Yahoo Finance Microsoft is now the ‘adult in the room’ among big tech: Seattle Congresswoman
The so-called FAAMG stocks have been the target of Washington, D.C. all year.
Well, most of them at least.
The CEOs of Facebook (FB), Amazon (AMZN), Apple (AAPL) and Google (GOOG) were virtually questioned before Congress this summer and are now the focus of a 451-page report released this week on their business practices.
Facebook, Google and Twitter (TWTR) will be back before lawmakers later this month for a Senate hearing.
But Microsoft (MSFT) – no stranger to Congressional inquiries in years past – has largely managed to escape the glare.
That’s because they are now “the adult in the room in some ways on this issue,” said Rep. Pramila Jayapal (D., Wash.), a Democratic member of the House Antitrust subcommittee, which has been diving into Big Tech’s practices for the last 16 months.
The final report doesn’t call for a break-up of the companies, but does talk about the need for “structural separations” to prohibit one part of a company from using another part of their platform to gain an unfair advantage.
The idea is a “roadmap” for restoring competition, improving innovation, and safeguarding democracy, say the report’s Democratic authors, Reps. Jerrold Nadler and David N. Cicilline.
‘I've had an open door policy’
Jayapal’s Seattle district includes Amazon’s headquarters and the company’s practices, specifically how it uses data from third-party sellers, has been one of her major focuses.
It’s Congress’s job to make sure “a company like Amazon can't just put a small business that produces diapers out of business by taking all of that market information that nobody else has access to, and using it to subsidize losses and push small companies out,” Jayapal told Yahoo Finance.
She has also had a less-than-cordial relationship with Amazon CEO Jeff Bezos. During a Yahoo Finance interview this summer, Jayapal said she had never before met the billionaire. They did talk virtually in July when she grilled him during the hearings, but she said this week that communication since then has been sparse.
“I've had an open door policy to speaking with Mr. Bezos and have invited him many times,” she said. Though she has met with Amazon senior managers.
Microsoft as the counterexample
“The lesson here is self-regulation doesn't work,” said Jayapal. She points to Microsoft as an example that Amazon should follow, of successfully working with the government.
In 1998, Microsoft was the subject of Congressional antitrust inquiries and many wanted to break the company up. In the end, Bill Gates was able to avoid a breakup by promising to change his company’s ways.
The company had to “change its culture, change its lines of business,” Jayapal said. The process of government involvement led to Microsoft creating a “platform for other small companies to thrive,” she said.
Jayapal is perhaps the most liberal member of the team charged with investigating big tech. Elected to Congress in 2016, Jayapal is seen as a mentor to freshman Democratic lawmakers like Alexandria Ocasio-Cortez, Ilhan Omar, and Rashida Tlaib.
Jayapal also pointed to the Microsoft example as to why breaking up a company isn’t always the best option.
“Perhaps in retrospect, Amazon, after we've regulated them, after we've put through some of the recommendations that are in the report, we'll look back and say, "You know what? It's a good thing that that happened,” she said.
Ben Werschkul is a producer for Yahoo Finance in Washington, DC.
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