Today, Explained - Tim, Mark, Jeff, and Sundar

Episode Date: July 30, 2020

The leaders of Apple, Facebook, Amazon, and Google testified before Congress on Wednesday in what The Verge’s Casey Newton says might have been the most important Webex in human history. Transcript at vox.com/todayexplained. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Visit connectsontario.ca. The Bad Boys of Tech came to Capitol Hill to testify on Wednesday. And by came, I mean they logged on to WebEx. But they were wearing suits and ties. And they swore an oath not to lie. Tim Apple Mark Facebook Billionaire Bezos and Sundar Google

This is the Tim, Mark, Jeff and Sundar Show. Here's your host, Sean Ramos-Furham. Casey Newton, you write about tech and democracy for The Verge. How big a deal were Wednesday's hearings? Nothing quite like this had ever happened before at the very least, yeah? With the exception of the Microsoft antitrust case in the late 90s, we really haven't seen meaningful antitrust regulation in this country for 50 years. 13 months ago, the House Judiciary Committee and its antitrust subcommittee undertook an investigation into the market power of Apple, Amazon, Facebook, and Google. And in the months since, they have held five preliminary hearings. They've produced

1.3 million documents. And Wednesday, we had the culmination of that, this hearing where you had the CEOs of the big tech companies facing real questions about how their companies have dominated the markets they're in. For people who couldn't watch, what did the main event look like? Because none of these dudes actually showed up, huh? Well, as you know, Sean, we have a global pandemic that's happening right now. Sure. And so rather than risk it all to appear before the antitrust subcommittee, the CEOs dialed in on Cisco WebEx and appeared before an in-person hearing of many members of the antitrust subcommittee. It was kind of a hybrid. Some of the members of Congress were at their homes or offices and some were actually there in D.C. in the committee room. And then everyone appeared

on a giant grid in the manner of so many of our conversations these days. And of course, Jeff Bezos appeared to have the nicest room because he has the most money by far. And that is how that works. You make the most money, you have the nicest room. And that's just basic science. So I didn't get to watch all of it, but I did get to watch some of it, including the opening statements in it, in which each one of the tech lords laid out their inspiring American billionaire business stories with these gentle sort of preemptive suggestions that nothing about Apple, Facebook, Google, or Amazon was anti-competitive. It felt like foreshadowing. Yeah. I mean, nobody loves America like a billionaire, right? Things are going very well for them. And they believe very firmly that they have acted within all of

the relevant rules and laws and that nothing ought to change. We also know that customers have a lot of choices and that our products face fierce competition. Many of our competitors have hundreds of millions or billions of users. Some are upstarts, but others are gatekeepers with the power to decide if we can even release our apps in their app stores to compete with them. Research found that free services like search, Gmail, maps, and photos provide thousands of dollars a year in value to the average American. And many are small businesses using our digital tools to grow. Amazon accounts for less than 1% of the $25 trillion global retail market and less than 4% of U.S. retail. And of course, immediately thereafter, that sort of utopia they painted was pierced by the representatives on the committee. It was kind of like whiplash watching it because it would go from

Google and the military to Facebook and free speech to iPhones. So why don't we just help the people at home and go company by company, starting with Apple? Because Tim Cook seemed to sort of have an easy go. The thing that is happening with Apple is that it runs one of the two dominant mobile phone operating systems. And it also operates an app store that is necessary to use any apps on that phone. And for many of the apps that run on that phone, Apple charges a 30% cut of revenue. And that is true even in cases where it makes a competing app that does not have to pay that cut. So, for example, Apple makes a music product that charges $10 a month,

and Spotify makes a music product that costs $10 a month. Spotify has to pay three of those dollars to Apple. And so many companies have come forward to say that this is hurting competition because they are unable to invest the same amount that Apple is, and they're not able to compete. And how did Tim Cook respond to that allegation that the app store is inherently anti-competitive. Tim Cook says that 84% of the apps are charged nothing. The remaining 16% either pay 15 or 30, depending upon the specifics. And he says, hey, if you don't like it, go find another operating system on another phone. People have like a 50-50 option there.

It's Apple or Google. Did Tim Cook sort of like get off easy in the whole thing? I think Tim Cook got off easy. He got the fewest questions of anyone up there, something like 35 questions compared to something like 60 for Zuckerberg. So it seemed like members just were not as interested in scrutinizing Apple as they were the other giants. And everyone loves to scrutinize Facebook, including you, of course. The questions to Mark Zuckerberg felt sort of familiar, like old hat. Did they feel new and interesting to you? You're right. And that Congress was really looking backward when it came to Facebook, whereas the antitrust questions facing the other companies feel

much more current and future. With Facebook, the question was... Mr. Zuckerberg, you have written that Facebook can likely always just buy any competitive startups. In fact, on the day Facebook bought Instagram, which you described as a threat, you wrote, quote, one thing about startups is you can often acquire them, close quote. And so they presented a bunch of new documents, which we reported on at The Verge, that showed conversations in which Zuckerberg says that it is a competitor and he would like to neutralize that threat. Now, Zuckerberg told Congress, look, I've been clear that Instagram was a competitor in the space of mobile photo sharing. But we never could have imagined it was going to grow as big as it eventually did.

And in fact, Facebook says by having them join us, they certainly went from being a competitor in the space of being a mobile camera to an app that we could help grow and help get more people to be able to use. Yeah, I saw that moment and I kind of scratched my head because I felt like Instagram was pretty huge before Facebook acquired it. It was certainly growing by the time that the ink dried on the contracts. And now today it has over a billion users. So, you know, certainly Facebook had the data

that showed that it was growing incredibly quickly and that growth has done nothing but continue ever since. Google had a much tougher go, it seemed. There were a lot of representatives taking a lot of Google's decisions recently apart. Yeah, Google faces the most imminent risk of real antitrust action. There has been some reporting that an antitrust case may be brought against them by the federal government this summer. And a lot of it has to do with search results.

When you Google something, in many cases, you will not see what you used to see on Google, which was links to websites. Instead, Google will try to answer your question for you. And often it will answer with another Google product, right? Like if you search for a location on earth, Google will show you Google travel products. And that has made it harder to compete for other travel-based businesses, right?

Or if you think about local reviews, Yelp built a whole business on reviewing local businesses. And it used to rank really highly in Google search. And then Google started to build in reviews of local businesses. And now Yelp reviews can be harder to find. So it's those kinds of things that have gotten regulators attention. And it seems like that has been persuasive to at least some of those regulators. So did Sundar Pichai do a good job of convincing the antitrust committee that Google is doing its best to foster competition? Or, you know, is the federal government sure to take action this summer? I don't think he did a good job convincing because I actually don't think that this

hearing was about convincing anyone. It was much more of a forum for members of Congress to present what they had learned and to show the homework that they had done. It was rare for a CEO to get more than a few sentences out of their mouth without being interrupted and told to wrap it up. Congressman, most of the data today we collect is to help users and provide personalized experiences back. Okay, thank you so much, Mr. Pukai. Mr. Chairman, I yield back. In Sundar's defense, he didn't have a lot of room to make his case.

And of course, lastly, the other elephant in the room that is certainly facing a lot of allegations of being anti-competitive and was a big debut for billionaire Bezos is Amazon, right? Yeah, he had never appeared to testify before Congress before, which seems wild. And he got questions about how Amazon's marketplace operates and whether it has made life difficult for the sellers that use that platform. Probably the thing that got the most attention is that Amazon has been accused of analyzing the sales activity on its platform, seeing what the other sellers are doing, and then saying, oh, this is really popular. We should make one of those. And so then they make one of those, and then they promote it higher in their search results. And next thing you know, the other guy's out of business. And Amazon will tell you that's not supposed to happen. But when Bezos was asked about it today, he said he could not deny that it had happened. And he said the company was investigating, which it has been saying for

months now. How did Jeff Bezos do in his debut? Look, he is a very genial presence. I would say he did his best to come across as reasonable. And frankly, it's easy to come across as reasonable when you're being constantly interrupted, right? Sometimes I feel like Congress would be better off if they would just let these guys talk for a little while. Like you might actually learn something, you know, but I will say he did stumble. For example,

one of the members of Congress said in relation to this problem of counterfeit goods, when people go to sell something on your website, do you require a real name and address? Yes or no? I believe we do. But let me get back to your office. And Bezos didn't know. And the member said, Do you require a phone number, yes or no? That seems like a fairly basic fundamental question that you would assume the CEO of Amazon would know. I don't know if it's required. I think we often have it. And he did not know. So briefly then, how do you verify that each of these pieces of information is accurate?

I don't know the answer to your question. And that was useful for me to know. Something refreshing to see during this hearing, which I certainly didn't see during the impeachment hearings, was it seemed like Democrats and Republicans were united in purpose, if not motivation. Yeah, I think it's fair to say that both the Republicans and the Democrats are frustrated with these tech companies with almost an equal level of intensity. But I would also say that while, that only some of those complaints are rooted in reality. Like Republicans really only have one message, which is they

believe that there is a conspiracy among tech companies to systematically disadvantage conservatives from using their platforms. Mike Wacker came out and was a whistleblower indicating that the manual blacklist targets that Google specifically goes after are those who support President Trump, who hold a conservative viewpoint. And he left your company in 2019 because he was speaking out against these outrage mobs. And that is despite the fact that a preponderance of evidence shows that conservative elected officials outperform Democratic elected officials when it comes to the sheer reach and engagement that the things that they post on those networks receive.

Does it seem like something might finally happen? I think that, yes, something will happen. I think that we will see antitrust legislation against Google this summer. I think we'll probably see an antitrust case against Facebook, although probably not before the election. And of course, the results of the election could change that outcome. People don't realize that there are now antitrust investigations being led separately

by the Federal Trade Commission, the Department of Justice, and multiple groupings of state attorneys general into Facebook, Amazon, Google, and Apple. And so while I don't expect that the result is that going to be every tech company broken up into smithereens, I do think we are going to see something meaningful come out of all of that. It just seems unimaginable that all of those investigations would turn out to be for naught. Casey Newton's got a very good newsletter called The Interface. You can sign up for it at

theverge.com slash interface. And after the break, I'm going to talk to Kara Swisher about the staggering amount of power these four dudes have. Support for Today Explained comes from Aura. Aura believes that sharing pictures is a great Thank you. videos directly from your phone to the frame. When you give an AuraFrame as a gift, you can personalize it, you can preload it with a thoughtful message, maybe your favorite photos. Our colleague Andrew tried an AuraFrame for himself. So setup was super simple. In my case, we were celebrating my grandmother's birthday, and she's very fortunate. She's got 10 grandkids. And so we wanted to surprise her with the AuraFrame. And because she's a little bit older, it was just easier for us to source all the images together and have them uploaded to the frame itself. And because we're all connected over text message, it was just so

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Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connex Ontario at 1-866-531-2600 to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with Something very strange happened on Fox News last week. Tucker Carlson went after Jeff Bezos for making $13 billion in one day. Now, 20 years ago, if that had happened, if a captain of industry had made $13 billion in a single day while the country got poorer, the Democratic Party would have had something to say about it. Not anymore, because the people getting rich are members of the Democratic Party.

But that wasn't particularly strange. It's rare anyone makes $13 billion in a day. It's worth questioning how that happened. The strange part transpired at the end of Tucker's show when he was doing his handoff with Sean Hannity, who always follows. You've seen these handoffs on cable. They're usually fluffy, you know, flattering, fatuous. This one was not that. Have a great night. And now, Sean Hannity takes over from you. People can make money. They provide goods and services. People want, need, and desire. That's America.

It's called freedom, capitalism. And as long as it's honest, right? People decide. All right, Tucker, great show. Welcome to... What you can't see is Tucker's face. He is frowning. He looks displeased with his colleague who just called him out. It's rare to see Sean Hannity call out Tucker Carlson on live TV,

and it was strange that the thing they were pecking at each other over was the wealth of Jeff Bezos. Kara Swisher noticed as well, and she wrote about it for the New York Times. Tucker Carlson looked totally tweaked. And then he had to sort of dial it back in a tweet saying, well, if it was dishonestly, obviously not. But honestly, I believe in capitalism. So it was this weird thing.

But the point of the matter is, is the $13 billion. And everybody focused on the money that Jeff Bezos has or the money that Mark Zuckerberg has. And all the tech moguls, Bloomberg keeps a list, have made enormous amounts of money during the pandemic. For people like Tucker Carlson, who can't really quite wrap their heads around how someone like Jeff Bezos could make $13 billion in one day, how does that happen? The stock of Amazon. Like, he owns a lot of Amazon. And so Amazon's gone up. It's done a really good job of delivery.

It's become a necessary service. We've sort of fast-forwarded a decade in terms of use of delivery services. And he is the one who has the services that work in a pandemic really well compared to other retailers. Now, other retailers are trying really hard, but Amazon is like, you know, just doing great. And of course, they've got their cloud services, which has always been super strong. And he's, you know, sort of trying to virus-proof his distribution system, not always successful. There's been a lot of illnesses at Amazon warehouses. Has it borne out for Google and Facebook and Apple, too?

Everybody. All of them are doing great. And they're more powerful than ever as they go, you know, to try to get Congress not to legislate against them. How should people be thinking about it? I mean, is it great that these American tech companies are profiting hugely off of this pandemic? Or is it problematic? I mean, did they set up the businesses that would succeed in this moment? And should we be happy for them? Well, it is what it is, right?

As President Trump likes to say, you know, they do have these businesses. They're not in the restaurant business. They're not in the theater business. But everybody's being accelerated by a decade. That's what you have to think about. This is things, trends that were going in Amazon's direction or Google's direction are now accelerated. And so, you know, Mark Cuban, I did an interview with him on Pivot and it was, he was like, this is a huge economic experiment to see if we're going to actually change our economy, which we are. Our economy is about to change in a massive way in terms of workers, in terms of benefits,

and lots of stuff like that. And it's just, it was trending that way, but now it's really trending that way. You seem to suggest in your op-ed in the New York Times that people should spend less time worrying about how much money these guys are making and spend more time thinking about how much power they're amassing.

Yes, I can think about it like the Rockefellers. Look, they stayed rich and good thing because the foundation gave away lots of money later and same thing with these these rich people they're giving marks giving me money mckenzie scott is giving away money um so they're going to stay rich the issue is like the rockefellers got out of power when there started to be legislation like the power that they held over society but the fact is that that's not going down until amazon goes down. And so the question is,

how much power should these companies and how many guardrails and regulations and ways to stop them from being totally dominant? And there are no rules for the internet companies compared to Wall Street or chemical companies or car companies. Everybody else has regulations except internet people. And then on the side light is you see this damage being done, whether it's hate speech or addiction or this and that. It's all systemic to the fact that they have total power and we have no control as a society.

And we've talked about this with you before. And Casey just said he thinks there might finally be some antitrust action this summer. I guess we'll see. Why is this so hard to do for tech? I don't know. I don't understand it because because Republicans, Democrats can't agree on something they absolutely should agree on, depending on the company. Now, the problem is each of these companies have a different issue. Apple has to do with the App Store, and that could maybe be by rules and regulations, right? That doesn't have to break up Apple to do that. Amazon's got some issues around marketplace and also selling things. Like I think the people who sell on the marketplace have good

question to be worried about Amazon products being sold under. I bought an Amazon safe the other day because it was so much cheaper. It was, and it was the same safe. Is it like Amazon branded safe? Yes, it is. It's an Amazon safe and I'm sure he has my numbers. I didn't think you'd trust same safe. Is it like Amazon branded safe? Yes, it is. It's an Amazon safe. And I'm sure he has the numbers. I didn't think you'd trust that safe, Karen. Well, it's just, it was like so, I tend to try to buy. And then I'm like, why am I buying branded stuff? They're only, I'm being charged for branded.

So why not? Like this white label stuff that Amazon makes. Some of the batteries. Why should I pay triple for batteries? Because they're Duracell when they're the exact same batteries. And so, you know, you sort of sit there. you're like, which one, which ridiculous conglomerate do I want to advantage here, but the one who has the lower prices. And so that's the issue with them. And then there's Google, which of course has search dominance. You've seen a lot of stories

recently about that they advantage their products in search. And besides the fact that they have so much search dominance, which is crazy, right? I mean, think about it, like 90 some percent, that's another issue, but then they also have products that compete. Apple also has products that compete with Spotify. Should, when they go into music, they have special rules when they go directly against, when they move into services that compete directly with their customers, should there be special rules? And then Facebook is just a lot of stuff, you know, should they own Instagram? Should they have all the means of social communication? Should they dominate social communications? And so, you massive system that's impossible to monitor because they've made it the way it is. the sort of evergreen question we ask on our show. Like, what would it take for people to rise up and say, hey, you know what, Facebook, you know what, Instagram, Twitter, you've gone too far. You need to do something about X. I wonder, I still wonder what it would take to get people

there. I don't know. Because, you know, the problem is you get a lot of free, good stuff that you like. You know, that's, I always, as you know, I call citizens cheap dates to the tech companies. They get all the money. We get a dating app or a map. God, I got a map. Thank you so much. What do you mean? You took data from the government that we paid for and then repurposed it and sold it to us and then took our data.

And now you have $13 billion in one day. Oh, how nice that is. That said, these are innovative people who have created really great products. They just need some regulation. By the way, welcome to your billions, Mr. Bezos. He created something from nothing, but he sat on the system that was created for him by the government and the government should have some say in some of it. Like, and they shouldn't be able to sell a safe for half the price of another company and then put it up there in front of you and then being the only way it can be delivered. And then, you know, it takes just a second to be like, oh, I'm exhausted with COVID. My kids are screaming.

I need a frigging safe. Like, just deliver it to me, Mr. Bezos. And what if we do all just give up and submit to Facebook and Amazon and Apple and Twitter? I mean, well, I'm not Facebook. I came off of it. I don't want their information. I don't want their grubby, thieving hands in my data. That's how I look at it.

I quit Instagram, too. Fair. Can you just remind people what the dangers are of not regulating these tech companies? They'll grab every piece of your data and turn you into Soylent Green. I don't know what else to say, right? Whatever. The internet is people. They'll take your data and they will,

they use it in any way they can and they need some regulation. And eventually these hacking incidents will get worse and you will not own yourself. That is what I feel is the problem. You need to own yourself. All right, Kara. Thank you so much.

Appreciate your time. All right. Good luck. I appreciate it. Don't buy a safe. Resist. Resist. Thank you.