We compete hard. We compete fairly. We try to be the best. Our goal is the best, not the most. We dont have a dominant share in any market or product category where we do business. Competition leads to better products and more choices for everyone. Emily but lawmakers coming out swinging. The ceo struggling to get their answers in. Jeff bezos of amazon having trouble getting some words in edgewise. Didnt have monopoly power over the sellers, do you think they would choose to stay in a relationship characterized by bullying, fear, and panic . With all respect, congresswoman, i do not accept the premise of your question. Does amazon pursue similar predatory campaigns in other parts of its business . I cannot comment on that because i dont remember it. Heres how the company described working with amazon. Amazon strings you along for a while because it feels so good to get that paycheck every week and in the past, we called it, heroin. This is one of your partners. Why would they compare your company to a drug dealer . I have Great Respect for you and this committee but i completely disagree with that characterization. Emily still, shares of all four companies ending the day in the green and above the rest of the market. Joining us, abigail doolittle. This hearingsee as went on and is still going on . Abigail some pretty interesting comments. I think these tech ceos and companies and more so the stocks benefited from the fact that it was a fed day. More of wall street attention was probably going to the fed as opposed to this testimony. We did have an up day. All these stocks up more than 1 . Look at a five day hast of these mega caps, it been a bit of a rough patch. Not just over the five days where all these stocks are down. Anticipation that this could be overhang. From the standpoint of whether any regulation will be slapped on big tech, it seems unlikely. The companies probably most vulnerable would be google and facebook. 90 . Nk i saw amazon, which seemed to be under the most pressure, the key there is less compelling when compared to walmart on some statistics. Thinking that while it was a psychological overhang, regulation is not going to happen anytime too soon. Emily abigail, thank you for that. We are in round three of questions with the representatives talking to the ceos. I want to focus on Mark Zuckerbergs testimony. Take a listen to this exchange with representative nadler. You have written that facebook can likely always by any competitor. On the day facebook bought instagram, which you described as a threat, you wrote, one thing about startups you were referring to Companies Like instagram, werent you . Ive always been clear that we viewed instagram as a competitor and a complement to our services. In the growing space after smartphones started getting big, and they competed with us in mobile cameras and photo sharing , but almost no one thought of them as a social network. People didnt think of them competing with us in that space. I think the acquisition has been wildly successful. We were able to continue investing and growing it as a standalone brand that now reaches many more people than kevin or i thought would be possible at the time. In early 2012 when facebook contemplated acquiring instagram, you told your cfo that instagram could be very disruptive to us. In the weeks leading up to the deal, you described instagram as a threat, saying, instagram can hurt us without becoming a huge business. At the time, there was a small but growing field did you mean consumers might switch from facebook to instagram . Congressman did you mean that . In the space of mobile photos and camera apps, they were a competitor. Ive been clear that instagram was a competitor in the space of mobile photo sharing. By having them join us, they went from being a competitor to an app that we could help grow. Mergers and acquisitions that by off potential competitive threats violate antitrust laws. Purchasedn words, you instagram to neutralize a competitive threat. If this was illegal at the time of transaction, why shouldnt instagram be broken off into a separate company . I think the ftc reviewed this and unanimously voted not to challenge the acquisition. The acquisition has done wildly well, not just because of the founders talent, but because we invested in building the infrastructure and promoting it and working on security and a lot of things around this. Thank you. You are making my point. In closing, i want to end where i began. Facebook, by mr. Zuckerbergs own admission and the documents, saw instagram as a threat that could potentially siphon business away from facebook. This is exactly the type of anticompetitive acquisition that the antitrust laws were designed to prevent. This should never have happened in the first place. It cannot happen again. Guest has some strong opinions on this. Joining us now, roger, early facebook investor and author. Roger, i know you have some thoughts on this. Facebook has made the case that instagram was much smaller when they bought it. What was your take on that exchange . Clearly the house obtained documents that showed zuckerberg was scared of instagram taking users from facebook. Roger i think the thing that is most fascinating about that exchange is exactly what you said. Subcommittee has a lot of documentation. I think 1. 3 million documents. Lots of internal communications. Slackedcompany that has , keep this clearly in mind. Each of these companies has their own software. It leads to a very informal style of communications. Inevitably there will be things that look terrible. Both facebook and amazon came off particularly badly in that regard. There was evidence brought forward that suggested explicit violations of antitrust law relative to mergers. In that context, i think this hearing is qualitatively different from any of the ones that have taken place with executives to this point. This is part of a very long investigation that is not done. And yet they clearly were unbelievably well prepared and they have a lot of data. Even on the narrowest definition of antitrust, suggesting there are real issues these Companies May not be able to evade. The market can correctly imagine that it is going to take time for this to work through. But i think that regulation is not only inevitable. What you heard today is openness to thinking about antitrust more broadly. Recognize that internet platforms require something more than antitrust. That they need to be addressed relative to the safety of the products they create. But also the privacy issues. All of that collectively is on the table now in a way that was not imaginable a year ago. Emily we are still listening in to this hearing. We are going to the fifth hour of it. The third round of questioning. Certainly the ceos struggled more than they have in previous hearings. If you could give each of them a grade, what would it be . Roger i havent thought about it that way. I think they came into the hearing with a very clear framework. Worldview, what they are doing is incredibly positive. View orustomer point of a shareholder point of view, these companies have been some of the greatest in american business. In the context of the pandemic, the economic contraction, and george floyd, the country has stepped back, and things that were acceptable suddenly dont look acceptable in the context of an economy that is contracting. And we look at the George Floyd Murder differently than we looked at similar murders in the past. I think that is because of the context of the pandemic and the contraction. I think these companies played the game they intended to play. I think they were maybe not expecting congress to come in with the level of preparation it brought, for which theres really nothing they could do, and with this openness on both sides. There were republicans who participated in this as well. Openness to thinking about regulation as something that is just good for the economy. Forgottentors have the Important Role antitrust has historically played in unleashing growth in the u. S. It started when at t signed a Consent Decree that restricted it to telephone business, which is why there is an independent computer industry in the u. S. But it was also forced to take the transistor and make it available to anyone, which created silicon valley. Other cases led to the creation of the software industry, puters, them internet itself, and the google and facebook era. I think as investors, we should look at antitrust as progrowth. They we are watching representative questioning amazon ceo jeff bezos. What did you make of jeff bezo showing here . I was wondering if he was taking a break or something. There was a viral video of him eating a snack while his colleagues were getting grilled. Upmakers certainly stepped and there were a number of times that bezos couldnt get a word in edgewise. Roger i thought jeffs Opening Statement was really remarkable. I suspect he wrote it himself. It was personal and thoughtful and laid out his personal philosophy well. I think the issue is not whether these companies did something wrong, although in some cases they did, but rather, there is a reassessment of the entire value system underlying the stock market and the economy. Prioritized the interest of shareholders above everybody else. That was great for investors and good for the economy for a while. But when the pandemic struck, what did we see . Our supply chains were so fragile that we couldnt make ppe when we needed to. We couldnt make qtips. We cant process enough tests to know rapidly whether people have the virus or not. Our hospitals are struggling. I think there is a legitimate need to ask questions about how we are going to organize the economy. I think this is going to unleash new growth. Weve been running one way for so long. The whole field is going to be open. The test for these companies and for congress is to keep what is great about the internet, and there is so much that we love, while getting rid of the things that are attractive. Doing so will make these Companies Less profitable but more sustainable. Pathways toroposed regulation and you say it is easy. What do you think should happen now . It is not just the house investigating various agencies, various countries around the world. What do you think could happen next . Roger i hope i didnt give the impression that i think this is easy. There are important paths to pursue. One is safety. Out companies basically put things and let the customers sort out the problems. At the scale of these large giants, you can undermine democracy and Public Health by doing that and it has happened repeatedly. Film, iterday, another guess a press conference, was broadcast on to facebook and youtube and other platforms that got Something Like 20 million views before it was taken down, and it was entirely disinformation on covid. That issue of safety is super important. We have to deal with privacy. That is unbelievably hard and important. One of the things i loved was how they drilled into data as one of the core issues for understanding whether theres competition or not competition in a marketplace. The notion that you dont have to have a monopoly to be dangerous. , with absolute control of its own ecosystem, it can still have anticompetitive behavior. What i third issue is would call honesty. The industry of Online Advertising supported as nurses. The industry is convinced that all the numbers are grossly overstated. If that is true, there are security issues. On antitrust, what is weird ,bout this, the reason i think this is a different kind of industry. We need different approaches. What i like about this hearing is that the antitrust subcommittee is showing a willingness to do really serious homework and ask those questions in a forum where we can have that debate. Important and i think it will be important for the economy to get away from concentrated power. Emily roger, so important to have your insight today. Lawmakers, much more prepared. My sources tell me voluminous amounts of documents were turned over. Lawmakers were more prepared. Much forank you so your insights. Coming up, more about this hearing. We are in the fifth hour of it. Tim cook being questioned right now. This is bloomberg. Lawmakers continuing to question the ceos of apple, amazon, alphabet, and facebook. The ceos continuing to make the case that they all face competition themselves. Services are about connection and our Business Model is advertising. Competition atce the developer side and the customer side, which is essentially so competitive i would describe it as a street fight. Categories which are commercial in nature, we see vigorous competition. We dont have a dominant share in any market or product category where we do business. Innovating,t keep someone will replace any company here today. Emily for more, i want to being in our ben brody. The lawmakers were much more prepared. Oftentimes the ceos could not make the arguments they wanted to make. What did you make of the orchestration of this compared to hearings past . Ben i think it was incredibly had done those months of preparation, all the interviews they did, documents they obtained. , almostscinated to see like a deposition with lawmakers, many of whom were probably prosecutors or lawyers, reading Mark Zuckerbergs words back to him. Company saying, i felt bullied and threatened by them, saying, what did you mean by that it was a totally different level from what you might have seen at zuckerbergs first hearing. It was interesting to see the attack that jeff bezos took on a number of occasions, where he simply said, i cant promise that that rule wasnt violated at amazon or by amazon. What did you make of that . Ben i thought it was fascinating, particularly on the issue of accessing the data of specific sellers. Floated the question again and again, that he thought the Company Might have lied about it. Basically, it was the main thing that bezos must have prepared for, and that that was the best he could offer was really striking to me. Investigationat hasnt progressed very quickly or if it is turning up stuff. It is unclear, but i think the fact that he knew he couldnt deny it was really telling. Bias, anticonservative definitely a concern among republicans. Lots of fire directed at alphabets Sundar Pichai and Mark Zuckerberg on that account. Tim cook somehow managed to avoid the toughest line of questioning. What was your take . Bias wasconservative something the republicans really hammered on. They made this clear in the days leading up to the hearing, in memos, that they wanted to talk about this first and foremost. Of course they are going to go out there and lean on this. , maybe that is sort of a back way of saying, we dont have to change them. I wasnt surprised that tim cook wasnt hit so much on that. He has always ducked the issue and has a good working relationship with the white house. Question, but even here, with all the documents, it is only now that they really started to train questions on him. I think in ways that is a win for him. We are now in the third round of questioning. How much longer do you think this is going to go . At some point they are probably not going to go past midnight. Even as they go into more rounds, it might not be the full hour and a half. It might be 40 minutes or 20 minutes. I wouldnt be surprised if maybe there was one more round. Emily they did manage to get quite a few different rounds of questioning in, which is impressive given that all these ceos could have multiday hearings of their own. Ben brody, thank you so much for that update. We will bring you the highlights as we have them. Coming up, we are going to get insights from andrew yang, former president ial candidate, who has a very interesting perspective on the intersection between technology and politics. This is bloomberg. Back toelcome bloomberg technology. Im emily chang in san francisco. The antitrust hearing continuing on capitol hill at this moment. We are in the fifth hour of questioning with house lawmakers grilling four big tex ceos. Heated exchanges. One company in particular compared to a drug dealer. Here is how the Apparel Company described working with amazon, and i quote emma, amazon strings you along because it feels so good to get that paycheck every week and in the past, for lack of a better term, we called it amazon heroin, because you just kept going and you had to get your next fix, your next check. At the end of the day, you find out this person who was seeming seeming thusly making you feel good was ultimately going to be your downfall. Mr. Bezos, this is one of your partners. Why on earth where they compare your company to a drug dealer . I have Great Respect for you and this committee. But i completely disagree with i characterization. What we have done is create in the store, if you go back in time, we sold only our own inventory. It was a very controversial decision inside the company to invite thirdparty sellers to come into what is our most valuable retail real estate. We did that because we were convinced that it would be better for the consumer, it would be better for the customer. To have those selections. I think we were right and i think it has worked out well. Im reclaiming my time. This is one of Many Small Companies that have told us during this yearlong investigation that they were mistreated, abused, and tossed aside by amazon. Emily joining us now, andrew yang, former democratic president ial candidate and entrepreneur. Think you for joining us. You have such an interesting Vantage Point having worked in the Tech Industry and run a president ial campaign. The did you make of lawmakers lines of questioning here . They certainly were a much more prepared than i think some folks expected them to be. Andrew i enjoyed it more than i thought i would. Certainly some of the lines of questioning did indicate that they have very specific topics they wanted to dig into. You just showed a clip of amazons treatment of its thirdparty sellers. That has been a persistent complaint. There are Many Companies that have sold through amazon and then felt like as soon as amazon figured out something was selling well, then they wouldve find a way to privilege a house brand. That came up. I wished that we talked a little bit more, a lot more, about the treatment of data by facebook and google in particular. But they were focused on antitrust issues and anticompetitive behavior on the part of these companies. Which to me is a very large signal as to what may be comi