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Is U.S. regulatory framework capable of reining in big tech companies?

The CEOs of Amazon, Apple, Facebook and Google encountered intense scrutiny from House lawmakers on Wednesday, particularly over whether they leverage unfair business practices to prevent their competition from succeeding. Is American antitrust law sufficient to handle the rapidly changing landscape of technology? Dipayan Ghosh of the Harvard Kennedy School joins Amna Nawaz to discuss.

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  • Amna Nawaz:

    Let's dive now into a few of the issues raised at today's hearing.

    We turn now to Dipayan Ghosh. He leads the Digital Platforms and Democracy Project at the Harvard Kennedy School. He also worked at Facebook, leading their efforts to address privacy and security issues, and later advised the Obama White House on technology policy.

    And before we begin, we should note for the record that the Chan Zuckerberg Initiative is a funder of the "NewsHour."

    Dipayan Ghosh, welcome to the "NewsHour." Thanks for being here.

    I think it's fair to say there's no question about the power and the reach of these four big companies, right? But when it comes to the concentration of power and to the detriment of competition, what new information did we learn today about their business practices and about their behavior?

  • Dipayan Ghosh:

    I think the good thing here is that both Democrats and Republicans on the committee really got to the details of how these companies work, how their corporate strategies work.

    And, for instance, both Democrats and Republicans really tried to pin down how Facebook and Google and Amazon and Apple went through certain decisions around corporate development, went through decisions around how they strategized with the app store and how they thought about mergers and acquisitions.

    And all of that really serves to support the imperative of holding these companies accountable on competition issues. So, I think we learned quite a lot today.

  • Amna Nawaz:

    There is, of course, this political divide we just reported on, right, Democrats digging on those accusations of anti-competitive behavior, Republicans largely focused — or some Republicans, at least, focused on what they're calling censorship of conservatives on these platforms.

    Even President Trump, I should mention, weighed in during the hearing. He was tweeting, saying: "If Congress doesn't bring fairness to big tech, which they should have done years ago, I will do it myself with executive orders."

    Dipayan, as you were watching the hearing unfold and seeing that massive gap between the lines of questioning, what did you make of that?

  • Dipayan Ghosh:

    There's no doubt about this. And you're absolutely spot on. There is this divide.

    And, traditionally, Republicans and Democrats have been coming at the issue of antitrust and market competition in the digital economy from different angles. Democrats have cared more about economic equity, algorithmic discrimination, racism and bias, these kinds of things, whereas Republicans have been thinking, including President Trump and his former Attorney General Jeff Sessions, have been thinking more about these content-related speech issues, and, in particular, anti-conservative bias, which are allegations that tech companies and many other experts have wholly rejected.

    I would acknowledge that certain Republicans on the committee have been asking really pointed technical questions about the market power of these companies, particularly Representative Armstrong from North Dakota.

    But, for the large — largely, we have seen this division. And I hope that we can get to more bipartisan action.

  • Amna Nawaz:

    There were a couple of lines of questioning I'd love to get your take on.

    There was one in particular directed at Facebook's Mark Zuckerberg. That was coming from Washington State Congresswoman Pramila Jayapal.

    The exchange here was based on e-mails that she says showed the committee Zuckerberg was essentially threatening to overrun Instagram with a similar photo product they were developing, even as Facebook was trying to buy Instagram. Take a listen to this exchange.

  • Rep. Pramila Jayapal, D-Wash.:

    Do you copy your competitors?

  • Mark Zuckerberg:

    Congresswoman, we have certainly adapted features that others have led in, as have others copied and adapted features that we have…

    (CROSSTALK)

  • Rep. Pramila Jayapal:

    I'm not concerned about others. I'm just asking you, Mr. Zuckerberg.

    Since March of 2012, after that e-mail conversation, how many competitors did Facebook end up copying?

  • Mark Zuckerberg:

    Congresswoman, I can't give you a number of companies.

  • Amna Nawaz:

    Dipayan, we know Facebook went on to acquire Instagram for about a billion dollars in cash and stock.

    But this allegation that Zuckerberg was threatening to basically overrun the company, right, saying, be acquired, or we will end you with our own product, is that fair? Is that what happened here?

  • Dipayan Ghosh:

    I think — I think it's fair to assume that that may be what happened.

    Of course, I'm not privy to Mark Zuckerberg's specific thoughts, nor was I the founder of Instagram, either of the two founders of Instagram.

    But I think — I think it's fair to assume that the company did really put pressure on Instagram and tried to really get at understanding what its business model was, how it was trying to engage people, and certainly tried to try to copy some of its features, which I think, to be fair, Mark Zuckerberg essentially acknowledged

    I think it's — I think it's a problem. And the reason that we see it happening over and over again — there were similar themes around questions asked of Amazon, and I think similar themes around Apple and Google as well.

    The problem here is that these are companies that have monopolized huge swathes of the digital media ecosystem today. And if they're — if they're copying small would-be rivals and (AUDIO GAP) own business, that really presents serious challenges to innovation in the very long run.

  • Amna Nawaz:

    Well, there's the issue of copying products. There's also the issue of pushing your own products over your rivals, right?

    There was another exchange I want to play for you with Amazon's Jeff Bezos, this one coming from Congressman Jamie Raskin. And he was asking, basically, if Amazon uses its platform, its massive platform to push its own products over rival products. He was asking specifically about the Alexa voice service in this exchange. Take a listen.

  • Rep. Jamie Raskin, D-Md.:

    Alexa-enabled smart speakers make up over 60 percent of the smart speaker market.

    Mr. Bezos, when I ask Alexa to play my favorite song, Prime Music is the default music player. So, has Alexa ever been trained to favor Amazon products?

  • Jeff Bezos:

    I don't know if it's been trained in that way. I'm sure there are cases where we do promote our own products, of course, a common practice in business. And so it wouldn't surprise me if Alexa sometimes does promote our own products.

  • Amna Nawaz:

    So, Dipayan, here is the big question. Is this just good business, right, promoting your own product on your platform, or is it anti-competition behavior?

  • Dipayan Ghosh:

    I think I think what the Internet companies have really waded into is a situation where they didn't quite recognize their market power.

    And, yes, they did engage in harmful business practices. We see this in the case of Amazon, which has this monopoly. We have seen this in the case of Facebook. And Facebook was questioned about Onavo.

    We have seen companies kind of spy on rivals, try to copy them, try to understand how their would-be rivals or smaller competitors might try to approach consumers, and then essentially just subsume them or suppress them.

    And those are the kinds of things that are — that are really damaging to competition, innovation, and consumer — the price to consumers. And I think there's no doubt that Amazon has really screwed with the markets and attempted to shut down smaller companies, at their expense and to Amazon's benefit.

    And that is precisely what this committee really needs to get to the bottom of with this full investigation.

  • Amna Nawaz:

    Dipayan, very briefly, it feels like every time big tech comes under the scrutiny of Congress, we ask this question, which is, do the laws and the rules that we have in place, the way we define antitrust, for example, do those keep up with the problems that are presented to us by big tech today?

  • Dipayan Ghosh:

    I don't think they have. I don't think they have kept up.

    Let's be real here. We have antitrust and competition policy enforcement regimes in place in the United States, and they do reasonably well with certain marketplaces, with certain consumer markets. But the digital economy is something totally different, where we're dealing with a new currency, in the form of people's attention and people's personal information.

    And our regulatory regime has not stayed in line with that. It is way behind where the digital economy is today. And I think, though, with this hearing being the start to a broader conversation about how we need to develop a stringent regulatory regime for a digital — for the digital economy, through privacy and through transparency and through interoperability and data portability and competition, and potentially even conditions on mergers and acquisitions, and potentially breakup, we are — we're going to see these companies having their feet held to the fire.

    And the committee will see to it, I think, in the long run.

  • Amna Nawaz:

    That is Dipayan Ghosh of the Digital Platforms and Democracy Project at the Harvard Kennedy School.

    Thanks so much for your time.

  • Dipayan Ghosh:

    Thank you. Thank you for the conversation.

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