The Army-McCarthy or Watergate hearings it was not.
No demagogue was shamed, no president’s crimes exposed.
Still, the testimony of four Big Tech chief executives before the House Antitrust Subcommittee on Wednesday was historic in its own way, whether it quickly leads to antitrust legislation for the digital age or not.
For one thing, it was Jeff Bezos’ first appearance before Congress. He was joined by Facebook’s Mark Zuckerberg, Alphabet/Google’s Sundar Pichai and Apple’s Tim Cook.
All appeared remotely because of the pandemic, reducing some of the drama of a crowded hearing room.
Under the disciplined leadership of Chairman David Cicilline, D-R.I., the committee focused on big issues: the enormous market power of these companies and their harm to competition; ways they weaken, snap up or destroy rivals; their danger to consumer privacy, and how data they collect is used.
As Cicilline put it in his opening remarks, “Simply put: They have too much power. Their ability to dictate terms, call the shots, upend entire sectors and inspire fear represents the powers of a private government. Our founders would not bow before a king. Nor should we bow before the emperors of the online economy.”
Also, Republicans, who typically go easy on antitrust issues, asked tough questions along with their Democratic colleagues on the committee. One hot-button issue for them is alleged censorship of conservative voices. Another was whether Big Tech is doing business with China, including allegedly peddling products made by slave labor.
Oh, and if you’re wondering why you can’t get Purell in the time of COVID-19? The hearing offered no answer to this supply chain mystery, but pump bottles of the coveted hand sanitizer were in abundant view on the committee dais.
The lawmakers (and their staffs) were admirably prepared on complex and highly technical topics. Still, the CEOs mostly denied, promised to get back to them or elided over uncomfortable topics.
As my colleague Benjamin Romano reported, Bezos faced some uncomfortable questions, especially from Rep. Pramila Jayapal, who represents the district where Amazon’s headquarters is located, and from Rep. Mary Gay Scanlon of Pennsylvania, both Democrats.
The only time I noticed Bezos thrown off balance, though, was when Jayapal brought up an April Wall Street Journal report detailing how the company gathered data from its third-party sellers to launch competing products.
Last year, an Amazon lawyer testified that “we don’t use individual seller data directly to compete” with the third-party sellers on its platform.
However, on Wednesday, Bezos said, “I can’t answer that question yes or no.” He said he couldn’t guarantee Amazon’s policy to protect the sellers had never been violated, but now the company was examining the issue “very carefully.”
Still, Amazon got off relatively lightly compared with criticism leveled against Google and Facebook.
Bezos was poised and as deferential and cooperative-seeming as possible for the world’s richest person. He was far from John Pierpont Morgan’s infamous 1901 quote, “I owe the public nothing.”
His opening statement was a paean to the American rags-to-riches story, the son first of a single mother and then a poor immigrant stepfather, starting a business out of his garage with no guarantee of success.
“You earn trust slowly, over time, by doing hard things well — delivering on time; offering everyday low prices; making promises and keeping them; making principled decisions, even when they’re unpopular; and giving customers more time to spend with their families by inventing more convenient ways of shopping, reading and automating their homes.”
He said Amazon created more jobs than any other company over the past decade and now employs 1 million.
He also mentioned a program to help 100,000 Amazon workers gain training for in-demand fields.
Bezos cleans up well and should spend more time talking to the public like this, rather than remaining silent behind lawyers, PR people or no comments at all. Of course, he’d have to engage on uncomfortable topics such as lack of unionization, and the effect of speed and intensity on workers at Amazon warehouses (which are still coveted by most localities).
The Amazon CEO would do himself good to take the Giving Pledge spearheaded by Warren Buffett and Bill Gates. The wealthy participants promise to give away at least half their wealth. MacKenzie Scott, Bezos’ ex-wife, took it.
At the hearings, Bezos was in agreement with the other CEOs that their companies faced abundant and vigorous competition, including internationally. And maybe that’s true seen through the lens of this moment, but certainly not compared with the American economy that existed even a few years ago.
But the bigness problem, which includes competition-stifling market power and even systemic risks to the economy, is not confined to tech. Overconcentration includes Walmart, the big banks, and such sectors as airlines, broadcasting, telecom, railroads, health care and food.
This grew up over decades of lax antitrust enforcement, where regulators looked mainly at the so-called consumer welfare standard. This was easily met by giants offering convenience and low prices. The risks to employment, unionization and disparate corporateheadquarters distributed broadly across the country were not relevant.
But they should be. Today’s concentration is a big cause of rising inequality, stagnant incomes for most households and lower levels of business formation and innovation. To take one example, the national market share of the top three drugstore chains grew from 30% in 2002 to 67% in 2017. In 2018, the top four cellphone companies controlled 97% of the market — now it’s three, Sprint being acquired by Bellevue-based T-Mobile.
The change in antitrust enforcement can be traced to the late 1970s, when deregulation began. In most cases, it opened the door to ever-larger companies controlling markets. Not surprisingly, the Federal Trade Commission stopped keeping and publishing data on industry concentration in 1981.
Will Wednesday’s hearing resonate with most people? (You can watch on C-SPAN.) Political will and Democrats controlling both houses of Congress as well as the White House could break up this toxic concentration. This would require shedding the ideology that focused only on “consumer welfare.”
But a cynic would answer, “The hearing will resonate until Americans buy the next item on Amazon that they found on Google using their iPhone and telling their friends on Facebook.”
The “cyberbarons” aren’t like the robber barons of the late 19th century railroads; the backlash against those created the Progressive movement and its historic reforms.
Bezos and his peers make life seem easy, amuse us, beguile us, keep us spending. The likes of J.P. Morgan are looking down with envy.