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              A Quick Rundown of Big Tech's Showdown with Congress

   Josh Centers

   On 29 July 2020, CEOs Jeff Bezos (Amazon), Tim Cook (Apple), Sundar
   Pichai (Alphabet/Google), and Mark Zuckerberg (Facebook) were
   (virtually) brought before the House Judiciary Committee for a hearing
   ostensibly about antitrust concerns regarding big tech. However, the
   over five-hour-long spectacle almost immediately turned into a
   [1]Festivus airing of grievances, with Congressional representatives
   hurling accusations at the Big Tech CEOs that ranged from stealing the
   content of smaller websites, blocking smaller competitors from the
   market, censoring conservative viewpoints, and even outright treason.
   As The Washington Post's [2]Heather Kelly succinctly put it: 'They came
   for blood.'

   Big Tech's CEO swearing that their testimony is true and correct to the
   best of their knowledge.

   If you have most of a day to kill, you can [3]watch the entire hearing
   on YouTube. I can't recommend that, because, after an entire afternoon
   of intense, high-speed questions and accusations, I felt like I'd been
   repeatedly hit in the head with a hammer. But unlike most government
   hearings, I can't say that it was boring.

   IFRAME: [4]https://www.youtube.com/embed/WBFDQvIrWYM?feature=oembed

Tech Regulation Seems Inevitable

   After a couple of hours, I reached the conclusion that this hearing
   wasn't actually meant for actual evidence gathering, but to be a sort
   of [5]struggle session. That seemed to have been confirmed by Chairman
   David Cicilline's pre-written (he literally read it from a piece of
   paper) closing statement:

     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.

   His conclusion had been reached long before the hearing, and it was
   clear nothing said there was going to alter that.

   Democrats and Republicans in Washington don't agree on much, but one
   point of commonality is that Big Tech is a problem. The stumbling block
   that prevents any real legislation is that each party thinks tech is a
   problem for completely opposite reasons.

   Republican lawmaker Jim Sensenbrenner asked Zuckerberg why Donald Trump
   Jr. was suspended for sharing a video promoting hydroxychloroquine as a
   COVID-19 cure (Which took Zuckerberg by surprise, since [6]Trump was
   temporarily banned from Twitter, not Facebook), only for Cicilline (a
   Democrat) to later ask why Facebook wasn't doing more to prevent the
   spread of COVID-19 misinformation. The Wall Street Journal [7]explored
   this disparity.

   If a single party were to gain control of the House, Senate, and White
   House in November, it seems likely that tech regulation will be near
   the top of the priority list, but I wouldn't expect it until one party
   is solidly in control.

What Happened at the Hearing

   To start, each of the four CEOs gave lengthy opening statements, all of
   which were published before the hearing in PDFs. Politico has done the
   yeoman's work of transcribing those PDFs [8]into a Web page. Daring
   Fireball's John Gruber published a [9]breakdown and analysis of Cook's
   opening statement. Rob Pegoraro also wrote up his [10]analysis of the
   four statements in Forbes, zeroing in on Cook's statement, saying that
   it 'comes closest to offering outright alternative facts.' (Alternative
   facts, of course, being the present-day euphemism for lies.)

   Apple CEO Tim Cook got off relatively easy, with only a handful of
   questions (the New York Times confirms that [11]he received the fewest
   questions by far), but Apple still took some licks, such as [12]a
   subpoenaed email, in which Eddy Cue said flat-out that the rejection of
   an app from publisher Random House led to the publisher finally joining
   the (then) iBookstore. We'll have more to say about the accusations
   against Apple, and Apple's responses, in a future article.

   Adi Robertson of The Verge wrote a good overall [13]summary of the
   hearing, which summarizes the key exchanges in neat little blocks.

   If you want something even more concise, the BBC breaks the five-hour
   ordeal into [14]five key points:
     * Zuckerberg emails discussing the threat of Instagram
     * Apple shown cutting special deals with Amazon despite claiming to
       treat all developers the same
     * Republican accusations of bias
     * Amazon refusing to give a straight answer about using third-party
       seller data
     * Google being accused of working for China

   The New York Times's take focused on [15]each of the four executives
   and how they did, with high marks to Bezo's office setup and discussion
   of the charge that Apple is profiteering from the COVID-19 pandemic.

The Good Times Still Roll, for Now

   Despite a day that could only be described as 'rough' for the four tech
   giants, it was immediately followed by a day of record earnings for all
   four companies. Of course, Apple pulled off a record Q3 2030, in spite
   of a drop in iPhone sales, supply chain woes, and Apple being forced to
   close stores (see '[16]Apple Q3 2020 Breaks Records While the World
   Burns, Next iPhone to Be Fashionably Late,' 30 July 2020).

   Facebook reported an [17]11% increase in revenue despite economic
   calamity and a mass boycott by major advertisers. Google [18]took a bit
   of a hit, but still beat analyst estimates and reported a quarterly
   profit of $7 billion. Perhaps most stunning of all was [19]Amazon's 40%
   year-over-year revenue jump that enabled it to beat its expected
   earnings per share by a [20]jaw-dropping $8.80. (To give you a sense of
   the magnitude here, it's usually a big deal when a company beats EPS
   estimates by a few nickels.)

   Despite the worst economic meltdown since at least 2008, all four of
   these companies are still rolling in dough, and Congressional gridlock
   practically guarantees that they will slide past US regulators for now.
   It's a [21]different story in Europe, and as we noted, it could change
   in the US after the November elections as well.

References

   Visible links
   1. https://festivusweb.com/festivus-airing-of-grievances.php
   2. https://www.washingtonpost.com/technology/2020/07/29/big-tech-antitrust-hearing-takeaways/
   3. https://www.youtube.com/watch?v=WBFDQvIrWYM&feature=emb_logo
   4. https://www.youtube.com/embed/WBFDQvIrWYM?feature=oembed
   5. https://en.wikipedia.org/wiki/Struggle_session
   6. https://www.axios.com/donald-trump-jr-twitter-temporarily-bars-tweets-ef46bb97-4213-4a13-ab5a-1f4c55b34eb1.html
   7. https://www.wsj.com/articles/after-big-tech-hearing-congress-takes-aim-but-from-different-directions-11596149053
   8. https://www.politico.com/news/2020/07/28/tech-ceo-antitrust-hearing-opening-statement-385233
   9. https://daringfireball.net/2020/07/parsing_cooks_opening_statement
  10. https://www.forbes.com/sites/robpegoraro/2020/07/29/what-tim-cook-left-out-of-his-version-of-app-store-history/#5f7120ca6bf0
  11. https://www.nytimes.com/2020/07/30/business/dealbook/tech-hearing-highlights.html
  12. https://twitter.com/HouseJudiciary/status/1288585924851503108?s=20
  13. https://www.theverge.com/2020/7/29/21335706/antitrust-hearing-highlights-facebook-google-amazon-apple-congress-testimony?scrolla=5eb6d68b7fedc32c19ef33b4
  14. https://www.bbc.com/news/technology-53592751
  15. https://www.nytimes.com/2020/07/30/business/dealbook/tech-hearing-highlights.html
  16. https://tidbits.com/2020/07/30/apple-q3-2020-breaks-records-while-the-world-burns-next-iphone-to-be-fashionably-late/
  17. https://www.cnbc.com/2020/07/30/facebook-fb-earnings-q2-2020.html
  18. https://www.marketwatch.com/story/alphabet-is-only-big-tech-stock-to-fall-after-earnings-as-google-ad-business-declines-for-first-time-2020-07-31
  19. https://www.cnn.com/2020/07/30/tech/amazon-earnings-second-quarter/index.html
  20. https://seekingalpha.com/news/3597948-amazon-eps-beats-8_80-beats-on-revenue-aws-revenue-falls-short
  21. https://www.nytimes.com/2020/07/30/technology/europe-new-phase-tech-amazon-apple-facebook-google.html

   Hidden links:
  22. https://tidbits.com/wp/../uploads/2020/07/CEO-swearing-in.jpg

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