HOOKED TO THE BIG TECH HEARING

Economics Aug 19, 2020

This article is organized as follows. The first section contains a summary and some highlights from the Big Tech Hearing in-front of the House Judiciary Sub-Committee on Anti-Trust of the US Congress. Jeff Bezos, Sundar Pichai, Mark Zuckerberg, and Tim Cook were present for this hearing, and the Congress had some choice words for each of them. The second section contains an economic review of what platform markets are and what we know about them. The third section is dedicated to something from the hearing that struck out – I realized that I was not too fond of Sundar Pichai, and his Indian-ness is perhaps harming Google in more ways than one.

A Quick Look At What Transpired

Contrary to common beliefs, all big governments are not “Big Governments.” A government can be big without being ‘Big,’ and a government can be ‘Big’ without being big. This might sound strange to many, but understanding the difference between big and Big is central to identifying what happened at the Big Tech Hearing in the US Congress.

A government is considered big if it employs a lot of people, that is if it is big in the numerical sense of the term. On the other hand, a government is considered ‘Big’ if, irrespective of its size, the government wields a lot of power. For example, the Indian government during the License Raj was a Big government, which controlled everything from the raw materials and processes of the industries to export quotas and price caps on products. On the other hand, the US government is merely big  – it employs 22 million people directly (as opposed to the Indian Public sector, which employs just 18 million). Still, it does not use the iron hand of the law to exert excessive control over companies. But this raises an obvious question – why does a not ‘Big’ government need such a big government?

Well, the answer to this dilemma is easy – in countries where the government pursue a hands-off approach, there is a greater need for bureaucratic and technocratic expertise within the government for PROPER OVERSIGHT. What this means is, that the government employs many more people to ensure that reckless companies, mostly unregulated, don’t venture into territories that might hamper consumer interest, or morph into giant monopolies that would reduce productivity and harm innovation. The Big Tech Hearing was a manifestation of this oversight.

Crowded on a massive CISCO-WEBEX LED screen, four prominent CEOs with a net worth of $266 Billion (roughly equal to Pakistan’s GDP)  presented themselves to be questioned on whether their companies indulged in “practices that were deemed monopolistic, and could harm future innovation in the tech sector“. Every member of the sub-committee was given 15 minutes (in three rounds of 5 minutes each) to question the four CEOs on their company’s practices, policies, cultures, mergers, etc. I present a brief (surprisingly bi-partisan) summary of the case made by the US Congress against each company below. For the theatrics and the drama, please watch the almost 7 hour hearing at your time.

Check out the rest of the piece (with a solid diss on Sundar Pichai) here: https://ecobphc.wordpress.com/2020/08/05/hooked-to-the-big-tech-hearing/

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