Everything advertisers need to know about Facebook, Google, Amazon and Apple's big day in Washington
Lawmakers likened Google, Facebook, Amazon and Apple CEOs to modern day robber barons—“cyber barons”— as Congress questioned the four tech titans about their market dominance on Wednesday.
The much-anticipated hearings were held by the antitrust subcommittee in the House of Representatives, and starred four of the most powerful business leaders in the U.S.: Facebook CEO Mark Zuckerberg, Amazon CEO Jeff Bezos, Google CEO Sundar Pichai and Apple CEO Tim Cook. All four companies are subjects of state and federal investigations into their business activities.
“There is a consistent lesson for everyone today,” says Jason Kint, CEO of Digital Content Next, a trade group that often pushes back on the market power of tech companies. “Congress brought to light the power of the access to data by these four companies. It has made any brand that relies on them expendable, particularly if perceived as their competitor which more and more is everyone. Tread lightly or be killed.”
Here are the breakout moments from this historic day in D.C.:
Facebook ad boycott
U.S. Representative Pramila Jayapal raised the Stop Hate for Profit boycott against Facebook this month. Jayapal said the fact that the boycott could not truly dent Facebook raised its own monopolistic concerns. Facebook has 8 million advertisers, but hundreds of them, including major brands like Verizon, Starbucks and Pfizer joined the boycott to protest hate speech on the social network.
“It’s really relevant,” said Jonathan Greenblatt, CEO of ADL, talking about how Stop Hate for Profit reached the corridors of Congress. “When you dismiss your customer, let alone just disregard stakeholders or ignore your user, that’s the kind of monopolistic indifference that I think prompted this questioning.”
One of the most intense lines of inquiry into Facebook surrounds its acquisition strategy, especially how it bought Instagram in 2012. Congress said it had a trove of internal Facebook communications that showed Zuckerberg was interested in market domination when buying the fledging camera app.
Lawmakers questioned how Facebook could use its power to soak up data about rival apps, and then approach them with offers they couldn’t refuse, saying it would clone their products if they don’t agree to selling their companies. “When the dominant platform threatens its potential rivals,” Jayapal said. “That should not be a normal business practice. Facebook is a case study in my opinion in monopoly power.”
Amazon’s market moves
Amazon CEO Bezos was confronted over tactics the company uses to create new products that compete with small sellers on its site. Lawmakers described tactics that were similar to their concerns with the rest of the tech companies; that they use their platforms to essentially spy on competitors and use the data from those rivals to build rival services and products.
In one instance, Amazon has been accused of allowing employees to rifle through competitors’ sales and advertising information when coming up with competing brands. Jayapal quoted a former Amazon employee who said the access to data was like “a candy shop, everyone can have access to anything they want.”
Streaming media wars
U.S. Representative Jamie Raskin questioned Amazon about Fire TV and Amazon Prime video services. Raskin wanted to know how Amazon negotiates with streaming video rivals like WarnerMedia to carry their subscription apps.
Amazon runs both the distribution of the apps through platforms like Fire TV and has competing services like Prime. Raskin said Amazon uses its leverage to force companies like WarnerMedia to share programming if they want access to the distribution pipeline. “Is it fair to use your gatekeeper status role in the streaming device market to promote your position as a competitor in the in the video-streaming market with respect to content?” Raskin asked.
Data and privacy for kids
U.S. Representative Mary Gay Scanlon pointed out how the Federal Trade Commission found that Google collected data on children through YouTube and allowed advertisers to target them. Pichai said he took those concerns seriously, that he has a family, and said the company has invested tremendously to make child safety a priority.
“I’m more concerned you’re investing rigorously in luring advertisers like toymakers Mattel and Hasbro by telling them YouTube is the No. 1 website visited by kids,” Scanlon said. “It sounds like you are targeting kids and then advertisers to bring them on board.”
Reviewing DoubleClick acquistion
U.S. Representative Val Demings delivered the biggest blows to Google, says Tim Derdenger, an associate professor of marketing and strategy at Carnegie Mellon University's Tepper School of Business. “Demings' questions around privacy and the merging of data between DoubleClick and Google, after Google’s acquisition, was perhaps most damaging,” Derdenger says. “This merger raised several privacy flags at the time as it would allow Google to connect personal identities to browser activities.”
As with Facebook, lawmakers are looking back at acquisitions made over the past 10 years, including Google’s 2008 acquisition of DoubleClick. Today, Google owns the software that marketers and publishers use to buy and sell ads. And it also owns the largest marketplace where these transactions occur—an area the Justice Department is investigating.
Demings got Pichai to acknowledge that he signed off on a key decision in 2016 to combine web-browsing activity and personally identifiable data. “The impact of such a revelation was monumental for the advertising industry,” said Derdenger. “The merging of data most likely led to higher ad prices due to the removal of anonymity.”
Apple's app power
U.S. Representative Lucy McBath questioned whether Apple used its power as gatekeeper of the App Store to quash competition. One example was how in 2018 Apple introduced a Screen Time app so parents could monitor childrens' online activity. Apple removed two competing apps from the App Store, McBath said.
“We were concerned about the privacy and security of kids,” Cook said. “The technology being used had the ability to take over the screen and a third party could see what was going on.”
Lawmakers were unconvinced that Apple always had such altruistic motives when making decisions about its App Store, and how it charges many developers a fee that takes up to 30 percent of their revenue, in some cases. “Mr. Cook, I am concerned that Apple’s policies are also picking winners and losers in the app economy and that Apple’s rules mean Apple always wins,” Demings said.