US tech giants face Congress grilling

US CongressCopyright: US Congress

The committee's chair Congressman Cicilline has ended the hearing with one last shot across the bows of the tech leaders.

"Today we had the opportunity to hear from the decision-makers from the most powerful companies in the world," he said.

"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.

And he added: "We must make our choice. We may have democracy or we may have wealth concentrated in the hands of a few. We can't have both."

So, today's skirmish is over.

But how willing the politicians are to enforce regulations capable of reining in the tech giants, and what the tech giants might do to resist, remain open questions.

US CongressCopyright: US Congress

Over recent weeks, Facebook has seen an exodus of big-name advertisers, which have voiced protest over its handling of hate speech and disinformation.

Shortly after the walkout began, comments Zuckerberg made to an internal meeting were leaked, revealing he had said the advertisers would be back soon enough.

Congresswoman Jayapal asked if Facebook was now so big that it wasn't worried how it was impacted by a major boycott of 1,100 advertisers.

"No congresswoman. Of course we care," he responded.

"But we're also not going to set our content policies because of advertisers. I think that that would be the wrong thing for us to do.

"We've cared about issues like fighting hate speech for a long time, and we have invested billions of dollars [in content moderators and AI systems]... I do believe that they are industry leading."

US CongressCopyright: US Congress

There have only been a few instances when the politicians have taken advantage of the fact that all four CEOs are present to bounce a question between them.

But Congressman Jordan has just used the opportunity to question their commitment to the First Amendment's protection of freedom of speech.

Here's their responses -

Cook: "I think it's good for people to hear different points of view and decide for themselves."

PichaI: "We take pride in the fact that across our platforms, including YouTube, there are more diverse voices than ever before."

Zuckerberg: "I believe strongly in free expression. Giving people a voice is an important part of what our services do. And I'm very worried about some of the forces of illiberalism that I see in this country."

Bezos: "I am concerned in general about that, and what I find a little discouraging is that it appears to me that social media is a nuance-destruction machine. And I don't think that's helpful for a democracy."

ReutersCopyright: Reuters

Democratic Rep David Cicilline has been grilling Mark Zuckerberg over the firm's response to the coronavirus.

"What are you doing right now to protect people from demonstrably false claims related to this deadly pandemic?" he asks.

He says misinformation is often the most-shared content on the platform.

"The more engagement there is, the more money you make from advertising," he says - and goes on to list some examples.

He accuses Facebook of being so big that it can't effectively police "deadly content".

Zuckerberg says such content is not good for its business model and it removes offending posts.

"I think we have relatively good record in taking down misleading content," he responds.

But Cicilline goes on: "This is the tip of the iceberg. It's not just about Covid. Facebook gets away with it because there is no competitor. It’s the only game in town."

The four bosses are asked a yes-or-no question by Republican Greg Steube: Do you believe the Chinese government is stealing technology from US companies?

Tim Cook. "I don’t know of specific cases where we have been stolen from by the government. I know of no case on ours where it occurred."

Sunder Pichai: "I have no first-hand knowledge of any information stolen from Google in this regard."

Mark Zuckerberg: "I think it’s well documented that the Chinese government steals technology from US companies."

Jeff Bezos: "I haven’t seen that personally but I’ve heard many reports of it."

ReutersCopyright: Reuters

Democratic Congresswoman Mary Scanlon has been asking Sunder Pichai about YouTube’s policies on content for children. She asks Mr Pichai if Google has been collecting data on the children who use YouTube.

Mr Pichai responds that this is an area the firm takes very seriously. He says under-13s are not allowed to set up their own accounts, and the firm had invested in a special version of its video clip service, YouTube Kids.

Ms Scanlon then asks if YouTube is investing in “luring in” advertisers by telling them that YouTube is regularly visited by children.

“Are you targeting children and then targeting advertisers to bring them on board?”

Mr Pichai responds by saying everything the firm does complies with regulations.

Finally Ms Scanlon asks if content creators are able to choose which advertisements appear next to their content.

“If Sesame Street doesn’t want to show junk food ads on YouTube, does Google allow them to make that choice?”

Mr Pichai says users have a choice – they can use it as a subscription service without seeing such advertisements or they can use it for free with ads.

He says he is not aware of a report in the Wall St Journal alleging that YouTube is making it difficult for independent auditors to report back to companies on what advertisements are shown alongside their content, but will get back to her about it.

US CongressCopyright: US Congress

Having earlier questioned Google about bias, the Republican Matt Gaetz has now chased Zuckerberg over the issue.

The politician claimed that Facebook's culture "disadvantages conservatives" and that its employees had been caught out on video revealing their prejudices.

"I certainly do not want our platforms to be run in a way that has any ideological bias," Zuckerberg replied.

Facebook's chief declined to get into the specifics of the hidden-camera clips being referenced, but said: "People make mistakes... it's our job in running the company to make sure that we minimise errors."

Mr Gaetz then switched tack asking why Zuckeberg had fired Palmer Luckey.

The co-founder of the Oculus virtual reality division Facebook acquired in 2014 was ousted two years later after it emerged he had donated money to an anti-Hillary Clinton group during the presidential election.

"I'm not sure it's appropriate to get into a specific personnel issue publicly," Zuckerberg responded.

Mr Gaetz wasn't satisfied with this.

"I've seen the messages where you have specifically directed Mr Luckey to make statements regarding his politics for the benefit of your company," he said.

"So I think both in the case of these content moderators and in the case of the testimony you just gave regarding Mr Luckey... there is serious question as to whether or not you're giving truthful testimony here."

These days Mr Luckey runs a surveillance start-up that is helping patrol the US-Mexico border.

ReutersCopyright: Reuters

The US markets are now closed. So how do investors think the tech CEOs are doing?

Obviously, it's a bit simplistic to link stock prices to their performance - but if the politicians had landed a deadly blow, you might have expected at least one of the companies' shares to have suffered.

But at the close of trade:

• Apple was 1.9% up
• Alphabet (Google) was 1.3% up
• Amazon was 1.1% up
• Facebook was 1.4% up

Four of the world’s top technology company executives may have been testifying before the Judiciary Committee from a distance, but they were still caught in the middle of a political storm on Wednesday afternoon.

The stated purpose of the hearing was to address whether existing anti-trust laws provide sufficient regulation of transnational tech Goliaths. The reality, however, was that the proceedings - with each member of the committee receiving five minutes to speak - were more akin to a feeding frenzy, as corporate chiefs faced criticism from every direction

Democrats expressed concern that the companies were abusing their power by disadvantaging competitors or buying them out entirely. Republicans accused the witnesses of insufficient patriotism and being too cosy with the Chinese.

Both sides expressed outrage over how the companies managed speech and expression on their platforms. They didn’t go far enough in removing hateful rhetoric and false information, Democrats said. They singled out conservatives for censorship, the Republicans countered.

Through it all, the witnesses thanked the questioners and took their lumps, perhaps confident that they could soon log off and get back to their work. While all the politicians seemed to agree that the big tech companies were a problem, their chances of arriving at any kind of solution seems unlikely.

Getty ImagesCopyright: Getty Images

While we are in another break, a reminder of who the tech chief executives are giving testimony to the House Judiciary Antitrust Subcommittee:

- Mark Zuckerberg launched Facebook while a student at Harvard. It is the biggest social media network in the world. He is the youngest of the four men, aged 36, and has masterminded a series of key takeovers, including WhatsApp, Instagram and Oculus.

- Sundar Pichai, the former chief of Google's Chrome browser, climbed the ranks to take charge of parent company Alphabet at the end of 2019. He was born in India and is now one of the best compensated chief executives in the US - company filings revealed he earned $281m (£213m) last year.

- Jeff Bezos founded Amazon as an online bookstore in his garage and built it into a giant spanning e-commerce, streaming and cloud computing. He's the world's richest man and had never appeared before Congress until now. He regularly sells part of his stock in Amazon to fund another venture, the space transport company Blue Origin.

- Tim Cook joined Apple in 1998, and served as co-founder Steve Jobs' chief financial officer before taking the top job in 2011. Under his leadership, Apple has made digital privacy one of its core values, and sought to become less reliant on hardware sales by expanding across a range of digital services.

Jeff Bezos has been questioned about why Amazon doesn't do more to remove fake goods sold via its online marketplace.

"Counterfeits are a scourge," said Mr Bezos.

"It's bad for customers. It's bad for honest third-party sellers."

But the Democratic member Henry Johnson said the panel had heard evidence from one seller that Amazon had only agreed to stop diverting sales to knock-off rivals once the vendor had committed to a $2m advertising spend.

"That's unacceptable," responded Mr Bezos.

"If someone, somewhere inside Amazon said 'you know, buy X dollars in ads and then we'll help you with your counterfeit problem', that is unacceptable.

"And I will look into that and we'll get back to your office with that."

ReutersCopyright: Reuters

Facebook’s Mark Zuckerberg has once again been pressed on whether his company stifled competitors by copying their features or forced them into a sale.

He said he saw it as part of Facebook's job to work out what people found valuable in tech.

“We’ve certainly adapted features that others have led in, as have others copied and adapted features that we have led in," he explained.

But Congresswoman Pramila Jayapal didn't give up the theme, asking: "Has Facebook ever threatened to clone the products of another company while also attempting to acquire that company?"

"Not that I recall," said Zuckerberg.

The politician pressed on, asking what he then made of reports that he had threatened to go into "destroy mode" when trying to convince Kevin Systrom to sell Instagram.

"I want to respectfully disagree with the characterisation," said Zuckerberg.

"It was clear that this was a space that we were going to compete in one way or another. I don't view those conversations as a threat in any way."

In any case, Mr Zuckerberg clinched the deal, and Mr Systrom has since quit.

BBCCopyright: BBC

The committee chair David Cicilline has pressed Jeff Bezos over claims that his company has an inherent conflict of interest with sellers who use its marketplace.

He said one clothing company had likened receiving a cheque from the online store to getting a fix of "Amazon heroin" - the idea being that it felt good in the short-term to be paid, but ultimately Amazon would cause the seller's downfall by launching rival products of its own.

"Mr Bezos, this is one of your partners. Why on earth would they compare your company to a drug dealer?" the congressman asked.

“I completely disagree with that characterisation,” replied Mr Bezos.

“I think it's important to understand that we have a policy against using individual seller data to compete with our private-label products.”

Mr Cicilline made clear he was unconvinced.

"Amazon is only interested in exploiting its monopoly power over the e-commerce marketplace," he concluded.

"Amazon's dual role as a platform operator and competing seller on that platform is fundamentally anti-competitive and Congress must take action."

Amazon's Jeff Bezos is presented with a complaint from a family bookseller, who says their business evaporated after being de-listed from his online store.

“I would like to talk to her. It does not at all to me seem the right way to treat her. And I’m surprised by that. It’s not the systematic approach that we take," Mr Bezos said, rejecting accusations his company was "bullying" small suppliers.

EPACopyright: EPA

Republican congressman Jim Jordan returned to the theme that tech companies are biased against his party, suggesting Google might tailor its features to aid Joe Biden's presidential campaign.

"We won't do any work to politically tilt things one way or another. It's against our core values," responded Mr Pichai.

But Mr Jordan went on to bring up a 2016 email, in which he said a Google executive had talked about the "silent donation" Google had made to Hillary Clinton's campaign.

"We didn't find any evidence of such activity," Mr Pichai replied.

Mr Jordan continued, saying the email had referred to Google urging people to vote "in key states". He suggested this was a reference to the swing states of Nevada and Florida, meaning there had been a deliberate effort to prevent Donald Trump from winning.

"I can assure you we were compliant with the laws in 2016," said Mr Pichai, adding that Google would obey the law this year as well.

"Can you assure us you are not going to silence conservatives and... you're not going to configure your features [to favour] Joe Biden?" Mr Jordan said again.

"You have my commitment. It's always been true and we'll continue to conduct yourselves in a neutral way," was the reply.

It seemed to be a relatively calm end to the session until the next politician, the Democrat Mary Gay Scanlon, suggested Mr Jordan had been pushing "fringe conspiracy theories".

At which point, Mr Jordan reacted with fury, saying: "We have the email - there was no fringe conspiracies."

In a testy exchange, the Democratic member Val Butler Demings asked Sundar Pichai whether it was true that "the more user data that Google collects, the more money Google can make".

"That's not true," he replied.

"Most of the data today we collect is to help users and provide personalised experiences."

But before he could flesh out this response - or be challenged over it - the session ended to make way for the next set of questions.

ReutersCopyright: Reuters

A gentle reminder from the committee chair to the tech bosses that time is short, with each committee member just getting five minutes each.

All four have often begun their answers by thanking the committee for the question.

"We appreciate the gratitude for the questions, and your description of them as good questions, but we'll just assume that they are good questions and that you are happy to answer them."

ReutersCopyright: Reuters

Amazon's Jeff Bezos has finally been asked a question, so it looks like his feed is working - though the picture is a bit fuzzy.

Democratic congresswoman Pramila Jayapal asked him for a "yes or no" answer to whether his firm had ever used seller data to make business decisions.

This was a reference to reports that Amazon had used data gathered from businesses selling products via its site to design and price its own rival first-party goods - something the firm has previously suggested had been limited to a group of rogue employees.

Mr Bezos responded that he couldn't give in answer in such simple terms.

"What I can tell you is we have a policy against using seller-specific data to aid our private label business, but I can't guarantee you that that policy has never been violated," he said.

Ms Jayapal said she remained concerned that Amazon was continuously monitoring its logs to prevent any other business from becoming big enough that it would pose a competitive risk.

The hearing is back in business and with questions for Alphabet's Sundar Pichai on General Data Protection Regulations (GDPR).

Republican Kelly Armstrong makes the case that the privacy law has helped entrench Google's market-leading position rather than weaken it.

Mr Pichai responded: "We see robust competition in the marketplace [and] we have to comply with regulation."