Please stop big tech firms, small rivals tell lawmakers
For all the criticisms directed at the largest tech companies in the last years, few smaller rivals have been willing to speak up publicly.
That changed for a couple of hours Friday as executives at four businesses pleaded with federal lawmakers to rein in Google, Facebook, Apple and Amazon.
At a congressional hearing in Boulder, Colo., top executives of Sonos, PopSockets, Basecamp and Tile testified that the biggest technology companies hindered their businesses. Their stories varied, but they shared a theme: The tech giants have used their powerful positions in search, e-commerce, online ads and smartphones to squeeze out them and other rivals.
Tile, which makes small tracking devices, said Apple had put up hurdles for Tile’s smartphone app that didn’t apply to Apple’s competing product. Sonos, the highend audio company, said Google had copied its patented speaker technology and used its dominance in search to enter new markets. PopSockets, which makes smartphone grips, said Amazon “bullied” it into sales agreements and ignored complaints about counterfeits on the retail platform.
“It’s like playing a soccer game,” said Kirsten Daru, vice president and general counsel of Tile. “You might be the best team in the league, but you’re playing against a team that owns the field, the ball, the stadium and the entire league, and they can change the rules of the game in their own favor and anytime.”
The executives’ criticism provided lawmakers on the House antitrust subcommittee, which conducted the hearing, with personal stories about the power and influence of Silicon Valley’s biggest companies. Last year, the House opened a broad investigation into whether those large companies violated antitrust laws. At the same time, the Justice Department and the Federal Trade Commission opened separate competition investigations into Amazon, Facebook, Apple and Google. In addition, nearly all 50 states are investigating whether Facebook and Google engage in anticompetitive practices.
Despite all of those investigations, few companies have come forward to complain in public. The House antitrust subcommittee has interviewed dozens of companies that accuse the big tech companies of unlawfully stifling competition. Most have insisted on confidentiality. This month, Sonos sued Google on allegations of antitrust violations and patent infringement, in its first pointed action against the company.
Lawmakers at Friday’s hearing, which was held in Boulder in part to draw more national attention to the House investigation, noted how rarely startups spoke out about their complaints, and encouraged them to keep making their case.
“Thank you for your testimony, and quite frankly your courage to be here today,” said Rep. Ed Perlmutter, D-Colo. “Because when you take on dominant players, whether it’s Amazon, Google, Apple or Facebook, you’ve got to have a little trepidation.”
Rep. David Cicilline, DR.I., who leads the antitrust subcommittee, thanked the executives for “describing economic retaliation.”
The tech companies vehemently deny that they illegally harm competition. Google, for instance, has disputed all the claims made by Sonos and said it would fight the lawsuit.
The hearing capped a difficult week for big tech, which was the target of fierce criticism by top politicians. Much of that anger was directed at Facebook, which has refused to police lies shared by politicians on its social network.
Speaker Nancy Pelosi said Thursday that Facebook “just cares about money” and that the company intended “to be accomplices in misleading the American people.” Former Vice President Joe Biden, who has been the focus of false ads by President Donald Trump’s reelection campaign, told The New York Times editorial board that Facebook and other companies that allow the spread of misinformation should lose a critical liability shield for internet platforms.
The hearing Friday focused entirely on whether the big companies dominate markets. The executives, who argued at length that companies like Google and Amazon unfairly hurt their businesses, received little pushback from lawmakers.
David Barnett, founder of PopSockets, said Amazon had pressured it to lower listing prices or else allow unauthorized resellers to sell the product. He also alleged that Amazon allowed a flood of counterfeits to compete with PopSockets on the site to pressure the company into spending more on marketing.
It is “bullying with smile,” Barnett said.
David Heinemeier Hansson, the chief technology officer and a co-founder of Basecamp, a provider of online productivity tools, said Google’s domination of the search industry forced his company to go with the advertising titan’s demands.
“The internet has been colonized by handful of big tech companies that wield their monopoly powers without restraint,” Hansson said.
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