats and Republicans for a sharp interrogation of Bezos.
Facebook long has faced criticism for gobbling up its rivals, including the photo-sharing app Instagram and the messenger service WhatsApp. The social networking behemoth says it competes for users’ time against a wide array of services, including newer entrants such as TikTok. But congressional critics have taken interest in the fact that Facebook’s insatiable appetite for data makes it impossible for other social networks to gain much of a foothold, giving Internet users few viable alternatives from which to choose.
Google has been faulted for its dominant search and advertising platform and the extent to which that harms an array of competitors, including news publishers. In Europe, it has been fined approximately $9 billion in cases that fault its strong-arming tactics — adding to pressure on U.S. regulators to revive a probe they closed years ago without severely punishing Google. The Mountain View, Calif.-based company has said its search and ad services empower the Web and make it easier on users to find what they want.
Apple recently has emerged as an antitrust conundrum in the eyes of developers. Companies such as Tile, which makes a tool to track lost keys, wallets and other belongings, previously told lawmakers the iPhone giant’s heavy-handed approach to the App Store makes it difficult for rival services to grow and maintain their popularity. Apple, however, contends the App Store has made the smartphone software ecosystem possible and has chafed at those who have called for it to be investigated in the same way as its peers.
For other segments of the economy, similar showdowns with Congress in recent decades have proved equally pivotal. In the 1990s, for example, cigarette executives who claimed under oath that their products weren’t addictive soon found themselves facing probes, regulations and other penalties. More than 10 years later, Democrats and Republicans summoned some of baseball’s biggest stars to press them about doping in what later compelled the league to rethink its approach to testing. Veterans of these and other probes in banking, energy and telecommunications say they illustrate the formidable power Congress can wield when it conducts meaningful oversight.
“You shouldn’t have oversight investigations hearings just to blow things up and embarrass people,” said former congressman James C. Greenwood (R-Pa.), who oversaw some of the hearings into Enron leading up to the 2002 Sarbanes-Oxley Act that reformed public financing. Members of Congress, he said, had to ask themselves: “Is this something that can help us become informed to change the law?”
Entering the Wednesday hearing, some House Democrats and Republicans say they indeed have grand aspirations in mind with tech, rethinking federal laws so the U.S. government can more easily probe, penalize and potentially unwind large corporations, including those in Silicon Valley. Buck, a GOP lawmaker, insisted even regulation-wary members of his party might be open to adopting new laws targeting the tech industry.
“In order for the hearing to be a productive hearing and a success, in my view, it ultimately must lead to statutory recommendations made [on] a bipartisan basis, being pursued by a full Congress,” added Rep. Joe Neguse (D-Colo.), the vice chairman of the House’s antitrust panel.
“It has to happen,” he added. “I think it’s long overdue.”

Tony Romm is a technology policy reporter at The Washington Post. He has spent nearly ten years covering the ways that tech companies like Apple, Facebook and Google navigate the corridors of government -- and the regulations that sometimes result.
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