The CEOs of Facebook, Google, Amazon and Apple defended the size and power of their companies in front of a U.S. congressional subcommittee on Thursday. 

Their unprecedented testimony—which marked their first-ever joint appearance before Congress, and the first such appearance for Amazon CEO Jeff Bezos—comes more than a year into the U.S. House Judiciary Committee’s antitrust subcommittee’s investigation into Google and Facebook’s ad-market dominance, Amazon’s share of e-commerce and Apple’s alleged abuse of its App Store to hurt rivals. All four firms have seen their market capitalizations soar during the pandemic. They’re also facing numerous antitrust investigations around the world.

The virtual hearing, which lasted about five and a half hours, was filled with pointed and at times pugnacious exchanges, with lawmakers revealing key details from at least 1.3 million documents Congress has collected from the firms. 

The Logic watched every moment of the hearing. Here are the key takeaways.

Democrats question firms’ size, Republicans claim anti-conservative bias

Democratic subcommittee chairman David Cicilline focused his questions on the antitrust implications of the firms offering free services to consumers, but charging companies seeking to access them. 

Republican Representative Jim Jordan focused his inquiries into the tech firms’ supposed anti-conservative bias. 

“Our founders would not bow before a king,” said Cicilline. “Nor should we bow before the emperors of the online economy.” Jordan, by contrast started off with, “What’s not great is censoring people, censoring conservatives and impacting elections.”

The clash over how to question the CEOs included Democratic Rep. Mary Gay Scanlon characterizing some Republican questions as a “fringe conspiracy theory,” as well as multiple shouting matches between lawmakers. 

Overall, several Democratic representatives signalled an interest in overhauling antitrust laws and making it harder for the four firms to buy smaller rivals. “These companies, as they exist today, have monopoly power. Some need to be broken up and all need to be properly regulated and held accountable,” said Cicilline. Multiple Republican lawmakers focused their suggestions on how to ensure greater reach for conservative voices. 

Internal documents used to challenge CEOs on anti-competitive behaviour

Lawmakers collected over one million documents from the four companies in the lead-up to Thursday’s testimony, releasing key ones throughout the hearing, including a 2012 email from Mark Zuckerberg stating his firm “can likely always just buy any competitive startups, but it’ll be a while before we can buy Google.” In another email from the same year, Zuckerberg wrote to Facebook’s then-CFO that by purchasing Instagram, “what we’re really buying is time.” Zuckerberg said the US$1-billion acquisition helped Instagram grow larger than it otherwise would have, and also improved Facebook’s product. 

Amazon CEO Jeff Bezos was questioned for writing, “We’re buying market position, not technology,” in the lead-up to the company’s acquisition of Ring. He said looking to acquire market position is a standard reason for purchasing firms. The CEOs weren’t only up against internal documents. Committee members repeatedly referenced testimony from rivals including Yelp and Snapchat. Zuckerberg was asked if he told Snapchat CEO Evan Spiegel that Facebook was looking to buy that company, while also copying some of its features. He said he didn’t remember the conversation. 

CEOs cite broader market landscape in defense of competition

Bezos highlighted the fact that third-party sellers make up about 60 per cent of sales on Amazon. He also said Amazon accounts for less than one per cent of the US$25-trillion global retail market and less than four per cent of U.S. retail. Democratic Representative Joe Neguse asked Bezos how much of the e-commerce market his firm controlled, and they both cited numbers between 30 and 40 per cent. 

Alphabet CEO Sundar Pichai said competition in ads has helped lower online advertising costs by 40 per cent over the last 10 years. Apple’s Tim Cook said the smartphone industry is competitive: “I would describe it as a street fight for market share in the smartphone business.”

On the other side, lawmakers rolled out their own data, stating that Amazon controls 70 per cent of all online marketplace sales in the U.S; Google controls 90 per cent of online search; and 63 per cent of web searches that start on Google also end somewhere on Google’s own websites.

Ahead of the hearing, Apple and Facebook released studies defending their practices, while a coalition of unions, a retail industry group and a think tank published calls for greater scrutiny. 

Zuckerberg takes shots at his peers in framing Facebook as behind competitors

In his verbal opening statement, the Facebook CEO said Apple’s iMessage is the most popular U.S. messaging app; the most popular video app is YouTube; the largest ad platform is Google; and the most rapidly growing ad platform is Amazon. The comparisons were not in his prepared written remarks. “In many areas, we are behind our competitors,” said Zuckerberg. 

Later in the hearing, he pointed to TikTok as the fastest-growing social app. Zuckerberg’s comments come hours after TikTok CEO Kevin Mayer said Facebook was launching “maligning attacks” and copycat products in a bid to push his Chinese-owned firm out of the U.S. 

Google questioned over business dealings in China 

Republican Rep. Ken Buck asked Pichai to account for China’s human rights violations, including collecting data on its citizens and the forced labour of the Uyghur ethnic minority. Pichai said his firm has limited operations in China. Apple, which has extensive operations in the country, worked with a firm in China recently blacklisted by the U.S. for forced labour. All four CEOs were asked if they would promise not to use slave labour at their firms by Buck, who said that such practices happen in China. All promised they would not. They were also asked if they believe the Chinese government steals data from U.S. tech companies. Cook and Bezos said they had no firsthand knowledge of the Chinese government stealing data from their firms. Pichai initially echoed their comments, then later corrected himself to say he remembered a decade-old incident where Google was targeted. Zuckerberg said it’s “well documented” that Beijing steals data. 

Google faced pressure from members other than Buck. Republican Rep. Matt Gaetz said Google was helping the Chinese military. Pichai said that wasn’t true. 

The scrutiny came after Google cancelled Project Dragonfly, its proposed search engine for China. 

Trump threatens tech regulation if Congress doesn’t act

Thursday’s hearing is part of a broader investigation into whether U.S. antitrust laws need to be updated. If the subcommittee ultimately decides that they do,  changes would need to be approved by both the Democrat-controlled House and the Republican-controlled Senate, who don’t exactly see eye to eye on many of these issues. 

That said, before the hearing U.S. President Donald Trump tweeted, “If Congress doesn’t bring fairness to Big Tech, which they should have done years ago, I will do it myself with Executive Orders.” The Trump administration is expected to launch an antitrust suit against Google, possibly as early as this summer, and he recently signed an order removing the legal immunity tech firms enjoy for content on their platform. That order is being challenged in court. 

Global regulators are also watching these hearings closely, with an eye to ongoing antitrust investigations in their own jurisdictions. Fifty states and territories, for example, are investigating Google. Forty-seven state attorneys general are investigating Facebook, and European regulators are looking into Apple and Amazon. 

Despite today’s testimony, the long-term prospects of tech giants are viewed favourably

With the exception of Facebook, the firms whose CEOs testified today consistently rank toward the top of The Logic Sentiment Index, where subscribers are polled on how they feel about major private and publicly traded companies. Among those who’ve responded to the surveys, Amazon tends to do especially well. The firm climbed to the top of the index in June, with a rating of 80 out of 100 possible points. Only Shopify scored higher. Amazon’s rating comes despite criticism it’s received throughout the pandemic over its treatment of workers, as well as warehouse safety issues.

Google and Apple have also seen sentiment trend up in recent months. The firms scored 71.6 and 69.9 in June, respectively, compared to an average rating of 47.6 for all public tech firms included in the survey. Like the stock market, where tech stocks have leapt ahead of the broader market amid the pandemic, these numbers reflect optimism toward a company’s prospects rather than public approval. Only Facebook’s rating tends to waver—the social media company fell a substantial 30.8 points in June, nearing neutral sentiment with a score of 1.4. The drop came after CEO Zuckerberg refused to censor and fact-check Trump’s posts, virtual walkouts and an advertising boycott. Facebook’s rating had previously been trending up since hitting a low point of -45 in March 2019.

The stock market had a similar sentiment. All four firms’ stocks closed up over one per cent Wednesday. The four will release their quarterly earnings on Thursday.

With files from Caroline Mercer