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Apple, Google, Facebook & Amazon hearing: what you need to know - YouTube
Channel: The Verge
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- [Kelly] On Wednesday,
lawmakers squared off
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with the chief executives
of the tech industries
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four most powerful players,
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Amazon's Jeff Bezos, Apple's Tim Cook,
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Facebook's Mark Zuckerberg,
and Google Sundar Pichai.
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Since last June, the
house judiciary committee
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has been engaged in a
sweeping investigation
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of each of the four companies,
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honing in on how they stifle competition
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in the tech industry.
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These companies have
been consolidating power
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for a long time,
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and now, Congress is getting
ready to do something about it.
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- Open markets are predicated on the idea
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that if a company harms
people, consumers, workers,
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and business partners will
choose another option.
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We're here today because that
choice is no longer possible.
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The purpose of today's hearing
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is to examine the dominance of Amazon,
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Apple, Facebook and Google.
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- [Kelly] For years,
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antitrust experts have
been building the case
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against big techs
questionable acquisitions,
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predatory pricing, and copycat behaviors.
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The CEO's had to face those
arguments head-on on Wednesday.
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- Amazon runs the largest
online marketplace in America,
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capturing 70% of all
online marketplace sales.
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Despite a litany of privacy scandals
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and record-breaking fines,
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Facebook continues to
enjoy booming profits,
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$18 billion last year alone.
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Google is the world's
largest online search engine,
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capturing more than
90% of searches online.
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- [Kelly] These are four
very different companies,
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but the committee use Wednesday's hearing
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to show how similar they were
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when responding to competitors.
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In particular, the committee looked at how
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each company controls distribution,
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surveys nascent companies,
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and how they use their market dominance
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to suppress competition.
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- We used to have a policy
that restricted competitors
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from using our platform.
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- Okay Mr. Zuckerberg, these examples
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and supporting documents strongly suggests
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that Facebook does weaponize its policy
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to undermine competitors.
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- Is it true that Amazon
refers to third party sellers
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as internal competitors?
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- We've interviewed many small businesses
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and they use the words like
bullying, fear and panic
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to describe their
relationship with Amazon.
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- That's an enormous amount of power.
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- [Kelly] The committee
argued that companies
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like Facebook and Google
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control how information is disseminated.
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The same goes for Apple and Amazon,
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but when it comes to their
app stores and marketplaces.
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- Apple is the sole decision maker
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as to whether an app is
made available to app users
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through the Apple store.
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Isn't that correct?
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- If it's a native app? Yes, sir.
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If it's a weapon, no.
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- Throughout our investigation,
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we've heard concerns that rules governing
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the app store review process
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are not available to the app developers.
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The rules are made up as you go.
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They are upper trevally
interpreted and enforced,
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and are subject to change
whenever Apple sees fit to change.
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And developers have no choice,
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but to go along with the changes
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or they must leave the app store.
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That's an enormous amount of power.
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Mr. Cook, does Apple not treat
all app developers equally?
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- Sir, we treat every developer the same,
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because we care so deeply about privacy
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and security and quality.
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We do look at every app before it goes on,
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but those rules apply evenly to everyone.
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- [Kelly] Surveillance is key
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to the committee's investigation.
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Throughout the hearing,
lawmakers argue that
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each company has used its
dominance in the tech industry
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to keep a watchful eye
on their competitors.
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Google face tough questions from lawmakers
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who fear that its dominance in search
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allows it to monitor the
web traffic of competitors.
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This information could
result in the company
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ranking competitors
lower in search results.
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- In 2010, Google stole
restaurant reviews from Yelp
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to bootstrap its own rival
local search business.
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- Mr. Pichai, do you
know how Google responded
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when Yelp asked you to stop
stealing their reviews?
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Well, I'll tell you,
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our investigation shows
that Google's response
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was to threaten to delist Yelp entirely.
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In other words, the choice
Google gave you up was,
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let us steal your content
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or effectively disappear from the web.
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Mr. Pichai, isn't that anti-competitive?
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- Congressmen, you know,
when I run the company,
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I'm really focused on
giving users what they want.
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We conduct ourselves to
the highest standard,
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happy to engage, understand the specifics
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and answer your questions further.
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- [Kelly] You can make the same argument
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for Facebook buying Instagram,
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Amazon buying Ring,
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or Apple using the app store
to fend off competing software.
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Has Facebook ever threatened
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to clone the products of another company
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while also attempting
to acquire that company?
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- Congresswoman, not that I would recall.
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- And I'd like to just remind
you that you are under oath
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and there are quotes from
Facebook's own documents.
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Prior to acquiring Instagram,
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Facebook began developing
a similar product called
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Facebook Camera, correct?
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- Congresswoman, that's correct.
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- Did you ever use this very
similar Facebook camera product
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to threaten Instagram's
founder, Kevin Systrom?
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- Congresswoman, I'm not sure
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what you would mean by threatened.
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I think it was public that
we were building a camera app
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at the time, that was a
well-documented thing.
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- In a chat you told Mr.
Systrom that Facebook was
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"Developing our own photo strategy.
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So, how we engage now will also determine
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how much we're partners versus
competitors down the line."
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Instagram's founders seem
to think that was a threat.
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He confided in an investor at the time
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that he feared you would go into
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"Destroy mode" if he didn't
sell Instagram to you.
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- Congresswoman, I wanna
respectfully disagree
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with the characterization.
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I think it was that this was a space
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that we were going to compete
in one way or another.
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I don't view those conversations
as a threat in any way.
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- I'm just using the documents
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and the testimony that the committee
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has collected from others.
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Did you warn Evan Spiegel,
the founder of Snapchat,
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that Facebook was in
the process of cloning
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the features of his company,
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while also attempting to buy Snapchat?
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- Congresswoman, I don't remember
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those specific conversations,
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but that was also an area
where it was very clear
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that we were going to
be building something.
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- [Kelly] Finally, the committee honed in
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on how each platform
allegedly abuses its control
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over current technologies
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to strengthen their market dominance.
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Lawmakers argued that
through self preferencing
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and predatory pricing,
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these platforms have made it difficult
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for small businesses and
competitors to succeed.
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And in one case we heard
from one Amazon bookseller
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who was blocked by selling
books for no apparent reason.
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- We were a top book seller on Amazon.com,
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and we worked day-and-night very hard
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towards growing our business
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and maintaining a
five-star feedback rating.
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Most importantly, this business
feeds a total of 14 people.
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And as we grew, we were
shrinking Amazon's market share
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in the textbooks category.
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So now, in retaliation
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Amazon started restricting
us from selling.
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They started with a few
titles in early 2019,
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and within six months,
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Amazon systematically blocked us
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from selling the full textbook category.
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We haven't sold a single
book from the past 10 months,
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or probably more.
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We were never given a reason.
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Amazon didn't even
provide us with a notice
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as to why we were being restricted.
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There was no warning. There was no plan.
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- She told us that they sent
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more than 500 separate
communications to Amazon,
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including to you Mr.
Bezos, over the past year.
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There was not a single
meaningful response.
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Do you think this is an acceptable way
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to treat someone that you described
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as both a partner and customer?
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- No, congresswoman. And I
would like to talk to her.
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It does not at all to me
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seem like the right way to treat her.
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- [Kelly] Wednesday's hearing
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was really just the beginning.
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In a few weeks, the committee
will publish a final report,
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detailing how large tech firms
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allegedly violate antitrust laws,
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and what they can do
to fix these problems.
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By this fall, Chairman
Ciciline and company
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will release that report,
and the real work will begin.
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Thinking about how Congress
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wants to regulate these companies,
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or if any of them should be broken up.
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- We need to ensure the
antitrust laws first written
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more than a century go
work in the digital age.
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When these laws were
written in Minneapolis
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were men named Rockefeller and Carnegie.
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Their controls in marketplace
allowed them to do
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whatever it took to crush
independent businesses
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and expand their own power.
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The names have changed,
but the story is the same.
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And without objection,
this hearing is adjourned.
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