Opinion | How to Hold Big Tech’s Feet to the Fire

Amid the coronavirus pandemic, Congress’s attention will turn briefly to another matter: world domination. On Wednesday, the chief executives of Facebook, Amazon, Apple and Google’s parent company, Alphabet, will appear together to defend themselves in a continuing inquiry into their market power by the congressional subcommittee focused on antitrust.

The virus’s reach means Mark Zuckerberg of Facebook, Jeff Bezos of Amazon, Tim Cook of Apple and Sundar Pichai of Alphabet will dial into the hearing via video chat, avoiding the glare of photographers, members of Congress and the gallery as they are peppered with questions. While in their home offices, the men also could receive messages from aides about how to respond.

Nonetheless, the one-day hearing, conducted by the House Judiciary Committee’s antitrust subcommittee, could give the public a rare glimpse into the inner workings of some of the world’s most valuable companies. Panel members are likely to turn a good deal of attention to Mr. Bezos, the world’s wealthiest person, in part because he’s never appeared before Congress. (He initially tried to avoid it this time.)

The challenge for the subcommittee will be in establishing whether these tech companies — which have amassed immeasurable power — operate as illegal monopolies in certain domains, such as online search (Google), online marketplaces (Amazon), mobile phone app stores (Apple), the dissemination of information (Facebook), advertising sales (Google and Facebook) and mergers and acquisitions.

It’s not against the law to be the largest search engine, online marketplace or social media network. But antitrust laws, meant to protect against outsize market power, do not allow companies to suppress competition — a practice known as exclusionary conduct — by, for instance, quashing or gobbling up potential rivals. Freed from competition, companies may also cross the line by squeezing suppliers or imposing higher prices on consumers.

Wednesday’s hearing will be the culmination of a roughly yearlong investigation into the businesses’ operations and is likely to be the final public forum before the subcommittee releases its findings, expected in the fall.

Representative David Cicilline, Democrat of Rhode Island and the subcommittee’s chairman, has indicated the tech companies may not like the results, this month calling the companies’ power “terrifying.”

It’s up to the subcommittee to help the public understand the breadth of the companies’ power and, potentially, to recommend that regulators break them up or take other action. Also at issue is determining if existing rules are sufficient given the tech companies’ market power and whether the laws should be updated because the companies behave in ways that should be illegal.

Here are some questions subcommittee members ought to consider:

The subcommittee will probably focus on the company’s relationship with third-party merchants that use the site to sell directly to consumers. Such merchants represent about 60 percent of Amazon’s sales. The company also operates an enormous shipping network, an advertising sales business and a cloud computing service that may raise alarms among regulators. Amazon’s trove of sales data gives it incredibly detailed insights into both customers and merchants.

  • After an investigation by German regulators, Amazon vowed last year to overhaul its contracts with third-party merchants. Did the company adequately do so? Does Amazon have contracts that require lower prices than other retailers’? Does it require exclusivity, meaning merchants cannot offer their goods on other sellers’ websites?

  • An Amazon lawyer told the panel, “We don’t use individual seller data directly to compete” with other businesses on Amazon’s site. But a Wall Street Journal report showed evidence that Amazon does just that, helping it create tailored private-label products that undercut competitors. What is the extent of Amazon’s use of seller data?

  • Amazon offers its sellers warehousing and shipping services worldwide. What does it seek in return, beyond a commission? Does Amazon use sales data from small merchants to source new products or to help larger sellers succeed, forcing out smaller ones?

  • In 2010, Amazon dropped diaper prices well below profitability, in a successful effort to force a competitor, Diapers.com, into acquisition talks. Amazon has since shuttered that site. Does Amazon view such actions as exclusionary? And is the company engaged in other such pricing wars in order to force a competitor to sell?

  • A Washington Post investigation showed that Amazon pushes consumers toward its private-label products even when they appear to want to buy name brands. Does Amazon favor its own products in consumers’ searches? Does it require fees or advertising purchases from merchants or brands to ensure their products rise to the top of searches?

While Apple is best known for its iPhones and laptops, it also has healthy competition from companies like Samsung and Lenovo in hardware sales. As a result, Mr. Cook is most likely to be asked about the structure of Apple’s App Store, where millions of software developers offer their apps for download.

  • Developers are generally required to offer their in-app purchases and paid subscriptions through Apple’s App Store, rather than on their own websites, where they may avoid Apple’s commissions. Apple has threatened to remove apps that don’t abide. How is this in the best interest of consumers and app developers?

  • Some app developers have alleged that Apple uses the detailed data it collects about app downloads to copy their ideas and that the company favors its own apps in searches. Is this true? If so, how does the company defend such practices?

Facebook’s aggressive acquisition strategy — including the giants Instagram and WhatsApp — makes it vulnerable to a breakup if regulators find that it was trying to rid the market of real competition.

  • Reportedly, the Federal Trade Commission had documents demonstrating Facebook acquired Instagram in 2012 in an explicit bid to stifle a competitor. Were those documents mischaracterized? How did Facebook’s buying Instagram benefit consumers, and how did it determine the $1 billion price?

  • British lawmakers released emails showing Facebook used an analytics app to collect detailed data about competitors in order to snuff them out. That helped Facebook decide to buy WhatsApp for $19 billion, the emails show. Couldn’t that be called an abuse of market power? Does Facebook still cull proprietary data on rivals in order to protect its market leadership?

  • Advertisers can target customers on Facebook with incredible accuracy, in part because of the platform’s ability to track users’ internet browsing activity across the web. Shouldn’t users consider those terms onerous? Also, has Facebook made assurances about the privacy of customer data that it later reneged on? What assurances do consumers have that their data will remain private and not be repurposed for Facebook’s benefit?

  • According to The Wall Street Journal, Facebook quashed efforts to make its site less politically divisive because partisan content drives more use of the site, which is beneficial to its advertising business. How can suppressing opposing views for users be viewed as anything but an abuse of power?

Alphabet’s signature product, Google, is central to nearly every activity on the web — and increasingly, many activities off the web as well. It is the dominant search engine by far and operates sprawling advertising and cloud computing businesses. Subcommittee members are likely to home in on how Google’s search business potentially stifles competition by favoring its own services and how YouTube, a Google subsidiary, pushes content to users.

  • Frequently, answers to common Google search questions can be found in so-called answer boxes at the top of a results page. Google culls that information from other websites, eliminating the need for users to visit those sites. Doesn’t that starve other websites of valuable traffic? Don’t answer boxes simply buttress Google’s market leadership by stifling competitors?

  • Google has paid Apple billions of dollars to be the default search engine on the Safari web browser on iPhones and iPads. How does Google expect rivals to compete on an even playing field if it has cornered such a significant share of the market?

  • Google controls multiple levers in the process of placing advertisements on the web, including analytics. The company also requires some businesses to use its ad technology if they want to use Google services. How does Google’s ad sales technology benefit advertisers? Why doesn’t Google allow marketers to see what prices others pay to place ads? Doesn’t that stifle bargaining power?

  • Critics say YouTube pushes videos that are politically slanted, based on data about its users, meaning viewers aren’t likely to see competing viewpoints. Is it correct that YouTube’s software is designed to reinforce biases? Other than keeping users on YouTube longer, what is the purpose of that system?

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