U.S. tech giants are abusing power, democrats tell CEOs | Tech News

U.S. tech giants are abusing power, democrats tell CEOs

Representative David Cicilline of Rhode Island on Wednesday leveled a blistering attack against Amazon.com Inc, Facebook Inc., Alphabet Inc. and Apple Inc. as the companies’ chief executives testify before the House antitrust committee.

| Updated on: Aug 20 2022, 22:10 IST
Representative image.
Representative image. (Pixabay)

U.S. technology giants have too much power and control over digital markets and are harming workers, consumers and small businesses across the economy, said the Democratic lawmaker leading a House inquiry into the companies.

Representative David Cicilline of Rhode Island on Wednesday leveled a blistering attack against Amazon.com Inc, Facebook Inc., Alphabet Inc. and Apple Inc. as the companies' chief executives testify before the House antitrust committee. The companies are gatekeepers to the digital economy with the power to “shake down” small businesses and pick winners and losers, he said.

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“Their ability to dictate terms, call the shots, upend entire sectors, and inspire fear represent the powers of a private government,” Cicilline said. “Our founders would not bow before a king. Nor should we bow before the emperors of the online economy.”

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The CEOs are expected to face hours of tough questions from lawmakers who are nearing the end of a yearlong investigation into whether the companies are using their dominance to harm smaller rivals and thwart competition. Cicilline is expected to issue a report recommending ways to strengthen the antitrust laws that failed to rein in the tech giants.

Also read: Facebook gains temporary court reprieve on EU antitrust data demand

Jerrold Nadler of New York, the Democrat who chairs the House Judiciary Committee, said the four tech companies make up the “essential infrastructure” of today's economy, and he likened them to the power railroads had more than a century ago.

“If you are an independent merchant, developer, or content producer, you are increasingly reliant on these powerful intermediaries to access markets and consumers,” Nadler said. “Across the economy, many businesses live in fear of exclusion from these platforms, a fact that some companies have shared with the Committee over the past year during this investigation.”

While Democrats are expected to focus their questioning on how the companies are a threat to competition, Republicans on the panel plan to target what they see as political bias against conservatives. A confidential memo from Republican leadership preparing lawmakers for the hearing casts the effort to change antitrust law as a Democratic push to undermine the legal regime that has fostered a thriving American economy.

Also read: Big Tech goes on shopping spree, brushing off antitrust scrutiny

“While I find these complaints informative, I don't plan on litigating each of these complaints today,” said Jim Sensenbrenner, the soon-to-retire Wisconsin Republican and the ranking minority member of the panel. He said U.S. antitrust laws have served the country well “for over a century” and cleared the way for American success.

Yet he cautioned that “as the business landscape evolves, we must ensure that our existing antitrust laws are applied to meet the needs of our country and its consumers.”

Republican Jim Jordan of Ohio cited numerous examples that he said showed tech companies, including Twitter Inc., silencing conservative views.

“I'll just cut to the chase: Big tech is out to get conservatives,” he said. “That's not a suspicion, that's not a hunch, that's a fact.”

Wednesday's session is the first time Amazon's Jeff Bezos has testified before Congress and the first time all four tech leaders have appeared together.

In written testimony released late Tuesday, the CEOs -- Bezos, Facebook's Mark Zuckerberg, Alphabet's Sundar Pichai and Apple's Tim Cook -- told Congress that competition is thriving across the tech industry and consumers are benefiting as a result.

“The global retail market we compete in is strikingly large and extraordinarily competitive,” Bezos said in his statement. “Unlike industries that are winner-take-all, there's room in retail for many winners.”

Also read: Google is reportedly collecting data from rival apps to improve its own products

They touted the various ways they help small businesses grow, whether third-party sellers on Amazon or independent developers that build apps for the Apple App Store. They also portrayed their companies as embodying American entrepreneurship.

Zuckerberg said competition is so fierce that he expects one day a product will replace Facebook -- and he wants Facebook to build it. He also positioned the debate over the tech companies as a geopolitical issue, warning that efforts to break up or limit the reach of American companies could open the door to Chinese competitors.

“We believe in values -- democracy, competition, inclusion and free expression -- that the American economy was built on,” Zuckerberg said in his statement. “There's no guarantee our values will win out. For example, China is building its own version of the internet focused on very different ideas, and they are exporting their vision to other countries.”

The hearing is the clearest sign yet of the intense scrutiny the four companies -- with a combined value of nearly $5 trillion -- face in Washington. While the committee's inquiry is focused on competition, the companies are also grappling with criticism over privacy breaches, election misinformation, the spread of racist content -- and in the case of Amazon, its treatment of workers during the pandemic.

Also read: Amazon market power has grown amid pandemic, unions tell FTC

The companies face a variety of complaints about their business practices, from charges that Amazon abuses its power over the third-party merchants that sell on its site to allegations that Facebook acquires companies to eliminate potential rivals. All four companies are under federal, and in some cases state, investigations by antitrust authorities.

Critics claim that Google's dominance of search and online advertising allows it to preference its own products and squeeze publishers. And some app makers contend that Apple uses its grip on high-end devices to force apps into its payment system, extracting high fees in the process and deciding which ones survive.

Written by David McLaughlin and Ben Brody.

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First Published Date: 29 Jul, 23:26 IST