Washington vs. Big Tech: Taking on the Trillion-Dollar Club

Squawk Pod


Lawmakers came out swinging yesterday against Amazon Apple, Alphabet and facebook at an historic antitrust hearing held with CEOS, Jeff bezos, Tim Cook Sundar Pichai, and Mark Zuckerberg. Over remote Webcam, you swear or affirm under penalty of perjury that the testimony you out to give his show incorrect. The Best of your knowledge information and belief. So help you God. Yes. Let the record, show the witnesses answered informative. Thank you, and you may remain seated members of the House Judiciary Committee's antitrust subcommittee used charged language like too much power, Anti Competitive Acquisition and emperors as they aired their concerns about those four giant platforms. Here's the subcommittee chairman. Democrat, Peterson, Selene, a Rhode Island, our founders would not bow before king, nor should we bow before the emperor's of the online economy and ranking member? Wisconsin's Jensen. Brenner. Pointing out. Political concerns about size does big tech have a bias serves our consumers to? The need the protection of the antitrust laws. Both sides of the aisle had their opportunity to highlight this core conflict between Washington and Silicon Valley that antitrust enforcement can fix whatever is challenging or concerning about big tech. The CEO's for their part. Say We haven't squashed the competition. Here's Pichai Cook and Zuckerberg competition drives US team. needs to better products, Noah choices and more choices for every customers have a lot of choices in their products space fierce competition companies like Samsung, G. while way in Google has built successful businesses with different approaches. We okay with that. Our goal is the best, not the most I recognize that there are concerns about the size and power of tech companies. Now, we're services are about connection. Our business model is advertising and we face intense competition in both Amazon's ECOMMERCE dominance sparked a few intense moments after CEO Jeff bezos. The richest man in the world with a personal fortune of about one hundred and eighty billion dollars didn't get a question until nearly two hours into the hearing apparently due to a tech glitch. But then the pressure was on basis was asked about undercutting diapers, dot com before buying it Amazon's counterfeit problem whether Alexa favors Amazon's own products, many times. He didn't have the answer I. Don't remember that at all. I remember is that we we we'd match competitive. I believe we follow diapers cog, and this is eleven years ago I. Think we do is offer to get you information if you. Get it to your office for you read that article, but I didn't remember that piece of that I apologize for that I don't know the specifics of that situation, and I would be happy to give back to your office with more information about that. These questions for Basil's and Amazon strike at the heart of the antitrust that had been building for years as these four companies that we use every day every single day grow and grow larger with a combined market. Market cap of about five trillion dollars. If they were their own stock exchange, they'd be the fourth largest in the world. Here's vice chair. Joanna goose to facebook's mark. Zuckerberg strikes me over the course of the last several years. FACEBOOK has used. It's market power to either purchase or replicate the competition and facebook facebook. MESSENGER WHATSAPP instagram are the most now downloaded APPs of the last decade your company. Sir, owns them all and we have a word for that words monopoly. My Take Away I. Don't know I. Don't know if you guys watched I thought some of it was fascinating. A couple of questions, not not a lot of great questions thought. There's a lot of some good answers, some not good answers, but I didn't think that there was a major takeaway that all of a sudden. You know Washington was Gonna come down hard on these companies and there was evidence that was presented. That was gonna GonNa, create that challenge. I thought the most challenging piece of of news out there. But I think we've seen it before was instagram and facebook in some of the emails back and forth. Did you ever use this very similar facebook camera product to threaten instagram's founder Kevin side-stream? Congresswoman I'm I'm not sure what you mean by threatened I. Think it was public that we were building a camera up at the at the time in a chat. You told, MR, science that facebook was quote developing our own photos strategy. So how we engage now, we'll also determine how much were partners versus competitors down the line instagram's founders seem to think that was a threat he confided confided in an investor at the time that he feared you would go. That you would go into quote destroy mode if he didn't sell instagram to you, one of respectfully disagree with the characterization. Really dug into the emails and didn't take them out of context I. Thought, you'd have a hard case to make. Yeah, I, mean. I thought on on the point with facebook is easy Riley points to the quite a few different lawmakers went off the Mark Zuckerberg on on the topic of their competition practices whether he considered some of those companies they've taken over I, walk up and Instagram as competitors at that point which knowledge that they had been, which kind of course, a bit of a stir. Has Been Engaged in purchasing competition I, in some cases, replicating competition in some cases eliminating your competition, would that be a fair statement? The space of people connecting with other people is a very large space and I would agree that there were different approaches we took to to addressing different parts of of that space, but it's all in service of building the best services. Likewise said that they had tried to copy some of the particular tools that other rivals whether they bought them or not use including. Of course, the stories feature snap, which I thought was quite interesting, but Geo Point, Andrew as to whether we we conclude from yesterday that significant action from no makers is imminent. Even if we go to a sweep at the next election, the market didn't take that conclusion on those times. Talks hit session highs during the hearing, but the interesting dichotomy which goes to the question. Of, how much we managed to watch I watched as much as I could apart from when fed chair Jay Powell speaking and I watch that instead, and you had one side of Washington of goes up pressuring these tech stocks. The other part saying that we're hit as long as it takes, we're not even thinking about thinking about thinking about raising rates and not allowed old. Not just the textbooks. And close at a pretty strong session yesterday can I? Can I just ask whoever buys a company? That's not a competitor I mean. News the idea that you would buy a competitor when. Merger has ever taken place among a company that does an entirely different area that you wouldn't consider a competitor. Watching. This yesterday was complete theater just like it often is with the these congressional hearings. At. The beginning, they were asking questions and not even letting them answer. So this was really about giving Congress people their time to have their six minutes to talk and to go through with some of these things, I didn't feel like learned a lot under yesterday. I couldn't take my eyes off it when I was watching it, but it was theater. Classic, you'll take the time comments from lawmakers when they get me on. So they wanted to I, totally agree on that, but I would say compared to say twenty eighteen when Mark Zuckerberg had to go to face, they'll make on his own. Better prepared than they had even if it was then making arguments rather than letting. The answer, their questions, they made better arguments. They brought up more pertinent facts whether that was is Amazon. Abusing small sellers on this. Platform. In two, thousand, thirteen, it was reported that you instructed Amazon employees to approach discussions with certain business partners, and I quote the way a Cheetah would pursue a sickly gazelle is the gazelle projects still in place and as Amazon pursue similar predatory campaigns in other parts of its business. I cannot. comment on that because I don't remember it. Is. Apple misusing the margins, it takes on on the APP store. Apple from increasing its commission to fifty percents we serve. We have never increase commissions in the store since the first day at operated in two thousand eight. From doing so is it? No, Sir I disagree strongly with that, there is a competition for developers just like there's a competition for customers. So I think they were getting it the crux of some of the issues. But as we I think all concluding I, it didn't spell imminent danger for the tech stocks just because of that air. Just one note though on the competitor. Comment there or issue that you were just discussing Becky, which is an interesting one. We often talk on the show about how being a monopoly unto. itself is not illegal, and you just commented that you can't buy from everybody wants to buy competitor. Interestingly, if you're deemed a monopoly which is not illegal, but you have that market power, it actually is illegal to buy a competitor, and so if you really go back and read mark, Brooks emails even. Even about the instagram transaction, he actually even doubled back on one of his emails because I. Think he realized that given the power that having that industry depending on how you define it that he had to rewrite the email later to suggest no, I'm not trying to do this. He was by the way thinking about this, even to two, thousand, ten, you can. Almost, if you look through emails, you can sort of see how tracking in his mind. The Way He's thinking about it. So yes, everybody always wants to buy. But Inter stands at the size and scale that these companies are. Now, it's very hard to do that actually. Hit His. Answer. was that the FTC had all the same information that they had at that point in the FTC Peruta

Coming up next