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CEOs to Congress: Don't hate me cause I'm popular

Fully Charged
Bloomberg

Hey everyone, it's Sarah Frier. On Wednesday, Mark Zuckerberg, Jeff Bezos, Sundar Pichai and Tim Cook testify before Congress in a high-stakes hearing on their companies' potentially monopolistic power. All four leaders plan to start off by wrapping themselves in the American flag. 

Apple Inc.'s success is "only possible in this country," Cook

plans to say, according to prepared testimony released on Tuesday. Facebook Inc. is "proudly American," Zuckerberg will say. "American leadership in these areas is not inevitable," Alphabet Inc.'s Pichai will argue. "Who do Americans trust more than Amazon to 'do the right thing?'" Bezos will ask. (Only their doctors and the military, apparently.)

The right thing—the American thing, according to these companies—is to innovate. To create value and amass consumers. Apple's feat selling so many apps in the U.S., Cook says, is "nothing short of an economic miracle." If you build something people want, you get to keep growing, and if you don't, you die, Zuckerberg argues.

The companies are measuring innovation by the economic success and popularity of their products and websites—but that metric is flawed. We don't know how the world would work if Google or Amazon.com Inc. ordered their search results differently, or if Apple had different app store rules. And we certainly don't know how Instagram and WhatsApp would have fared without their acquisition by Facebook.

The companies argue that their dominance means consumers have chosen them, rewarding their innovation. But what if consumers simply have so few choices because these networks are so strong that nobody else can get momentum? That's a central question for Big Tech, and one that's not convincingly addressed in the companies' planned testimony. 

Facebook, for instance, makes a particularly bold argument about its acquisitions over the years. After listing its suite of product offerings—from Instagram to Oculus—Zuckerberg plans to say, "we built these new products and services because the intense competitive pressures we face push us to experiment with new ideas." Notably, he uses the word "built," not "bought." He'll also give Facebook credit for features added by Instagram and WhatsApp after they were acquired, saying they "would not have happened had we not made those acquisitions."

There's no alternate history to look at. But WhatsApp, at the time of Facebook's acquisition, had hundreds of millions of users. Instagram was already the most popular photo-sharing app. Facebook purchased them not out of a drive to innovate, but because otherwise, they would have threatened Facebook's dominance.

Maybe it's uniquely American to be ruthless, competitive, and paranoid about survival and success. The companies call that a focus on the customer. When the customer wants it, it's "doing what's right." But even the customers don't have the final say. "When we think our critics are right, we change," Bezos says in his prepared testimony. "When we make mistakes, we apologize. But when you look in the mirror, assess the criticism, and still believe you're doing the right thing, no force in the world should be able to move you."

U.S. officials will soon have to decide what to do about companies that no force in the world can move. You can watch the testimony coverage here. Sarah Frier

 

If you read one thing

Facebook and Twitter yanked a video retweeted by President Trump featuring dubious claims about the coronavirus, Bloomberg reported, and Twitter temporarily suspended Donald Trump Jr.'s account on Tuesday for sharing it.

Despite those efforts, the video, backed by a Tea Party-linked group, racked up millions of views before the social platforms took it down—becoming both a symbol of viral misinformation and a rallying point for conservatives claiming tech censorship. 

And here's what you need to know in global technology news

The U.S. sought to dismiss charges against two former Twitter employees for allegedly helping the Saudi government spy on dissidents.

Netflix set an Emmy record Tuesday, raking in 160 nominations, the highest tally ever for a single network. 

AMD shares jumped 9% in after-hours trading after the chipmaker gave stronger-than-expected revenue forecasts, suggesting it's winning orders away from Intel. 

In other earnings news, EBay sank 6% in extended trading after its outlook disappointed investors who expected the company to be better positioned to cash in on the surge in online shopping.

Newsletter startup Substack sent out an email update to many users that exposed recipients' email addresses, leading to a reply-all debacle. "We are aware of the irony," the company said in an apology letter Tuesday night. 

 

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