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Break up Big Tech? With congressional probe, the idea may be gaining steam

Beyond the theatrics, the high-profile hearing could end up having real consequences for the world's biggest technology companies.
Image: Big Tech CEO's Testify Virtually Before House Judiciary Committee
Facebook CEO Mark Zuckerberg speaks via videoconference during the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law hearing on Online Platforms and Market Power on Capitol Hill on July 29, 2020.Graeme Jennings / Pool via Getty Images

The calls to break up Big Tech are not going away. If anything, they may be growing more serious.

That was the bottom line for some antitrust lawyers and other technology industry analysts who watched members of Congress spend five and a half hours Wednesday grilling major tech CEOs about monopoly power on the internet.

It was also the conclusion of Rep. David Cicilline, D-R.I., who presided over the hearing as the chairman of the House Antitrust, Commercial and Administrative Law Subcommittee — and who has become a chief antagonist of Silicon Valley.

“This hearing has made one fact clear to me: These companies as they exist today have monopoly power. Some need to be broken up. All need to be properly regulated and held accountable,” he said as the hearing ended Wednesday evening.

Four Big Tech CEOs appeared together in the virtual hearing to give testimony: Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai.

Together, the executives represented a historic concentration of corporate power in one congressional proceeding, and experts said it was a spectacle just to see lawmakers bombarding some of the world’s most powerful men with pointed questions about their business practices.

“It was refreshing to see lawmakers going toe-to-toe with the titans of the tech sector."

“It was refreshing to see lawmakers going toe-to-toe with the titans of the tech sector,” said Gene Kimmelman, a former Department of Justice antitrust official who’s now a senior adviser at the advocacy group Public Knowledge.

At times, the questioning was nearly derailed as some Republican members of the subcommittee sought to shift the hearing to other topics such as online speech rules, but even some Republicans raised questions about whether the companies have dealt fairly with competitors.

The Democrats also seemed to have coordinated ahead of the hearing, dividing up lines of questioning among themselves so as not to duplicate efforts or waste limited minutes.

Possible new laws

But beyond the theatrics, the hearing could end up having real consequences for the four companies. Critics were able to sharpen their case against the tech industry just as the Justice Department and several states are preparing to launch antitrust lawsuits.

The hearing also underscored a new level of seriousness among Democrats about addressing tech industry power, months before the Nov. 3 general election, when they will have a chance to take unified control of the federal government and possibly attempt a rewrite of century-old antitrust laws.

Cicilline has already been working with Sen. Elizabeth Warren, D-Mass., another harsh critic of large tech companies, on draft legislation that would radically shake up antitrust law. They would have a chance to move it forward if Democrats sweep the election.

One idea is for the biggest companies to be broken up, but critics have also examined reining them in via other methods.

“The hearing gathered momentum around ‘regulation,’” Diana Moss, president of the American Antitrust Institute, said. “It’s not out of the question that there might be bipartisan support for a new digital technology regulatory act,” she said — in short, a new law to establish a framework to ensure nondiscriminatory access on platforms, among other things.

Sarah Miller, executive director of the American Economic Liberties Project, an advocacy group that opposes monopolization, said the hearing created momentum that will carry forward into other hearings and legislation.

“It has probably been decades since a committee in Congress has brought a deeply researched and aggressive approach to major corporate actors,” she said. “I really have not seen anything like this in 15 years in politics.”

Focus on data

Several moments stuck out from the marathon hearing, according to outside experts.

In one, Rep. Val Demings, D-Fla., pressed Google’s Pichai about a decision in 2016 to combine data from the company’s DoubleClick ad business with other data held by Google — a decision that she said reversed an earlier pledge not to commingle the information.

“We today make it very easy for users to be in control of their data,” Pichai replied.

Demings cut him off, saying, “I am concerned that Google's bait and switch with DoubleClick is part of a broader pattern where Google buys up companies for the purposes of surveilling Americans, and because of Google’s dominance, users have no choice but to surrender.”

Rep. Kelly Armstrong, R-N.D., also asked Pichai about ad data, saying a 2015 decision by YouTube to change the way it sells ads “resulted in smaller competitors unable to participate.” Pichai responded that there was still a robust set of choices in the market.

Several lawmakers questioned Bezos about Amazon’s use of data about products sold by third parties on its website. Bezos said Amazon was investigating a report by The Wall Street Journal this year that Amazon employees had used such data to develop competing products, despite a company policy against that.

But Cicilline said that was not enough. “Amazon’s dual role as a competing seller on that platform is fundamentally anti-competitive, and Congress must take action,” he said.

Facebook and Apple also were asked about their use of data that they collect in one context and then use to inform business decisions in other contexts. Experts said it was no accident that lawmakers kept such a steady focus. The tech companies have enormous amounts of data, and although their practices may be allowed under current law, that may be a focus for future legislation.

“That’s the big overarching theme here: The Big Tech platforms have both the opportunity and incentive to take advantage of the data they can develop to undermine smaller players in the market,” Kimmelman said.

Not everyone thinks the timing is right for considering antitrust legislation, especially before the Justice Department and other authorities finish their ongoing probes.

“It's hard to see Congress changing the antitrust laws until those investigations play out and we get some guidance from the antitrust agencies and the courts,” Asheesh Agarwal, deputy general counsel at the advocacy group TechFreedom, said.

But some of what the tech companies were asked about Wednesday raised questions under existing antitrust law, such as whether government enforcers should revisit their earlier approvals of Facebook buying Instagram, and Amazon buying

The tone of the questions posed to the CEOs indicated that lawmakers were not intimidated by the idea of trustbusting, after years of rarely discussing it.

“There was no, ‘thank you for being here, you’re amazing innovators and we don’t want to inconvenience you,’” Miller said. “This was asking them very specific and detailed questions about their market power and how they’re leveraging that to harm other businesses and consumers.”