The Silicon Valley once again stands at the crossroads of history

This article is written by a friend of Momentum Works who decided to go anonymous

The wheel of history in 2020 ushered in a small climax today, and it deserves to be written into the history of the Internet. Today, the Capitol Hill in Washington held the largest hearing after the Microsoft antitrust law hearing in the 1990s. The CEOs of the four US technology giants attended the hearing: Amazon’s Bezos, Apple’s Cook, and Google’s Pichai, and Facebook’s Zuckerberg. They appeared together in a scene at the hearing for the first time. It can be said that this hearing affects the eyes of Internet practitioners all over the world.

What are the reasons behind the hearing?

The hearing mainly questioned the following three points, which can be said to be the reasons announced on the public:

1. The four major companies have controlled the channels for data collection and processing, and a large amount of user data has brought the possibility of insecurity and abuse.
2. The improvement of the service structure makes many small companies rely on the four giants ecosystems to develop and survive, which makes it impossible for small companies to compete with the rule-makers.
3. The high concentration of science and technology has further strengthened the moat and head effect, technological advantages increased continually and monopolized the market

Chairman Cicilline said in his opening speech that the four giants are the absolute leaders in the current fields of the United States: the largest e-commerce platform, the largest mobile device manufacturer, the largest social network platform, and the largest search engine. The epidemic has made the head effect of the Internet more concentrated on these four giants.

In general, their success is not a problem, but the abuse of data and blocking the development of small businesses is problematic. What’s more, if it is only a business issue, it is not enough for the CEOs of the Big Four to be required to attend the hearing.

The Internet platform has objectively had an impact on the US election. Some conservative politicians who participated in the questioning, such as Jordan and Steube, spoke very fiercely; made the Speaker Cicilline angry, and told Jordan to shut up and put on the mask on the spot.

There is even a political view like concentrated business power leads to political control. Some senior executives at Google and Facebook have previously stated that they will not let Trump win. Now they have discovered that they are not like this.

The chain reaction brought about by this is no longer as simple as a business issue. In general, the two parties have different points of attack. Democrats are mainly targeting unfair competition and monopoly, while Republicans accuse them of abusing information and prejudice as always

What was asked about the content of the hearing?

This is a summary of some of the questions I heard.

 Amazon

A number of lawmakers mentioned Amazon’s monopoly on e-commerce and related ecology. Regarding the huge profits of the e-commerce ecosystem, Chinese companies going overseas have also experienced the wave of bankruptcy in the previous two years. 

A congressman also brought a tearful recording complaint from an Indian shopkeeper, leaving Bezos at a loss. In addition, a large number of companies store data on AWS, including Amazon’s advertising ecosystem, which also caused continuous attacks by Congress.

Some lawmakers questioned that Amazon can buy rankings with money. Of course, this is a fact, but Congress understands that this is a thing that completely undermines fairness. Even chairman Cicilline said: “What on earth that compares your business other than a drug dealer“

 (It’s hard to imagine whether this kind of words will come out on Capitol Hill)

Apple

It is not the market share of smartphones that Cook is more questioned, but the ability of iOS to control and block app innovation. The availability of apps is controlled by Apple, which means that small businesses will always be at a disadvantage in the iOS ecosystem.

Of course, this issue needs to be analyzed in two ways. It does not necessarily mean that there is a problem with the policy. However, many policies are not transparent, especially when they are changed frequently.

Who can beat the rule-makers in the competition? Is this fair? It is difficult to give an exact answer. In general, Cook speaks less, indicating that he has not been questioned much. Apple is lucky one among the four.

   Facebook

Zuckerberg spent a lot of time in the first half of a few hours dealing with mergers and unfair competition issues. The first to bear the brunt was the 2012 acquisition of Instagram. Congressman Mcbath even questioned the existence of something fishy or irrational in the Obama administration that passed the merger proposal.

During the questioning, the Congressman also listed some internal emails from Sandberg and the founder of Snapchat, pointed out that Zuckerberg used some threatening words such as “partner or competitor” to threaten Instagram. If it is interpreted from the perspective of the media, it is guessed that Congress may already have the intention of splitting Facebook and Instagram.

Google

Google has also been questioned a lot. I only mention stealing information and Youtube. Some parliamentarians criticized the content of Youtube for improper guidance of Covid19 information (such as video discussion on Youtube whether or not to wear a mask). Congressman Yelp provided the fact that Google used the platform to steal reviews of its users. This is indeed indisputable. As the only foreigner (Indian) attending, Pichai was obviously a little nervous.

How did I feel after the hearing?

1. The two sides of the hearing have completely different understandings of “commercial fairness”, just like a chicken talking to a duck: in the sense of political correctness of parliamentarians, what they want is a fair stage based on the national category and full competition. Such entrepreneurs believe that Apple iOS has provided APP entrepreneurs with a fair enough platform, with sufficient competition (of course not with Apple, but with other apps), and the dimensions are completely different.

2. Avoid the importance and dwell on the trivial shows their negotiating skills, each with its own needs: objectively speaking, the four CEOs may all play dumb, but it really looks like elementary school students are being taught collectively by teachers, sitting in distress and stammering.

Many of the time when the MPs ask questions, they do not need them to answer. They are more like making statements on the offensive side. Of course, the responses they get are just to deal with them. For example, Zuckerberg has demonstrated a strong ability to shirk responsibility on many issues. For example, when he was questioned about the monopoly in the advertising field, he even said that our Facebook is underdog, not the largest, and the largest advertising ecosystem is Google. Very obviously, the answer is not important.

3. The power of the Internet is still too small, and its status is still a small baby. When have we seen American oil companies being questioned? When have you seen the US arms company accused of a monopoly? In this era of scientific and technological innovation, further progress will require a lot of effort and a long way to go. Moreover, in this meeting, Congress used a large number of evidence for the company’s internal communications, emails, recordings, etc., and there was no privacy at all.

4. Chinese companies lack experience in handling relations with local governments overseas. TikTok is already the most well-prepared for Chinese companies, but I still can’t imagine Kevin Mayer accepting the question. When the question was asked last time, TikTok’s reply was that people were not there. Many times Chinese companies are not ready to communicate with government agencies.

5. How does the road of “building a closed ecology” go down? In the past five years, the four major companies have come out with a closed ecology from data to realization, and it has become four big mountains that are pressing on the heads of global companies going overseas. It is also the direction of the Chinese giants’ efforts to break the game.

While accepting questions today, we are at a loss for the future of the industry. Will the United States self-defeating itself, or there’s no marking without breaking? Just as the four companies grew up after Microsoft’s questioning, maybe today’s hearing will be a good thing to go overseas, maybe the next growth period in Silicon Valley is coming.

Several hours of hearings have just ended, and finally, I tried to guess the direction of the outcome. Hearings may continue for several more. In the case of Congress accusing Microsoft 20 years ago, it finally ended with an API interface.

Microsoft’s luck does not mean that these four companies will be the same today. Not surprisingly, these companies will be more or less forced to make corresponding adjustments. As for the four debaters, Cook didn’t talk too much and stammered, Zuckerberg shirked responsibilities slickly, Bezos was the most pitiful, and he had no choice but to admit those questions he couldn’t answer. In all, I feel that Amazon and Google may be more affected.

What’s more interesting is that although the four people who are being questioned are today, Jack of Twitter and Kevin of Tiktok are also mentioned from time to time. Quite a few issues at the hearing today are almost exactly the same as the attacks on Tiktok, all of which are aimed at data abuse and youth protection.

Kevin Mayer also spoke before the meeting, with the implication: “TikTok has problems as you have on Facebook.” “Rather than slander behind and play tricks, it is better to compete in business.” It is foreseeable that this Congress initiated It is an overall question for Internet companies, and the different perspectives and demands of the two parties have also made this battle suddenly and perplexing changes.

Players deep in the vortex are constantly trying to pull down more ones. The general election and the epidemic have run wildly under the influence of various factors. Dominoes move from the center to the outside, gradually tearing down the more uncontrollable bricks.