The sharp tactics employed by the world’s largest technology companies to cement their dominance over the digital economy have been revealed in documents released by US politicians.
Facebook adopts a “copy, acquire, and kill” strategy when rivals emerge, Amazon aggressively prices out competition and Apple stifles independent developers with its app store fees, according to documents and testimony at a historic inquiry into Silicon Valley.
The revelations during a five-hour hearing in Washington on Wednesday are likely to strengthen calls for tighter regulation of America’s big tech firms, whose share prices and market power have grown during the pandemic. Some of the country’s most senior politicians cast Amazon, Facebook, Apple and Alphabet, the parent company of Google, as “robber barons” of the 21st century.
Monopolies stifled freedom and were “incompatible with democracy”, David Cicilline, a Democratic congressman, said. The companies “shake down small businesses and enrich themselves while choking off competitors”, he said.
The hearing is the culmination of 13 months of investigation by the House judiciary subcommittee on antitrust. The four companies, which are collectively worth about $5 trillion, are accused of abusing their market position.
Mark Zuckerberg, founder of Facebook, Jeff Bezos, founder of Amazon, Sundar Pichai, chief executive of Alphabet, and Tim Cook, chief executive of Apple, were on the back foot for most of the session but denied abusing power.
Mr Zuckerberg was repeatedly questioned about his $1 billion takeover of Instagram in 2012, when the photo-sharing startup had a dozen staff and no revenue but a fast-growing user base. It now has more than one billion users.
The hearing was shown emails between Mr Zuckerberg, 36, and David Ebersman, his chief financial officer at the time, in which they discussed “going after” Instagram and other social media sites. “If they grow to a large scale, they could be very disruptive to us,” Mr Zuckerberg wrote. An acquisition would “give us a year or more to integrate their dynamics before anyone can get close to their scale again”.
He told the hearing Instagram had succeeded because of the investment.
Pramila Jayapal, a Democratic congresswoman, told him: “Your company uses data to spy on competitors and to copy, acquire and kill rivals.”
