Amazons Jeff Bezos, Apples Tim Cook, Googles Sundar Pichai and Facebooks Mark Zuckerberg, CEOs of four of the worlds most powerful companies, are testifying before Congress Wednesday.
Specifically, they are going before the Houses Subcommittee on Antitrust, Commercial, and Administrative Law, and the issue here boils down to power. How did these companies get it? Did they do so legally, or did they break rules? Finally, do they have too much power?
Erik Gordon, professor at the University of Michigans Ross School of Business, spoke with host Sabri Ben-Achour. The following is an edited transcript of their conversation.
Sabri Ben-Achour: So can you explain why this hearing is happening? And, specifically, why this question of how these companies became so powerful and whether they did so legally is an issue right now?
Erik Gordon: The hearing is happening because members of Congress think that these companies are really powerful, and that theyre abusing their power, and that Congress should look into it and maybe pass some new laws. The question you brought up is the key question. Under current antitrust law, its perfectly OK to be big and to be powerful, and, in fact, to be a monopoly, as long as you got big and powerful by lawful means, as long as you didnt do anything illegal. The government cant break you up, under current law, just for being big.
Ben-Achour: So whats an example of how, say, Google or Facebook or whichever might have accumulated power illegally?
Gordon: Suppose you have a dominant online search engine, and you use that search engine dominance to make you even more powerful in an other area. So, for example, suppose you say, You can only use my search engine, if you use my browser. Now you get big and powerful in the browser business, because you already had power in the search engine business. That would be an example of getting bigger and more powerful illegally.
Ben-Achour: Do you think anything significant will come out of these hearings? Or are they sort of theatrical?
Gordon: I have a sense that in an election year, were going to see some theater. Its an opportunity for politicians to control the questions. They get to put together some nice sound bites for their campaign. This isnt the first round of hearings we had, and in the other hearings, where there were some beat-ups of Zuckerberg and other tech people, oh, a few bills were introduced in Congress. They didnt go anywhere. Nothing much happened.
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