Big Tech’s Antitrust Hearing, U.S. TikTok Plans, Huawei and Samsung

Big Tech recovers from a lengthy day in court, the U.S. prepares recommendations on TikTok and Huawei overtakes Samsung in smartphone shipments.
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Washington, D.C., USA: United States Capitol Building as seen from the Longworth House Office. (By Daniel Quattro)
Washington, D.C., USA: United States Capitol Building as seen from the Longworth House Office. (By Daniel Quattro)

Good morning! Today’s word count is 1,164 words, or a 6-minute read. Let’s get to it:

Congress Grills Tech CEOs Amid Backdrop of Covid-19 and Economic Struggles

For more than six hours, the House Antitrust Subcommittee grilled the CEOs of Amazon, Apple, Facebook and Alphabet on a wide range of matters centered around whether big tech companies are too powerful. Here’s how each executive faired:

Amazon CEO Jeff Bezos

The Subcommittee’s questioning of Bezos focused mostly on how Amazon uses data from customer behavior to create a competitive advantage against third-party sellers who use the Amazon Marketplace to promote their products. Bezos said the company is investigating The Wall Street Journal report that drew attention to the practice and that it would “take action” against employees who breached internal policies around using customer data.

Bezos appeared visibly surprised when the Subcommittee played a recording from an Amazon Marketplace vendor who said the company removed her from its platform without explanation. He responded by saying he did not believe there was a systemic problem with how the company treats its marketplace vendors.

Apple CEO Tim Cook

Cook defended Apple’s policy of taking a 30 percent cut of transactions through apps downloaded via the App Store, saying commissioners were similar or lower than other digital platforms. He added that customers can always turn to Android phones if they’re unfairly treated.

Cook also faced accusations that Apple is inconsistent in its treatment of third-party developers, as well as whether Apple cut a special deal with Amazon to take lower fees and offered a Chinese search engine (Baidu) additional insight navigating the rules. Cook said any developer could reach the lower rates if they meet the conditions, but “demurred on the Baidu question.”

Facebook CEO Mark Zuckerberg

Zuckerberg dealt with a barrage of questions surrounding Facebook’s acquisitions of Instagram and WhatsApp. Some members of Congress called the moves “anti-competitive and should be revisited, or forcibly spun out.”

Representatives cited documents revealing Facebook’s view of Instagram as a “powerful threat” and its intentions to either clone or buy the app to neutralize the competition. Zuckerberg acknowledged his company viewed Instagram as a competitor, but it was “far from a given that the picture-sharing app would reach the kind of scale it did with Facebook’s help.”

In another line of questioning, the Subcommittee accused Facebook of being too slow to remove misinformation about Covid-19. Zuckerberg replied by saying the company’s size makes it difficult to police content.

Alphabet CEO Sundar Pichai

Pichai faced “persistent questioning” about the company’s core search business and whether it stole content from other websites and why Google consistently points to its own results rather than third-party sites.

Pichai was also pressed on why Alphabet dropped its bid for a $10 billion Defense Department cloud computing project and pursued other opportunities in China. He responded by describing how his company partners with U.S. Agencies and “was adamant about not serving customers in China” except for a small number of projects.

Here’s a breakdown of how the committee directed its 210 questions at the individual CEOs:


Read More: (CNBC)

U.S. Treasury to Submit its Recommendation on TikTok to Trump This Week

The answer to arguably TikTok’s most crucial question may be on the horizon. U.S. Secretary of State Steven Mnuchin announced Wednesday a government review assessing the national security risk of the app will present its findings to President Trump this week. 

Why It Matters

The Trump administration, along with other governments, has expressed concerns about TikTok’s access to personal data since its owned by a Chinese Company, ByteDance. The app says it stores all data offshore.

Sanctions or an outright ban in the U.S. could be devastating for TikTok – American users account for 165 million of the app’s downloads, according to Sensor Tower. As a result, TikTok has been looking at options to avoid a ban, including a potential sale to American investors already involved with ByteDance. However, spinning off TikTok from ByteDance would be difficult as the app shares software and engineering resources with ByteDance.

Numbers to Consider

  • 800 Million – TikTok’s monthly active users.
  • 41 Percent – TikTok’s users between the ages of 16 and 24.
  • 2 Billion – The number of times TikTok has been downloaded on the App Store and Google Play.

Read More: (THE INFORMATION)

A Quick Look

Huawei Overtakes Samsung in Smartphone Shipments

  1. Huawei surpassed Samsung and became the world’s biggest smartphone maker for the first time in the second quarter thanks to substantial growth in China, according to Canalys.
  2. Huawei shipped 55.8 million smartphones in Q2, compared to Samsung’s 53.7 million. The milestone comes even though Chinese shipments in overseas markets declined 27 percent due to the Covid-19 pandemic and U.S. sanctions that block new Huawei phones from using Google’s software.
  3. Huawei’s shipment in China, the world’s largest smartphone market, rose 8 percent and made up for some of its overseas decline. Samsung has been crushed by the pandemic, watching its worldwide shipments fall 30 percent.

Read More: (THE INFORMATION)

Worth Your Time

Rise Up: As Covid-19 restrictions keep people at home, more consumers are turning to e-commerce, and UPS is reaping the rewards. It’s an unsurprising development, given the state of the world, as the company saw a 13 percent jump in revenue during the June quarter. Its new boss said the delivery giant has “room to raise rates on retailers relying on its network.” (WALL STREET JOURNAL)

Getting Back Up: It looks like any hopes of a quick Covid-19 recovery will have to be tempered. Jobless claims grew for the second consecutive week, reaching 1.43 million. Coming off a record U.S. contraction last quarter, also signs are pointing to a slowing recovery effort. (WALL STREET JOURNAL)

Tidbits

The battle over China’s huge digital payments market has escalated as Chinese online food delivery marketplace Meituan has dropped Alibaba’s Alipay as a preferred payment option for new users.

After seeing revenue drop 25 percent as a result of the Covid-19 pandemic, NBC is planning a massive reorganization of its television streaming business.

As the outlook for oil-and-gas demand remains uncertain, Royal Dutch Shell reported its first quarterly loss since over a decade ago.

Herman Cain, a former Godfather’s Pizza CEO who also ran for president as a Republican in 2012, has died after being hospitalized for Covid-19.

A Couple Cents Content

Justin Oh dives deeper on Rush Street Interactive’s $1.8 billion SPAC merger in his latest video. (YOUTUBE)

In a unique crossover between the sports and finance worlds, Oakland A’s executive Billy Beane has joined forces with Redbird Capital to form a SPAC. (TIKTOK)

Curious how people view returning to live events? Check out Part Two of my conversation with industry expert Alex Evans. (POST)

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