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Jeff Bezos set for debut as Congress tees up top tech CEOs for antitrust showdown

Utah among states investigating Big Tech for potential malfeasance as potential Google lawsuit looms

SHARE Jeff Bezos set for debut as Congress tees up top tech CEOs for antitrust showdown
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This composite of four images shows, clockwise from top left, Facebook CEO Mark Zuckerberg, Amazon CEO Jeff Bezos, Apple CEO Tim Cook and Alphabet/Google CEO Sundar Pichai.

Alex Brandon, Pablo Martinez Monsivais, Jeff Chiu and LM Otero, Associated Press

SALT LAKE CITY — In 1998, the world’s richest man appeared before a U.S. congressional hearing and vehemently defended his tech company’s business conduct and competitive strategies as fair and appropriate in the face of antitrust lawsuits filed by both the U.S. Department of Justice and 20 state attorneys general, including Utah’s.

On Wednesday, the current world’s richest man, Amazon CEO Jeff Bezos, will appear before the House Judiciary Committee’s Subcommittee on Antitrust, Commercial and Administrative Law, and field questions about his tech company’s conduct and competitive strategies.

Microsoft co-founder and CEO Bill Gates, who was at the top of Forbes’ global billionaires list in 1998, at the time predicted his company would be vindicated by the federal courts (it wasn’t, mostly) and if not, the ruling would have a chilling effect on the U.S. innovation sector (it didn’t). At issue was Microsoft’s practice of bundling the company’s new internet browser with its Windows operating software in a way that disadvantaged browsers made by other companies and created preferential links to other Microsoft products.

In 1998, Windows was powering about 90% of the world’s personal computers.

“How ironic that in the United States, where freedom and innovation are core values, these regulators are trying to punish an American company that has worked hard and successfully to deliver on these values,” Gates said in a CNN interview, shortly after the lawsuits were filed that year.

In September 1998, Microsoft eclipsed General Electric as the world’s most valuable public company, reaching a market capitalization of $261 billion. On July 27, Bezos’ personal wealth nearly matched that mark, at $256 billion, and Amazon stock, trading at about $3,000 per share at the end of regular trading Tuesday, had a market capitalization of $5.2 trillion.

It is currently holding down the No. 3 position among the world’s most valuable public companies.

How the operators of the world’s biggest tech companies wield their vast financial and structural power will once again be the focus of U.S. lawmakers on Wednesday and Bezos will not be alone in the calling to account.

Joining him in the virtual hearing will be Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg and Alphabet/Google CEO Sundar Pichai.

Each of those companies is facing its own criticisms and inquiries when it comes to taking advantage of scale and/or market position to shoulder out, or absorb, competition. Those include Facebook’s acquisition history, including the practice of swallowing emerging competitors; Apple’s control and curation of its popular app store; and Google’s domination of the online search and advertising realm.

Bezos’ appearance is earning the most attention as he is the only one of the four witnesses who is making his debut appearance in front of federal lawmakers. And his virtual hot seat may be a few degrees warmer than his colleagues’ thanks to a damning report earlier this year by the Wall Street Journal. The April story offered details reflecting how Amazon was leveraging its access to information on products offered for sale on its platform by third-party sellers to create and market its own competing products.

“In one instance, Amazon employees accessed documents and data about a bestselling car-trunk organizer sold by a third-party vendor,” the Wall Street Journal reported. “The information included total sales, how much the vendor paid Amazon for marketing and shipping, and how much Amazon made on each sale.

“Amazon’s private-label arm later introduced its own car-trunk organizers.”

The House antitrust subcommittee has been conducting its own, wide-ranging antitrust investigation for over a year and noted the in-person testimony of those at the top of the Big Tech pyramid was necessary to complete its work.

“Since last June, the subcommittee has been investigating the dominance of a small number of digital platforms and the adequacy of existing antitrust laws and enforcement,” House Judiciary Committee Chairman Jerrold Nadler, D- N.Y., and Antitrust Subcommittee Chairman David Cicilline, D-R.I., said in a joint statement. “Given the central role these corporations play in the lives of the American people, it is critical that their CEOs are forthcoming. As we have said from the start, their testimony is essential for us to complete this investigation.”

Google has been under additional scrutiny since late last summer when a group of state attorneys general announced the launch of a collaborative investigation. Utah is among the states participating in the expansive inquiry, and Attorney General Sean Reyes said at the time of the announcement it was time to determine whether the internet search giant has “played by the rules and acted fairly.”

“The question for us today is whether Google has strayed from its founding principles to not do evil in its search and relentless drive to be the market-dominant player,” Reyes said. “That is what our investigation together, bipartisan, jointly will uncover.”

Numerous outlets have reported in recent weeks that the Justice Department and the group of state attorneys general were close to launching formal actions focused on Google. A virtual meeting on June 26 between DOJ officials and representatives of the state group was purported to have been an opportunity to discuss legal strategy as well as determining whether the two concurrent investigations would emerge in a single legal effort or move forward as separate suits, as was the case in the benchmark Microsoft antitrust action.

Google’s response to the announcement of the investigation last September mirrored, in many ways, the tack taken by Gates when his company was under federal scrutiny.

“Google’s services help people, create more choice, and support thousands of jobs and small businesses across the United States,” wrote Kent Walker, Google senior vice president of global affairs. “Google is one of America’s top spenders on research and development, making investments that spur innovation: Things that were science fiction a few years ago are now free for everyone — translating any language instantaneously, learning about objects by pointing your phone, getting an answer to pretty much any question you might have.

“At the same time, it’s of course right that governments should have oversight to ensure that all successful companies, including ours, are complying with the law.”

In a Deseret News interview Tuesday, Reyes’ deputy and antitrust specialist David Sonnenreich said the investigation is at a point where there is little he can say about its status, but he did confirm that the work is ongoing and his office remains very involved in the effort.

Sonnenreich noted that the law enforcement investigation of Big Tech in which the Utah Attorney General’s Office is participating is in a markedly different lane than the work federal lawmakers are engaging. While Congress, through its inquiries, is grappling with whether current antitrust law, which has gone essentially unchanged for a century, is sufficient to address issues raised by the evolving realm of high technology, the Justice Department and state attorneys general are focused on identifying what, if any, illegal conduct has occurred under the current rules.

Watch Wednesday’s virtual hearing live via the House Judiciary Committee’s website, judiciary.house.gov/calendar/eventsingle.aspx?EventID=3113.