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Here we go... @RepCicilline making his opening statement. #BigTechBarons
Cicilline praising Sensenbrenner and "the former ranking member of the committee" Doug Collins. Pointedly not mentioning current ranking member, Big Tech lickspittle Gym Jordan. #BigTechBarons
Cicilline quotes Ken Buck saying this Big Tech investigation was the most bipartisan investigation he's ever been involved with in Congress
Cicilline explains how tech firms will accelerate its market power in the pandemic. As I mentioned yesterday in @TheAtlantic: theatlantic.com/ideas/archive/…
Cicilline: "We've observed common patterns and competition problems" among these four firms #BigTechBarons
Some of these common patterns:
"Buying, copying or cutting off" rivals
self-preferencing and predatory pricing
Cicilline: "Simply put, these companies have too much power."
"I'm confident that addressing he problems we see in these markets will leave us with a stronger economy... will lead us to whether we the people govern ourselves, or allow ourselves to be governed by monopolies." -Cicilline
Sensenbrenner starts by thanking the CEOs for their flexibility in changing their schedules. (this hearing was originally set for Monday)
Sensenbrenner: "Being big is not necessarily bad," something that both FB and Amazon CEOs will mimick in the hearing. Though he adds that the committee wants to know what these companies are doing with their accumulated power.
Sensenbrenner: "Antitrust law and the consumer welfare standard have served this country well for over a century... however as the business landscape evolves, we must ensure our existing antitrust laws meet the needs of consumers."
I don't expect much from Sensenbrenner here.
And here comes the "conservative censorship!" line, which you'll hear from Republicans over and over today.
Sensenbrenner: "I want to leave here today with a more complete picture on how your companies use your size and power and how it impacts the consumer"
Nadler up now. As Judiciary Committee chair he's ex officio on the subcommittee.
Nadler cites Jefferson and Brandeis, that concentration of economic power is dangerous to society.
Nadler uses the key phrase "essential infrastructure" to describe Big Tech, relating it to the railroad monopolies of the progressive era. Suggests public utility regulation, like we did with the Interstate Commerce Commission.
Nadler: "regulation in (the railroad) era did not stop technological innovation." In fact it hastened it.
Nadler's statement was largely about Congress' authority in this area.
And Gym Jordan's up, and it's entirely about "conservative censorship!!" This is just going to be a clown show from the Republican side.
Gym Jordan giving off a big "guy in Twelve Angry Men shouting racist things and wondering why everybody's walking away from him" vibe
Jordan trying to start a fight over getting more Republicans in the questioning.
Bezos about to give his opening statement. You can read the long version here: blog.aboutamazon.com/policy/stateme…
Cicilline notes to the #BigTechBarons that "you are the only ones testifying today." The fear is that there are lawyers right offscreen who are feeding them the answers.
Bezos: "We'll I'm standing on a corner in Winslow Arizona, it's such a fine site to see" (approximately)
Weird that C-SPAN only has the big board inside the hearing room rather than a feed of the CEO video. Looks awkward.
That people love Amazon is not really germane to an antitrust investigation.
As Bezos extolls all the small businesses on his platform, here's a thread on what the Amazon marketplace really looks like
Bezos closes by sending everyone on the subcommittee a giant flag with one-day shipping
Google CEO Sundar Pichai is now up.
How is Zuckerberg going to compete with both Bezos and Pichai telling their immigrant stories (the father who adopted Bezos is a Cuban immigrant)
These companies Google and Amazon sound really great, notes the CEOs of Google and Amazon.
Pichai: "Competition helped lower online advertising costs" hahaha. Does he have an estimate of the actual value of online advertising? I've seen it as low as $0.00008. Is it that low yet?
Tim Cook now up, and he went to the same consultant who said "praise John Lewis first"
Apple says customers give the iPhone high satisfaction ratings. Again, not germane, especially when the complaint against Apple is about developer access to those customers.
Now Apple going on to the AppStore situation. It's a very careful portrait, reminds me of when Cook said "we pay every dollar in taxes that we're supposed to"
Zuck batting cleanup. Amazingly, he's also deeply moved by John Lewis' death
Zuck is going to use the "national champions" argument, that we must defend Facebook from the ChiComs
FB: "In many areas we're behind our competitors"
And Zuck has a plan for that
Hilariously, Zuck is claiming that giant tech firms moving to dominate adjacent markets is an example of competition
Zuck: "There is no guarantee that our values will win out"
I hope they don't!
Cicilline starts the questioning.
"Over 85% of online searches go through Google... businesses told us Google steals their content and privileges their own sites."
So, what's up with that?
This is a brutal question from Cicilline. "Why does Google steal content from honest businesses."
Pichai: "With respect i disagree with the characterization of that question."
Pichai filibustering, Cicilline having none of it.
Cicilline: "Increasingly Google shows whatever's profitable for Google," not relevant results. Is there a conflict of interest?
Pichai: no we give relevant info though.
Pichai: we show ads for only a subset of inquiries.
Cicilline: What's your revenue?
Pichai: $100bn
Cicilline: That's a lot of money.
Google is now a walled garden, not a turnstile to the Web. Google staff discussed the "threat" of Web pages that could get "too much traffic"
Cicilline: were you involved in discussions about the threat of vertical search?
Pichai dodges. Says there's "vigorous" competition in commercial searches.
Cicilline notes that Google stole restaurant reviews from Yelp. Then Yelp complained and Google's response was to threaten to delist Yelp. Isn't that anti-competitive?
Pichai: um, let's talk later.
Cicilline: Does Google use data to identify threats to traffic?
Pichai: we use it to improve our product
Cicilline: No, our records show you do exactly what I said.

This was pretty masterful from Cicilline.
Cicillline: "Google identifies Web threats and crushes them. .. Ensures any business that wants to be found must pay Google a tax."
Great work. Amazon, Apple, and FB, get ready.
So we're going to get really tough questions from Dems, and Republicans whining about censorship. Got it.
Maybe tech reporters can express some humility about prior snickering about how members of Congress "don't understand tech." Judging from Cicilline's questioning, seems like some of the tech reporters don't understand.
Now, snicker all you want at Sensenbrenner taking valuable time asking the CEO of Facebook about Donald Trump Jr getting banned from Twitter for talking about hydroxychloroquine
Zuck says that they should not be in the position to be "arbiters of truth."
Which is true. That's why their platform is completely unmanageable.
Nadler is up.
Asking about the FB/Instagram deal. "FB saw Instagram as a powerful threat and bought it." On the day FB bought Instagram, Zuck said "one thing about startups is that you can always acquire them"
Zuck says Instagram wasn't a general social network at the time, it was a photosharing site.
I really don't think that flies.
Nadler: in early 2012 when FB contemplated buying Instagram, you told CFO that Instagram was a threat, "can meaningfully hurt us"
(that was a clear anti-competitive merger. BTW the FTC HAD THIS INFORMATION!)
Zuck admits that Instagram was a competitor.
Nadler notes that Zuck said about IG "what we're really buying is time... even if new products popped up they wouldn't have scale."
This questioning from Nadler shows how much of a failure the FTC was in 2012 for not blocking the Instagram merger.
Nadler pointing out that this was an illegal merger by Zuck's own words.
Zuck correctly points out that the FTC had all these docs at the time of the acquisition.
The problem is not the laws, it's the willingness to use them. The FTC failed.
Nadler made a very solid case that the FB/Instagram was an anti-competitive acquisition and that Instagram should be broken off.
Jordan being skipped, going to Ken Buck. This actually should be decent questioning, even if it starts with a paean to capitalism.
Buck: OK maybe it won't be so good. Chastising Google for dropping out of JEDI. Sheesh.
(what about Amazon trying to rig JEDI?)
Buck going on about Google being aligned with China, goes on to talking about Google stealing companies' tech. Notes stealing lyrics from Genius.
(it ended up weird but not bad)
Pichai says this is a dispute between Genius and other companies haha.
Hank Johnson up.
He's going after Apple for its AppStore policies.
Cook says the AppStore is a feature of the iPhone. Um, no, it's a store. And if you're gouging the suppliers to that store it's an antitrust issue.
Cook claims developers are not favored over others.
Johnson says Baidu has 2 AppStore employees engaged to navigate the AppStore bureaucracy, and other developers don't.
Johnson: Apple requires developers to use Apple's payment processing if users want to use the store.
Cook: yes
Johnson: so you're using their data and judge it for whether to start a competing app
Cook: but 84% of apps charged nothing! (so, the profitable ones are!)
Johnson: what's to stop Apple from increasing commissions?
Cook: we've never done it!
Johnson: but there's nothing to stop you
Cook: but developers can write apps for Android.
(come on man)
Johnson: has Apple ever retaliated against a developer?
Cook: We don't bully people.
Got cut off. Wonder if there's evidence of that.
Oh great, it's Matt Gaetz.
Again getting mad about Google pulling out of Project Maven. Because we have a free market unless they decide to not make weapons for the military.
Google's work in China is worth scrutinizing. I guess that's all Republicans are going to focus on but it is fair game.
Raskin is up. Democrats have been quite organized here.
Unfortunately as I say that, Raskin kind of goes off script and talks about the Russians and Trump and Cambridge Analytica, which is orthogonal to antitrust law at best.
We've had many, many hearings on Facebook and elections and hate speech. It's important, but probably should not have been rehashed here.
10 minute recess for the IT guy! fitting
Back with Rep Armstrong (R-ND). This is pretty standard issue "censoring conservatives"
Pichai's strategy in this hearing is to say he doesn't know much specifics about anything so I'll have to get back to you.
He's the CEO.
Too big to manage.
Armstrong says "market power consolidation is significant" but uses the old canard about how regulating big companies leads to keeping out small ones, citing GDPR. Notes that market share of Google has increased since GDPR.
This is an important-ish question, but too often it's used to throw out all regulation entirely. And there are plenty of ways to institute regulation that allows and enable competition.
Armstrong's testimony was sort of interesting. Jayapal is going after Bezos, for the first time.
Jayapal: Does amazon ever access and use 3rd party seller data when making business decisions?
Bezos: Thanks for representing us (she's Seattle's congresswoman). I can't answer yes or no. We have a policy against it but might have broken it.
Jayapal: WSJ said specifically that you do this. Are you denying that report?
Bezos: I know of that article. We're looking into it. (it came out over a month ago)
Jayapal: So you're not denying it.
Jayapal: A former employee told us it's a rule but nobody's enforcing it.
Bezos: It's a voluntary policy.
Jayapal: So there's no actual enforcement?
Bezos: No I have misspoke! The fact that we have a policy is voluntary!
Jayapal: There are numerous reports and our interviews that confirm employees have access to 3P data and are using it. This is documented. Whatever rule you have it's being breached.
Jayapal: You can access aggregate data when there are few in the marketplace?
Bezos: Yes we can get aggregate.
Jayapal: Amazon accessed a detailed sales report on a product and then launching its own competing product in 2019. That's directly in opposition to Amazon GC stmt
Jayapal: you have access to entirety of seller information. Can set rules of the game for competitors but not follow those rules yourself.
Bezos: Thanks for your question. i'm proud of 3p sellers on platform. (filibuster)
Jayapal: You have access to data your competitors don't have. They can't compete with you. Your company started in my district. But goal of cmte work is to make sure there are more Amazons. Why we need to regulate marketplaces to reduce dominance.
This R starts his thing with "my wife called me and said there was a good article on Gateway Pundit."
Going to get something to eat.
I do hope someone else will ask Amazon about the rent they collect from 3p sellers, not just the data they collect.
Gmail has organized its email notifications. They don't see that someone's the father of the designated campaign email sender. This is a pretty ridiculous line of questioning.
Val Demings note that her campaign emails go into spam too. Moving on to an actual question.
Demings questioning about Google's acquisition of Doubleclick. Good issue.
Demings: June 2016, Google merged data with Doubleclick. This was a year after Pichai was made CEO. Did you sign off on this decision? Google don't Congress this data would be separate.
Pichai: fumfer
Demings: Yes or no
Pichai: I review all important decisions
Demings: That's a Y
Demings: so now you have my gmail, location, browser history, all that data in one place. A "cross-site cookie"
Email from Doubleclick exec said this was exactly the kind of policy that would lead to backlash.
Demings: In 2007, Larry Page said this would hurt rep. But by 2016, they gained enormous market power and didn't have to care about market power. Agree?
Pichai: This is an impt issue. We make it easy to put users in control of data.
Demings: I'm concerned about Google's bait and switch with Doubleclick. Part of broader pattern of surveillance. Targeted ads are more profitable with more user data.
Pichai claims Google can't make more money from collecting data.
OH! then we can #BanTargetedAds then I guess
And here's Gym Jordan for 5 minutes, getting something to eat again.
I would say that, while Jordan is just working the refs, the problem is that Google IS A REF with enormous market power.
Scanlon: "I'd like to return to antitrust law rather than fringe conspiracy theories"
And Jordan goes ballistic.
Scanlon on to Bezos. Using the example of Quidsi. This is a pretty amazing story that's in my book.
Amazon decided to undercut Diapers.com so deeply that they reduced prices to effectively $0 to force it into the ground.
Scanlon "it appears that in one month alone, Amazon was willing to bleed $200 million in diaper profit losses." How much were you willing to lose?
Bezos: This was a long time ago. But it's OK to use a loss leader right?
Bezos just kind of admitted to predatory pricing right there.
Scanlon: You increased the prices of diapers after destroying Diapers.com. Did you sign off on raising those prices?
Bezos: I don't remember. But I think we followed Diapers.com.
Scanlon: How would customers benefit when the prices were driven up when you eliminated the main competitor, Diapers.com?
Bezos: I don't agree with the premise. Diapers sold everywhere!
Scanlon: This was the online marketplace.
Scanlon: In 2013 you instructed to approach other businesses the way a cheetah would approach a gazelle.
Bezos: i don't remember that. (filibuster)
Scanlon: One of biggest needs is families don't have diapers. What you did has an impact.
Neguse up. He's the vice chair of the subcommittee.
Neguse: You had a lot of competitors in 2004?
Zuck: More competitive now!
Neguse: but all your competitors are gone now. Are you a monopoly?
Zuck: we face a lot of competitors. (trying to claim that literally any connection you make with friends is a competitor to FB)
The phone is a competitor to FB
Neguse: here's a slide for a presentation that Sandberg gave in 2012 that says FB is 95% of social media.
Neguse: FB has purchased, replicated, and eliminated competition.
Zuck: but the space of people connecting with other people is a very large space.
(People talking over their fence is a competitor to FB)
Neguse: here's an email from CFO calling FB acquisition strategy "a land grab."
Neguse: IG is the 6th largest social platform, WhatsApp is 2nd largest. You own them. FB tried to buy other startups. You told a sr engineer that "you can buy any startup but it'd be a while before you can buy Google"
Zuck: That was a joke!
Neguse gives the full context of the email. Zuck's wrong.
Neguse: FB has used market power to purchase or replicate the competition. Now own the most downloaded apps of last decade. We have a word for that, that word is monopoly.
Lucy McBath up. Questioning Bezos.
McBath: We've interviewed many small biz. They mention "bullying, fear and panic" about dealing with Amazon.
Plays video of a 3P seller
Seller on video: Amazon started restricting their business, blocked them from selling textbook category. "Haven't sold a single book in last 10 months." No warning from Amazon.
the business sent 500+ communications to Amazon without response. Is this acceptable?
Bezos: No that's not, I'd like to talk to her. Doesn't seem to me the right way to treat her.
(Bezos is either lying or the site is too big to manage)
McBath: You're missing the point. This is a pattern of behavior that has to change. Are you willing to make sure that numerous sellers that have had problems with suspension is remedied?
McBath is talking about suspensions. This is a major portion of my book. Suspensions are a byzantine Phantom Zone. Your life and business can be ruined on a whim.
McBath: according to eMarketer, Amazon has 7x market share of closest ecommerce competitor. Sellers have nowhere else to go.
Bezos: I disagree. There are a lot of options out there.
(ok then)
McBath: If Amazon didn't have monopoly power would they stay in a bullying relationship?
Bezos: I don't accept the premise.
Plays video of bookseller: We've contributed to your business, followed the rules, and have been locked out. Help us earn our livelihood. We beg you. There are 14 lives at stake.
Back to Cicilline for round two. Addresses Bezos.
Don't small biz have no other option?
Bezos again says he has a different opinion. I just think we're the best option!
Cicilline: 37% of sellers on Amazon as sole source of income. 800k sellers. Doesn't Amazon refer to 3P sellers as "internal competitors"?
Bezos: um, that wouldn't surprise me?
Cicilline pulls the email.
Cicilline: One seller said "we're stuck" another "never been a great partner but you have to work with them." Amazon poaches best-selling items.
Cicilline: ex of apparel company. Business started selling unique item, making $60k/year on it. One day Amazon listed same product, sales went to $0 overnight.
Cicilline: 3P seller: "Amazon strings you along for a while... we called it Amazon heroin. But ultimately this would be your downfall." This is one of your partners comparing you to a drug dealer!
Bezos: I just don't recognize that. We made tough decision to bring in 3P sellers.
(look 3P sellers are mistreated, the evidence is overwhelming.)
Cicilline: isn't it a conflict of interest to compete with the 3P sellers when you set the rules of the game?
Bezos: I don't think so. The consumer makes the decisions of what to buy.
(they only see what Amazon wants them to see)
Cicilline: can you tell me where data collection policy was violated? Why should 3p seller list product on Amazon if they can be undercut by data you take from them?
Bezos: But we have a policy!
Cicilline: You couldn't assure us that the policy isn't violated!
Bezos: Well we're looking at that.
Cicilline: Data we collected shows that Amazon only interested in building its market power. Congress must take action.
Sensenbrenner says Congress does a poor job of picking winners and losers. I have reached the conclusion that we don't need to change antitrust laws. The question is enforcement.
(the whitewash effort is on)
Sensenbrenner: Obama's FTC signed off on FB/Instagram.
(yes, absolutely, that's the whole problem)
Sensenbrenner is not wrong, the problem is enforcement. We need political will.
Sensenbrenner, approximately: this isn't Congress' job
(he's completely wrong about that. But he's right that Congress should press the regulators on their conduct)
Jayapal up, addressing Zuckerberg.
Citing damning emails where Zuck/Sandberg is talking about copying competitors.
Jayapal: How many competitors did FB copy?
Zuck: can't give a number.
Jayapal: Any estimates? Your team made a plan.
Zuck: we just want to build the best services
Jayapal: has FB ever threatened to clone products while trying to buy them?
Zuck: No
Jayapal: You are under oath.
Jayapal: what about IG and Facebook Camera?
Zuck: well we did try to compete?
Jayapal: Did you threaten IG's co-founder
Zuck: what do you mean by threaten?
Jayapal: In a chat you said FB was developing photo strategy. IG founder said it was a threat
Jayapal: Did you do this with other companies?
Zuck: I disagree with the characterization. I don't view convos as a threat?
Jayapal: IG cofounder said so. Did you warn Snap that you were cloning features?
Zuck: I don't remember.
Zuck trying to say FB just builds the best product.
Jayapal:When dominant platform tries to copy rivals, that's market power. Monetizing data and threatens rivals. These tactics reinforce FB's dominance, which you use in destructive ways. Impossible for new companies to flourish
My goodness that was good from Jayapal. Now Ken Buck talking about Amazon leveraging counterfeits to force companies into deals.
Buck gives example of a mic technology company. The company showed data to Amazon. Then Amazon cut off communication and copied the tech.
buck goes on too long, there's not enough time for questions.
Tim Cook taking the bold stand that forced labor is abhorrent.
Raskin relates 19th c. robber barons to 21st c. cyberbarons.
Raskin asking Bezos about Amazon holding up HBO Max on Fire until the company gets content. I wrote about this the other day.
Bezos: Hey it's just 2 large companies making an agreement
Raskin: But they stand in for hundreds of smaller companies. You're not just negotiating terms but trying to extract leverage.
Bezos: in general when 2 companies negotiate you ask for leverage it's fine
Raskin: But you're using control over access in order to obtain creative content you want. Conflict of interest. Converting power in 1 domain into power in another
Bezos: I'll get you some info
(more "I'll get back to ya")
Raskin: Does Amazon price Echo devices below cost?
Bezos: sometimes if there's a deal
Raskin: a lot of companies told us that
(again, admitting predatory pricing)
Raskin: is smart speakers a winner take all market?
Bezos: no. Speakers should answer to different wake words.
Raskin: when you bought Ring, you said you were buying "market position." If there's no lock-in effect, why is that valuable?
Bezos: Market position is valuable in any business.
Raskin: if I ask Alexa to play a song Prime Music is default?
Bezos: Yes
Raskin: if I say buy batteries I get Amazon batteries?
Bezos: I'm sure we do promote our own products.
More "conservative censorship" from Gaetz, but again, the problem the power. Let's say it's all true and Google's totally in the tank. The problem is they're the only game in town. If there was heavy search competition, a different story.
We now know there will be a third round of questioning.
Nadler talking about journalism in crisis and Google and Facebook's grabbing of practically all ad revenue.
Nadler talking about the pivot to video. This is an ENTIRE CHAPTER of Monopolized. FB said they were getting great stats on video and then it turned out they lied.
Zuck not saying he was sorry to journalists "who lost their jobs because of FB's deception)
Nadler: Does google use data in Chrome data for its advertising
Pichai: We do use data for improving products for our users
Nadler: That's a yes?
Pichai: We use data to show ads, but they can turn ads on or off.
In reality practically nobody turns the ads off
Nadler: FB and Google have gravely threatened journalism in the US. Now we hear they're making money on what news they let the American people see. This is a dangerous situation.
Steube picking up on this strange personal narrative about what he personally gets in his email and how he links to stuff.
While Steube figures out how to use his email, let me say that Democrats were extremely well-prepped today and loaded for bear. This is an impressive hearing.
Johnson is up for 5 and then there will be a break
Johnson asking Amazon about counterfeits.
Johnson: Amazon said it's fixing counterfeits but it's getting worse. Customers are not guaranteed products purchased are authentic. Acts like you're not responsible for counterfeits policed by 3rd parties. (digital flea market) Why isn't Amazon more aggressive?
Bezos: important issue, we're working hard on it. Counterfeits are a scourge.

(a useful one if it allows Amazon to leverage them to force 3p sellers to make deals)
Bezos: We have programs to stop counterfeits
Johnson: But why isn't Amazon responsible for keeping all counterfeits out?
Bezos: We try to do so.
Johnson: we've heard from sellers that knockoffs are used as leverage. (PopSockers example)
Johnson: PopSockets had to spend $2m in ads to get the knockoffs to stop.
Bezos: If that's true it's unacceptable.

Bezos: We have a counterfeit crimes unit! Congress should pass stricter policies.
(well we have the Consumer Product Safety Commission, but Amazon is going around it by saying hey we're just a platform, Sec 230)
This is the correct attitude for all readers of the thread!


We're back, Rep. Armstrong (R) is up. Asking Amazon about how they use non-public aggregate data, even where there are only a few sellers in a market.
Armstrong: Does Amazon use aggregate data to inform its own private-label brands when there are only 3 sellers of a product?
Bezos: Yes
Armstrong: 2 sellers?
Bezos: Yes
Armstrong: On to Twitch. Users receiving DMCA takedown requests. Twitch allows users to stream music but doesn't license?
Bezos: I don't know.
(too big to manage)
Armstrong: Shouldn't Twitch pro-actively license music rather than retroactively taking down?
Bezos: That's an important issue, will get back to you.
Armstrong: Google's retiring 3p cookies. This will stop competitors to Google from tracking users. Does Google have alternative means of collecting data?
(yes of course)
Pichai: We're listening to users who don't want this
(they don't want ANY tracking, incl from Google)
Armstrong: You have other ways of collecting that info
Pichai: we don't rely on cookies
Armstrong: But you can collect through gmail and other things.
Pichai: we don't use gmail for ads but on other things we have data.
Demings up. Addressing FB.
Demings: Why would FB enforce policies against competitors "more strongly"
Zuck: when we were a smaller company...
Demings: This was 2012
Zuck: we review policies over time
Demings: In 2013, sr FB employee identified MessageMe growing in use. And they were dropped. In 2014, managers discussed removing Pinterest. Why restricting Pinterest but not Netflix?
Zuck: I'm not familiar.
Demings: Why did your company make that decision.
Zuck: We used to have a policy of restricting competitors from platform.
Demings: But FB does weaponize platform policies, selectively undermining competitors.
Demings now to Apple.
Says Apple allowed a Saudi app to remain on App Store, but kicked out another that did the same function. Different rules to the same apps. Why?
Cook: I'll get back to ya!
Jim Jordan again, who is yielding to Matt Gaetz.
This is about editorial manipulation and censoring conservatives. Time for a snack!
Facebook's top lobbyist hosted a party for Brett Kavanaugh before he was confirmed, I have a hard time believing it's a hard-left company.
Scanlon up. About the Google-YT acquisition. Why did Google pay so much more for YT above its initial bid.
Pichai; that was 2006! (says he wasn't involved but saw YT as a "new emerging area")
Scanlon on about targeting ads in YT to children
Pichai: I'm a parent! We take this seriously! We have clear policies.
Scanlon: You're investing rigorously in luring in advertisers by saying YT is #1 website visited by kids
Wow, that was a "you worked for a company that fixed the price of bread" moment
Pichai says there's choice in YT because you can buy a subscription that gets rid of ads.
Scanlon: If there's Sesame St that has content but doesn't want certain ads on it, you say content creators can do it but reporting shows you're not honoring that.
Pichai: dunno
Neguse up, addressing Bezos
Neguse: you say Amazon is 4% of retail, when you refer to retail, are you including restaurants and bars and gas stations? What about online retail sales?
Bezos: I've seen we're 30-40% of ecommerce.
Neguse: that's an important distinction.
Now asking about AWS and its strategy to gain market share.
Bezos: we see an important product for customers and make our own product offering. We have competitors using AWS and we work hard to make them successful.
Neguse: There's a pattern here. We are concerned about this innovation kill zone that's emerging. Entrepreneurs shared stories with us. They're dependent on Big Tech and live in fear that they'll steal tech.
McBath up: Does Apple have the power to exclude apps from the App Store?
Cook: We have 1.7 million apps!
McBath: But can they exclude? I'll answer that, yes!
McBath: ScreenTime app example. After it was introduced, you removed competing apps from the store. One mother wrote that she was disappointed.
Cook: but we were worried about child safety!
McBath: the timing is suspicious
Cook: We have a bunch of parental control apps.
McBath: But Apple sidelined ScreenTime's competition. You claim it was because of privacy standards. But you let them in 6 months later. That's an eternity, and ScreenTime took away customers at that time. Not an isolated incident.
McBath: Is it fair for Apple to use its power to force a business to use its own app?
Cook: lots of reasons why an app might not initially go through. The App Store is an economic miracle!
McBath: Apple has enormous power to hold access to apps. You've used power to harm rivals.
This round will be the last, and will conclude within the hour.
Cicilline to FB. Do you agree there are limits to false speech?
Zuck: Yes and our policies go far.
Cicilline: You have 1 billion users. You have a responsibility to remove lies from your platform?
Zuck: we have no incentive for this on FB
Cicilline: But it brings most engagement.
This line of questioning is a tough one. I don't want FB to be a speech-regulating private government.
The problem is power. It's that when something goes on FB it matters because there aren't alternatives.
Cicilline is right that this is about FB's business model. You get rid of the business model toward surveillance/engagement/targeted ads, this will begin to wither.
Cicilline: your platform is so big that even with the right policies in place you can't contain deadly content.
Zuck: I don't think so
Cicilline: If a TV station holds a false political ad they are held liable. Why should FB be different. You're using the algo to share things, that's a business decision, not a 1st amt decision.
Cicilline: FB gets away with it bc you're the only game in town. There's no competition on you.
Gaetz up. More conservative censorship, etc
Pichai says Google respects the democratic process. Talking about the 2016 all staff which had some anti-Trump content.
Something about Southern Poverty Law Center and Amazon Smile and how hate groups that Gaetz doesn't think are hate groups are hate groups.
(this is a solid antitrust question, in the sense that it isn't)
Hank Johnson up. On FB.
Johnson: You have several tools for digital surveillance. This offers insight into competitors?
Zuck: Broadly the answer is yes. We do a lot of market research!
Johnson on an email where an exec said FB should build a model about competitors and "whether they are friends are foes." How did that work?
Zuck: not sure. He was an analytics guy
Johnson: didn't FB buy Onavo in 2013 to monitor competitors?
Zuck is calling spying non-publicly on phone apps to identify up and coming competitors to crush them "market research"
Johnson: Wasn't Onavo kicked out of the App Store because of this spying?
Zuck: We took it out
Johnson: Because of surveillance tools
Zuck: Not sure
Johnson: After Onavo booted, you used FB Research App?
Zuck: Yes we do market research
Johnson: Did FB pay teens to spy on them by placing the app?
Zuck: Market research!
Johnson: FB Research App got tossed from the App Store?
Zuck: dunno
Johnson: You spied to identify competitors to crush them. You got caught, apologized and did it again. True?
Zuck; disagree it's just research!
Johnson: did you use that capability to purchase WhatsApp?
Zuck: It was one of the signals we had to show WhatsApp's trajectory.
Steube is up with question for all 4. Does Chinese govt steal tech?
Cook: Dunno if they took it from us.
Zuck: it's well documented
Bezos: (on mute) Heard many reports, haven't seen personally
(I missed Pichai)
Gaetz asking about FB execs pursuing a "digital land grab"
Gaetz quotes email that FB would spend 5-10% of market cap on reinforcing its market position
Zuck: he was just referring to question from investors, not an internal strategy.
(but that's still the strategy?)
Gaetz: So you were telling investors that you would run company through digital land grabs? You said "one thing about startups is you can often acquire them"
Zuck: in order to "serve people better" we built a lot of new features and acquired others. A successful strategy!
Nadler up.
Asks Tim Cook, we've heard from businesses that Apple has canvassed the App Store to see what fees it can grab.
Nadler: Are you calling businesses asking for your 30%? Is this pandemic profiteering?
Cook: We'd never do that. You're talking about things moving to a digital service, where we need to talk to them.
Nadler: Is online learning next on the list to monetize?
Cook: no
Cook going on about all the great COVID philanthropy (PR) they're doing.
Nadler: We heard Apple is trying to extract commissions when you didn't before. Threatening to throw out apps if they don't give you a cut.
Nadler noting the Basecamp story, which has been in the media.
Cook: Hay is in the store today, and we're happy that they're there. Have a free version. Not paying on that. Our fees for lots of different services.
Cook claims the App Store is the "highest job creator in the last decade" hmm emoji
Armstrong up. Asking Google about YT ad buys only going through Google products. You cited privacy. Seems that this policy, regardless of privacy, reduced competition. Agree?
Pichai: We're always looking to improve YT!
Pichai: We give YT skippable ads. Today we have hundreds of thousands of creators earning a livelihood. We focused on it. Integration allows that.
Armstrong: But Google limited 3P analytics on YT too. Again claiming privacy.
Pichai lauding how well YT works.
Armstrong: But this lessened competition no?
Pichai: there's robust choice of advertisers! (not on YT, claiming this about other apps)
Gaetz back on his SPLC hobby horse.
Raskin up. Cites the "victimology of some of our colleagues" but says look at FB, the top content is all right wing
Raskin: "If FB is out there trying to suppress conservative speech they're doing a terrible job of it." Says it's "endless whining"
This is not really germane and I'd rather Raskin pin down the CEOs but FWIW
Raskin to Cook: "I'm hung up on this 30% question." Explain when your fees are 15 and when 30
Cook: 84% of the time 0. 30% in first year and drops to 15% after.
Raskin cites business owner, says she pays 20% in taxes and 30% to Apple but not much left over. Does this squeeze out entrepreneurs?
Cook just deflects
Gym Jordan is back. "Mr. Cook, is the cancel culture mob dangerous?"
Solid House Antitrust Subcommittee question
Hoping for a Harper's letter reference. We did get a Bari Weiss letter reference!
Glad to get Jeff Bezos' perspective on Bari Weiss' views. This is critical stuff.
Jordan claiming groupthink is bad and also whining that conservative views aren't made prominent enough across media channels is a take
Jayapal up, back to the hearing.
Asking about Google ad exchange. Cites Dina Srinavasan!!
Jayapal: What's Google's share of Ad Exchange market
Pichai: Not sure
Jayapal: it's 50-60%.
Jayapal: websites go through a middleman to buy from Ad Exchange. Google has 50-90% of the middleman market.
Jayapal explains the online ad market. Google runs the ad space, the buy side and the sell side. It sounds a bit like a stock market except there's no regulation. Doesn't prohibit insider trading. Brokers don't have to serve the clients.
Pichai: we're deeply committed to journalists.
Jayapal: this ad exchange is an insider trading creation machine. at the expense of publishers.
Jayapal: revenue is moving more to Google sites rather than 3rd parties. Is Google steering ad revenue to Google search?
Pichai: But users come to Google search, we work to earn trust. Competition is a click away!
Jayapal asks Zuck about Stop Hate for Profit. Asks if they're so big they can't be hurt by a boycott.
Zuck kind of alludes to how small businesses, not the big ones in the boycott, drives revenue.
Pichai making a correction: in 2009 there was a cyber attack in China that he didn't mention before.
Scanlon up. About Amazon's temporary ban on non-essential products. But Amazon designated own products essential and delayed competing ones. (Wow I hadn't heard this)
Scanlon: Did FireTV and Ring and Echo designated essential during pandemic?
Bezos: dunno. There was "no playbook for this", we had to make a lot of decisions. Sure we aren't perfect.
Scanlon: Were Ring competing products essential?
bezos: dunno
Scanlon: how about fees amazon charges. $60bn in 2019, five years ago it was 19% of each sale, now 30%. Doesn't ability to hike fees suggest market power?
Bezos: I don't believe so. more sellers "taking advantage" of services like FBA
Scanlon: Since 2014 3P seller fees twice as high as overall sales. Aren't seller fees subsidizing retail division?
Bezos: No sellers are choosing to use own services.
(um, "choosing." They have to do it to get up in the placement on the site)
Scanlon: is FBA a factor in getting the Buy Box? Evidence shows that. Forces sellers to pay for FBA to make sales. Has algo favored FBA sellers?
Bezos: Not sure if it's direct, but favors products shipped with Prime. (He's saying yes without saying yes)
That was very good from Scanlon. She got a lot out of it.
Now Zuck clarifying something. He had said he wasn't familiar with FB Research App. But he does know about it.
Neguse up. Him and one more.
To Apple. App Store guidelines say not to offer copycat apps. But app developer agreement gives Apple the right to copy other apps. Why one rule for developers and the opposite for Apple?
Cook: don't know about that!
It's amazing what happens when you have engaged Congressmembers who actually know the information they're talking about. This is a throwback hearing to a time when Congress worked.
Neguse using info from a Verge article published TODAY
Neguse: Does Google have access to sensitive info on Android devices
Pichai: Yes with user consent.
Neguse: Does Google use that information to develop competing apps? (asked this a couple times)
Pichai: We try to understand what's going on in market. But primary use of data to improve the health of Android.
McBath: Many of you mentioned John Lewis and fight for equality. Can you commit to improve racial and gender equity in your own companies and senior ranks.
(they all say yes but the proof is in the employee rolls)
McBath: FB said they will not use cookies in 2004. Today does FB use cookies to collect private data.
Zuck: My understanding is no, not cookies. (they use other things)
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