A blog of the Science and Technology Innovation Program
Here is a snapshot of the last issue of Flagged for the summer, our email newsletter looking at disinformation. We鈥檒l be back in early September to flag the most important updates in news related to online disinformation.
A that gathered and reviewed culminated in a heated, nearly six-hour-long hearing on 鈥淥nline Platforms and Market Power鈥 between lawmakers and Silicon Valley鈥檚 most powerful executives. Last week, Mark Zuckerberg of Facebook, Jeff Bezos of Amazon, Sundar Pichai of Google鈥檚 Alphabet, and Tim Cook of Apple appeared virtually before the House Judiciary Antitrust Subcommittee to respond to allegations of anti-competitive business practices.
The four executives represent four of the five most highly valued companies in the U.S. (Microsoft is not currently being investigated as part of the probe), and while the watershed Big Tech hearing drew comparisons to the in the 1990s, digital platforms aren鈥檛 losing steam anytime soon鈦 -- the has only shown Americans鈥 increasing reliance on these tech giants.
Americans still have overwhelmingly favorable opinions of tech giants, even while holding . The inquiry into their practices attempted to grapple with this dichotomy, as well as alleged anti-conservative bias, complicit behavior in foreign interference campaigns, and connections with Chinese government institutions. Overall, given the breadth of issues discussed, the hearing was less incisive than it might have been if it focused on a single platform or single issue at a time, underlying how deeply Big Tech鈥檚 influence permeates daily life.
Here鈥檚 what each executive discussed as they faced lawmakers:
The subcommittee focused on two areas of Facebook鈥檚 business practices: its digital advertising and acquisition of competitors. Lawmakers argued that Facebook鈥檚 -- from engagement metrics to detailed information about preferences, demographics, and interests -- gives the company a competitive advantage. Targeting advertisements with this data threatens not only antitrust regulations but also and . Zuckerberg downplayed Facebook鈥檚 dominance in advertising but failed to account for this critical asset.
also drew concern about competitiveness, namely the acquisitions of Instagram in 2012 and WhatsApp in 2014. In response to his own email naming Instagram as a 鈥渢hreat,鈥 Zuckerberg argued that there was no guarantee at the time of acquisition that Instagram would become so popular, asserting that 鈥渢he acquisition has done wildly well...because we invested heavily in building up the infrastructure.鈥 However, Zuckerberg鈥檚 statement raised the question of whether Facebook can truly be competitive while also being a key enabler of success for social media start-ups.
Zuckerberg attempted to distract from discussion of Facebook鈥檚 acquisition practices by underlining a common adversary that Members mentioned throughout the hearing: China. Zuckerberg amplified , arguing that if Facebook does not retain dominance, Chinese tech companies will. He highlighted the emergence of Chinese tech leaders over the last decade and suggested that breaking up tech companies would undermine U.S. leadership in the tech sector.
Zuckerberg also rejected responsibility for and hate speech, emphasizing Facebook as a place to share ideas and connect friends and family, and to regulate Big Tech. Zuckerberg also claimed Facebook 鈥...proactively identif[ies] 89% of the hate speech we take down before it is even seen by other people.鈥 This statistic, however, is misleading, as it only cites 鈥渉ate speech鈥 that the company has identified.
Lawmakers asked Cook nearly just over directed to his counterparts, mostly regarding Apple鈥檚 management of its App Store. Lawmakers were quick to point out that Apple could at any moment decide to increase the 30% commission Apple charges app developers to put their content in the App Store, and push competitors out. Further, lawmakers and companies ;鈥 as companies began to switch to virtual services at the start of the pandemic, Apple began to charge companies like Class Pass and Airbnb a 30% commission fee for sales.
These anti-competitive practices also played out in 2018, when Apple kicked . Cook defended the ban as a protection of kids鈥 privacy. However, shortly after removing the apps, Apple introduced its own competitor Screen Time, promoting the app directly to Apple product users who were upset with the removal of the other parental control apps. Six months later, Apple allowed the competitors back onto the App Store, but the damage to their businesses was done. Similarly, all payments on the App Store are processed through Apple鈥檚 own system, which Rep. Hank Johnson (D-GA) noted would provide Apple with the data they need to assess what competing apps could be lucrative. These examples demonstrate that Apple has the power to similarly identify and eliminate competitors in other fields.
In his , Amazon CEO Jeff Bezos took the opportunity to introduce himself in his testimony. Bezos鈥 argument described Amazon as an economic engine for the U.S.: creating jobs, supporting small businesses, and earning American consumers鈥 trust.
Bezos seemed like the odd-man-out for part of the hearing, waiting for two hours before receiving any questions from lawmakers. The committee invited Bezos in May to testify after revelations from a revealed that Amazon uses private third-party seller data to develop its own private-label AmazonBasics products. This disclosure contradicted to Congress that this practice does not happen. The EU into the issue last month. When Rep. Pramila Jayapal (D-WA) of Seattle鈦 -- home to Amazon鈥檚 headquarters鈦 -- pressed Bezos on the issue, he the charge. Instead, he explained that Amazon has policies against using third-party seller data to decide which private-label products to make, but he could not guarantee the policy was not violated. He said an internal investigation is underway.
Other questions for Bezos revolved around Amazon鈥檚 and how it in their online marketplace. These topics are also under scrutiny in led by FTC regulators.
One important topic was not discussed at this hearing: not only is Amazon a large retailer, it is the world鈥檚 largest cloud computing provider. The FTC from Amazon鈥檚 marketplace services to its cloud services late last year.
Sundar Pichai, CEO of Google鈥檚 parent company Alphabet, received the most scrutiny amongst the four executives and fended off criticism from both sides of the committee. Democrats zeroed in on user privacy and Google鈥檚 preeminence in online search, digital advertising, and smartphone software. Rep. Val Demings (D-FL) took aim at Google鈥檚 user privacy practices, specifically its to merge data from ad company DoubleClick, which it acquired in 2008, with Google account data. Demings characterized this decision as 鈥.鈥 In 2007, Alphabet鈥檚 founder Sergey Brin pledged to the Senate Judiciary Antitrust Committee that the company would not, and contractually could not, merge the personal data. Pichai to Demings that he signed off on the 2016 decision anyway when he became CEO in 2015.
Questions from Republicans strayed from topics of antitrust, and instead honed in on Google鈥檚 commitment to 鈥.鈥 They challenged Google鈥檚 decisions to not pursue defense contracts with the Pentagon鈦 -- including its drone strike advancement plan and cloud computing deal (JEDI) -- while continuing to pursue and work on its censored search engine, Dragonfly (). They requested a commitment from Pichai that Google would not adopt 鈥.鈥
A snapshot of headlines and story updates from this week.
President Trump is expected to deliver an executive order to Chinese internet company ByteDance to sell off TikTok鈥檚 U.S. operations. This news comes after the U.S. Treasury Secretary Steve Mnuchin a CFIUS investigation into national security risk associated with TikTok. Secretary Mnuchin said the committee would issue a recommendation on the app this week to the president. While it remains to be seen if President Trump has the authority to order action from a foreign company, Microsoft is currently with TikTok about a possible acquisition. This entire situation leads us to wonder: How will the U.S. government handle the next Chinese-owned app that goes viral in the U.S.?
Google will place further limits on deceptive ads before the November election on all its platforms, including Youtube, starting September 1st. who attempt to hide their identity. Even more important are measures to prevent foreign entities from promoting ads that promote access to illegally obtained documents, including stolen campaign emails. As Congress continues to debate over how it will address foreign election interference, protection of electoral discourse falls to Big Tech.
The Myanmar government accused journalists of accepting bribes to disseminate 鈥渄isinformation and misinformation.鈥 Myanmar, which is holding its general elections in November, claimed journalists accepted anti-government groups鈥 bribes due to pandemic-related financial hardships, providing no evidence. The appropriation of the terms 鈥渄isinformation and misinformation鈥 toward legitimate journalists demonstrates a pattern in how Myanmar鈥檚 government mishandles government criticism. Earlier in the pandemic, the Myanmar government ordered phone operators based on the country鈥檚 telecommunications law, which allows blocking sites in an 鈥渆mergency situation.鈥
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