BOULDER, Colo. — Apple, Amazon, Facebook and Google took a public lashing at a congressional hearing here Friday, where some of their smaller rivals, including Sonos and Tile, pleaded with federal lawmakers to take swift action against big tech.
Democrats and Republicans at times appeared stunned as they heard tales of tech giants wielding their massive footprints as a weapon, allegedly copying smaller competitors’ features or tweaking their algorithms in ways that put encroaching companies at a costly disadvantage. The testimony came as part of a wide-ranging antitrust probe into Silicon Valley’s biggest players that House lawmakers aim to wrap up — with recommendations for regulation — in the coming months.
“It’s like soccer,” said Kirsten Daru, the general counsel of Tile, which has accused Apple of acting anti-competitively. “You might be the best team in the league, but you’re playing against a team that owns the field, the ball, the stadium and the entire league, and they can change the rules of the game at any time.”
The pleas for regulatory relief resonated with lawmakers, led by Rep. David Cicilline, D-R.I., the chairman of the House’s top antitrust committee. “It has become clear these firms have tremendous power as gatekeepers to shape and control commerce online,” Cicilline said to open the session.
The hearing at the University of Colorado, Boulder, put a public face on the pain caused by some of the largest tech companies in the United States. Cicilline and his Democratic and Republican peers have sought to determine if federal antitrust law is sufficient to hold Silicon Valley accountable — and whether changes to federal law are necessary to address anti-competitive concerns in search, smartphones, e-commerce and social networking.
“I think it’s clear there’s abuse in the marketplace and a need for action,” said Rep. Ken Buck, a Republican from Colorado.
The House investigation comes as the U.S. government’s two competition agencies, the Federal Trade Commission and Justice Department, proceed with their own probes into Apple, Amazon, Facebook and Google for potential antitrust violations. Nearly all state attorneys general, meanwhile, have trained their sights on Facebook and Google, announcing wide-ranging inquiries of their own earlier this year.
A key leader in those states’ efforts — Colorado Attorney General Phil Weiser — sketched out a broad, ambitious agenda for antitrust enforcement in a private meeting with U.S. lawmakers Friday morning, where he called on them to invest more resources in oversight.
“The idea we’re not going to regulate tech companies is so 1990s,” Weiser said in an interview before he spoke.
At the hearing, Tile took issue with Apple for changes to its most recent iOS software for iPhones and iPads. Tile said Apple’s tools to help smartphone owners find their missing items largely mimics its own offering. Adding to its advantages, Apple imposes tougher restrictions on how Tile and others collect much-needed location data, said Daru, the company’s general counsel.
“Tile welcomes competition,” she said, “but it has to be fair competition.”
Apple says its policies seek only to protect privacy, but lawmakers at times did not appear convinced, pointing to other instances in which the iPhone giant — seeing a successful product in Apple’s app ecosystem — launches competing services of their own.
“Once Apple has essentially decided to do the same, it renders all of those apps superfluous and unnecessary,” said Rep. Joe Neguse, D-Colo.
Patrick Spence, the leader of Sonos, blasted Google and the rest of the industry for “using their power in one market to conquer or destroy nascent markets.” The high-end speaker company alleges in a lawsuit that Google unlawfully copied its technology, a charge Google denies.
PopSockets, a Boulder-based company that makes circular grips for smartphones, took issue with Amazon. David Barnett, the company’s founder, fretted about restrictions Amazon places on sellers. He said PopSockets at one point tried to quit selling through the e-commerce giant, but severing those ties ultimately cost his company $10 million. Amazon has disputed Barnett’s claims.
And David Heinemeier Hansson, the co-founder of Basecamp, which makes web-based product management tools, said the digital ecosystem as a whole had been “colonized by a handful of big tech companies.” He likened the current behaviors of Apple, Amazon, Facebook and Google to some of the same practices that decades ago led the government to try to penalize Microsoft for antitrust abuses.
“Help us, Congress,” Hansson said, “you’re our only hope.”