This Week in Startups - Emergency Pod! Jason Calacanis reacts to Big Tech hearings: Grades for Bezos, Cook, Pichai & Zuckerberg

Episode Date: July 30, 2020

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Hey, everybody. I thought we'd do an emergency pod. Yes, an emergency pod on the big tech hearings today. Lots to talk about. Obviously, it's a big day. And I wanted to put some context around what we heard and point out who the big winner of the day was, who the big loser of the day was, and who might not be allowed to buy a company ever again. I want to start off with who I thought was the big winner in the opening statements, and that was none other than Jeff Bezos who talked about his mother, his stepfather, and his amazing journey to build one of the most important companies in the history of technology and commerce. Clip to tape. I was born into great wealth, not monetary wealth, but it said the wealth of a loving family, a family that fostered my curiosity and encouraged me to dream.

big. My mom, Jackie, had me when she was a 17-year-old high school student in Albuquerque. Being pregnant in high school was not popular. The school tried to kick her out, but she was allowed to finish after my grandfather negotiated terms with the principal. She couldn't have a locker, no extracurriculars, and couldn't walk across the stage to get her diploma. She graduated and was determined to continue her education, so she enrolled in night school, bring me her infant son to class with her throughout. My dad's name is Miguel. He adopted me when I was four. He was 16 when he came to the U.S. from Cuba by himself shortly after Castro took over. My dad didn't speak English and he did not have an easy path. What he did have was grit and determination.

He received a scholarship to college in Albuquerque, which is where he met my mom. Together with my grandparents, these hardworking, resourceful, and loving people made me who I am. I walked away from a steady job on Wall Street into a Seattle garage to found Amazon, fully understanding that it might not work. It feels like just yesterday I was driving the packages to the post office myself, dreaming that one day we might afford a forklift. Customer obsession has driven our success, and I take it as an article of faith that customers notice

when you do the right thing. You earn trust slowly over time by doing hard things well, delivering on time, offering everyday low prices, making promises and keeping them, and making principled decisions, even when they are unpopular. And our approach is working. 80% of Americans have a favorable impression of Amazon overall. Who do Americans trust more than Amazon to do the right thing, only their doctors and the military. The retail market we participate in is extraordinarily large and competitive. Amazon accounts for less than 1% of the $25 trillion global retail market and less than 4% of U.S. retail.

There's room in retail for multiple winners. We compete against large, established players like Target, Costco, Kroger, and, of course, Walmart, a company more than twice Amazon's size. Twenty years ago, we made the decision to invite other sellers to sell in our store to share the same valuable real estate we spent billions to build, market, and maintain. We believe that combining the strengths of Amazon store with the vast selection of products offered by third parties would be a better experience for customers, and that the growing pie of revenue and profits would be big enough for all.

We were betting that it was not a zero-sum game. Fortunately, we were right. There are now 1.7 million small and medium-sized businesses selling on Amazon. The trust customers put in us every day has allowed Amazon to create more jobs in the United States over the past decade than any other company. Hundreds of thousands of jobs across 42 states. Amazon employees make a minimum of $15 an hour, more than double the federal minimum wage. and we offer the best benefits, benefits that include comprehensive health insurance, 401k retirement, and parental leave, which includes 20 weeks of paid maternity leave. More than any place on earth, entrepreneurial companies start, grow, and thrive here in the U.S.

We nurture entrepreneurs and startups with stable rule of law, the finest university system in the world, the freedom of democracy, and a deeply accepted culture of risk-taking. Of course, this great nation of ours is far from perfect. Even as we remember Congressman John Lewis and honor his legacy, we're in the middle of a much-needed race reckoning. We also face the challenges of climate change and income inequality, and we're stumbling through the crisis of a global pandemic. Still, with all of our faults and problems, the rest of the world would love even the tiniest sip of the elixir we have here in the U.S. Immigrants like my dad see what a treasure this country is. They have perspective and often can see it even more clearly than those of us who are lucky enough to be born here. It is still day one for this country, and even in the face of today's humbling challenges,

I have never been more optimistic about our future. I appreciate the opportunity to appear before you today, and I'm very happy to take your questions. And we're back. I thought that was a very powerful statement and a great opening for him, because we don't want to kill capitalism in the process of regulating big tech. And there are mistakes that have been made and there are behaviors that should change. So even though I'm an angel investor and a fan of technology and obviously a capitalist who believes in entrepreneurship, I do believe in the rules should be fair. And I think the congressmen and congresswomen,

the congresspeople, did a relatively good job of asking great questions, which I was shocked at. Of course, the format is a little bit hard. They were on Zoom, and each person gets a short amount of time. I think they should have a smaller number of people with longer periods of time. But there were some great moments. And I thought this moment about third-party sellers on Amazon was really important. Let's cut to an edited version. We edited out some of the back and forth that was superfluous,

and we tried to get to when these subjects, in this case, Jeff Bezos, was answering the questions really concisely cut to. take. Mr. Bezos, in July 2019, your employee, Nate Sutton, told me under oath in this committee that Amazon does not, quote, use any specific seller data when creating its own private brand product. So let me ask you, Mr. Bezos, does Amazon ever access and use third-party seller data when making business decisions? And just a yes or no will suffice, sir. I can't answer that question, yes or no. What I can tell you is we have a policy against using seller-specific data to aid our private label business. But I can't guarantee you that that policy

has never been violated. I will tell you a former Amazon employee in third-party sales and recruitment told this committee, quote, there's a rule, but there's nobody enforcing or spot-checking. They just say, don't help yourself to the data. It's a candy shop. Everyone can have access to anything they want. Let's talk about aggregate data for a minute. Your rules do allow for you to access combined data on a product when there are only one or two sellers in the marketplace, correct? Yes, aggregate data is allowed under our policies. That is correct.

Okay. And interviews with former employees have made it clear that that aggregate data essentially allows access to highly detailed data in those product categories. There's an example of Fortem, a small business that had no direct competitors except for Amazon warehouse deals, a resale clearance account that only sold. 17 units. And Amazon employee access to detailed sales report on Forteum's product with information on how much the company spent on advertising per unit and the cost to ship each trunk. And then Amazon launched its own competing products in October 2019. That's a major loophole. And I go back to

the General Counsel statement to this committee very clearly that there was no access to this data, that Amazon does not use that data for its own benefit. And I'm now hearing you say, you're not so sure that that's going on. And the issue that we're concerned with here is very simple. You have access to data that far exceeds the sellers on your platforms with whom you compete. You can track consumer habits, interests, even what consumers clicked on but then didn't buy. You have access to the entirety of sellers' pricing and inventory information past, present, and future, and you dictate the participation of third-party sellers on your platform.

So you can set the rules of the game for your competitors, but not actually follow those same rules for yourself. Okay, we just heard from Representative Jayapal, hopefully I'm pronouncing that correct, who's a Democrat, asking Bezos specifically about do they use sensitive data that they collect from third-party sellers to compete with them? There's been a lot of coverage of this. And you saw Bezo say, hey, listen, I can't guarantee this didn't happen. And obviously there's a lot of evidence that it does happen. I think there's a much better answer that Bezo should have given during all of this, which is to say, we wanted to create an open playing field. So we challenged ourselves at Amazon to make the best products while letting other entrepreneurs build their own products and sell and have reach on our platform.

And what you're hearing today is Apple not letting people onto their platform and Google putting their results above other competitors' results. and you're alleging that they're stealing content, well, here we have the most open platform of all. We allow over 2 million entrepreneurs to compete with us on our own platform. So would you have us turn off third-party sellers? Would that be in the best interest of those 2 million entrepreneurs? Would that be in the best interest of capitalism and having a vibrant competitive landscape for us to kick them off the platform?

Now, we should not have an edge on them because of our, on our platform. But if your product is so simple that we can copy it and make a better version that's cheaper or another third-party seller can make a better version, well, isn't that the core of capitalism? So why don't we let people compete and lower prices? That would have been the perfect way to turn the tables on, you know, these Congress people, because what are they going to say? Yeah, you should turn them off and you should have a monopoly and only sell your products on there. That would be crazy. And in all fairness, Amazon has another way they could have dealt with this, which is to say, Congresswoman, I understand your concern.

Number one, as I previously stated, we allow people to compete with us on our own platform. Number two, people do not need to be on our platform. They could be in Target. They could be in Walmart. They could have half of their products like many of them do on their website and use our platform to just promote half of the products and not even the good ones and just use us as branding, which is how a lot of direct consumer companies actually in reality are using our platform. Would you rather stifle competition or allow competition? And that's really what the core of this is. And if you have better suggestions for me than us allowing 2 million people to sell on our platform, I am open to them. And that would have changed the entire dynamic.

Amazon is the most open of all the platforms. What Amazon does with third-party sellers, is the equivalent of Facebook allowing people to take the social graph and take all of their content and just in one click put it somewhere else. That's what it would be like. If you could just take your whole Facebook graph and move it over to your own service or another service like Twitter, which they don't allow. Another way to look at this is Amazon is like if Apple allowed anybody to put an app store on their platform.

Amazon sells their products or Amazon Basic Cables. If Apple wants to sell their cables or Facebook wants to make, USB-C cables, anybody can make cables. Anchor, let competition drive prices down, and create innovation. So Amazon won the day. They could have done a better job. They should have done better coaching for Bezos. But overall, I think he came out best.

And now let's get to who came in worst. That buy off potential competitive threats violate the antitrust laws. In your own words, you purchased Instagram to neutralize a competitive threat. if this was an illegal merger at the time of the transaction, why shouldn't Instagram now be broken off into a separate company? Well, Congressman, I think the FTC had all of these documents and reviewed this and unanimously voted at the time not to challenge the acquisition. I mean, I think with hindsight, it probably looks like obvious

that Instagram would have reached the scale that it has today, but at the time it was far from obvious. A lot of the competitors that they competed with in mobile sharing, I'm including companies like PATH, which were hot at the time and had great founders and entrepreneurs running them. Dave Moore and I worked closely with him. I mean, I don't even think PATH exists today. It was not a guarantee that Instagram was going to succeed. The acquisition has done wildly well, largely because not just of the founders' talent,

but because we invested heavily in building up the infrastructure and promoting it and working on security and working on a lot of things around this. And I think that this has been an American success story. Well, thank you. Mr. Zuckerberg, you're making my point. In closing, Mr. Chairman, I want to end where I began. Facebook, by Mr. Zuckerberg's own admission and by the documents we have from the time, Facebook saw Instagram as a threat that could potentially siphon business away from Facebook. And so rather than compete with it, Facebook bought it.

This is exactly the type of anti-competitive acquisition that the antitrust laws were designed to prevent. this should never have happened in the first place. It should never have been permitted to happen, and it cannot happen again. I yield back. Okay, this was amazing by Rep Nadler, just a great job, because he was setting Zuckerberg up here because they have the inside information that Zuckerberg had had conversations that they wanted to kill Instagram because it was competitive and that they had their own new product,

Facebook camera that was going to compete against it. And that he was setting the table not only that Facebook wouldn't be allowed to buy future companies, but that they might force them to spin out Instagram, which would be so damaging. And I think it's a 1% chance that this would happen. But the ability to force Instagram to be sold would be, it would just absolutely crush Facebook stock while Instagram would soar. And of course, Instagram would be owned by Facebook. So it would still be a victory ultimately, full. for Zuckerberg because he would have shares in that new company.

But this was really well done. And then you saw Zuckerberg say, well, you know, there were other competitors out there like Path.com, which Dave Morin created. Dave Morin worked for Zuckerberg. Zuckerberg stole a ton of features from path.com. And not only did, and so that makes his statements you're so brazen that on follow-up, I think it doesn't help him because they were specifically stealing not only features,

from path.com, but obviously it comes up later, Snapchat and their aggressive approach with Snapchat and the aggressive approach with Instagram. So now, all of these Congresspeople are painting a picture of Zuckerberg as being very anti-competitive, stealing ideas, which isn't illegal, but maybe using monopoly power to take their ideas, put them into his platform, and then threaten them, which I'm not sure if that's illegal, but it certainly is distasteful, and it feels like it could build a bit of momentum to making Zuckerberg. and Facebook, not broken up. I don't believe that will happen.

It's a very small chance that would happen. But I think it will make them not be able to buy another Instagram or WhatsApp, which in a way is going to be really devastating for them, perhaps more devastating than actually being broken up. It might be wise for Zuckerberg right now to just spin out WhatsApp and say, hey, WhatsApp's going to be its own product and I'll put somebody in charge of it. That would actually be a power move by him. But here he comes across looking terrible.

And as we see in this next, clip, you know, the beating continues where he has so many skeletons in his closet from all of this back and for them for some stupid reason Zuckerberg feels the need to say things on email and SMS messages like calling user stupid and other famous things he said in private. And I don't understand why he doesn't understand these things will be discoverable eventually. They should not even be talking over any electronic communications about acquisitions. especially not saying they want to do it for anti-competitive reasons. And this is where it gets super interesting.

Here is, again, Representative Jaya Paul, who is from Washington talking about Kevin Sistram and Zuckerberg threatening him. Let's cut to tape. Since March of 2012, after that email conversation, how many competitors did Facebook end up copying? Congresswoman, I can't give you a number of companies. Is it less than five? Congresswoman, I don't know. Less than 50? Any estimates?

Your team was making a plan. How did it play out? Congresswoman, I'm not sure I agree with the premise here. Our job is to make sure that we build the best services for people to connect with all the people they care about. This was a brutal moment during this where she keeps telling them, well, how many companies were you planning on copying? Was it over 50, under 50?

over five. And this is where she really was deft at asking him probing questions around this. And he kind of stumbles here. And it's really pathetic. Has Facebook ever threatened to clone the products of another company while also attempting to acquire that company? Congresswoman, not that I would, not that I recall. And I'd like to just remind you that you are under oath. And there are quotes from Facebook's own documents. Prior to acquiring Instagram, Facebook began developing a similar product called Facebook camera, correct? Congresswoman, that's correct. Did you ever use this very similar Facebook camera product to threaten Instagram's founder, Kevin Seistram?

Congresswoman, I'm not sure what you would mean by threaten. I think it was public that we were building a camera app at the time. That was a well-documented thing. In a chat, you told Mr. Seistram that Facebook was, quote, developing our own photo strategy. So how we engage now will also determine how much. much were partners versus competitors down the line. Instagram's founders seemed to think that was a threat. He confided in an investor at the time that he feared you would go into, quote, destroy mode if he

didn't sell Instagram to you. So were there any other companies that you use the same tactic with while attempting to buy them? Congresswoman, I want to respectfully disagree with the characterization. I think it was clear that this was a space that we were going to compete in one way. or another. I don't view those conversations as a threat in any way. I'm just using the documents and the testimony that the committee has collected from others. Did you warn Evan Spiegel, the founder of Snapchat, that Facebook was in the process of cloning the features of his company while also attempting to buy Snapchat? Congresswoman, I don't remember those specific conversations, but that was also an area where it was

very clear that we were going to be building something. Facebook is a case study, in my opinion, in Monopoly, power because your company harvests and monetizes our data, and then your company uses that data to spy on competitors and to copy, acquire, and kill rivals. You've used Facebook's power to threaten smaller competitors and to ensure that you always get your way. These tactics reinforce Facebook's dominance, which you then use in increasingly destructive ways. So Facebook's very model makes it impossible for new companies to flourish separately. And that harms our democracy. It harms mom and pop businesses and it harms consumers. Mr. Chairman, I yield back. And he goes on to talk about,

hey, I'm not sure what you mean by threatening. And I don't recall. And he just comes across really, really cutthroat and the worst of everybody in the day. And it wasn't just the Democrats that were going after Zuckerberg. Of course, the Republicans aren't fans of Zuckerberg, even though Facebook is the most right wing. And when you look at the trending topics and you look at their board composure with both Mark and Dreson, who feels a little bit right to me

and certainly Peter T.L. who spoke at the Republican National Convention and was a big proponent and reason, I believe, why Trump is in office right now. I think everybody pretty much agrees that TL had a big part in that. Now the Republicans get in on it. And this is where it's just brutal

making Zuckerberg the loser of the day. Would you revise your prior testimony to energy and commerce, you said this does not happen, it cannot happen? Would you at least be willing to acknowledge, based on the irrefutable evidence before us that you don't seem to have investigated, that it is possible that at Facebook, your employees do have the power to disadvantage conservative viewpoints and that they in fact have used that power in ways that we need to root out? Congressman, my testimony in the past and today is about what our principles are as a company and what we try to do. Of course, when you have tens of thousands of employees, people make mistakes, people have some of their own goals some of the time, and it's our job in running the company to make sure that we minimize errors and that we make sure that the company's operations reflect the principles. that we intend to run it on. And when you fire people as a consequence of their politics,

do you think that that impacts the culture and perhaps empowers some of the content moderators to also treat people worse as a consequence of their politics? Congressman, I'm not sure what you're referring to, but I'm not aware of any case where we have fired someone on behalf of their politics, and I would say that that would be an inappropriate thing for us to do. Why did you fire Palmer Lock? Congressman, I'm not sure it's appropriate to get into a specific personnel issue publicly.

I mean, I could just tell you that Palmer Lucky's NDA with you. I only have 10 seconds, but Palmer Lucky's NDA with you doesn't allow him to talk to anyone except government officials. I'm a government official. I've seen the messages where you have specifically directed Mr. Lucky to make statements regarding his politics for the benefit of your company. So I think both in the case of these content moderators and in the, case of the testimony you just gave regarding Mr. Lucky and firing people over their politics, there is serious question as to whether or not you're giving truthful testimony here or whether it's lying before Congress. I see my time's expired and I'll yield back. Okay, so now what Matt is

talking about in the first part of this is content moderators are low-paid employees who, Project Veritas, which is his right-wing, hidden camera group that I think Peter Till actually funded, somebody can fact check me on that or was a fan of. They, caught these people who are moderators talking about how they tip the scales to the left and to liberals or Democrats, etc. Now, obviously, if you have thousands of people moderating content and they're incredibly low paid, you know, grunt workers for lack of a better word here, of course, they're going to tip the scales in one direction or the other. What Zuckerberg should say is, well, we have checks and balances on that. If somebody says something is too far to the left, we just look at their history and they would have been. been fired. So we would have eventually caught them. And in some cases, we have three people

blindly look at the same objectable content and we'll look at, is there any difference? Do all three people agree or do two out of three people agree on this piece of content and this moderation? That would have been the right answer. Zuckerberg, because he lacks this ability to listen and empathy, I think he fumbles these questions and he's not very good under pressure in terms of answering questions, nor does he have the high ground because he's gotten caught so many times lying and doing things that are uncouth or that are just against the rules and screwing people over, including his past partners, including people who've co-founded the company with them. So when you have a record of screwing everybody from your partners to the users so consistently, you lose the high ground, which Jeff Bezos had,

which was why he's the winner of the day, and Zuckerberg is obviously the loser. And this guy Matt Gets or Matt Gates. I'm not big into politics. I'm not even going to pronounce a lot of these people's names. But he's a bit of an idiot, to be totally honest. I've seen him in these hearings before. It's like a grand standard. But boy, does he beat Zuckerberg around like a

bobcat beating a mouse? I mean, it is just brutal because he says, would you fire somebody for this? He's like, I don't know that we would fire somebody because of their political beliefs. And boom, he drops the hammer. Palmer Lucky. Palmer Lucky, obviously is a bit right wing and he's working for the DOD. I think he's working on the Defense Department for building

those like sort of interesting technology-enabled walls to do perimeter security, which I think is a brilliant idea, by the way. And I think it's totally fine to build walls and security for our borders. There's nothing wrong with that. There might be things wrong with how you do immigration policy, but sure, you want a secure border. I don't think anybody, you know, disagrees with Palmer working on that. But Matt calls him out like, you're running, you can be committing perjury right now because I've seen the Palmer Lucky text and the messages or whatever it is where Zuckerberg is obviously upset at Palmer Lucky for allegedly being on Reddit or being right wing. And this was another pummeling from both sides of the aisle for Zuckerberg, who was the worst performer today, hands down,

and is at the most risk, I believe, along with Google, for having action taken against them eventually. I think Apple and Amazon did great. Facebook did horrible. And Google is somewhere in between those other parties. With that, Sundar was horrible today, not as bad as Zuckerberg, because Zuckerberg's a liar and you can tell he's got bad intent. Sundar, you give him the benefit of the doubt because he is new, right? Nobody really knows him. This is one of the first times people are hearing his voice. It's not Larry and Sergey. And now you know why Larry and Sergey are no longer in the CEO slot.

It's specifically because they do not want to be under this grilling. They would rather just own a massive percentage of it, control the board, and they would much rather send Sundar to deal with this kind of nonsense. And Sundar did terrible. Sundar was trying to be on message about, you know, supporting small businesses, but he was giving these canned rehearsed answers that made him completely insincere. Amazon, Bezos, super sincere. Apple, pretty sincere.

Zuckerberg, you just feel is completely lying and dishonest. And then you just felt like Sinderr was not even, he was too on script, which is terrible because then you lose people's belief that you're telling the truth. Let's cut to tape. In 2007, Google purchased double-click. When Google purchased a proposal-the-merger, alarm bells were raised about the access to data Google would have, specifically the ability to connect a user's personal identity with their browsing activity. Google, however, committed to Congress and to the antitrust enforces that the deal would not

reduce user privacy. But in June of 2016, Google went ahead and merged this data anyway, effectively destroying anonymity on the internet. Practically, this decision meant that your company would not combine all of, would now combine, for example, all of my data on Google, my search history, my location from Google Maps, information from my emails from Gmail, as well as my personal identity with the record of almost all of the websites I visited. So in 2007, Google's founders feared making this change because they knew it would upset their users. But in 2016, Google didn't seem to care. Mr. Pekai, isn't it true that what changed between 2007 and 2016 is that Google gained enormous market power? So while Google had to care about user privacy in 2007, it no longer

had to in 2016. Would you agree that what changed was Google gained enormous market power? Congressman, there's an important issue. If I could explain, well, you know, we today make it very easy for users to be in control of their data. We have simplified their settings. They can turn ads personalization on or off. We have combined most of activity settings into three groupings. We remind users to go to a privacy checkup. One billion users have done so. Okay, Mr. Pricay, thank you so much for that. I am concerned that Google's bait and switch with double-click is part of a broader pattern where Google buys up companies for the purposes of surveilling Americans and because of Google's dominance, users have no choice but to surrender.

So she is talking about one thing, taking the double-click display ad network, banner ads, basically, and combining that with the Google data from deep Google sources like you're searching and your Gmail and putting them together. And he goes off on this tangent that there's privacy settings. And so when you don't answer her question, you look like you are doing misdirection. Now, he's so well-dressed. He's got so polite and he's so rehearsed that you don't feel he's lying to you the way you feel Zuckerberg's being dishonest. So at least he's not in the Zuckerberg dishonest category, but he's not in the sincere, authentic entrepreneur, Bezos. And he doesn't have founder authority like Zuckerberg or Bezos.

And really, that's, I think, why Tim Cook is at a disadvantage and also Sundar is at a disadvantage because he's actually ultimately not running the company. Larry and Sergey can replace them anytime they want. And he kind of knows that, obviously. And so this was a terrible moment for him. And then the other terrible moment is, you know, they pushed all of the content down the page and put their services up top. That is really at the heart of what they did that was overreaching. The second piece that was overreaching, of course,

forget about this privacy and double-click issue. When they were fighting with Yelp, they're pushing Yelp down the page and putting Google, results up top. And then having little boxes, snippets, where they answer questions. And if you do this right now and I tweeted it in, I'll have them cut it into the video here. You can see my tweet where I did a screenshot of internal temperature brisket, something I would actually type into Google. When I type into Google, and you probably have this experience, you can see not only an answer that they pulled from somebody else's website and served up to you knowing that you will not click through. Because it says internal temperature should be 225 or whatever it is, 190 in the case of brisket,

if you like it like I do. And not only that, they put the five most common questions there and you have little carrots where you can open them up and you never go to those pages. They should have pulled that up. If I was up there, and I'm not saying I'm running for any political office, but if I was up there, I would have demolished him by saying, what gives you the right to pull these answers, put them on the top, and then put all of your clicks around it and never send traffic. and then his proper answer should be being in Google,

because I'm going to give you both sides of the kung fu here and how to fight this, the misdirection he should have been using is, listen, you do not need to be in the Google index. And some companies, like Facebook, don't let us index all of their content. Other companies like Twitter want their content on our service,

and they appreciate the traffic, and they understand that we have a business to build here as well. And if Sundar spoke like that the way I'm speaking right now, you can opt out. You don't have to be in Google. You can just go to your robot. dot txt and if you put in there that you don't want us to crawl your webpage we will not crawl it and if you find any webpage in here and there's anybody who doesn't want their site crawled please

email me at sundar at google ink.com and put no crawl in your subject line i'll make sure the no crawl team takes you out of the google index so you don't have to worry about this that would have been the slam dunk but the problem is PR people and lawyers prepared him and because he doesn't have founder authority. He has to listen to those PR people because he's got this fear of losing his job, whereas Bezos can just say, hey, listen, I'm going to be honest with you, I can't guarantee you that third party sellers didn't take this content and use it to make a better product. If they did, that's against our rules, we'd fire them. And, you know, we're open to having a conversation about that. And that's how they should have done this. Zuckerberg should have been much more open.

Hey, if you've got a better suggestion for us, we don't want it to, we don't want to be perceived this way. And we want a level playing field. They should have been much more casual and open to suggestion, right? And you can see these different styles and PR people like Google's PR people who prepared Sundar should be fired. And Zuckerberg, I don't even know if any PR people can polish him and make him polished when he's awkward when he speaks. And number two, he's got so many skeletons in the closet that they correctly pointed out. So Sundar, Zuckerberg gets an F, Bezos gets an A. Sundar, I'm giving you a C minus. You weren't terrible, but you could have done a lot better. Okay, let's go on and talk about Tim Cook, who is very eloquent, and he did an okay job.

Let's listen to this portion. Apple is the sole decision maker as to whether an app is made available to app users through the Apple store. Isn't that correct? If it's a native app, yes, sir. If it's a web app, no. Okay, and this first part, he says, no, we're not the only place you can get apps because you can do web apps.

This is a lie by Tim Cook. it's totally dishonest and he's using a web page and calling it an app. We all know that apps are apps and what you can do in an app is distinctly different than what you can do in a web page. So this is a straight up lie and this, you know, somebody who's in politics is not like us where we can in the industry pick up that that's a lie. But really, you know, on follow up, if they get pulled in there again, they should know that a web app cannot do what a modern app.

app on iOS can do. This is obvious to all of us, right? You're not going to run one of these sophisticated games in a web browser and expect people to actually make it work or, you know, run subscriptions. Throughout our investigation, we've heard concerns that rules governing the App Store review process are not available to the app developers. The rules are made up as you go. They are arbitrarily interpreted and enforced and are subject to change whenever Apple sees fit to change. Also, the rules get changed to benefit Apple at the expense of app developers. And the App Store is said to also discriminate between app developers with similar apps. Mr. Cook, does Apple not treat all app developers equally?

Sir, we treat every developer the same. We have open and transparent rules. It's a rigorous process. because we care so deeply about privacy and security and quality, we do look at every app before it goes on. But those rules apply evenly to everyone. And as you can tell by going from... Some developers are favored over others, though. Isn't that correct? That is not correct.

We do a lot of things with developers, including looking at their beta test apps, regardless of whether they're small or large. Now the next part where he gets it wrong is, and I think Tim Cook, is, you know, somewhere between Sundar's like overpolished and maybe a little more authentic like Bezos. You say, hey, listen, we have transparent rules for the app store. The last descriptor, anybody in our industry would give the Apple app store as a descriptor would be transparent. It's opaque to the level of absurdity. Like, people can't get an answer.

Do you just remember hey.com? why did nobody bring up hey.com here and say, hey, do you know that? Maybe I didn't see every single minute of the hearing today. I had to step out for a little bit. So maybe it did come up, but I don't think so. And they could have just said, hey, why did hey.com not be able to get an answer? And the fact is there is no way for you to get an answer from them. And there's a very simple solution here.

And this is why I think Tim Cook really needs to think about this. The easiest solution for them is to say, we allow a developer version for your iOS device. If you get the developer version, it costs $29 a year, and you can do whatever you want with your phone. But we will not support you because we want to protect children from porn, and we want to protect your privacy, and we need to have a closed ecosystem. If you want to unlock your phone, by all means, get the developer edition, pay us $29,

which is a fraction of the cost of the phone, and you will be able to have your phone hacked, your privacy compromised, and you'll be able to have your, kids see things they shouldn't see on the internet and that's your right or you could go buy an android phone and have a raw version of android and have no rules we are the rules operating system just like on family tv you might have one standard HBO might have another and then on the wild west of the internet of course you can see any videos you want and some of them are going to be disturbing and not meant for everybody we want to be that safe network television kind of place and i think that's important that we exist in the world as that choice now he did lie again or

I shouldn't say a lie. He was dishonest when he said, we don't have top market share in any of the categories we operate in. Okay. You may not have the number of phones when you're up against Android, which is open source. But if you look at the dollars made from the App Store, in the United States at least, and you look at the profits from phones, certainly Apple has the majority of profits from phones and smart devices, clearly, even though they're the smaller number on units, they have a massive profit with the other phones. are sold at a loss or a modest profit. And then in the App Store, everybody knows when you run an app, 60, 70, 80, even 90% of your revenue will come from iOS and 10% will come from Android users. So they do have a leading position when it comes to the revenue. It really does depend on how you look at and you define leading position.

Okay. And finally, the worst person in all of this after Zuckerberg is this guy, Jim Jordan, who, to me, Jim Jordan is like the, you know, a parent at a baseball game and a little league game who like runs on the court in a meaningless game and gets in the umpires face and yells and spits on them and all the parents and the wife and the kids are all like looking away like oh my god dad you're so embarrassing he just kept interrupting and yelling at people and these other uh you know congress people they deserve to have their time and he doesn't have his mask on and he's yelling and screaming at people about

conspiracy theories uh and he was just a horrible human being and i've seen him at other things with the jacket off and the it's a bad look he looks like he's just in some 1950s like throwback hearing and he thinks that he's like going to do this grandstanding thing and he's in some you know movie of his own creation but he looks like an idiot uh and to yell and shout over other people when it's their time to do questioning was authentic roll the tape this is a simple question can you today assure americans you will not tailor your features in any way to help help one candidate over other. And this, this, what I'm concerned about is you helping Joe Biden over President Trump. We won't do any work, you know, to politically tell anything one way or other. It's against our

core values. But, but you did it in 2016. There's an email in 2016 where Ms. Ileana Marillo, head of your multicultural marketing, talks about the silent donation Google made to the Clinton campaign and you applauded her work. She points that out in the email. I'm just curious, if you did it in 16, I want to make, you know, in spite of the fact you did it in 16, President Trump won. I just want to make sure you're not going to do it again in 2020. Congressman, I recall our conversation at that time, and I appreciate your concern. We didn't find any evidence of such activity. And I took the opportunity after our conversation to reinforce to the company. We realized even an appearance could.

be improper. So we have clearly communicated to our employees. Any personal political activity, while that's their right, needs to happen on their own time. The chair now recognizes this is gentlelady from Pennsylvania. Ms. Scanlon. Thank you, gentlemen. I'd like to redirect your attention to antitrust law rather than fringe conspiracy theories. Mr. Bezos, our investigation... Mr. Chairman, we have the email. There is no freezing. It's not your time. You do not have the time. Please be respectful of your colleague. He controls the time. Put your mask on.

Put your mask on. Mr. Jornd. Mr. Jordan. I want to talk about math. Mr. Jordan. Why would the deputy secretary of treasury unmasked Michael Flynn's name, Mr. Raskin. And what I want to know is when someone comes after my modus for asking questions,

I get a chance to respond. The gentlelady is recognized. Thank you, Mr. Chairman. Okay. I would love to hear your feedback on this. If you got any feedback on the emergency pod, we just did, thanks to producer Nick for putting these clips together. I'd love to hear your feedback.

We're going to dump it into the RSS feed. We'll put it on Twitter and the other places. And if you want to talk to me anytime, this week in startups.com slash slack. We've got a Slack room. Join us there. And we'll talk soon. Bye-bye.