Advertisement
Supported by
House Antitrust Panel Seeks Documents From 4 Big Tech Firms
Congress showed the breadth of its investigation into the big tech companies on Friday, making a public demand for scores of documents, including the personal emails and other communications from dozens of top executives.
Republicans and Democrats alike on the House Judiciary Committee, which is investigating the market power and behavior of the companies, sent letters directly to Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook and Larry Page of Google.
The requests called for all communications to and from eight executives at Amazon, 14 at Apple, 15 at Facebook and 14 at Google.
With the request, which was posted on the committee’s website, the lawmakers sent a not-so-subtle message that executives would be held responsible for the replies, and that the investigation would continue to play out publicly. That has the potential of damaging the brands’ reputations.
The companies, once held up as beacons of American ingenuity and business acumen, have been under siege about spreading disinformation, failing to respect users’ privacy and maneuvering to minimize their taxes. In addition, President Trump and other Republicans accuse some of the companies of censoring conservative voices.
Similar inquiries are underway at the Justice Department, at the Federal Trade Commission and by attorneys general of dozens of states. The investigations are just beginning in earnest. How far they will go, what they will uncover and whether any allegations will stand up in court are all uncertain.
But the investigations show the growing angst about the power of the tech companies, which for decades faced little regulation. Now Silicon Valley’s influence on everything from how we vote to how we shop is readily apparent — and yet the technology driving it remains largely mysterious.
“There is this great and growing dependence on technology that we don’t really understand,” said A. Douglas Melamed, a former antitrust official in Justice Department. “And that frightens people.”
House lawmakers were expected to demand internal corporate documents and communications as part of their antitrust investigation. But such demands are often made to a company’s top lawyer. And the committee asked for all communications related to a long list of corporate actions, like Google’s purchase of ad companies, Facebook’s acquisitions of other social networks and Amazon’s handling of its private-label products.
By releasing its requests, the House committee offered a glimpse of the depth of the scrutiny that the companies will face and laid out the lines of investigation. The lawmakers are looking for signs of executives’ intent when they made decisions that harmed competitors, according to a person close to the congressional investigation who spoke on the condition of anonymity because the lawmakers’ plans were private.
The information the committee collects can also feed the other investigations, and help lawmakers more sharply question witnesses under oath in hearings, said William Kovacic, a law professor at George Washington University.
“Those interrogations take on an entirely different tone,” said Mr. Kovacic, a former chairman of the Federal Trade Commission. “This is a significant escalation of the process.”
The inquiries into individual companies are complex; the tech giants span a range of digital markets, including internet search, advertising, e-commerce and social media. And the companies are likely to resist some of the requests, contending they could reveal trade secrets.
The companies will almost certainly try to narrow the scope and reduce the volume of the documents they deliver. But the House investigators have leverage. These are document “requests” but backed by the threat of subpoenas if the companies do not comply.
The communications habits of the individual companies will also play a role in determining how much evidence there is and in what form.
At Amazon, for example, Mr. Bezos writes brief emails to make announcements or delegate, but largely gives feedback and discusses issues in person. He is well known internally for forwarding customer complaints to staffers with just a “?,” leaving teams scrambling to resolve the issue.
He has developed a rigid process for making decisions at Amazon that heavily relies on paper documents — called six-pagers for their length — that lay out the plan and reasoning for a proposed strategy. They often include hefty appendices and are presented to executives in long meetings where they are read and discussed.
But there are numerous examples of tech executives’ correspondence turning up as evidence in legal cases. Emails from Steve Jobs, the Apple co-founder, were key evidence in the Justice Department’s successful lawsuit against Apple for conspiring to raise the prices of e-books.
“Wow, we have really lit the fuse on a powder keg,” Mr. Jobs wrote in a 2010 email to a colleague after Apple opened an e-bookstore that prompted Amazon to change how it sold e-books.
In response to the committee’s requests, representatives of the companies mainly pointed to their previous public statements: They have consistently said they would cooperate with the federal and state investigations, and would seek to demonstrate that they operate in dynamic, highly competitive markets.
In a statement, Representative David Cicilline, the chairman of the subcommittee on antitrust, which is leading the Judiciary Committee’s investigation, called the document requests “an important milestone” in the fact-gathering stage.
Mr. Cicilline also emphasized the effort’s bipartisan nature. The letters to chief executives are signed by Mr. Cicilline, a Rhode Island Democrat; Representative Jerrold Nadler, a New York Democrat and the chairman of the Judiciary Committee; and the ranking Republicans on the committee and the subcommittee, Representatives Doug Collins of Georgia and Jim Sensenbrenner of Wisconsin.
The formal requests for information begin with cover letters to the chief executives, saying the investigators are examining competition in online markets and “whether dominant firms are engaging in anticompetitive conduct.” The letters are accompanied by detailed lists of the requested documents and communications.
It is unclear how much investigative work will become public as the various inquiries progress. At later stages, when investigators are trying to lay the groundwork for a suit, they won’t want to show their hand to a potential corporate defendant.
Such work — collecting more documents, taking depositions, assembling evidence and building the narrative of corporate misbehavior — is best done in secrecy. Major antitrust investigations typically last many months or years.
Sometimes, companies themselves make disclosures about an investigation. Google, for example, said last week that its parent company, Alphabet, had received a mandatory request for information from the Justice Department about previous antitrust investigations.
The House’s document requests indicate that its staff has closely studied the companies.
The request sent to Google, for example, seeks communications to or from senior executives on a series of company moves including Google’s purchase of DoubleClick in 2008 and AdMob in 2011. Those acquisitions helped build up Google’s huge and lucrative ad business.
House investigators also want to see the executives’ communications on Google practices: One request is for communications on its policy on “whether non-Google companies can provide competing ad networks” and other services.
That part of the House inquiry echoes that of the states’ investigation of Google. The Texas attorney general’s office, which is leading that effort, sent Google a lengthy demand this week for information on its ad business, The Wall Street Journal reported on Thursday.
But the House investigation is broader. Its request touches other businesses, including smartphone software, seeking information on Google’s purchase of Android in 2005.
The House requests for the other companies are similarly detailed. From Amazon, the investigators asked for information on fees charged to sellers on its online marketplace, algorithms for ranking products for sale, favored treatment for Amazon-branded products and bundling of marketing benefits for vendors that also use the company’s distribution service, Fulfillment by Amazon.
The House committee asked Apple about its technology for ranking apps in its App Store, its policy on links to non-Apple payment systems and whether iPhone users can choose non-Apple services by default.
The document sent to Facebook asks for extensive internal information about its acquisitions of Instagram in 2012 and WhatsApp in 2014, which were potentially emerging competitors until they were bought.
The House committee asks for company documents related to the “strategic value” and “any antitrust risks associated with acquiring” those companies.
The House document also requests information on any Facebook decisions that limit third-party apps’ access, including a version of the company’s “platform policy,” which it withdrew last year and could be read as a policy intended to keep competing technology off Facebook.
According to the House document, the policy said apps should “add something unique to the community” and continued, “Don’t replicate core functionality that Facebook already provides.”
Advertisement
No comments:
Post a Comment