Congress Grills Tech Chiefs

"Our founders would not bow before a king. Nor should we bow before the emperors of the online economy,” Rep. David Cicilline (D-RI), the chairman of the House Judiciary antitrust subcommittee, said in the opening of Wednesday’s five-hour hearing.

The event was occasionally derailed by interruptions, grandstanding, non-sequiturs...and once by Jeff Bezos being on mute. But Congress’s tech chops are improving and the subcommittee did its homework. The 13-month investigation has so far produced 1.3 million documents.

• Reps grilled Bezos, Tim Cook, Sundar Pichai, and Mark Zuckerberg on competition, market power, acquisitions, bias, content moderation, privacy, and more.
• Worth noting: Some of those issues can’t be addressed through antitrust policy.

Flash-forward 24 hours...Wall Street was unfazed by potential antitrust action and excited to pounce following the closing bell Thursday. After blowout earnings reports, Big Tech added hundreds of billions in market cap in after-hours trading last night.

What nobody talked about

Research wasn’t an overarching theme of the hearing, but Pichai did note that Google’s annual R&D spend increased tenfold to $26 billion, from 2009–2019.

Consider how FAMGA companies have evolved over the decade: In 2010, they were relatively specialized in the domains of search, social, e-commerce, and devices. Today, thanks to greater R&D spend, acquisitions, and aggressive hiring strategies, they’re all AI companies with tentacles in every category of emerging technology.

Taking it global

Members of the anti-breakup camp (including Mark Zuckerberg) say antitrust action would hurt American tech competitiveness on the global stage, especially vis-à-vis China.

At least one U.S. senator has discussed balancing domestic regulation and global competition. “I’m not in the break-’em-up category–yet...These are all global companies. Frankly, to have them replaced by Alibaba or Baidu or Tencent–Chinese companies may not be the better alternative,” Sen. Mark Warner (D-VA) told CNBC Wednesday.

Bottom line: Washington is scrutinizing the online emperors and Congress could eventually put more tech regulation in the pipeline. But don’t hold your breath for an AWS or App Store spin-off.