Zuckerberg, Dorsey get a Congressional tongue lashing, however does DC have extra punishment in retailer?
It has become a ritual for CEOs of America’s largest tech companies to appear before Congress to be sharply criticized for allegedly guilty of monopoly behavior, biased censorship, and data breaches, but in the decade since big social media rose . Congress has failed to back up its grievances with real legislation.
This could change soon.
A legislative push to curb dominant technology platforms through competition policy is gaining momentum, according to a Thursday hearing where a non-partisan group of lawmakers began questioning the business models of Facebook Inc. FB, + 1.54% Twitter Inc. TWTR . + 0.10% and Google’s toget, -0.43% YouTube.
Facebook CEO Market Zuckerberg, Twitter CEO Jack Dorsey, and Google CEO Sundar Pichai whipped their tongues at members of the House’s committees on communications, technology and consumer protection on Thursday.
Lawmakers specifically focused on complaints that Facebook Inc. FB, + 1.54%,
Twitter Inc. TWTR (+ 0.10%) and Google’s toget (-0.43%) YouTube were carriers of the misinformation that led to the violent invasion of the Capitol on January 6th and heightened skepticism about COVID-19 vaccines. They have also been criticized by Republicans for allegedly prejudicing conservative political views.
Continue reading: Big Tech CEOs have resented the role of social media in promoting misinformation and extremism
Alex Cynamon, an analyst at Veda Partners, told MarketWatch that while these lines of attack were not entirely new, and that Republican and Democratic complaints about big tech practices were often contradicting each other, investors should be looking at what it claims to be newly saw the interest of the legislature in the “core business models of targeted behavioral advertising” of social media companies.
He referred to comments by Democratic MP Anna Eshoo from California, whose district includes parts of Silicon Valley, who characterized the business models of social media companies as fundamentally problematic.
“Your model has a cost to society. The most interesting contributions are often those that inspire fear, restlessness and anger and contain deadly, fatal misinformation, “Eshoo Zuckerberg said at the hearing on Thursday. “That is dangerous and therefore representative [Jan] Schakowsky and I are drafting a bill that bans this surveillance advertising business model, ”said the Illinois Democrat.
“If more members think about this topic in these terms, it has ramifications for investors,” said Cynamon. It remains to be seen whether more Democrats are ready to take up this fight, let alone whether Republicans would sign up. However, Cynammon argued, “The longer it takes for Congress to push a federal data protection framework, the stronger it gets,” because states are already starting to push their own frameworks and because big tech public opinion appears to be growing more negative over time.
Robert Kaminski, CEO of Capital Alpha Partners, is more skeptical that yesterday’s hearing increased the likelihood of effective legislation. “Businesses are now in a paradox where they have committed to doing the impossible: to be forums for free expression, but not misinformation; to censor political speeches but not to interfere in elections; useful and engaging, but not addicting, ”he told MarketWatch.
These conflicting demands from Democrats and Republicans make significant legislation less likely. “They are threatened with laws, but there are too many perceived problems to make progress on any one. I call it Big Tech’s chaos theory, ”he added.
At the same time, there is an unmistakable momentum on the part of the antitrust authorities to improve the oversight of big tech. Legislation to significantly increase funding for the Federal Trade Commission and the Justice Department’s Antitrust Division is supported by both parties in both the House and Senate. On Thursday, FTC Acting Chair Rebecca Kelly Slaughter announced the creation of a new regulatory group to focus on these issues, banning unfair or misleading practices and unfair competitive practices that affect social media companies as well as platform Marketplaces like Apple Inc. AAPL (+ 0.51%) and Amazon.com Inc. AMZN (+ 0.19%) could have an impact..
“It would be cleaner and easier for Congress to address these issues with a legislative package,” said Cynamon. “But it’s not uncommon for Congress to let an agency roll up their sleeves and develop these rules.”
See also: The current FTC chairman calls for “bold action” to curb technology and other monopolies