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FIVE TAKEAWAYS FROM BIG TECH’S BIG DAY: The long anticipated confrontation between the chief executives of America’s largest tech firms and Congress produced several memorable moments Wednesday and gave important insight into the House Judiciary subcommittee on antitrust’s investigation into competition in digital marketplaces.
The hearing — featuring Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai teleconferencing in — went more than five hours, with each lawmaker on the panel getting three rounds of questioning.
Here are the five biggest takeaways from Wednesday’s hearing.
MORE COVERAGE FROM THE HEARING:
MONOPOLY CONCERNS: Rep. David Cicilline (D-R.I.), the chairman of the panel hearing testimony Wednesday compared America’s biggest tech companies to historic monopolies such as AT&T and Microsoft during his opening statement.
“When the American people confronted monopolists in the past — be it the railroads and oil tycoons or AT&T and Microsoft — we took action to ensure no private corporation controls our economy or our democracy,” he said.
Cicilline, who has led the House Judiciary subcommittee on antitrust’s yearlong investigation into tech companies, also described the biggest platforms as “emperors of the online economy.”
He argued that the power of Amazon, Apple, Facebook and Google has limited consumer choice and stunted innovation.
BIG BAD WOLF?: Rep. Jim Sensenbrenner (Wis.), the top Republican on the congressional panel questioning the CEOs of America’s largest tech companies, said Wednesday that “being big is not inherently bad,” instead pointing to concerns about anti-conservative bias on their platforms.
“Since the start of this investigation we’ve heard grumblings from people who say your companies have grown too large,” the Wisconsin congressman said. “…While I find these complaints informative, I don’t plan on litigating these complaints today.
INSTAGRAM ACQUISITION PROBE: Facebook CEO Mark Zuckerberg on Wednesday pushed back against allegations by House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) that the 2012 Facebook acquisition of photo-sharing platform Instagram violated antitrust laws.
“I’ve been clear that Instagram was a competitor in the space of mobile photo sharing, there were a lot of others at the time that competed,” Zuckerberg testified during a hearing on potential antitrust violations among major tech companies hosted by a House Judiciary Committee subcommittee.
Nadler cited copies of emails between Zuckerberg and former Facebook Chief Financial Officer David Ebersman ahead of the merger in which the two Facebook leaders discussed the deal. Facebook bought Instagram in April 2012 for $1 billion, and the Federal Trade Commission (FTC) concluded an investigation later that year that allowed the acquisition to go forward.
The Verge published copies of those emails as Zuckerberg testified. In one email, Zuckerberg wrote that his motivation for potentially acquiring Instagram was a “combination” between goals Ebersman had previously listed: “neutralize a potential competitor” and “integrate their products with ours in order to improve our service.”
THIRD PARTY DATA USE: Amazon CEO Jeff Bezos said Wednesday he cannot guarantee that his company has fully adhered to a policy against using data from third-party sellers on the platform to boost its own products.
“We have a policy against using seller-specific data to aid our private label business,” Bezos said at a House subcommittee hearing under questioning by Rep. Pramila Jayapal (D-Wash). “But I can’t guarantee you that that policy has never been violated.”
The Wall Street Journal reported earlier this year that Amazon used information from other sellers on the platform to make decisions regarding its private label business, which includes more than 243,000 products.
That reporting directly contradicted 2019 testimony from Amazon associate general counsel Nate Sutton, who told the House Judiciary Committee that “we do not use any seller data to compete with them.”
When pressed on that report by Jayapal during Wednesday’s hearing on competition in digital markets, Bezos said an investigation is ongoing.
GOOGLE DATA CONCERNS: Democratic Rep. Val Demings (Fla.) on Wednesday repeatedly pressed Alphabet CEO Sundar Pichai on Google’s practices when it comes to consumer data, asking whether the tech giant felt it didn’t need to care about Americans’ privacy because of its market power.
Demings, considered a candidate to be presumptive Democratic presidential nominee Joe Biden‘s running mate, used her allotted time to question whether Google’s consolidation of consumer data was leading to fewer restrictions surrounding privacy. She said her chief concern was a broad pattern of “Google buying up companies for the purposes of surveilling Americans,” arguing that because of its dominance “users have no choice but to surrender.”
NEWS INDUSTRY WOES: Nadler said that the American journalism industry was “gravely threatened” by the growing dominance of Facebook and Google, claiming that the tech giants’ power was presenting a “dangerous situation” for the future of news.
Critics say that the tech giants’ dominance in the digital ad market has helped cause an emerging crisis for local news outlets, as they siphon away a critical revenue source for the industry.
GOOGLE TO KEEP WORKING WITH POLICE: Pichai pledged to keep working with police departments despite internal company opposition to the arrangement during Wednesday’s House hearing on competition in the digital marketplace.
“We are committed to continuing to work with law enforcement in a way that’s consistent with law and due process in the U.S,” Pichai said after questioning from Rep. Matt Gaetz (R-Fla.) about collaboration with the U.S. military and law enforcement.
They were his first comments on an internal letter signed by more than 1,600 Google employees that circulated last month calling for the company to cancel its contracts with the police amid new scrutiny on law enforcement after the killing of George Floyd and subsequent nationwide protests.
CORONAVIRUS MISINFORMATION: Cicilline confronted Zuckerberg about the spread of misinformation on the platform, questioning whether the company was doing enough to suppress unfounded claims about the coronavirus pandemic.
Cicilline pointed to a video posted on multiple social media platforms on Monday that featured false claims about the coronavirus outbreak. While the video was eventually taken down by Facebook and others, Cicilline noted that it wasn’t before it had racked up roughly 20 million views in the course of five hours.
“Doesn’t that suggest that your platform is so big that even with the right policies in place, you can’t contain deadly content?” Cicilline asked.
Zuckerberg pushed back, arguing that Facebook has a “good track record” when it comes to policing misinformation, including on topics related to the current health crisis.
STILL WANT MORE FROM THE HEARING?:
Read the prepared testimony of Zuckberberg here.
Read the prepared testimony Cook here.
Read the prepared testimony of Bezos here.
Read the prepared testimony of Pichai here.
IN OTHER NEWS, TIKTOK: Newly appointed TikTok CEO Kevin Mayer announced Wednesday that TikTok’s code will be made available for experts to study, as the company pushed back strongly against “rumors and misinformation” around its data security practices and ties to the Chinese government.
“We believe our entire industry should be held to an exceptionally high standard,” Mayer, a former Disney executive who took over as CEO in May, wrote in a blog post. “That’s why we believe all companies should disclose their algorithms, moderation policies, and data flows to regulators.”
He announced that TikTok “will not wait for regulation to come, but instead TikTok has taken the first step by launching a Transparency and Accountability Center for moderation and data practices. Experts can observe our moderation policies in real-time, as well as examine the actual code that drives our algorithms. This puts us a step ahead of the industry, and we encourage others to follow suit.”
The move comes amid increasing concerns on Capitol Hill and in the Trump administration that the company, which is owned by Chinese company ByteDance, may be a national security threat due to its ties to China, where companies are subject to a national intelligence law that requires them to disclose sensitive data.
The House recently approved legislation to ban TikTok from government devices, while Secretary of State Mike Pompeo said earlier this month that the Trump administration is considering banning TikTok and other Chinese apps entirely due to security concerns.
The company pushed back strongly on Wednesday and pointed to concerns that fairness and competition in the marketplace could be limited if TikTok is eliminated, particularly as Facebook prepares to roll out “Reels,” a similar video creation app.
Read more about TikTok’s pushback here.
HOUSE INTEL OPENS ITS DOORS (SORT OF): The House Intelligence Committee voted Wednesday to give all members of the House access to classified information that Democrats say shows evidence of “a concerted foreign interference campaign” against members of Congress ahead of November’s elections.
The evidence, compiled in a “classified addendum,” was submitted to the FBI earlier this month by Speaker Nancy Pelosi (D-Calif.), Senate Minority Leader Charles Schumer (D-N.Y.), House Intelligence Committee Chairman Adam Schiff (D-Calif.) and Senate Intelligence Committee Vice Chair Mark Warner (D-Va.).
The Democratic leaders pointed to it in requesting an immediate all-members classified briefing from the FBI on election threats.
Schiff said in a statement Wednesday that the evidence, which had previously been available to view only for members of the House Intelligence Committee, was being made public for all House lawmakers in response to multiple requests.
“In the absence of an FBI defensive briefing to the Congress, more than two dozen Members have requested access to the classified addendum to our July 13 letter, which addresses the concrete, specific, and alarming reporting that the congressional intelligence committees have seen regarding our elections,” Schiff said.
Read more about the decision here.
FCC TAKES ACTION DURING PANDEMIC: FCC Chairman Ajit Pai on Wednesday said his agency has been working closely with Congress during the pandemic, particularly to improve telehealth and online learning as more Americans stay at home to slow the spread of the coronavirus.
Pai, the keynote speaker at The Hill’s virtual technology event, told The Hill’s Bob Cusack that the pandemic accelerated efforts to pursue remote learning initiatives and required funding “more quickly and in a more flexible way.”
“We wanted to make sure we worked with Congress proactively, and we’ve done that since early March,” Pai said. “I hope that we are able to continue to work with Congress and those members of Congress who are interested in remote learning solutions. Obviously, with the school year coming up, and many schools going virtual, this is a more important issue than ever.”
The Trump appointee also emphasized the importance of telehealth during the pandemic, saying it has had its “moment to shine.”
Read more about Pai’s comments here.
VATICAN GETS HACKED: A cybersecurity firm has concluded that Chinese hackers penetrated the Vatican’s computer networks in recent months during the lead-up to negotiations between the Catholic Church and Beijing.
The attack, reported Tuesday by the Massachusetts-based firm Recorded Future, comes as the Chinese government works to strengthen its control over religious groups in the country. It also comes before September negotiations regarding control over the appointment of bishops and the status of churches in China.
The infiltration targeted the Vatican and the Holy See’s Study Mission to China, a group of informal Vatican diplomats based in Hong Kong who have been negotiating the Church’s status in China, and began in early May.
Read more about the incident here.
BAR EXAM GETS HACKED: The online Michigan bar exam was targeted by a “sophisticated” cyberattack that temporarily took down the test, the vendor offering the online exam said Tuesday.
ExamSoft, one of the three vendors offering the exam that certifies potential attorneys, said the test had been hit by a distributed denial of service (DDoS) attack, which involves a hacker or group attempting to take down a server by overwhelming it with traffic.
“This was a sophisticated attack specifically aimed at the login process for the ExamSoft portal which corresponded with an exam session for the Michigan Bar,” ExamSoft said in a statement on Tuesday.
The company noted that “at no time” was any data compromised, and that it was able to “thwart the attack, albeit with a minor delay” for test takers.
Read more about the incident here.
STATES INVESTIGATE IPHONE SLOW DOWN: Arizona is leading a multistate investigation into whether Apple is violating trade practice laws by deliberating slowing older iPhones, Reuters reported Wednesday.
The Tech Transparency Project, a watchdog group, released documents last week showing the Texas attorney general might sue the Cupertino, Calif.-based company for violations from a multistate probe, but did not specify charges, Axios reported.
The probe has been ongoing since at least October 2018 with investigators requesting information from Apple about “unexpected shutdowns” of older phones along with the company’s throttling of iPhones through power management software, the documents obtained via public records showed.
Read more about the investigation here.
Lighter click: Tech reporters as soon as the CEO hearing is over
An op-ed to chew on: Stop treating internet platforms as the enemy–they’re not
NOTABLE LINKS FROM AROUND THE WEB:
Congress doesn’t get big tech…by design (The New York Times / Shira Ovide)
Google’s top search result? Surprise, it’s Google (The Markup / Adrianne Jeffries and Leon Yi)
Facebook says China is it’s biggest enemy, but it’s also a highly valued customer (Gizmodo / Shoshana Wodinsky)
Anti-NATO disinformation effort uses coronavirus to poke political tensions (CyberScoop / Jeff Stone)