Big Tech Giants Say They Are Subject to Intense Competition
Sounding a bit like Google execs in front of the Senate Commerce Committee almost a decade ago, Facebook told the House Antitrust Subcommittee that it faces "vigorous" competition for its products and services, including fierce competition for revenue and low barriers of entry for new competitors.
That is according to the prepared testimony of Matt Perault, director of public policy, for Facebook.
He also said the company had been a boon to small businesses, saying it had "democratized advertising, helping millions of small and medium-sized businesses along the way."
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Perault suggested Facebook had been successful because it had worked hard and taken risks. "America does not punish success; it rewards it," he said.
Google was represented at the same hearing--by Adam Cohen, director, economic policy, who was making the same arguments in his testimony about being subject to vigorous competition for search, including from Bing, DuckDuckGo, Yahoo and "many more."
Cohen pointed out that last year, 54% of product searches originated on Amazon, and specialized search services are growing in the areas of flights, hotels and restaurants.
Amazon's Associate General Counsel for Competition, Nate Sutton, weighed in, too. He talked in his testimony about how each of the company's many businesses "faces intense competition from well-established competitors," including its online retail business, for which it says it knows its customers have many options, including the brick and mortar type, who are also doing their own online business, and the third-party sellers Amazon hosts on its platform, many of them small businesses it is helping out.
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And for Apple, said Chief Compliance Officer Kyle Andeer, "the competition is fierce. Our customers have an ever-growing number of choices when it comes to products and services. We compete against some of the largest companies in the world, both foreign and domestic."
Their statements were at odds with the general tenor of the Hill inquiry into Big Tech, which is based on the companies' massive size, market cap, and dominance in various areas. Legislators on both sides have talked about the need to rein in or break up edge giants, Republicans pointing to allegations of conservative bias, Democrats of the need to downsize converged corporate giants in general.
Rep. David Cicilline (D-R.I), chairman of the Antitrust Subcommittee, gave the companies props for dynamism, immense tech breakthroughs and economic contributions. But he said they had been allowed to grow without sufficient antitrust oversight, leading to an increasingly concentrated and less open internet "growingly hostile to innovation and entrepreneurship."
The companies' protestations about fierce competition notwithstanding, Cicilline said Google controls nearly all the search in the country (about 90% of all searches), with Amazon controlling almost half of all online commerce, despite the company's statement that it only captures a small percentage or retail. He said its closest competitor, eBay, controls less than 6% of the market.
Facebook controls over half of the U.S. social media market, he said, with about 2.7 billion monthly users, notwithsanding the growth of Chinese social app TikTok, which Perault noted as one of its fierce competitors, he said Facebook captures over 80% of global social media revenue.
Apple, he pointed out, is under scrutiny for prices in its app store and policies that may favor its own services and products.
Cicilline said there was a good argument that the market lent itself to shielding dominant firms and producing a "kill zone" for new startups that might want to challenge them. "There is growing concern that anticompetitive practices and the gatekeeper role of online platforms is now imperiling small business in our communities," echoing the knock on ISPs inside the Beltway of the past decade.
Ranking member James Sensenbrenner (R-Ill.) raised red flags about coming down too hard on Big Tech. He said the antitrust laws don't exist to punish size or success and that because a company is big doesn't necessarily mean it is bad.
He echoed the Big Tech comments that they had actually helped small businesses, not hurt them. "Breaking up big businesses because they are large could wind up hurting small businesses throughout the country."
He also said breaking up the companies would not solve all the problems, like privacy, he said.
He did not dismiss the possibility of anticompetitive conduct, but said he was offering a counterpoint to some of the more radical speculation. He said they should look seriously at wrongdoing, but not break up companies by fiat because big was inherently bad.
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.