Why The Tech Giants Will Walk Away From Today’s Hearing In Great Shape
The reality behind the scenes: a preordained outcome
Hello, and happy hearing day,
Jeff Bezos, Tim Cook, Sundar Pichai, and Mark Zuckerberg are just starting to testify as part of the House Judiciary Committee's antitrust inquiry into their companies (you can watch here). This is a major event, yet much of the popular discussion will treat it as sport. Commentators will focus on who scored points, who had the best questions, the worst answers, and the best Zoom background. Some will also consider the issues.
My mission with Big Technology has always been to cut through the noise and discuss the game behind the game. So today, I’m going to share a special edition of the newsletter with some quick points about what’s really happening. In short: No matter what’s said, the tech giants are going to walk away with little threat from Congress.
Here’s what’s worth keeping in mind today:
A noble purpose
This hearing is part of Congress’s investigation into whether the archaic US antitrust laws need updating. Congress is considering what antitrust means when companies offer their services for free, but shakedown small and mid-sized businesses through their marketplaces. Apple’s App Store, Amazon.com, and Facebook and Google’s ad exchanges all fit this category. Society becomes unstable when the middle of the economy crumbles — and the tech giants often prey on that middle.
What Congress will do
The short answer is Congress will do nothing. At least in the near term.
Figuring out how to update US antitrust laws will be difficult. But it will be easy compared to passing legislation in this Congress. Even though anti-tech giant sentiment is bipartisan, Republicans and Democrats simply don’t work together today. Their gerrymandered districts make them impervious to accountability. So they snipe, insult, and tweet. Add a health crisis, an economic crisis, and a contentious election to the mix, and antitrust is now toward the bottom of the agenda. This makes near-term, concrete action extremely unlikely.
What US regulators will do
Congress may refer some of its findings to the regulatory agencies, but those agencies aren’t able to take on Big Tech in a meaningful way due to resource constraints. The FTC all but admitted it was overmatched in its battle with Facebook when the company agreed to a $5 billion settlement that didn’t slow it down. “We got a lot of relief that we couldn’t otherwise have obtained and that is in some small part due to not going further,” FTC enforcement director Jim Kohm said at the time. Will Congress look inward and push to empower these agencies? I’m waiting.
The election factor
If Joe Biden wins, and the Democrats capture the Senate, and keep the House, then we could see some action on tech-antitrust within a few years. Biden would first need to focus on putting this broken country back together, however. And that’s a lot of “ifs.” The same would be true if the results go the other way.
The bottom line
Today’s hearings will make the Tech Giant CEOs think “Will I have to explain this to Congress?” the next time they consider doing something nefarious. So that’s a win. It’s good these hearings are happening. But that’s pretty much where it starts and ends.
That said, enjoy the spectacle. It’s not every day that Bezos, Cook, Pichai, and Zuckerberg face a grilling from people they fear. There’s some justice in that.
Tomorrow, I’ll be back with my weekly Thursday article about the US government and Big Tech’s unhealthy interdependence. Please spread the word, and always feel free to hit “reply” to share a response directly in my inbox.