House Judiciary Democrats Present Evidence Against Tech CEOs

Based on documents and Mark Zuckerberg’s testimony, Facebook saw Instagram as a threat, and rather than compete with it, bought it, said House Judiciary Committee Chairman Jerry Nadler, D-N.Y., and that's behavior antitrust laws are meant to prevent. Democrats presented emails detailing how Zuckerberg described Instagram as a threat that could be potentially bought.

Instagram was a competitor in mobile photo sharing, Zuckerberg told Nadler, but there were others. Instagram went from being a competitor to being an app capable of expansive growth, the CEO said. Zuckerberg noted the FTC viewed these documents at the time of sale. It wasn’t a guarantee Instagram was going to succeed, but Facebook invested heavily in promoting the app, he said. He said Facebook understands the concerns about the size of Big Tech. If companies don’t keep innovating, someone will replace every company represented today, he said.

Chairman David Cicilline, D-R.I., presented evidence alleging a multiprong attack against Yelp by Google, which was allegedly stealing restaurant reviews. The evidence shows Google threatened to delist Yelp if it didn’t allow the platform to use the content, Cicilline said. CEO Sundar Pichai denied there’s any evidence of such behavior, saying his company is focused on improving the customer experience. The committee is exploring whether existing antitrust law and architecture is sufficient to respond to the digital market, Cicilline told reporters.

Mary Gay Scanlon, D-Pa., detailed alleged anticompetitive behavior by Amazon against Diapers.com. Scanlon claimed Amazon saw the website as a threat so it temporarily slashed diaper prices on Amazon, taking as much as a $200 million loss one month. Amazon then bought the struggling Diapers.com, she said.

CEO Jeff Bezos said he didn’t remember exact details from more than a decade ago, disagreeing with the premise of Scanlon’s questioning and denying his company engaged in anticompetitive behavior. Lucy McBath, D-Ga., claimed Amazon delists booksellers without explanation. Hundreds of queries from third-party sellers got no meaningful response, she said, playing audio from sellers pleading with Bezos. The corporate chief again disagreed with the premise: That’s not how the company operates, and it’s not an acceptable way to treat partners.

Big Tech is out to get conservatives, said Judiciary Committee ranking member Jim Jordan, R-Ohio. He cited the mass censoring of Breitbart and The Daily Caller by Google and Facebook, and Amazon's banning President Donald Trump on Twitch. Subcommittee ranking member Jim Sensenbrenner, R-Wis., claimed Facebook is filtering certain political speech.

Facebook’s goal is to offer a platform for all ideas, Zuckerberg said. It distinguished itself as the platform that defends free speech the most, he argued.

Tempers flared between Jordan, Cicilline and Rep. Jamie Raskin, D-Md., when Jordan asked for unanimous consent to allow Constitution Subcommittee ranking member Mike Johnson, R-La., to question witnesses, a “customary practice.” Raskin objected.

Jordan asked Pichai to ensure Google won’t favor Democrat Joe Biden in the election against Trump. Google won’t do any work to favor one party over another, Pichai said. Tempers flared again immediately after Jordan’s questioning, when Scanlon said the subcommittee should focus on antitrust law, not fringe conspiracy theories. Jordan interrupted Scanlon’s time to respond.

Hank Johnson, D-Ga., raised concerns about the App Store, asking what’s stopping Apple from raising its commission rates for developers from 30% to 50%. The company hasn’t raised the commission since starting in 2008, CEO Tim Cook said. There’s fierce competition for developers, he said: It’s so competitive, it’s a “street fight” for market share. Commerce Committee ranking member Greg Walden, R-Ore., and Consumer Protection Subcommittee ranking member Cathy McMorris Rodgers pressed Apple and Google Wednesday about app store vetting (see 2007290033).

Pramila Jayapal, D-Wash., cited reports of Amazon using third-party data aggregation to leverage products against its competitors (see 2005070056). It allows Amazon to view pricing history and deploy products that undercut competitors, she said. She noted Bezos didn’t deny the allegations, and he said data aggregation is allowed. “I’m proud of what we’ve done for third-party sellers,” Bezos said. Amazon experienced a technical issue during the hearing. The company didn’t comment about the issue.

“History shows technology innovation is dynamic, consumer preferences change quickly, and leadership is tenuous,” CTA CEO Gary Shapiro said. “These are companies that perpetuate the pro-consumer, antitrust values that have fueled U.S. innovation leadership and will help lead us out of this recession.”

“Congress has been concerned that these large Internet platforms are buying other companies just to eliminate competition, but, in many cases, they buy companies in order to add new technology and capabilities,” the Information Technology and Innovation Foundation said Wednesday prior to the hearing. It warned against using antitrust laws to launch an “ill-defined broadside” against tech companies.

“Many of the large companies we see today started from humble beginnings and have gone on to create opportunities for thousands of employees and small businesses and serve millions of customers,” TechNet CEO Linda Moore said.