How legal is it for a company to pull a chequebook and sign a check with several zeros to buy a small or medium-sized company that tomorrow can be a rival and keep its service? To what extent is it reasonable to tie short an electronic commerce giant that has managed to convince millions and millions of people to buy there and what freedom should they have to set commissions to those who want to sell their products there, knowing how much and what Do you sell? How understandable is it that the company that has created the most effective search engine in the world and essential for a large part of the population, prioritizes some of its services in the results and not its alternatives or displays the information that most interests you? How much is it fair to charge a developer for selling subscriptions in a ‘marketplace’ for millions of their devices, with that platform being the only gateway to that market?
These questions are not asked by ordinary users when they buy from Amazon, search Google, download an app on their iPhone or link their Instagram with Facebook. But the leaders of these companies this Wednesday have had to answer these issues in a historic appearance lived in the United States Senate, which has called the leaders of its main technology companies to answer certain questions that their businesses generate. for alleged monopolistic practices.
Only the subject of the session made it far from being a massage. But the truth is that it was far from being a dog-face encounter, as was the appearance of Mark Zuckerberg in his day by the scandal of ‘Cambridge Analytica’. For several reasons. The first is that the covid-19 has imposed that the appearance of this Wednesday has been made electronically, by videoconference, at a time when face-to-face events are at historic lows. The other reason is that the interventions of Sundar Pichai, CEO of Google, have been concentrated; Tim Cook, his Apple counterpart; Jeff Bezzos, founder of Apple; and Mark Zuckerberg, co-creator and CEO of Facebook; on a single date, instead of four different ones.
This has forced to distribute the time and that implies that there is less possibility of delving into each case, that despite having a common denominator (that of the competition), each one has its nature. The meeting is part of an investigation that began last year and which, according to those responsible, has more than a million documents proving these practices. A volume of reports that, according to some media, has not been reached since Microsoft once had to go through this process. What results from these appearances will be reflected in the conclusions of this commission that could be the basis for opening in-depth investigations tomorrow. “They are too powerful and will emerge more powerful from the pandemic”, said the commission’s spokesman before opening question time.
What has been seen this Wednesday is basically the defense of technology companies, with their particular interests, of business and the strategies that have led them to that position of leadership and power. And on the other side, a political side that must decide if the time has come to opt for greater regulation, which depending on what form it takes, could force a significant change in the operation of these companies. But this is only the starting point of something that if it were to develop at the legislative level, would have ballots to end up in court and have to spend many years to see the outcome.
Although the session did not have a predefined script, since there was a battery of important questions, the speeches of each of the managers, released in the last hours before this event already gave enough clues as to why the arguments were going to go.
Apple defends its App Store
Apple has been asked about a topic for which it will also have to explain this side of the Atlantic. The 30 per cent commission it charges for subscriptions (15% from the second year on) and digital downloads through its App Store, a recurring debate but that rose to this point after a Spotify complaint. The problem is aggravated because they do not allow them to include their own links or purchase buttons. The company and today Cook has also been maintaining the same position: they are a “guardian” and the only option to acquire apps on their devices but they do not fall into monopolistic practices, since that 30% commission only falls on a 15% of developments that are distributed on its platform. He said that the Conditions also “are imposed equally” on all developers, who are given the possibility of using multiple “programming languages”. In addition, he came to imply that a problem is being made where there is no already that he assured that 99% of customers have been “satisfied” in their surveys.
“Of the 1.7 million apps we host, only 70 have been developed by us, ” says Cook, who believes that there is no conflict of interest in the vast majority of cases. They also maintain, it was made public with a report published a few days ago, that the commission is in line with the market and is far from the highest. As already announced in the broadcast speech, Cook stressed that the mobile phone industry is a highly competitive sector and highlighted alternatives such as those of Huawei, Samsung and LG. He also said that none of his products “do not have a dominant share in any of the markets.” Something that does not prevent them from being a machine to generate money, thanks to the closed ecosystem that constitutes a large part of their catalog.
Amazon and the discourse of work
Jeff Bezos, founder of Amazon and now the owner of the Washington Post, also mentioned some competitors in his speech. But he was struck by the personal part that he included in the speech, with references to his parents and the values that were instilled in him. The businessman, who was going through such a procedure for the first time, defended himself against the accusations of a dominant position, assuring that Wallmart was a company “twice as big” as them and that they had services, such as delivery on the sidewalk, that they were unable to match, as were their return systems.
Bezos also made reference to the labor issue. Amazon often uses recurrently as a communication argument and communications are usually common announcing the jobs that are created. The complaint usually comes, however, due to the conditions of the employees, an issue that has been especially sensitive in the different European markets. “Our employees earn a minimum of $ 15 an hour, more than double the federal minimum wage, which we have asked to increase,” he said, as well as adding to the fact that it has been the company that “generated the most jobs” in the United States.
The patrio component was also used by Sundar Pichai, CEO of Google, who came to say that his large investments helped maintain the country’s technological competitiveness. “Each year, we are among the world’s largest investors in research and development.” He assured that from 2009 to 2019 the R&D products would reach 26,000 million annually, from the initial 2,800.
The situation of Google is delicate, with several voices considering that it should be broken up, in the same way that it has been raised with Facebook and in the past, it was done with Microsoft. It manages the two most used search engines in the world, Google and YouTube, and all its services are connected in a certain way, serving its advertising service. To imagine the weight of some of its products, you just need to remember the fuss that arose when it announced that Chrome would stop supporting ‘cookies’. Pichai had to answer questions from the senators who came to argue that both Android, its search engine and its browser prevailed ads that “benefited more”.
“All our guidance is to provide the most relevant information to the user,” said Pichai, who argued that there are more alternatives than ever by putting Twitter, Alexa or Snapchat as an example. There were also references to Amazon or eBay, where he said: “the most queries were made.”
Mark Zuckerberg had to explain his intentions when buying Instagram and WhatsApp. The creator of Facebook has defended that these acquisitions – which once removed two potential rivals – have led to notable improvements and that it has not led to a dominant position. He said that when Google bought YouTube or they bought the messaging app, the alternatives did not disappear, in a clear reference to Telegram, Vimeo, WeChat … It should be said that this intervention does not come at the worst time, that the new enemy on the internet from the USA is none other than ‘Tik Tok’, of Chinese origin.
In the case of the social photography network, it ensures that the technical infrastructure has been “stabilized” as well as to enhance its commercial side. In the case of the messaging app, he has referred to end-to-end encryption, video calls and other developments “made thanks to his company’s technology”. Zuckerberg probably experienced the most surreal moment of the day when Congressman Jim Sensenbrenner asked Trump about the veto on his platform. “I think you mean Twitter,” the manager replied, to a question that will have puzzled more than one.