By Ryan Tracy
Congress opened a new front in the government's antitrust probe
of giant technology firms, with House lawmakers on Friday demanding
emails and other records from some of the top chief executives in
technology as they look for evidence of anticompetitive
behavior.
The requests from House Judiciary Committee leaders from both
parties to Amazon.com Inc., Facebook Inc., Apple Inc. and Alphabet
Inc., owner of Google, sets up potential conflicts between tech
leaders protective of their business tactics and lawmakers who want
to scour their corporate records.
Among other requests, the committee asked the firms to provide
by Oct. 14 reams of documents, including executive communications
and financial statements as well as information about competitors,
market share, mergers and key business decisions.
The dozens of executives named in the requests include Amazon
founder Jeff Bezos, Facebook CEO Mark Zuckerberg, Apple CEO Tim
Cook and Google's early leaders Larry Page, Sergey Brin, and Eric
Schmidt.
The companies are likely to resist such carte blanche access,
which could set in motion negotiations with the House committee
over the scope of materials provided, said William Kovacic, former
chair of the Federal Trade Commission.
"If you want everything, everything will take a long time," said
Mr. Kovacic, who is now a George Washington University professor.
The next step will be "intense negotiations between the companies
and the committee about what will be produced," he said.
The House committee isn't subpoenaing the records, though it has
the authority to do so -- a fact that gives lawmakers a stick they
can use in negotiations over access.
Committee Chairman Jerrold Nadler said the requests will aid an
investigation, begun on June 3, into "growing evidence that a
handful of corporations have come to capture an outsized share of
online commerce and communications."
"This information is key in helping determine whether
anticompetitive behavior is occurring," said Rep. Doug Collins (R.,
Ga.), the panel's top Republican. The letters were also signed by
Reps. David Cicilline (D., R.I.) and Jim Sensenbrenner (R., Wis.),
the two senior members of the panel's subcommittee on antitrust
issues.
The companies didn't comment Friday. All four firms have
previously said they provide significant benefits to consumers and
face significant competition. They have expressed willingness to
work with authorities.
The congressional probe adds to scrutiny of the tech giants,
which already face a broad antitrust review by the Justice
Department that could lead to formal investigations. The department
has asked Google for information about previous antitrust
probes.
The Federal Trade Commission, the other top U.S. antitrust
enforcer, has opened an investigation of Facebook, with an early
focus on its key acquisitions, and is privately questioning
third-party sellers who use Amazon's marketplace. FTC Chair Joseph
Simons declined to comment Friday on the House letters.
State attorneys general from both parties recently launched
probes of Google, with an early focus on its advertising business,
and Facebook. Authorities in other countries are also
investigating. Officials have said they would work together on the
overlapping probes, although the extent of that cooperation isn't
known.
U.S. sanctions against the companies, if they come at all, are
likely to be years away and imposed by federal or state enforcers
rather than Congress. Lawmakers can find facts and change laws, but
not bring enforcement actions.
The House probe represents a threat to the firms, even if it
doesn't result in changes to antitrust laws. Documents released to
lawmakers could become public and serve as justification to summon
top executives to high-profile hearings. That would create risks to
the companies' reputations and could fuel political pressure for a
regulatory crackdown.
The House panel's detailed information requests also provide
hints as to how authorities could try to build an antitrust case
against the firms:
-- The request to Alphabet targets 24 products and services,
from advertising technology to YouTube and the Waze navigation app,
seeking executives' communications regarding acquisitions and how
other businesses interact with Google's own services.
-- The lawmakers asked Amazon to provide executive
communications related to product searches on Amazon.com and the
pricing of Amazon Prime as well as fees charged to sellers.
-- Apple was asked for executives' emails about search rankings
in its App Store, whether Apple has discussed copying some
third-party apps and the company's policy on requiring that apps
use Apple's payment systems for purchases, an issue raised by
Spotify Technology SA . The Wall Street Journal has reported that
Apple routinely lists apps ahead of competitors though the
company's apps skirt its own rules for rankings.
Apple, which takes a 30% cut from most apps it sells, has said
the App Store encourages competition and that its cut is justified
by the work its staff does reviewing apps to protect consumers from
malware or other threats. Its apps account for a small fraction of
those available on the store, and it collects money from only 16%
of the 2 million apps available.
-- Facebook received questions about its executives' discussions
around the acquisitions of WhatsApp, Instagram, and the
data-security app Onavo, as well as decisions related to how
third-party apps work on its social-media platform.
Big tech companies have ramped up spending to influence the new
antitrust discourse, as well as other policy debates, none more so
than Google. It is a funder of at least 33 nonprofit groups that
are active in the antitrust debate across the political spectrum,
according to its public policy transparency reports.
Google is also a financial supporter of minority lawmaker groups
such as the Congressional Black Caucus Foundation and the
Congressional Hispanic Caucus Institute. It has given substantial
sums to state attorneys general groups over the last decade or so,
including more than $450,000 to the Democratic Attorneys General
Association and more than $250,000 to the Republican Attorneys
General Association, according to data gathered by the Center for
Responsive Politics.
Its Google NetPAC contributed about $1.9 million to federal
candidates and committees in the 2017-2018 election cycle,
according to federal data, compared with about $1.8 million for
Amazon's PAC and about $721,000 for Facebook's. Amazon leads the
group in spending for the 2020 election to date. Apple doesn't have
a PAC.
Amazon in 2017 gave $12,500 each to the Democratic and
Republican attorneys general associations. For 2018 it bumped that
up to $50,000 each
Staffers on the Judiciary Committee are simultaneously dealing
with other time-consuming issues, most notably potential
impeachment proceedings. That said, the bipartisan nature of
Friday's letters reflects broad support for the probe.
Congress has a history of going after emails, although those
from top-level executives tend to be less revelatory because
cautious higher-ranking people typically send few such online
communications, investigators have found. In 2010, Senate
investigators released an email from then-Goldman Sachs Group Inc.
Chief Executive Lloyd Blankfein in which he appeared to acknowledge
that the firm dodged a bullet in the financial crisis by betting on
a market decline through taking "short" positions.
But generally, emails from lower-level employees have led to
more criticism. A 2010 probe of the BP PLC oil spill made headlines
when a lower-level employee said in an email "who cares" about a
shortage of parts on a drilling rig before it exploded. In the
General Motors Co. ignition-switch crisis, the company pinned the
blame largely on a single engineer who received emails warning him
of problems.
This isn't the first time that Congress has probed whether large
tech companies are stifling competition. In 2011, the Senate
Judiciary Committee hauled Mr. Schmidt, former Google Inc.
executive chairman, for questioning related to whether the company
was abusing its dominance of online searches by steering users
toward its own services at the expense of rivals. But he emerged
largely unscathed, and amid a weak recovery from the worst
recession since the Great Depression, Congress had little appetite
to pursue a probe into a driver of the U.S. economy.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
September 13, 2019 14:13 ET (18:13 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Aug 2024 to Sep 2024
Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Sep 2023 to Sep 2024