Life is the best screenwriter, and the plots that sweep before our eyes are intricate, full of intrigue and unpredictable in their consequences. I am sure that many of you have watched the series “Billions”, where you are filled with sympathy for one hero, then for another, until you understand that this is a tangle of snakes and each of them is a great fellow. Ego, multiplied by power and money, turns heroes into cartoon characters, but the director’s work is beyond praise. Even in the fifth season, the intensity of passions does not subside, and the plot keeps in suspense, although this is already the usual expectation of feints, deceitful maneuvers and tricks. Small psychological sketches do not spoil the series and are masterfully inscribed in the canvas. Who is your hero? Chuck or Ax? Could it be Wendy Rhodes?
Now imagine for a moment that the President of the United States decided to stage his own show and someone in the White House sketched a rough script. The background of the story is very simple. The largest American companies, the leaders of which are unhappy with the president’s policies, must pay the price. Some of them openly supported the Democrats, others criticized the “brilliant” ideas of a senior official. The president used Twitter to unleash all possible curses on them, but his magic was not effective, and therefore it was necessary to open the cabinets of these companies and shake up all the skeletons in them. It is common knowledge that big money always coexists with bad stories hidden in the closet, and if you take it out into the light, shake it off thoroughly, present it to the people of America, you will get an excellent pre-election story.
The crime will be found, the punishment determined. But the supreme commander-in-chief cannot throw himself into battle on his own; this requires Congress, or rather, the antimonopoly subcommittee of the legal committee. The script is defined, the pieces are placed on the board, and the case is given the green light.
In the summer of 2019, four victims were selected: Apple (Tim Cook is well-known to Donald Trump, but he puts up with him, there is no smell of friendship, Apple employees clearly supported Clinton in the election), Facebook (Zuckerberg constantly snarls publicly at the president and his initiatives, considers him inept manager), Amazon (Bezos is simply the richest man on the planet, as a businessman he is more successful than Trump), Google (also supported the Democrats and continued to do so until recently, explicitly and cynically, according to their opponents). I am sure that many will ask the question, where is such a monopolist as Microsoft on the list, why the anger of the President of the United States has passed this company. The answer is self-evident, Microsoft quickly understood the rules of the game and saluted it when Trump took over in the White House. Formally, all big business in America is outside politics, in fact, everyone supports one or another candidate or party. Huge corporations take a safe position, give money to both, and then simply support the winner. The problem with Apple, Facebook and Google is that they bet on the wrong horse, and when they lost, they began to put spokes in the wheels little by little, did not admit their own mistakes.
It seems to me that, having climbed to the top of the political Olympus, Donald Trump could count on at least recognition of his victory in a difficult struggle. In order to give the opportunity to take the vassal oath, he even gathered the leaders of the American industry in the White House, this is one of the first official meetings. In December 2016, Tim Cook from Apple arrived at the White House, Peter Thiel (PayPal, actively supported Trump during the election campaign), Sheryl Sandberg (the COO of Facebook, which was also a mistake for Mark Zuckerberg, did not honor the high meeting with his own presence), Larry Page, Sergey Brin and Eric Schmidt from Google (at that time already Alphabet, but estimate the size and importance of these people), Jeff Bezos from Amazon. In order not to list everyone, I will say that there were also top officials from Intel, Oracle, Microsoft, Cisco, Tesla, Uber. Formally, Donald Trump promised to help the guys, he literally said: “I’m here to help you guys achieve success in your business.”
Source: Evan Vucci / AP
The most difficult thing at the meeting was for Tim Cook, he was seated to the left of the president, right behind Peter Thiel. Not very far, but also so as to make it clear that he is not the main star here. During the entire meeting, Tim had such an expression as if he found himself in a cage with a tiger and is trying to be extremely careful, since any movement can cause an attack. Some people like the comparison with a room in which an unattached, violent madman is sitting (but we know that only Democrats think so!).
Trump’s election victory for Apple employees was an outright disaster, the mood inside the company was such that in November 2016 Tim Cook wrote a conciliatory letter. This was not support for the new president, but an attempt to reassure the company’s employees and indicate that they need to go forward no matter what. Within Apple’s corporate culture, the aggression against Trump is easily explained – in the election controversy, he repeatedly cursed immigrants, supported traditional values and spoke impartially about same-sex relationships (thanks to Tim Cook at Apple, the diversity of views is the maximum among all companies, what is called diversity in the modern corporate language) … Trump for people outside the traditional guidelines of relations between a man and a woman is like a red rag for a bull, the reaction is instant, and it is impossible to call her calm.
Here is one personal observation. In New York, there was some kind of rally in Times Square, I, as always, was interested, wedged in and began to ask what the fuss was about. It turned out that the LGBT community is protesting against the fact that transgender people may be banned from serving in the American army. It was July 2017. Various people stood in the paddock with placards, there were many film crews around. I was offered a poster, but I politely refused and began to get out. On the way out, a local film crew caught me and in an American aggressive, more precisely, assertive manner began to ask what I think about Trump and his initiatives. Judging by the way the girl frowned when talking about the president’s initiatives, and how she spat out Trump’s name, her attitude towards him was, to put it mildly, not very good. Our conversation turned out to be funny, in some ways I supported Trump, criticized him for something and did it all from my bell tower. And only at the end they asked me where I live, and my answer put an end to my interview: “Oh, so you are Russian, then it is clear why you support him so much!”. The film crew vanished in seconds. As I replayed what I said to the news group that day, I realized that there was no unequivocal support for Trump, there was enough criticism. But even a calm look at his actions was not perceived, Trump in New York, what then, what now could only be hated. And compete in this art and in how much you hate it and blame it for all deadly sins. Did the dog mark the door? Damn Trump did everything to make this happen. Are the newspapers wet in the rain? Damn the president for creating all the conditions for this. At such moments, Danil Bagrov involuntarily pops up in the memory of how he met a taxi driver in America, similar to the same boss in Russia.
Hatred only gives rise to hatred in response. And you can go to personal growth trainings, assume that, having billions of dollars in your account, you have achieved something, but to anger a person who can cause you serious trouble is definitely not the most sensible strategy. Many leaders of the IT market did not realize this and started playing. For example, Facebook got caught in the crossfire and paid for it to many. Zuckerberg did not find an opportunity to support Trump, he played for the Democrats. But someone had to blame for the loss, and Mark became the scapegoat, as well as the horde of Russian hackers that intervened in the American elections. No traces of the hackers were found, but in American politics this is a fact that has already happened, an indisputable event. And this puts Trump’s legitimacy in question, which causes him a sharp reaction and accusations against the main media that have played and continue to play against him. Zuckerberg was appointed guilty of his own, and he did not want or could not go over to Trump, so Mark became a whipping boy, and he definitely succeeds in this role. Constantly speaking to Congress, making excuses for what Facebook did and what it couldn’t do even in theory. Each performance deserves special attention, the answers are such that you just rock. Facebook arrives from all directions.
Feel the heat of passion that is raging in America and affecting industry leaders? Now let’s go back to the intermediate point, on July 29, 2020, when the final hearing of the antitrust case against four leaders of the global IT business took place.
A friendly court is the fairest in the world! How Apple and others were interrogated
The pandemic and the soaring number of cases in the United States led to the fact that the leaders of Apple, Facebook, Amazon and Google gave testimonies before Congress via video link. The congressmen were sitting in the big hall (sorry, but I will also call women congressmen “mens”, for the Russian ear this is more usual), and the guilty leaders were displayed on the big screen. Something reminded me very strongly, and it was extremely difficult to get rid of such an association, it was too sticky.
I’m not sure company executives were thrilled to have Cisco Webex written next to their names, but the video ads from Cisco were great. It is clear that this is the connection that has been established in Congress, but this “little thing” very well shows who is the boss and dictates the rules of the game.
First, I will share my impressions of each of the respondents, this is my personal opinion, which was formed after five hours of hearings, reading statements on behalf of companies, answering questions. My absolute favorite is Jeff Bezos, he answered with dignity, chose his words and was convincing enough. Obviously, all this was unpleasant for him, but he did not go into conflict, did not aggravate the situation and looked for neutral answers.
Tim Cook looked very dignified: balanced answers, he did not try to impose his point of view, did not get into a fight, but tried to remove the questions that arose to Apple. Considering that the very policy of the company is such that competitors are simply destroyed at the start of their existence, in essence it was difficult for him to answer. But the very manner, the way he carried himself, commands respect.
Sundar Pichai from Google was clearly not at ease, a couple of times it seemed that he should burst into tears and shout: “I am a simple Indian guy, why do you scare me with such terrible questions and accuse me of all mortal sins?” Hands are constantly clenched into the lock, sometimes he unhooked them and immediately frantically twisted them back. It was hard for him, and it is clear that the format itself did not imply a special dialogue, but more on that later.
Zuckerberg is already used to going out to the board and proving that he is not a camel. Squeezed, understanding where all this is going. On the plus side, they put a monitor in front of his eyes, and when he read out his address, his gaze was directed more or less forward, which is good. At that moment, a small army of lawyers worked for each of the leaders, who issued tips in real time, we did not see them, but the same Zuckerberg snatched them from the monitor that stood in front of him.
Mark already understands that he will be the most affected party, and after the hearings he publicly criticized Trump, the actions regarding the pandemic, that is, he once again took an active position against. He has nowhere to go, since Facebook is threatening the separation of the company, Instagram, as well as WhatsApp, can be torn away from it, making them completely independent. And this scenario looks more real than ever, hence such a sharp reaction of Zuckerberg to what is happening.
For almost a year, the antitrust subcommittee has been collecting information on the practices of the companies in question, including requesting email and work chats. They didn’t find anything extraordinary, since all the voiced claims are known to us and have been discussed in the public field for several years. It’s just that for the first time, these skeletons were taken out of the closets at this level and offered to companies for this atta-ta.
For your understanding, it must be said that it does not matter at all what was said at public hearings, everything is already predetermined, and it was just an act in the history of punishment. Victims need to be given the opportunity to say something, try to justify themselves, under certain conditions they can give more information on themselves. In a word, the hearings did not play a big role, this is one of the steps before the grand finale.
But it is important to sketch out the two directions of the questions and how everything was organized. Congressmen were given five minutes to ask questions (answers entered at the same time). It is almost impossible to unfold within such a narrow framework – just to indicate your position. Also, many questions were related to specific cases, the respondents often did not have answers to this, which is logical and easy to explain – corporations are too huge to know everything that happens in them.
But the hearings can be conditionally divided into two areas – real issues on the business of companies, as well as the political agenda. Both were equally divided.
Congressman Buck could easily participate in any congress of the Communist Party of the USSR, he is so identical to the party leaders of that era. He accused Google of supporting America’s enemies (who is our enemy? China today!), In particular, helping them to develop new weapons! After that, Sundar Pichai was ready to sink into the ground, but answered that it was not so. But the funniest thing was that Mr. Buck’s assistant was showing a poster with a photograph from a drone where the Uyghurs were being taken away to an unknown destination.
Initially, the poster did not fit into the frame, so the assistant took steps to choose the right angle and finally got into it. Do you know what struck me in this story? Somehow I was waiting for someone to come out with a test tube and white powder (pah you, with a small processor) and declare that there are Chinese spy chips inside this processor. But it didn’t happen.
Another political moment that amused. On Google, search results for the Democratic Party are supposedly always ahead, but Trump supporters are suffering. The Trump party congressman also said campaign emails are now automatically sent to spam in GMail, although this has never happened in the previous nine years. This is a manipulation that he and his associates want to understand.
It is important to understand that the entire list of claims does not play any role, it is the public voicing of theses, which will then be used in the daily rhetoric of politicians. But there were also some interesting moments that struck me as curious.
For example, it turns out that 6.5 billion fake accounts appear on Facebook every year, this is the number that the social network sees and closes them. Have you imagined the scale? Zuckerberg said that after interfering in the elections (!!!), the company hired 30 people to moderate the content. About 84% of messages banned by network rules are blocked even before someone sees them. But such impressive statistics are unlikely to save the company.
The main attack vector on Facebook was built around unfair competition and Instagram buying. In the past, Zuckerberg has argued that buying Instagram is necessary because it can challenge Facebook and get a competitor out of the way. These words were presented to him, and he could not deny them. I would argue that this is exactly what will become a key claim against the company.
Another point is Facebook tracking its users, collecting all possible information. Somehow it was forgotten that once the company promised not to monitor its users, this was part of the strategy. Everything has changed. Zuckerberg was shown his letter in which he de facto approves of surveillance. He had nothing to cover it with.
There were various complaints against Apple, but the main line of attack was against the app store. Why does Apple charge a 30% or 15% commission for an app or service in a store? After all, a company can decide to take even 50%, it itself regulates how much it wants to take. But most importantly, Apple denies access to the app store to those who can compete with them. Either he takes someone else’s work and turns them into part of iOS, and simply removes competitors from the store, and their business ends there.
There was a strong feeling that Apple would be forced to change the rules of the App Store, moreover, perhaps to allow other companies to create their own app stores for iOS (that would be ridiculous). But this attack vector is understandable, just like the line of defense against Tim Cook – the vast majority of applications are free, and therefore it does not matter how much or how we make money on others. Cunning, which will not allow you to fight back in the end.
Interestingly, what was presented by Google, I will leave secondary questions, and dwell only on online advertising.
The figure shows that Google actually acts as an ad buyer, seller, and sets prices itself. Buys at bargain prices and sells them dearly. Google has created an ideal market that they dominate, and this is not true from all angles. They also showed how the revenue in inventory changed (growth of own resources, rejection of third-party resources).
It remains to say a few words about Amazon. These guys were accused of having a dominant position in the online sales market and at the same time actively spying on the sales data of independent sellers in their system and immediately creating similar products, which kills the sales of the former. That is, they actually use their dominant position. All questions to Amazon revolved around this, but they were not too sharp, the feeling that the company is here for the crowd and will suffer less than others.
The materials of the investigation will be published in the near future, they will bring us a lot of interesting information, and I think we will return to them. But one thing I can say – the show was staged on a grand scale, and the time was chosen as correctly as possible. It’s a pre-election show, a punishment for those who misbehaved and a warning. The kind of club with which companies are beating, and the public flogging is already obvious to Facebook (Zuckerberg clearly believes in this, as well as investors, the company’s shares have dropped noticeably over the past year).
The chairman of the commission read out at the end a fiery speech about illegal practices, the need to split companies in order to return opportunities for everyone to the market, and so on. These were meaningless, but very powerful words that are important as a demonstration of the direction of the development of this whole situation.
Life is more interesting than any TV show, and these hearings proved it. They are very interesting in that they showed the direction of Trump’s attack on the largest American corporations. And formally, Trump’s revenge solves many problems in his election campaign, brings confusion to the ranks of IT corporations, and warns them against rash steps. Oddly enough, this is all politics, not a fight against bad business practices. If there were no elections in America, we would not have seen such a bright show.
PS If you know English, do not be lazy to watch the recording of this show, over 5 hours will fly by unnoticed. It’s great! And this happens extremely rarely, the most recent similar event was the hearings against Microsoft and Bill Gates’ speech to Congress in 1989.
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