Four Questions Congress Should Be Asking the Titans of Tech

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On July 27 it’s Big Tech’s turn to face a grilling from Congress. For the first time, the chief executive officers of Apple, Google parent Alphabet, Amazon.com, and Facebook will all testify before the House Judiciary antitrust subcommittee as part of its investigation into digital competition, albeit by videoconference.

Lawmakers will be sorely tempted to ask about topics such as hate speech and misinformation, which, while important, are easily batted away by the West Coast giants. But it’s essential that they focus on competition and get to the heart of the problem—business models.

Here’s one key question they should ask each exec and why they should ask it:

Alphabet Inc. CEO Sundar Pichai: “If I were to place the winning bid for a painting at Sotheby’s, I would know the size of the next highest offer. So when brands want to serve me an ad on one of Google’s platforms, why don’t they know the value of competing bids?”

When brands say how much they’re willing to pay to have Google users see their ads, they have no bargaining power. That’s partly because they have no idea what kind of prices they’re bidding against, and partly because Google controls so much of the online advertising ecosystem. And higher ad costs get passed on to consumers.

Facebook Inc. CEO Mark Zuckerberg: “If I sign up for Facebook or a Facebook platform like Instagram, why must I give permission to let you track my other internet browsing activity?”

This gets at the argument that Facebook is able to impose onerous terms that aren’t in the interests of its users because of its market dominance. And while you can opt out of ad targeting, you can’t refuse to allow Facebook to gather the data.

Apple Inc. CEO Tim Cook: “Because Apple charges a 30% commission when people sign up for a service through the iPhone, the likes of Netflix and Spotify instead redirect new customers to their websites. What costs does Apple incur to justify such a royalty charge?”

The workaround to avoid the so-called Apple Tax means it’s easier for iPhone users to sign up for Apple’s competing streaming video and music services. That may mean Spotify and Netflix lose prospective customers.

Amazon.com Inc. CEO Jeff Bezos: “If a company such as Duracell already sells batteries using your platform, why does Amazon need to offer its own competing product?”

Amazon Marketplace, which sells third-party goods, gives the company deep data on pricing and customer demand. Critics say it uses that to introduce competing, cheaper products, which it then features more prominently in search results. While lower costs might ostensibly be good for customers, reduced competition ultimately leads to less consumer choice and higher prices.
 
Webb is the European tech columnist for Bloomberg Opinion

©2020 Bloomberg L.P.

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