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Top tech execs will be asked to testify in U.S. House probe

Reuters

Leaders of big tech companies will be asked to testify as part of an investigation into whether the companies misuse their massive market power, the head of the U.S. House Judiciary subcommittee leading the probe said on Tuesday.

The comments came a day after sources said the U.S. executive branch is gearing up for a similar probe of Amazon.com Inc., Apple Inc., Facebook Inc. and Alphabet Inc.’s Google, setting up what could be an unprecedented, wide-ranging investigation of some of the world’s largest companies.

The House of Representatives Judiciary Committee opened its own investigation into competition in digital markets on Monday, with both Republicans and Democrats expressing concern about the power exercised by several of the world’s most valuable companies.

Rep. David Cicilline said “It will be necessary for some of the leaders of the technology companies to be part of this conversation.”

The Democrat added he was developing a witness list and that “I expect a number of them will actually testify before the committee or be interviewed as part of the investigation.”

House Republican Leader Kevin McCarthy, asked on Tuesday about the need for oversight of big tech companies like Google, told a news conference, “I think it’s only right that people look at it,” but added that he did not see how breaking companies up would help with privacy issues.

“I personally have a concern about personal privacy,” McCarthy said. Noting a few companies have a lot of market control, he asked “are we allowing the market to work?”

Still, Sen. Mike Lee, a Republican, said that the complexity of antitrust investigations suited them better to federal agencies, rather than Congress.

Apple Chief Executive Tim Cook, speaking in an interview with CBS News that aired on Tuesday, denied the company is a monopoly, saying the iPhone maker controlled a moderate share of the market but was not too big, and disagreed with calls from some U.S. politicians that the company be broken up.

“With size, I think scrutiny is fair. I think we should be scrutinized,” he said. But, he added, “I don’t think anybody reasonable is gonna come to the conclusion that Apple’s a monopoly.”

Cook’s comments were broadcast the same day two app developers sued Apple over its App Store practices, saying the company took an unfair commission on sales of iPhone apps.

The claims center on the same Apple practices highlighted in a lawsuit brought by consumers, arguing that Apple’s practices have artificially inflated the price of software in the App Store.

The Federal Trade Commission and the Department of Justice, which enforce antitrust laws in the United States, have divided oversight over the four companies, two sources told Reuters on Monday, with Amazon and Facebook under the watch of the FTC, and Apple and Google under the Justice Department.

The FTC has already been investigating Facebook’s sharing of data belonging to 87 million users with the now-defunct British political consulting firm Cambridge Analytica. Facebook said in April that it expected to be fined up to $5 billion by the regulator.

The owner of one-time rivals Instagram and WhatsApp has more than 1.5 billion daily users and has a huge influence in many countries. It has been criticized for allowing misleading posts and “fake news” on its service.

Cook in the CBS interview also said that “fake news is not under control,” and in response to a question about Facebook added, “I worry about any property that today pushes news in a feed.” Facebook did not immediately respond to a request for comment.

The probes could have financial implications for the companies. Brokerage Cowen cut its target price for Apple to $220 from $245 on Tuesday, citing antitrust enforcement concerns. Shares rose 3.7 percent to $179.64, as the broader market also rallied.