Strategy

The Good News from the Congressional Tech Hearing

For DTCs and digital brands, it's critical for ideas about how tech giants stymie competition to make it into the mainstream.

As we noted last week, Congress hasn't had what one might call the strongest track record when it's come to regulating or even fully understanding tech. This is what made a lot of pundits and industry observers a bit nervous about Wednesday's House Judiciary Subcommittee on Antitrust hearing, which featured testimony from tech CEOs Tim Cook of Apple, Mark Zuckerberg of Facebook, Jeff Bezos of Amazon, and Sundar Pichai of Google.

But, in spite of past performances, there were some bright spots about the hearing, which aimed to focus on how tech monopolies have the ability to stymie competition and harm consumers. Take this salvo from Rep. Pramila Jayapal, who also happens to represent a district in Washington where a large number of Amazon employees live:

“The whole goal of this committee’s work is to make sure that there are more Amazons, that there are more Apples. That there are more companies that get to innovate and small businesses get to thrive and that is what we’re trying to get at, that is why we need to regulate these marketplaces so that no company has a platform so dominant that it is essentially a monopoly.”

(For another impressive moment from Rep. Jayapal check out this grilling on Mark Zuckerberg over Facebook's pre-acquisition Instagram strategy.)

Putting competition into the conversation

What's important about hearings like these, even with so much else going on, is that they put a spotlight on the central tactics that big tech companies use to prohibit small businesses from flourishing. Whether it's old-school intimidation, outright intellectual property theft, predatory deals with smaller partners, or leveraging competitor data to use against them, the more that the survival-of-the-fittest practices of tech titans seeps into the mainstream, the stronger the opposition to them can be—not just among lawmakers, but among consumers.

Previous hearings revealed the failure of lawmakers to grasp how large tech companies wield power, a growing awareness appears to be underway. In yesterday's hearing, Rep. Mary Gay Scanlon's questioned Jeff Bezos over Amazon's battle against Diapers.com. “In an email that I reviewed,” she said to Bezos, “one of your top executives proposed to you an ‘aggressive plan to win’ against Diapers.com, a plan that sought to undercut their business by temporarily slashing Amazon prices.”

That scheme apparently included the willingness to lose $200m in one month on diapers in order to weaken Diapers.com before Amazon ultimately purchased its parent company. Following the acquisition, diaper prices didn't just go back to normal, they went up. There may not be a deep and abiding knowledge of Amazon's algorithms out there, but most anyone can see how corporate intrigue that leads to greater financial pressure on young parents is a bad thing for society.

No place to hide

If you happened to watched the hearings, you probably saw some perhaps unexpected squirming among normally placid tech executives. And that's because, unlike basically all other subcommittee events in the past few years, it was bipartisan in tone. While Democrats and Republicans have different reasons to critique the practices of Google, Amazon, Facebook, and Apple, their surprising unity gave four of the most powerful CEOs in the world no place to hide.

The emergence of a common cause isn't simply unique because the two major parties tend not to agree on much; it's meaningful because finding bipartisan agreement means the potential for significant action. And that alone might spark internal change within the tech industry without Congress even needing to pick up a pen. "Lawmakers of all political stripes seemed uncomfortable with the knowledge that four companies have this much influence," writes Shira Ovide in The New York Times. "Beyond the legal antitrust questions at issue, it’s this feeling of discomfort that makes it hard to imagine that nothing will change for these tech superpowers."

That's good news for the rest of us.