Please Stop Big Tech, Small Rivals Tell Lawmakers

Until Friday, few executives had complained in public about how Google, Apple, Amazon and Facebook hurt their businesses.

f t # e
Washington, D.C.-, January 17, 2020 | comments

For all the criticisms directed at the largest tech companies in the last couple of years, few smaller rivals have been willing to speak up publicly.

That changed for a couple of hours on Friday, as executives at four businesses pleaded with federal lawmakers to rein in Google, Facebook, Apple and Amazon.

At a congressional hearing in Boulder, Colo., top executives of Sonos, PopSockets, Basecamp and Tile testified that the biggest technology companies hindered their businesses. Their stories varied, but they shared a theme: The tech giants have used their powerful positions in search, e-commerce, online ads and smartphones to squeeze out them and other rivals.

Tile, which makes small tracking devices, said Apple had put up hurdles for Tile’s smartphone app that didn’t apply to Apple’s competing product. Sonos, the high-end audio company, said Google had copied its patented speaker technology and used its dominance in search to enter new markets. PopSockets, which makes smartphone grips, said Amazon “bullied” it into sales agreements and ignored complaints about counterfeits on the retail platform.

 

“It’s like playing a soccer game,” said Kirsten Daru, the vice president and general counsel of Tile. “You might be the best team in the league, but you’re playing against a team that owns the field, the ball, the stadium and the entire league, and they can change the rules of the game in their own favor and anytime.”

The executives’ criticism provided lawmakers on the House antitrust subcommittee, which conducted the hearing, with personal stories about the power and influence of Silicon Valley’s biggest companies. Last year, the House opened a broad investigation into whether those large companies violated antitrust laws. At the same time, the Justice Department and the Federal Trade Commission opened separate competition investigations into Amazon, Facebook Apple and Google. In addition, nearly all 50 states are investigating whether Facebook and Google engage in anticompetitive practices.

Despite all of those investigations, few companies have come forward to complain in public. The House antitrust subcommittee has interviewed dozens of companies that accuse the big tech companies of unlawfully stifling competition. Most have insisted on confidentiality. This month, Sonos sued Google on allegations of antitrust violations and patent infringement, in its first pointed action against the company.

Lawmakers at Friday’s hearing, which was held in Boulder in part to draw more national attention to the House investigation, noted how rarely start-ups spoke out about their complaints, and encouraged them to keep making their case.

“Thank you for your testimony, and quite frankly your courage to be here today,” said Representative Ed Perlmutter, a Democrat from Colorado. “Because when you take on dominant players, whether it’s Amazon, Google, Apple or Facebook, you’ve got to have a little trepidation.” 

 

Representative David Cicilline, the Rhode Island Democrat who leads the antitrust subcommittee, thanked the executives for “describing economic retaliation.”

The tech companies vehemently deny that they illegally harm competition. Google, for instance, has disputed all the claims made by Sonos and said it would fight the lawsuit.

The hearing capped a difficult week for big tech, which was the target of fierce criticism by top politicians. Much of that anger was directed at Facebook, which has refused to police lies shared by politicians on its social network.

Speaker Nancy Pelosi said on Thursday that Facebook “just cares about money” and that the company intended “to be accomplices in misleading the American people.” Former Vice President Joseph R. Biden Jr., who has been the focus of false ads by President Trump’s re-election campaign, told the New York Times editorial board that Facebook and other internet companies that allow the spread of misinformation on their sites should lose a critical liability shield for internet platforms. He also personally criticized Mark Zuckerberg, Facebook’s chief executive.

“I’ve never been a big Zuckerberg fan,” Mr. Biden said. “He knows better.”

The hearing on Friday focused entirely on whether the big companies dominate markets. The executives, who argued at length that companies like Google and Amazon unfairly hurt their businesses, received little pushback from lawmakers.

David Barnett, the founder of PopSockets, said Amazon had pressured it to lower listing prices or else allow unauthorized resellers to sell the product. He also alleged that Amazon allowed a flood of counterfeits to compete with PopSockets on the site to pressure the company into spending more on marketing.

It is “bullying with a smile,” Mr. Barnett said.

David Heinemeier Hansson, the chief technology officer and a co-founder of Basecamp, a provider of online productivity tools, said Google’s domination of the search industry forced his company to go online with the advertising titan’s demands and decisions.

 

“The internet has been colonized by a handful of big tech companies that wield their monopoly powers without restraint,” Mr. Hansson said.

Both Republicans and Democrats appeared to sympathize with him and the other executives.

“I think it’s clear there’s abuse in the marketplace and a need for action,” said Representative Ken Buck, a Republican from Colorado.

Mr. Cicilline said he didn’t expect the executives or their companies to suffer any economic retaliation from the giants for testifying. “But if you do in any way, it would be of tremendous interest to this committee,” he said.

Content originally published by The New York Times on January 17, 2020.
f t # e

Stay Connected

Sign up to get Ed's newsletter delivered straight to your inbox.

Upcoming Events

See the upcoming events on Ed's calendar.

View More