Amazon, Facebook and Google to Face Another House Inquiry
(Bloomberg) -- Big tech firms are about to face yet another congressional headache.
House Small Business Committee Chairwoman Nydia Velazquez plans to invite Amazon.com Inc., Alphabet Inc.’s Google and Facebook Inc. to face questions from her committee on how the companies may be damaging the competitive landscape for small businesses.
The hearing, which the committee hopes to hold in late October or early November, would be the latest front in the government’s probe of the companies that already face investigations from the House Antitrust Subcommittee, the Federal Trade Commission and the Justice Department.
“Chairwoman Velázquez believes that small businesses deserve to compete on a level playing field and hopes the hearing will be an opportunity for the committee to examine how small businesses are faring given the dominance of big tech companies in areas ranging from e-commerce to internet traffic,” Evelyn Quartz, a spokeswoman for the New York Democrat, said in an email.
In the hearing, Velazquez plans to home in on issues small businesses face when trying to compete with or promote themselves on the companies’ platforms. That’s a central issue in congressional and federal investigations of Amazon, whose online market is used by thousands of third-party sellers to reach customers. The inquiry could give ammunition to critics who complain that big internet platforms are abusing their dominance to harm competition.
The committee also plans a second panel with testimony from small businesses affected by the companies.
Amazon, Facebook and Google didn’t immediately respond to requests for comment.
The planned hearing is one more layer of scrutiny on top of a growing pile of hearings, pressure campaigns and formal investigations the companies face. The FTC and the Justice Department have already started potentially overlapping inquiries into whether large technology firms have violated antitrust law. The House Antitrust Subcommittee, led by Rhode Island Democrat David Cicilline, has held hearings and submitted intensive document requests to tech companies about potentially anti-competitive practices.
Velazquez’s hearing will give lawmakers yet another opportunity to probe and critique the companies -- this time on potential harm to small businesses, a constituency that carries broad bipartisan support.
It’s unclear whether any legislation or further investigations may stem from the hearing, but lawmakers’ past critiques of the companies offer some clues about what they may focus on.
Velazquez in June wrote a letter to Amazon calling a Bloomberg report that the company planned to stop placing bulk orders with thousands of smaller suppliers “deeply troubling.” She wrote that the change “could jeopardize small wholesale businesses from continuing to do business with Amazon and affect millions in sales and hundreds of thousands of jobs.”
More than 50,000 small and medium sized businesses exceeded $500,000 in sales on Amazon in 2018, according to a company report. However, Amazon sometimes changes the way product-search results are displayed or even decides to sell or manufacture the product itself, which can have a dramatic impact on the bottom lines of small businesses.
On Google, some small businesses have complained that the company displays advertisements next to their search listings, directing potential customers to competitors or to delivery apps that charge hefty fees. Facebook has also sometimes faced criticism for changes to the algorithm governing its News Feed that can dramatically reduce the web traffic some businesses receive.
Facebook is slated to have a busy fall before Congress. Also in October, the House Financial Services Committee is expected to question Chief Operating Officer Sheryl Sandberg on issues including its plan to create a new digital currency called Libra.
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