Competing is losers. Billionaire Peter Thiel was saying it bluntly in The Wall Street Journal in 2014, and his message seems to fit perfectly with what we saw a few hours ago at the appearance of CEOs of Google, Amazon, Facebook and Apple (GAFA) in front of the Congress of U.S.
The (virtual) participation of Sundar Pichai, Jeff Bezos, Mark Zuckerberg and Tim Cook was interesting but it will hardly make any difference in the short term. What he did make clear is that these companies want to remain (even bigger), and if they have to copy, buy or crush the competition, they will continue to do so .
Facebook: if you can’t handle them, buy them
It is not personal, it is business. If something or someone threatens your business, they act accordingly . It is basically the residue left by the appearance yesterday before the United States Congress of the CEOs of that artificial conglomerate formed by Google, Amazon, Facebook and Apple and which has long been known as GAFA.
All the signs have been pointing out for a long time that these technology giants do not go around with little ones when it comes to defending their positions in the market. A leaked email in the investigation indicated how Mark Zuckerberg viewed Instagram and Path as potential threats to his business in 2012.
Zuckerberg discussed this with his chief financial officer, David Ebersman, who was considering the possibility of acquiring either or both of these companies. Ebersman did not see it clearly and warned that acquisitions usually did not go well.
One of the two was wrong. Guess who .
The attitude of all these companies is clear and patent. Like probably any company, they do what it takes to bolster their position and crush competitors , and the questioning of the four CEOs gave a few more clues about that kind of activity.
Google argues that it focuses on what users want
David Cicilline, who led the scrutiny and interrogation process, quoted several emails from a decade ago in which Google employees spoke of sites that were growing in traffic and that could threaten Google’s revenue .
According to Cicilline, a clear example is on Yelp , which was hurt by Google and when it complained it was threatened to disappear from searches unless Google was allowed to crawl its content.
Sundar Pichai defended himself saying, “When I run a company, I focus on giving users what they want . [At Google] we behave according to the highest standards.”
Cicilline also asked Pichai about Google’s ability to collect data that allows them to identify potential competitors. Pichai said, “Like any other business, we try to understand the trends in, you know, the data we can see , and we use it to improve our products for users.”
Apple was, but almost as if it had not been
Tim Cook barely struggled like the rest of the CEOs who appeared virtually via Webex for questioning by Congress. In VentureBeat they analyzed the participation of each one of them, and Cook was asked seven questions by 13 to Amazon and 16 to Facebook and Google.
In fact, the CEO of Apple had a participation that lasted 25 minutes when those of Zuckerberg, Bezos and Pichai lasted 50 minutes. He did not have time for much, although he was asked about the policies of the App Store and how the company does not leave room for other alternatives.
The question did not help, because Cook – like the rest of the participants – tried to divert attention and emphasize that “Apple is a unique American company whose success is only possible in this country.”
Yes, an email was revealed in which Apple stated that in recurring subscriptions 40% was requested during the first year . In an email from Eddy Cue to his team to discuss commissions for content providers, he explained that “I think we would leave money if we only asked for 30% in the first year of subscription.”
Cook alleged that Apple has not increased App Store commissions since it launched, and has actually lowered them, referring to the 15% cut in recurring subscriptions. There was hardly any mention of the recent controversies with Hey or Spotify , in this case being investigated in the European Union .
Jeff Bezos was attacked from all sides
Pramila Jyapal, one of the congressmen who participated in the questioning, raised an important question with Amazon: “Let me ask you, Mr. Bezos, does Amazon ever access sellers’ data when making business decisions? “
The question was important and referred to suspicions that Amazon uses the information it has about sellers and their products to end up selling their own versions of those products at a lower price .
That issue is part of a European Union investigation against Amazon, and Bezos here was surprisingly more open than might be expected: ” I cannot guarantee that the policy has never been violated . We continue to investigate it carefully.”
Jayapal said “the committee has interviewed employees who say such violations occur frequently,” and another congresswoman, Lucy McBath, also attacked Bezos, claiming that the company “systematically blocks” vendors by preventing them from selling certain products.
Bezos, who suffered more attacks (and more aggressive) than the rest of CEOs, returned to indicate that ” I do not think that is what happens systematically . External sellers are doing extremely well globally.”
As with Facebook, Bezos was also reminded of Amazon’s attitude towards competitors. They reminded him of the case of Diapers.com, the diaper-making company with which he competed years ago. Amazon invested $ 200 million in lost funds in a quarter lowering the prices of other diapers that it put up for sale in its online store, which made Diapers unable to compete.
“You say that Amazon focuses exclusively on customers,” asked Congresswoman Mary Gay Scanlon. “If so, how do customers, especially single mothers and new families, benefit when prices rise simply because you eliminated your main competitor?”
Bezos replied that diapers “are a very large category of product that is sold in many, many places”, but the truth is that the company that owns Diapers.com, Quidsi , ended up being acquired by Amazon .
Conclusions: this is only the beginning (and by the way, does anyone remember Microsoft?)
As many analysts pointed out , the virtual appearance of these four great CEOs was more fireworks than anything else .
It is therefore more important to place this appearance as the first stone on the road . One that can lead to changes in the future, even in the distant future. The European Union has been especially tough with anti-competitive behavior for years, but the United States has always maintained a more lax stance on this, perhaps (or precisely) because the companies affected were US companies.
However, the latest scandals of the technology giants seem to have triggered events that show that the power and influence of these giants should raise clearer debates and regulations on the activity of these companies. A power that seems to make good the reflection of Thiel to which we alluded at the beginning. One that had another great message: “Monopolies are good for society. ” They are?
At least I have a doubt. I wonder what Satya Nadella was thinking about it. I imagine him with some popcorn attending the broadcast, smiling and thinking: “We’ve been through it already.”
They did it and survived . Now (almost) everything is good in Microsoft.