Tuesday, August 4, 2020

Tech giants defend their power over the Internet

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San Francisco David Cicilline did not hold back: “Our founding fathers did not bow to a king, we will not bow to the rulers of our internet economy,” said the democratic politician in the statement, which began the hearing of his anti-trust subcommittee.

Although the companies operate in different markets, according to Cicilline, they are all platforms that controlled “a bottleneck of a central distribution channel” for the economy on the Internet – in retail, for apps or information.

“They can charge huge fees,” said Cicilline, “imposing contracts on business partners or gaining valuable data from the people and companies that rely on them.” They misused their size and technological lead to secure their dominance.

The allegations in detail are very different depending on the group and range from Amazon’s dealings with small retailers to Google’s advertising business to Facebook’s platform moderation. Your defense against the accusations of politics resembles three broad lines:

1. Our customers love us

99 percent of iPhone customers are satisfied with their device, emphasized AppleChief Tim Cook in his testimony. The other companies on the dock also have their customers largely on their side, as surveys regularly show.

In fact, the image of the sluggish, anti-customer monopolist who is resting on his might doesn’t quite fit the tech corporations – after all, with smart speakers, faster and faster logistics or virtual reality glasses, they keep developing instead of worse services to offer higher prices.

In his prepared statement, Jeff Bezos stated that the expectations of his consumers forced constant innovation. “Customer trust is difficult to win and easy to lose.”

2. We have enough competitors

Amazon may be one of the most valuable corporations in the world, in Jeff Bezos’ eyes, his company is still tiny and is operating in an “extremely competitive market”.

For Bezos, Amazon’s power is just a question of how to define the market. Amazon has less than one percent of the 25 trillion global retail market – online and offline. The corona crisis has Amazon, but also competitors like Walmart or Shopify brought more sales.

Due to the lack of a wide branch network, Amazon cannot keep up with new forms of trade such as collection from the supermarket. “Unlike industries where one company usually dominates the entire market, there are many winners in retail,” said Bezos.

A market in which a company dominates is that for social media. But also FacebookChief Mark Zuckerberg tried to convince MPs that Facebook’s power is fragile. “In many areas we are behind our competitors. The largest messaging app is iMessage, the fastest growing platform is Tiktok, ”said Zuckerberg at the hearing.

3. Anyone who weakens us damages the USA

In particular, Tiktok, the video platform of the Chinese mega-start-up Bytedance, targeted Zuckerberg. Tiktok Facebook’s Instagram contests the role of the most popular app among young people in western countries.

In his previous statement, Zuckerberg wrote: “China is building its own version of the Internet based on completely different ideas than ours. And they export this vision to other countries, ”said Zuckerberg.

The Facebook chief’s argument was directed directly at Republicans who are discussing a ban on Tiktok. Nevertheless, Zuckerberg was in the crossfire from the beginning of the hearing.

Republican committee chairman Jim Sensenbrenner attacked the decision to freeze Donald Trump Jr.’s account. The president’s son had distributed a video calling the malaria drug hydroxychloroquine a proven cure for Covid-19.

Facebook had only deleted the video, but Trump’s account had not been blocked, as Zuckerberg emphasized – that only had Twitter done. Facebook is the social network that takes freedom of expression the most. However, Facebook does not allow false claims about Covid-19 on its platform.

The first questions already revealed the different priorities of Democrats and Republicans. While the former primarily questioned the economic power of the platforms, Republicans primarily aimed at the alleged prejudices of companies against conservative views.

After the survey, the committee plans to submit its recommendations by the end of August on how the US executive should deal with the power of tech companies.

More: The power of tweets on the stock market

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