House Antitrust Panel Seeks Documents From 4 Big Tech Firms  09/13/2019 17:52:42   Steve Lohr
ImageA Google office in New York. A House committee on Friday asked the company and three other big technology firms for detailed information about their business operations.
A Google office in New York. A House committee on Friday asked the company and three other big technology firms for detailed information about their business operations.CreditCreditBrendan Mcdermid/Reuters

Congress showed the breadth of its investigation into the big tech companies on Friday, making a public demand for scores of documents, including the personal emails and other communications from dozens of top executives.

Members of the House committee, Republicans and Democrats alike, who are investigating the market power and behavior of the companies, sent letters directly to Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook and Larry Page of Google.

The requests called for all communications to and from executives at those companies, including eight at Amazon, 14 at Apple, 15 at Facebook, and 14 at Google.

With the request, which was posted on the committees website, the lawmakers sent a not-so-subtle message that executives would be held responsible for the replies, and that the investigation would continue to play out publicly. That has the potential of damaging the brands reputation. They are already dealing with questions about spreading disinformation, failing to respect users privacy and maneuvering to minimize their taxes.

The requests come as similar inquiries are underway at the Justice Department, the Federal Trade Commission and by attorneys general of dozens of states. The investigations are just beginning in earnest. How far the inquiries will go, what they will uncover and if any allegations will stand up in court are all uncertain.

But the investigations show the growing angst about the tech companies power. For decades, the industry has been held up as a beacon of American ingenuity and business acumen, and it faced little regulation. Now, though, Silicon Valleys influence on everything from how we vote to how we shop is readily apparent  and yet the technology driving it remains largely mysterious.

There is this great and growing dependence on technology that we dont really understand, said A. Douglas Melamed, a former antitrust official in Justice Department. And that frightens people.

House lawmakers were expected to demand internal corporate documents and communications as part of their antitrust investigation. But such demands are often made to a companys top lawyer. And the committee asked for all communications related to a long list of corporate actions, from companies acquired to the treatment of potential rivals.

By releasing its requests, the House committee offered a glimpse of the depth of the scrutiny that the companies will face and laid out the lines of investigation being pursued. The lawmakers are looking for signs of tech executives intent when they made decisions that harmed competitors, according to a person close to the congressional investigation who spoke on the condition of anonymity because the lawmakers plans were private.

The information the committee collects can also feed the other investigations, and help lawmakers more sharply question witnesses under oath in hearings, said William Kovacic, a law professor at George Washington University.

Those interrogations take on an entirely different tone, said Mr. Kovacic, a former chairman of the F.T.C. This is a significant escalation of the process.

The inquiries into individual companies are complex; the tech giants span a range of digital markets including internet search, advertising, e-commerce and social media. And the companies are likely to resist some of the requests, contending they could reveal trade secrets.

The companies will almost certainly try to narrow the scope and reduce the volume of the documents they deliver. But the House investigators have leverage. These are document requests but backed by the threat of subpoenas if the companies do not comply.

The communications habits of the individual companies will also play a role in determining how much evidence there is and in what form.

At Amazon, for example, Mr. Bezos writes brief emails to make announcements or delegate, but largely gives feedback and discusses issues in person. He is well known internally for forwarding customer complaints to staffers with just a ?, leaving teams scrambling to resolve the issue.

He has developed a rigid process for making decisions at Amazon that heavily relies on paper documents  called six-pagers for their length  that lay out the plan and reasoning for a proposed strategy. They often include hefty appendices and are presented to executives in long meetings where they are read and discussed.

But there are numerous examples of tech executives correspondence turning up as evidence in legal cases. Emails from Steve Jobs, the late Apple co-founder, were key evidence in the Justice Departments successful lawsuit against Apple for conspiring to raise the prices of e-books.

Wow, we have really lit the fuse on a powder keg, Mr. Jobs wrote in a 2010 email to a colleague after Apple opened an e-bookstore that prompted Amazon to change how it sold e-books.

In response to the committees requests, representatives of the companies mainly pointed to their previous statements: They have consistently said that they would cooperate with the federal and state investigations, and would seek to demonstrate that they operate in dynamic, highly competitive markets.

In a statement, Representative David Cicilline, Democrat of Rhode Island, who leads the subcommittee on antitrust, which is conducting the House investigation, called the document requests an important milestone in the fact-gathering stage.

Mr. Cicilline also emphasized the efforts bipartisan nature. The letters to chief executives are signed by Mr. Cicilline, and Jerrold Nadler, a New York Democrat and the chairman of the Judiciary Committee, and also the ranking Republican members of the Judiciary Committee and the antitrust subcommittee, Doug Collins of Georgia and James Sensenbrenner of Wisconsin.

The formal requests for information begin with cover letters to the chief executives, saying the investigators are examining competition in online markets and whether dominant firms are engaging in anticompetitive conduct. The letters are accompanied by detailed lists of the requested documents and communications.

It is unclear how much investigative work will become public as the various inquiries progress. At later stages, when investigators are trying to lay the groundwork for a suit, they wont want to show their hand to a potential corporate defendant.

Such work  collecting more documents, taking depositions, assembling evidence and building the narrative of corporate misbehavior  is best done in secrecy. Major antitrust investigations typically last many months or years.

Sometimes, companies themselves make disclosures about an investigation. Google, for example, said last Friday that its parent company, Alphabet, had received a mandatory request for information from the Justice Department about previous antitrust investigations.

The House document requests indicate that its staff has closely studied the companies.

The request sent to Google, for example, seeks communications to or from senior executives on a series of company moves including Googles purchase of DoubleClick in 2008 and AdMob in 2011. Those acquisitions helped build up Googles huge and lucrative ad business.

House investigators also want to see the executives communications on Google practices: One request is for communications on its policy on whether non-Google companies can provide competing ad networks and other services.

That part of the House inquiry echoes that of the states investigation of Google. The Texas State Attorney Generals Office, which is leading that effort, this week sent Google a lengthy demand for information on its ad business, The Wall Street Journal reported on Thursday.

But the House investigation is broader. Its request touches other businesses including smartphone software, seeking information on Googles purchase of Android in 2005.

The House requests for the other companies are similarly detailed. From Amazon, the investigators asked for information on fees charged to sellers on its online marketplace, its algorithms for ranking products for sale, favored treatment for Amazon-branded products and bundling of marketing benefits for vendors that also use the companys distribution service, Fulfillment by Amazon.

The House committee asked Apple about its technology for ranking apps in its App Store, its policy on links to non-Apple payment systems and whether iPhone users can choose non-Apple services by default.

The document sent to Facebook asks for extensive internal information about its acquisitions of Instagram in 2012 and WhatsApp in 2014, which were potentially emerging competitors until they were bought.

The House committee asks for company documents related to the strategic value and any antitrust risks associated with acquiring those companies.

The House document also requests information on any Facebook decisions that limit third-party apps access, including a version of its platform policy, which the company withdrew last year and could be read as a policy intended to keep competing technology off Facebook.

According to the House document, the policy said apps should, Add something unique to the community. Dont replicate core functionality that Facebook already provides.

Karen Weise contributed reporting from Seattle, and Jack Nicas from San Francisco.

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