
The Antitrust Hearing, the Role of Congress, CEO Questions - simonpure
https://stratechery.com/2020/the-antitrust-hearing-the-role-of-congress-ceo-questions/
======
partingshots
Prepared statements from each of the companies respectively:

 _Alphabet Inc., Sundar Pichai Statement_
-[http://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG-...](http://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG-116-JU05-Wstate-
PichaiS-20200729.pdf)

 _Amazon.com Inc., Jeff Bezos Statement_ \-
[http://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG-...](http://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG-116-JU05-Wstate-
BezosJ-20200729.pdf)

 _Apple Inc., Tim Cook Statement_ \-
[http://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG-...](http://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG-116-JU05-Wstate-
CookT-20200729.pdf)

 _Facebook Inc., Mark Zuckerberg Statement_ \-
[http://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG-...](http://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG-116-JU05-Wstate-
ZuckerbergM-20200729.pdf)

Interesting to see what they’ve all chosen to say to start off with.

~~~
aniketpant
> For example, people have more ways to search for information than ever
> before — and increasingly this is happening outside the context of only a
> search engine. Often the answer is just a click or an app away: You can ask
> Alexa a question from your kitchen; read your news on Twitter; ask friends
> for information via WhatsApp; and get recommendations on Snapchat or
> Pinterest. When searching for products online, you may be visiting Amazon,
> eBay, Walmart, or any one of a number of e-commerce providers, where most
> online shopping queries happen. Similarly, in areas like travel and real
> estate, Google faces strong competition for search queries from many
> businesses that are experts in these areas.

I like how they've mentioned competitors as if they want to take a stand
against regulations together while also enacting a feeling that there's enough
competition within each of these markets.

~~~
gen220
I think it was Thiel in Zero to One, who said something like "Companies with
monopolies love to talk about their competition", and then he goes on to use
Google as a case study, ironically.

Historically, Google made themselves look small by casting themselves as an
advertising company, instead of a web-search company. (they own a very small
portion of overall advertising, compared to their portion of web search). By
making advertisers their competitors, they look like the underdog.

Here, it seems like Google's position has evolved further: "hey, look at all
of these other websites with search bars, _they_ are our competition, and
they're crushing us". I guess moving the goal-posts is a very effective
strategy. :)

~~~
xtracto
The Amazon PR writing says the same, they compare themselves to US Retail
saying that they are just 1% of that huge diverse market.... really?

~~~
dodobirdlord
Is that not fair? Amazon is legitimately in competition with me walking to the
store.

~~~
actuator
I personally think Amazon's dominance in ecommerce of physical good is fragile
and it would be hard to argue monopolistic behaviour there. If Shopify grows
like it is growing right now, it would be quite easy for brands to build their
own stores through it without bothering to list on Amazon. At least the ones
with their own name pull can afford to do this.

~~~
treis
Amazon hasn't really been able to use their dominance in online retail to any
great extent. They failed or are after thoughts in every other market they
entered. Video, music, phones, tablets, auctions, handmade (i.e. etsy
competition) and their app store are the ones I can think of off the top of my
head. Profit margins aren't great either.

The only really abusive thing that they do is around eBooks. They definitely
have a monopoly there and doing anti-competitive things to maintain it.

~~~
panopticon
Their AmazonBasics line has been very successful and incredibly anti-
competitive too.

Before you go and compare it to brick and mortar in-house brands like Walmart
has, consider that Walmart has a higher investment in things they end up
stocking in store (they pay for things up-front and shelf space is
comparatively scarce). Amazon doesn't have the concept of "shelf space", and
Amazon doesn't paid for the product up-front in many cases.

Walmart is notoriously pushy on suppliers, but once product is on the shelf
both Walmart and the supplier's interests are heavily aligned. Amazon would
rather peddle you their Basics line instead.

~~~
actuator
Walmart's interest are only aligned till they can cut a better deal with some
other brand or they come up with their own product.

~~~
panopticon
I didn't ascribe any virtue to Walmart's position, but it helps to illustrate
how Amazon is able to be much more effective at corning the market.

------
Barrin92
> _" This is a remarkable bit of framing for a (checks link) news article. It
> is taken as a given that the big tech companies are akin to big banks after
> the financial crisis, the tobacco industry, and airlines — no wonder there
> are “long-simmering frustrations”! People must hate Apple, Google, Amazon,
> and Facebook!

Needless to say, this doesn’t match reality; every year The Verge conducts a
tech survey and the results speak for themselves:_"

Wrong comparison. During its heyday high finance was actually very popular and
bankers had a positive reputation as brave risk takers. In the 80s it was
still very much seen as the heart of American capitalism. The demise of Wall
Street in popular opinion is quite new, and I'm sure if you go back to the
days of the Marlboro Cowboy when smoking represented freedom rather than lung
cancer you could find similar surveys. (not to mention smoking in popular
culture, the risks of smoking were not widely publicised until the 60s).

Whether big tech is comparable to big banks or big tobacco isn't really a
question of popular opinion on big tech right now, but rather on the
externalities they produce. The population being blind to externalities and
negative effects of emerging industries is exceedingly common.

~~~
sukilot
The S&L crisis was 1986-1995. The demise in popular opinion is not new.

~~~
techbio
Source(s) for popular opinion across that date range?

~~~
Anon4Now
I doubt you'd find much polling. The movies _Wall Street_ (1987) and _Other
People 's Money_ (1991) would be the next best thing for a pop culture view of
the finance industry.

~~~
techbio
Sure, thanks, good points. Could also add Tom Wolfe's bestseller "Bonfire of
the Vanities" to that time frame, and the Michael Lewis tell-all "Liar's
Poker".

------
shuntress
_" generally speaking the idea is that more competition should address harms —
and that increased regulation, in contrast, reduces competition"_

I think this idea that regulation is the opposite of competition is not
correct (or is too simplified to be meaningful). It is obviously _possible_ to
enact regulation that would make competition less viable. It is also just as
obvious that regulation which enables competition is possible.

For example, consider a regulation that standardizes a "social contacts list"
and requires that ecosystems in which a use can maintain a list of contacts
_must_ be capable of import/export in this standard format.

Do you think this would help or hurt competition among social networks? Would
this be an overreach? Is this an example of regulation performing "product
design"?

~~~
jjk166
> For example, consider a regulation that standardizes a "social contacts
> list" and requires that ecosystems in which a use can maintain a list of
> contacts must be capable of import/export in this standard format.

So now every social network must be similar enough to facebook that facebook
can import its social contacts lists (and thus must beat facebook at its own
game) or so different that it doesn't even have social contacts lists (and
thus isn't competing with facebook at all).

This sort of regulation may hadicap a dominant player in the field, but it
also handicaps everyone else, and the dominant player is best positioned to
play with a handicap. Things only get more problematic if lobbyists from the
dominant player get the regulations made in such a way that the handicap for
everyone else is worse. You can only regulate what already exists, so
regulations by their nature will always enshrine the status quo.

Breaking up monopolies and preventing mergers which significantly reduce
competition is much more reasonable than prescriptive regulation in cases
where innovations in technologies and business practices can reasonably be
expected.

~~~
enumjorge
The specific example the parent comment used may be flawed, but the main point
still stands. Regulation _can_ promote competition (just as it can prevent
it).

~~~
jjk166
That a regulation which promotes competition could be made has not been
definitively ruled out, but it has yet to be demonstrated. Clearly despite a
regulation being well reasoned and good intentioned, it may nevertheless
produce the opposite effect. Identifying the issues with such a regulation
prior to its passage may be quite difficult, even before we consider the
financial incentive to deliberately craft and promote a deceptive regulation.
On top of this, there is still the fact that regulations can not accurately
anticipate future innovation and thus it is purely left to chance that a
regulation which promotes competition right now will continue to do so in the
future.

If we had a history of strong independent regulatory bodies who consistently
updated regulations as new data emerged and dropped regulations which were
found to do more harm than good, I might agree that we should strive for those
hypothetical good regulations, but alas we can be quite confident that a
regulation which stifles competition (whether intentionally or not) will stay
on the books for years if not decades. I'd love to be convinced otherwise but
I see no reason to believe regulating innovative industries like tech is
likely to be a good idea.

~~~
enumjorge
Outlawing monopolies and breaking them up if they do occur, which you
mentioned in your previous comment, is a form regulation though. Enforcing
those rules hasn't been perfect, but I'd say having them around has been a net
positive for the market.

~~~
jjk166
It is a regulation, but not a prescriptive one. Separating instagram from
facebook doesn't, on its own, limit what either site can do, but it limits how
much power is concentrated in a single executive board. More importantly,
monopolies are incentivized to stay in the public's good graces to avoid being
broken up if the threat has teeth. Consider AT&T in the mid 20th century: for
fear of getting broken up they generated tons of research at bell labs and
allowed others to pursue every technology that wasn't narrowly related to
providing telephone service. This arrangement produced a slew of inventions
such as the solid state transistor. This came to a halt when AT&T was broken
up. Since anti-trust laws were gutted in the 80s and 90s, the telecom
monopolies have reformed, but this "keep the people happy so they don't break
us up" mentality has not returned with it because there's no serious chance
that they will be. Such regulation, and the threat of regulation, does not
promote competition, rather it mitigates the negative effects of the lack of
competition.

And frankly this whole thing is something of a sideshow. Yes Facebook and
Google and these tech giants are monopolies, but if any of them actually go
off the deepend its not too hard to switch to an alternative, and the services
they provide are hardly life or death, and they don't even stifle innovation
much. Indeed many of them have taken the AT&T route and started labs which
produce useful opensource developments. If you look at pharmaceuticals,
banking, insurance, retail, air-travel, telecommunications, and so forth
you'll find gross anti-competitive behavior which holds society back and can
cause terrible problems for people. I would argue that most of these issues
are a direct result of regulatory capture, but even if you do believe
regulation to do more good than harm it should be focused here first. It would
be farcical if facebook were to be prescribed how they format their friend
data while a pharmaceutical giant gets carte blanche to charge whatever they
want for a coronavirus vaccine.

------
supernova87a
Comparing these companies to tobacco, big banks, airlines? Are you kidding?
I'll tell you a simple reason why this won't fly like the other "big company
scandals" in the past that the author is alluding to.

The success of every one of these FAANG companies is because each one of us
uses, buys, and likes using their products on average. Complain once in a
while as we might that XYZ is hurting some group on some specialized issue, we
still continue to visit their websites, buy their hardware, use their search
engines, and yes -- enjoy doing it.

Why would these companies be worth billions of $ otherwise? Sorry, I mean
Trillions of $.

It's not like they're forcing something down our throats and pillaging the
earth as their primary reason for existence, or fraudulently filing loan
applications in our name or selling shady mortgages. We created them, each one
of us in our hour-by-hour behavior, every day. We don't hold our noses and
patronize them reluctantly once per year. We do it every minute. Voluntarily.

So, no, I don't think the average person cares as much about the specialized
negatives of these businesses as you think he/she does.

And btw, conduct a self-diagnostic once in a while: reading here on HN, you
get an inflated sense of how Apple's 30% cut of developer app store fees is
the worst thing in the world that everyone should take to the streets about,
or how Google's map API key pricing has become an outrage.

For what they get in return, it's not that bad to the average person. Or even
average senator or representative.

------
bconnorwhite
The best thing about "tech monopolies" is that there are so many of them

~~~
vageli
The problem is with word choice. "Tech" has little to do with the business
domain.

~~~
bconnorwhite
True, but even after narrowing this, you usually end up with 3/4 of these
companies in competition.

Messaging? FB vs Apple vs Google

Ads? FB vs Google vs Amazon

Video? FB vs Google (YouTube) vs Amazon (Twitch)

Especially re: Google linking to its own sites, are we now arguing Google has
a monopoly over google.com? It gets a bit weird

~~~
enumjorge
> are we now arguing Google has a monopoly over google.com? It gets a bit
> weird

I don't know anyone who's arguing that. But I do see people arguing Google
having a monopoly on search. In a lot of domains, a business can be created or
destroyed entirely on their Google search rank.

~~~
twblalock
Even if Google search was broken off to a standalone company, it would still
have a monopoly on search.

The competition just isn't as good at search. Bing has been around for a long
time and has managed to gain less than 10% of market share, even though almost
everyone has heard of it.

------
game_the0ry
That hearing was a joke, to be frank.

Anyone notice how much time the congressmen spoke versus the CEOs? Or how
often they were interrupted mid-sentence?

They weren't interested in answers, congress wanted to put on a show. Except
it was a poor attempt at...whatever they were trying to accomplish - should
have been expected given that it was congress.

And of course nothing will come of this hearing - those companies are not
technical monopolies. That's why they are being grilled in congress, rather
than being taken to court, because they would win in court.

~~~
sharatvir
That’s a product of this limited time format. Without interruptions, nothing
prevents the executives from wasting even more time and avoiding answering the
question.

------
ampgt
Am I the only one who finds some of these representatives impressively...
unimpressive?

And don’t even get me started on the format. How are we supposed to set an
example for the world when our representatives won’t even let the CEOs of some
of our most successful companies finish answering a question? What a waste of
time.

------
sschueller
Live now: [https://youtu.be/1s1uWo1_bzg](https://youtu.be/1s1uWo1_bzg)

------
oxymoran
Using a poll from the Verge to validate your opinion that people like tech
companies...sorry, that’s a no from me.

You discount that the vast majority of people are completely ignorant of how
computers and the internet actually function. They have no idea or, because of
their ignorance, do not care that companies such as Google are hovering up all
their data and doing who know what with it. Or that large monopolies are
wielding more power than any entity has ever possessed. Or that social media
is being weaponized by domestic and foreign parties. Or that they are acting
as arbiters as to what is and what is not science. I love tech but Facebook,
Google, and Twitter are tearing society apart. Twitter and Facebook aren’t
even special as far as code goes. Let’s just create open source social media
to remove the advertising aspect and kill Facebook and Twitter completely.
These sort of companies should NEVER be publicly traded FFS.

~~~
hrhrhrd
Mastodon already exists; it's just unpopular outside of small circles. People
have already spoken with their time that they prefer hosted, "easy" solutions
regardless of the evil they perpetuate (even if this preference is coming from
a place of ignorance). The biggest question now is how to popularise it.

~~~
single_source
I just tried Mastodon yesterday. I was highly unimpressed with the on-boarding
funnel and confusing UX.

I think one point people miss is, the social media market _is_ highly
competitive. All it takes is for Twitter's UX and on-boarding funnel to be 1%
better than Mastodon's for Twitter to win.

Someone needs to provide decentralized social media platform without leaking
the decentralization into the UX and on-boarding funnel and I've yet to see
anyone do that to date.*

*I'm still looking so if anyone has anything for me to check out I'd be thrilled!

------
nojvek
I don’t know if the hearing is going to go anywhere. All the CEOs are
basically saying “hey we did everything legally in an open market, the power
of tech has brought more choice and wealth to everyone, we aren’t monopolies,
anyone had a fair shot at bearing us if they have better tech”

I’m interested in hearing the other side. Big tech is so big they can afford
to take big losses and capture huge markets like maps, android, chrome etc
fueled by profits from one part of the business and undercutting the small
players until they’re dead.

The other bit that surprised me is why Microsoft isn’t part of this. Have they
made themselves so diverse that they’re not in the radar anymore? Isn’t what
Microsoft doing with bundling a bazillion things in Office 365 fair
competition? E.g Teams vs Slack.

------
LatteLazy
Ultimately we need a viable alternative to the current system before we trash
it. And no one has that.

------
in3d
I wonder what the fact-checkers would say about Pichai’s claims that the ad
prices fell by 40% because of more competition...

Cook says that the developers have so many other choices like Android,
PlayStation, or Windows. This is about the U.S. mobile market where the iOS
has a monopoly-like market share in terms of app revenue. Similar to Bezos
trying to make an argument that it’s not about online marketshare but all of
retail. Zuckerberg should take notes - social media apparently also includes
phone and in-person meetings.

Cook claims that Apple’s 30% cut is half of what the distributors were
charging software publishers or developers before Apple came along to save
them. Apparently having your software for sale on the web with just the
payment processor’s cut was not a thing.

~~~
discordance
Apple have 17% of the smartphone market share [0] and 32% of smartphone
related revenue [1] worldwide.

I understand the constraints on developers/consumers on iOS in regards to the
walled garden, but are those numbers considered monopolistic?

0: [https://appleinsider.com/articles/20/03/03/apple-iphone-
mark...](https://appleinsider.com/articles/20/03/03/apple-iphone-marketshare-
growing-amidst-contracting-global-market)

1:
[https://www.forbes.com/sites/johnkoetsier/2019/12/22/global-...](https://www.forbes.com/sites/johnkoetsier/2019/12/22/global-
phone-profits-apple-66-samsung-17-everyone-else-unlucky-13/)

~~~
mrep
IOS has a 58% market share in the US [0] which single handedly is well above
the threshold of market power using the Herfindahl–Hirschman Index [1] which
the antitrust department uses for mergers and acquisitions concerns (they
don't care about international users).

"The Supreme Court has defined market power as the ability to raise prices
above those that would be charged in a competitive market, and monopoly power
as the power to control prices or exclude competition" [2].

For people wanting to sell software to mobile users for which web does not
suffice, there is no substitute and apple actively excludes you from 58% of
the US market if you need mobile software unless you accept Apples 30% cut.
With Android at least, they don't exclude you as you can side load like
fortnite [3] but Apple is 100% abusing their market power by excluding
developers from avoiding their 30% fee.

[0]: [https://gs.statcounter.com/os-market-share/mobile/united-
sta...](https://gs.statcounter.com/os-market-share/mobile/united-states-of-
america/)

[1]:
[https://en.wikipedia.org/wiki/Herfindahl%E2%80%93Hirschman_I...](https://en.wikipedia.org/wiki/Herfindahl%E2%80%93Hirschman_Index)

[2]: [https://www.justice.gov/atr/competition-and-monopoly-
single-...](https://www.justice.gov/atr/competition-and-monopoly-single-firm-
conduct-under-section-2-sherman-act-chapter-2)

[3]: [https://www.theverge.com/2018/8/3/17645982/epic-games-
fortni...](https://www.theverge.com/2018/8/3/17645982/epic-games-fortnite-
android-version-bypass-google-play-store)

~~~
discordance
Appreciate the great input, thank you

------
Nelkins
I wonder if any of these companies are mining their vast troves of data to
research the members of Congress who are asking questions.

------
Abishek_Muthian
Judging from the types of questions asked during last congressional hearing to
these CEOs regarding privacy(They didn't even understand that Android & iOS
were from different manufacturers), I would be really surprised if they really
understood the difference between having single Appstore with 30% fee vs
allowing 3rd party Appstores, not allowing native browser engines and forcing
them to use your own browser with different skin etc.

------
aripickar
People have a very optimistic view of what this hearing is going to reveal,
and think that it is going to accomplish anything. But it’s largely gonna be
republicans performance vomiting rhetoric about tech companies censoring
conservative voices with no evidence, and democrats wanting to discuss
everything but what the hearing is actually about, anti-trust. I expect a few
democrats to make some interesting queries, and the tech news media to report
minor stories that are unknown as breaking news.

Full disclosure: I work at a subsidiary of Amazon

~~~
therealdrag0
> anti-trust Questions about Google holding Yelp hostage and Facebook
> acquiring IG to squash competition seemed on point.

~~~
aripickar
True, I was pleasantly surprised at those questions.

------
supercanuck
I find Ben to be out of his depth when he discusses the role of a
democratically elected body should be doing to represent its constituents.

He still thinks the United States is a competitive market and that congress
simply needs to open up competition.

What a wonderful, fantastic world that must be to live in.

Tech’s products are a series of unregulated skinner boxes vacuuming up data in
order to segment each customer into Infinitely smaller market segments to
charge them maximum prices they can afford while completely ignoring
externalities. The average American is exhausted from playing this “free
market virtual “game” in an ever increasing sociopathic world. The average
consumer is simply ill-equipped to keep up and they aren’t earning enough to
vote with their dollars.

Tech and America business needs to shape up or welcome a bunch of bullshit
laws because Americans are tired of this and will welcome “big government”.
maybe ben living in Hong Kong can’t see what is happening “on the ground” so
to speak.

Read the room, Ben.

~~~
rayiner
He’s reading the room correctly. At no point in the last 20 years have even
30% of people polled said that we need more regulation of business and
industry: [https://news.gallup.com/poll/243662/americans-worry-less-
gov...](https://news.gallup.com/poll/243662/americans-worry-less-government-
regulation.aspx). Since 2006, a plurality, often an outright majority, have
said we need less. And at every point since 2006, a majority of people have
said the federal government is “too powerful.”

~~~
free_rms
I hate to defend someone who unironically wrote "read the room", but breaking
up the big tech firms is also hugely popular: [https://www.vox.com/policy-and-
politics/2019/9/18/20870938/b...](https://www.vox.com/policy-and-
politics/2019/9/18/20870938/break-up-big-tech-google-facebook-amazon-poll)

Everybody hates congress and loves their congressman, everybody hates
'regulation' but strongly supports some forms of it.

~~~
aeternum
I don't think that breaking up big tech equates to regulation.

I strongly oppose increased regulation because it prevents competition. It's
very difficult for new companies to compete in many areas now without an army
of lawyers.

We already have laws on the books that should be preventing these anti-
competitive mergers if properly enforced.

------
santoshalper
The hearings will definitely not focus on competition because that is not what
congress cares about. At most, they will try to portray their actual concerns
(perception of censorship or bias) as a byproduct of the lack of competition.

To be clear the people driving this do not care about increasing competition
in the digital world, they care almost exclusively about advancing the GOP
agenda and forcing these companies to be more compliant and cooperative. This
is all chilling effect.

