Cicilline Takes on Tech CEOs — Theater or Substance
Wednesday, July 29, 2020
On Wednesday, Congressman David Cicilline (RI-01) will chair the U.S. House of Representatives Committee on the Judiciary Subcommittee on Antitrust and will hear testimony from the top tech CEOs in the country including the richest man in the world Jeff Bezos.
The prepared testimony of the four tech titans was posted on Tuesday night.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTCicilline has been saber-rattling about the anti-trust violations by big tech for years, but has done little substantively about it other than tweet again. No executives from Twitter will be testifying.
WATCH LIVE HERE AT 12:00 NOON
Who will be testifying is Tim Cook, the Chief Executive Officer of Apple; Sundar Pichai, the CEO Alphabet (parent company of Google), and Mark Zuckerberg. Chief Executive Officer of Facebook, as well as Bezos.
While Cicilline has been a critic of the dominance of big tech, he has also been the recipient of thousands in campaign donations from the very tech companies he has criticized.
Just before holding hearings in 2019, Cicilline received thousands in contributions from five senior executives at Amazon, CNBC.com reported first reported.
“Over a three-week period starting in late May, five senior executives from Amazon made individual contributions to Rep. David Cicilline, the Democrat from Rhode Island who’s leading the House antitrust investigation into major tech companies, public filings show,” reported CNBC. “Cicilline became the chairman of the House Judiciary Committee’s Antitrust, Commercial and Administrative Law Subcommittee in January, when Democrats regained control of the House.
Cicilline’s office told CNBC that on the day the subcommittee launched its antitrust investigation, that he put in place “a formal policy of refusing campaign contributions from companies and executives that may be subject to scrutiny.” The donations by Amazon executives were made before the antitrust probe announcement, and before the July hearing was scheduled.
Here are some excerpts that you will hear from the tech giants:
Bezos begins his testimony with the story of his America dream:
My mom, Jackie, had me when she was a 17-year-old high school student in Albuquerque, New Mexico. Being pregnant in high school was not popular in Albuquerque in 1964. It was difficult for her. When they tried to kick her out of school, my grandfather went to bat for her. After some negotiation, the principal said, “OK, she can stay and finish high school, but she can’t do any extracurricular activities, and she can’t have a locker.” My grandfather took the deal, and my mother finished high school, though she wasn’t allowed to walk across the stage with her classmates to get her diploma. Determined to keep up with her education, she enrolled in night school, picking classes led by professors who would let her bring an infant to class. She would show up with two duffel bags—one full of textbooks, and one packed with diapers, bottles, and anything that would keep me interested and quiet for a few minutes. My dad’s name is Miguel. He adopted me when I was four years old. He was 16 when he came to the United States from Cuba as part of Operation Pedro Pan, shortly after Castro took over.
My dad arrived in America alone. His parents felt he’d be safer here. His mom imagined America would be cold, so she made him a jacket sewn entirely out of cleaning cloths, the only material they had on hand. We still have that jacket; it hangs in my parents’ dining room. My dad spent two weeks at Camp Matecumbe, a refugee center in Florida, before being moved to a Catholic mission in Wilmington, Delaware. He was lucky to get to the mission, but even so, he didn’t speak English and didn’t have an easy path. What he did have was a lot of grit and determination. He received a scholarship to college in Albuquerque, which is where he met my mom. You get different gifts in life, and one of my great gifts is my mom and dad. They have been incredible role models for me and my siblings our entire lives.
Bezos on investment
Amazon has invested more than $270 billion in the U.S. over the last decade. Beyond our own workforce, Amazon’s investments have created nearly 700,000 indirect jobs in fields like construction, building services, and hospitality. Our hiring and investments have brought much needed jobs and added hundreds of millions of dollars in economic activity to areas like Fall River, Massachusetts, California’s Inland Empire, and Rust Belt states like Ohio. During the COVID-19 crisis, we hired an additional 175,000 employees, including many laid off from other jobs during the economic shutdown. We spent more than $4 billion in the second quarter alone to get essential products to customers and keep our employees safe during the COVID-19 crisis. And a dedicated team of Amazon employees from across the company has created a program to regularly test our workers for COVID-19. We look forward to sharing our learnings with other interested companies and government partners.
Amazon is less than 1% of the market
The global retail market we compete in is strikingly large and extraordinarily competitive. Amazon accounts for less than 1% of the $25 trillion global retail market and less than 4% of retail in the U.S. Unlike industries that are winner-take-all, there’s room in retail for many winners. For example, more than 80 retailers in the U.S. alone earn over $1 billion in annual revenue. Like any retailer, we know that the success of our store depends entirely on customers’ satisfaction with their experience in our store. Every day, Amazon competes against large, established players like Target, Costco, Kroger, and, of course, Walmart—a company more than 5 twice Amazon’s size. And while we have always focused on producing a great customer experience for retail sales done primarily online, sales initiated online are now an even larger growth area for other stores. Walmart’s online sales grew 74% in the first quarter. And customers are increasingly flocking to services invented by other stores that Amazon still can’t match at the scale of other large companies, like curbside pickup and in-store returns. The COVID-19 pandemic has put a spotlight on these trends, which have been growing for years. In recent months, curbside pickup of online orders has increased over 200%, in part due to COVID19 concerns. We also face new competition from the likes of Shopify and Instacart—companies that enable traditionally physical stores to put up a full online store almost instantaneously and to deliver products directly to customers in new and innovative ways—and a growing list of omnichannel business models. Like almost every other segment of our economy, technology is used everywhere in retail and has only made retail more competitive, whether online, in physical stores, or in the various combinations of the two that make up most stores today. And we and all other stores are acutely aware that, regardless of how the best features of “online” and “physical” stores are combined, we are all competing for and serving the same customers. The range of retail competitors and related services is constantly changing, and the only real constant in retail is customers’ desire for lower prices, better selection, and convenience.
Bezos Says Scrutiny Welcomed
Let me close by saying that I believe Amazon should be scrutinized. We should scrutinize all large institutions, whether they’re companies, government agencies, or non-profits. Our responsibility is to make sure we pass such scrutiny with flying colors. It’s not a coincidence that Amazon was born in this country. More than any other place on Earth, new companies can start, grow, and thrive here in the U.S. Our country embraces resourcefulness and self-reliance, and it embraces builders who start from scratch. We nurture entrepreneurs and start-ups with stable rule of law, the finest university system in the world, the freedom of democracy, and a deeply accepted culture of risk-taking.
Zuckerberg on Scale
I understand that people have concerns about the size and perceived power that tech companies have. Ultimately, I believe companies shouldn’t be making so many judgments about important issues like harmful content, privacy, and election integrity on their own. That’s why I’ve called for a more active role for governments and regulators and updated rules for the internet. If we do this right, we can preserve 4 what’s best about this technology — the freedom for people to connect and express themselves and for entrepreneurs to build new things — while also protecting society from broader harms. In the meantime, Facebook is working to address problems at scale. From election security to building more privacy-protective products, we are bringing significant technical and financial resources to bear on the challenges we face. For example, we now have more than 35,000 people working on safety and security — three times as many as we had just three years ago. We’ve built sophisticated systems to find and remove harmful content. We’re funding new technologies to tackle emerging threats like deepfakes. And we’re building products to connect people to authoritative information, like our recently introduced Covid-19 and voter information centers.
Zuckerberg cites the American Way
Our success rests on our ability to build products that bring value to people’s lives -- whether it’s finding a supportive Facebook group, starting a business on Instagram, video calling loved ones on Messenger or staying in touch with a friend on WhatsApp. Facebook is a successful company now, but we got there the American way: we started with nothing and provided better products that people find valuable. As I understand our laws, companies aren’t bad just because they are big. Many large companies that fail to compete cease to exist. This is why we’re focused on building and updating our products to give people the best possible experiences. Provided we continue investing in new ideas and living up to our broader social responsibilities, I’m hopeful that we’ll keep making progress and deliver better products and services -- for the people and businesses that use our products, for the wider tech ecosystem, and for the world. Several years ago, Facebook moved our headquarters to the campus where Sun Microsystems used to be. We kept their sign out front, on the back of ours, to remind us that things change fast in tech. I’ve long believed that the nature of our industry is that someday a product will replace Facebook. I want us to be the ones that build it, because if we don’t, someone else will. Thank you, and I look forward to your questions.
Pichai - Future Success Not Guaranteed
Just as American leadership in these areas is not inevitable, we know Google’s continued success is not guaranteed. Google operates in highly competitive and dynamic global markets, in which prices are free or falling, and products are constantly improving. Today’s competitive landscape looks nothing like it did 5 years ago, let alone 21 years ago, when Google launched its first product, Google Search. For example, people have more ways to search for information than ever before — and increasingly this is happening outside the context of only a search engine. Oen the answer is just a click or an app away: You can ask Alexa a question from your kitchen; read your news on Twier; ask friends for information via WhatsApp, and get recommendations on Snapchat or Pinterest. When searching for products online, you may be visiting Amazon, eBay, Walmart, or any one of a number of e-commerce providers, where most online shopping queries happen. Similarly, in areas like travel and real estate, Google faces strong competition for search queries from many businesses that are experts in these areas.
Cook Defends Apple's Control of Apps
An Apple-commissioned study by economists at the Analysis Group found that, in 2019 alone, the App Store ecosystem facilitated over half a trillion dollars in commerce worldwide and $138 billion just in the United States. This is nothing short of an economic miracle in a relatively brief span of time.
We continue to invest heavily and constantly in the App Store's improvement, giving every developer access to the very latest technology. We relentlessly evangelize coding education at all levels, from elementary schools to community colleges. We do these things not out of obvious financial interest, but because we realize that we have a long-term stake in the health, dynamism and vitality of the whole system.
We recognize that with pride in what we have built, comes responsibility for what it contains. Our users expect and deserve the highest standard of privacy, security and quality in what they discover on the App Store.
I share the Subcommittee's belief that competition is a great virtue, that it promotes innovation, that it makes space for the next great idea and that it gives consumers more choices.
