WASHINGTON — Lawmakers leveled stinging criticism and sharp questions at Big Tech executives Tuesday, attacking Amazon, Apple, Facebook and Google for their market power, their perceived bias as gatekeepers of communication and Facebook’s ambitions to reshape the financial industry.
The criticisms came at three hearings on Capitol Hill that showcased Washington’s widening range of concerns with Silicon Valley. Lawmakers from both parties, including Sen. Ted Cruz, R-Texas, who oversees a subcommittee on the Constitution, and Rep. David Cicilline, D-R.I., who leads a subcommittee on antitrust law, took aim at the businesses.
The executives acknowledged that technology had changed, and sometimes hurt, companies in industries like retailing, advertising, music and movies. But their companies, they said, have opened new opportunities to millions of entrepreneurs and small businesses. They insisted they faced competitors at every turn — entrenched big companies, ascendant startups and one another.
And consumers, they said, are the big winners, benefiting from convenience, lower prices, and new products and services.
But their celebration of the virtues of Big Tech did not carry the day. Some lawmakers were sympathetic, but this was not their stage. Most were decidedly unconvinced, even disdainful.
“Facebook has said, ‘Just trust us,’” Sen. Sherrod Brown, D-Ohio, said at a hearing focused on the social media company’s cryptocurrency efforts. “And every time Americans trust you, they seem to get burned.”
The hearing performances were a telling moment, showing the rising force of the backlash against the tech giants. Not long ago they were revered as treasures of American capitalism. Now they are targets of political attacks from both parties, growing public criticism and regulatory scrutiny. President Donald Trump has also turned up the volume of his critique of tech companies in recent weeks.
The Justice Department and the Federal Trade Commission recently decided to divide responsibility for potential antitrust investigations. The Justice Department is taking Google and Apple, while the FTC has Facebook and Amazon. Last week, the FTC voted to fine Facebook about $5 billion for mishandling users’ personal information, by far the agency’s largest fine against a tech company.
The House Judiciary Committee has opened a bipartisan inquiry into the power and practices of major technology companies. The subcommittee announced the investigation last month and planned to request documents from the companies and hear testimony from confidential witnesses, who may fear retribution from the tech giants.
It has also started holding hearings, including one Tuesday afternoon that was focused on how Amazon, Apple, Facebook and Google altered innovation and entrepreneurial activity. The practices under scrutiny included acquiring upstart competitors and favoring their own offerings on the digital marketplaces they operate.
Lawmakers appeared to be zeroing in on the areas that concern them the most. In one exchange, Cicilline addressed whether the tech companies’ marketplaces — for goods, software apps and online ads — gave them an unfair advantage over rivals who rely on those marketplaces to distribute their own products or services. He pointed to Amazon’s many lines of private label products, which compete for sales on the company’s site with similar products from other brands.
“Doesn’t that create a conflict of interest?” Cicilline asked Nate Sutton, Amazon’s associate general counsel.
“I respectfully disagree,” replied Sutton, who said that many big brick-and-mortar retailers offer private-label brands.
Amazon’s control of products on its site, Cicilline said, is different from and stronger than that of a traditional retailer that offers some private-label merchandise.
At one point, Cicilline pointedly told Sutton, “I may remind you, sir. You are under oath.”
Isn’t it the case, Cicilline pressed, that the best sale for Amazon is the sale of an Amazon-branded product, and that Amazon uses the vast amount of data it collects to favor its own offerings?
“No, that is not true,” Sutton replied.
Rep. Joe Neguse, D-Colo., focused on Facebook.
He pointed out not only that Facebook is the world’s largest social network but also that those ranked third, fourth and sixth — WhatsApp, Facebook Messenger and Instagram — are Facebook properties.
Owning four of the top six players in a market, Neguse said, spoke for itself. “We have a word for that. It is called monopoly.”
Earlier in the day, in the hearing about Facebook’s cryptocurrency project, Libra, lawmakers grilled David Marcus, a top executive.
The company project has a bold goal: to offer an alternative financial system that makes it possible to send money around the world with few fees. But the company has run into bipartisan resistance from Washington, including the White House.
The initiative is far from the first effort of its kind. The best-known cryptocurrency, bitcoin, is in wide circulation, and it introduced the idea of digital currencies that are free from government control.
But the Libra effort has put a spotlight on cryptocurrencies and amplified the voices of critics who say the technology has little value beyond speculative investing and illegal transactions, like online drug sales. Last week, the chairman of the Federal Reserve, Jerome Powell, said Libra raised “serious concerns” around “money laundering, consumer protection and financial stability.” Trump and Treasury Secretary Steven Mnuchin have also criticized Libra and other cryptocurrencies in the past week.
That concern was obvious Tuesday when members of the committee questioned Marcus, who leads Facebook’s cryptocurrency initiative, for more than two hours. Marcus was asked about a variety of Facebook controversies, including lax protection of the private information of its users, Russian disinformation on Facebook’s platforms and claims that it tries to muzzle conservative viewpoints.
Sen. Martha McSally, R-Ariz., said, “I don’t trust you guys.”
Marcus, a former PayPal executive, was picked by Mark Zuckerberg, Facebook’s chief executive, to lead the Libra effort.
Marcus, adopting a conciliatory tone, said the company would do its best to fight fraud and earn back the trust of the more than 2 billion people who use Facebook’s services regularly.
“We’ve made mistakes in the past,” Marcus said. “We have been working, and are working hard to get better.”
Google was at the center of the day’s third hearing, about censorship in search, held by a Senate subcommittee.
Republican lawmakers used the hearing to air often-repeated but largely unproven claims that Google tilts search results to bias against conservative viewpoints. Democrats called the hearing a charade and raised concerns about Google’s inability to effectively police the content on YouTube.
The Republicans took turns battering Karan Bhatia, Google’s vice president for government affairs and public policy. Sen. Josh Hawley, R-Mo., delivered the most pointed attacks. He said it was hard to believe Google’s executives when they say that censoring search results would go against the company’s mission and ideology, considering that the search giant had been working on plans to re-enter China with a censored search engine.
“Clearly, our trust and patience in your company and your monopoly has run out,” said Hawley, a vocal critic of Google.
Bhatia replied that Google had abandoned plans to restart its search engine in China.
Cruz, the chairman of the subcommittee, said Congress needed to rethink the legal immunity for internet companies, established in 1996, that protects them from liability for content posted by users. The law, known as Section 230 of the Communications Decency Act, has allowed platforms like Google’s YouTube, Facebook and Twitter to grow rapidly without concern of being held liable for content on those services.
Even before the hearing that focused on Google, the president applied his own brand of pressure with an early morning tweet. He said that his administration “will investigate” remarks from billionaire investor Peter Thiel, who said that Google had been infiltrated by Chinese intelligence. Thiel also accused the technology giant of treason for refusing to work with the Pentagon on a future artificial intelligence project while agreeing to work with the Chinese military. He provided no evidence for his allegations.
A Google spokeswoman said in a statement that the company had not worked with the Chinese military and that it had cooperated with the U.S. government in many areas such as cybersecurity, recruiting and health care.
Asked during the hearing whether Chinese intelligence had infiltrated Google’s management, software or private data, Bhatia said: “Absolutely not.”