Four of the five largest US technology companies, Amazon, Facebook, Apple and Google, have spoken this afternoon before the Justice Commission of the United States Congress. It has been an atypical intervention. First, because the COVID-19 epidemic has forced the usual rules of this type of event to change. Instead of sitting directly before the congressmen who are part of the Commission, Jeff Bezos, Mark Zuckerberg, Tim Cook and Sundar Pichai have defended their companies by videoconference.
But it has also been due to the very magnitude of the appearance, which many have compared with the government's confrontation with the big tobacco companies in the 90s or Microsoft at the end of the same decade.
These four giants dominate all aspects of digital life, from electronic commerce to the digital identity of the vast majority of Internet users. In Europe and Asia they have had to face heavy fines or change their operating policies, but the US has so far not been concerned about the size of its operations. Its power has grown and been concentrated in recent years without any limitation by the country's government.
A year ago, the Congressional Justice Commission began investigating them to determine if they might be harming free competition. The intervention before Congress is part of this investigation and has forced the managers of the companies, accustomed to operating in the territory without major obstacles, to adopt for the first time a defensive attitude.
Amazon too big
Jeff Bezos, founder and CEO of Amazon, has stressed, for example, that Amazon really only represents 4% of US retail sales and that large stores, such as Walmart , not only have a greater weight in the country's economy. They are growing at a faster rate than Amazon. "There is room in the world of retail for many success stories," he told the commission.
But part of Congress' concern is that its size and the amount of information it has from its customers allows it to sell products much more efficiently than traditional businesses can aspire to. Amazon has been selling consumer electronics products for years (Kindle e-books or Echo speakers, for example) and has begun to strengthen its position in fashion and accessories with its own brands as well.
Bezos has downplayed this part of his business, stating that it is not yet a big risk for more established brands.
The founder of the company, in any case, was favorable to the attitude of the Commission. "Amazon needs to be investigated. We should keep an eye on all the big institutions, be they companies or government agencies. Our responsibility is to make sure we pass the scrutiny successfully," he conceded.
In recent years, several consumer advocacy organizations and some politicians have begun to appreciate the need to split Amazon's business into several independent companies, especially now that the company is developing its own logistics business, creating supermarket chains, and bearing in mind that it also controls a large part of the network infrastructure through its Amazon Web Services business. The company has also been questioned for its predatory practices towards traditional distributors and investigated for labor abuse in its distribution centers.
Apple on the ropes
Apple's problem is similar to Amazon's, but digitally. The Commission considers that its app store, the AppStore, could be suffocating the third-party business . Apple takes between 15% and 30% of all transactions made in the store, including the purchase of digital goods within the apps themselves, a commission that it claims is "similar" to that of other digital stores but that many developers consider disproportionate.
In order to ensure payment, the company has also put in place a series of policies that make alternative operations very difficult. Developers, for example, cannot put direct links to alternative purchasing methods for content. An additional problem is that Apple often competes directly with its own apps and services with third-party developers, but benefits from not having these types of commissions.
Speaking to Congress, Tim Cook, Apple's president, defended the company's attitude, recalling that Apple has only a small part of the mobile phone market and that the AppStore has opened the door for many small developers, creating a platform that It has generated more than $ 1.2 billion in revenue for them since its inception in 2008.
"The only apps that have commission are those in which the developer acquires a customer thanks to Apple," said Cook, who recalled that the company does not take money for free apps or for the income generated by ad-supported apps. "These are much less than 50% or 70% commissions that many developers had to pay before the AppStore for distribution," he added.
Several of these developers have independently testified before Congress as part of the investigation. In recent years, Apple has had to appease many of them due to the frustration generated by the draconian approval process for different apps in the company's store. Unlike Android, where alternatives exist, it is only possible to reach iPhone users (a very lucrative market given the high purchasing power of the average customer) through this store, a fact that could complicate Apple's defense in a lawsuit by monopoly .
Facebook and the Chinese threat
Facebook's absolute dominance of the social sphere thanks to WhatsApp and Instagram acquisitions , and the adoption of many of its competitors' features, such as SnapChat , has forced the commission to also consider the power that Mark Zuckerberg, founder and president Facebook has about public discourse in the United States.
In an election year it is a particularly worrying issue, especially when considering derived problems such as the spread of false news and propaganda . Zuckerberg took advantage of his appearance before Congress to explain some of the protection measures that have been implemented ahead of the elections and to remember the threat posed by the rise of certain social networks of Chinese origin, in a veiled reference to TikTok, which has managed downgrade the strength of Instagram, particularly among younger users.
"China is building its own version of the Internet, focused on ideas very different from ours, and they are exporting that vision to other countries," he explained. Zuckerberg also called on the government to more actively regulate freedom of expression online, an issue that, he says, should not be left to business.
Google, the only search engine
The Commission is also considering whether Google could have become too large a company in the business of web searches and advertising , preventing the normal development of activity for a company that does not want to use its services.
Sundar Pichai, president of the company, assured the Commission that there are alternative search engines on the web, but that Google's success is exclusively due to the quality of its product. He also took advantage of the intervention to point out that his tools have been key to the survival of many small businesses during the COVID-19 pandemic. "Thanks to us, small businesses can compete globally today," he explained.
Pichai noted that the search market has evolved in recent years and direct web search can no longer be viewed as the only competitive arena for alternatives. Voice assistants or search within apps are also a reality and Google has strong competition in these sectors.
Several independent studies, however, have concluded that Google's near-absolute dominance of the advertising market has led to an increase in the price of digital ads and that their size clearly destabilizes the market.
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