Secret documents from US antitrust probe reveal big tech’s plot to control or crush the competition – ProWellTech
Nearly 500 pages of evidence were made public during the House of Judiciary marathon heard this week about Amazon’s potential anti-competitive actions, Facebook, Google and Apple . We have collected them here with an added context and an omnibus and searchable version for anyone who prefers not to juggle four dozen documents.
The emails, chat logs, and other communications listed here emerged online as the hearings continued. Many are internal documents that should never have been exposed publicly – for example, Facebook CEO Mark Zuckerberg told a colleague that “we will probably always be able to buy any competitive startup” shortly before acquiring Instagram in 2012.
Congressional investigators exercise considerable power in convincing the release of such documents, even against the will of companies, which almost certainly would never provide journalists with such self-incriminating information. As such, these documents contain all sorts of useful information, most of which provides information about managers’ otherwise opaque thinking as their companies made key decisions about growing their businesses and hint at the strategies traditionally used by monopolies.
Although there is nothing that could be called a smoking gun, these are not the only pieces of evidence gathered from the investigations, but only those needed to make this hearing public. Lawmakers talked about other documents and also about interviews and testimonies that corroborated their accusations or contradicted reports of corporate events.
While there are too many documents to discuss individually, we have noticed some interesting exchanges that we have found in the files for each company. At the bottom of this post you can find a combined mega file of internal documents. It’s not in a particular order, so it’s best to sift through key terms, key figures and company names.
The documents contain internal communications on Amazon’s research and on the possible purchase of Diapers.com, which also emerged during the hearing itself. The aggressive reduction of prices by the former forced the latter to cease trading, allowing it to be broken up and integrated. In one document, we see that Amazon discusses setting special automatic pricing rules that lower Diapers.com’s prices more aggressively than other diaper and toy sellers.
Another document shows that Amazon lost around $ 200 million in the neighborhood in a single quarter during this period, demonstrating that it was willing to suffer losses on a scale that small businesses couldn’t have endured – a classic monopolistic tactic only possible if you command a huge chunk of a market. Scanlon Representative (D-PA) pushed Amazon CEO Jeff Bezos about 2 hours and 15 minutes.
Jeff Bezos, spurred on by a ProWellTech post, asks what is the plan for the next Diapers.com game, Soap.com, and receives a summary of the existing plan, which “reduces the business of basic diapers for diapers.com” and “it will slow down the adoption of soap.com.” This email shows how Amazon acknowledged it positioned itself as “the place to sell globally”, particularly with Chinese manufacturers who wanted direct access to American consumers. A bunch of Diapers.com metrics mention “predatory pricing” and Amazon as very specific threats to their short and long term plans.
As for Amazon’s purchase of Ring, which may have emerged as a competitor for the smart home, this document shows executives who argue that they are “willing to pay for the market position as it is difficult to capture the leader.” “. Another email offers more context on Amazon’s thoughts on the acquisition of Ring (then called Project Darwin) before it passed. Bezos himself states in this exchange that “we are acquiring the market position, not the technology. And that market position and momentum are very precious.”
In a March 2012 email exchange, the month before Facebook announced that he would buy Instagram, Zuckerberg shares a conversation about “the strong Chinese culture of rapid cloning of things.”
In the original conversation, sent to Chris Cox and CTO Mike Schroepfer, Facebook product manager, a high-level Facebook employee describes how they met with the founders of the Chinese company RenRen, who described how their company copied apps like Voxer. and Pinterest. The author comments that it is easier for those companies to quickly distribute products “since they are copying other people” and continues by suggesting how a similar strategy could work for Facebook. By forwarding the email to Sheryl Sandberg, Zuckerberg comments “You will probably find it interesting and agree.”
Another set of documents captures Mark Zuckerberg’s private courtship of Instagram co-founder Kevin Systrom. It is evident that a lateral conversation between Systrom and a former vice president of the Facebook product shows that the creator of Instagram was worried about Zuckerberg going into “destroy mode” if Systrom had not agreed to sell. There is also a deeper insight into how Facebook saw the Instagram deal and how the company decided to keep it a separate product.
The Facebook documents also include some conversations about the acquisition of WhatsApp, which he nicknamed “Project Cobalt”, including the minutes of a board meeting four days before Facebook went public with its acquisition plans. “SM. Sandberg stressed that the high concentration of the mobile operating systems market – with two providers serving the vast majority of smartphone users worldwide – represents a significant strategic threat for [Facebook’s] business … “say the minutes.
Apple’s is not famous for having crushed competitors like the other three companies, but it certainly loves to snatch the revenues from its software partners while keeping a close grip on both hardware and software. Many of the documents focus on Apple’s internal strategies that respond to criticism of issues such as the right to repair dispute and developers dissatisfied with Apple’s obsessive level of control over its products.
Apple documents also describe how the creator of the App Store offers preferential treatment to some companies on the commissions it takes. In 2016 emails between Jeff Bezos, Amazon CEO and Apple SVP Eddy Cue, Apple appear to have entered into a special deal with the Amazon Prime Video app for iOS and Apple TV.
An email exchange in 2011 also explains how Apple raised commissions to 40% for the first year for subscription apps. “I think we could leave some money on the table if we asked for only about 30% of the first year of submission,” wrote Cue. This did not happen, but the correspondence provides information on some questions about the setting of its rules to which the company did not really have an answer at the hearing.
In a confidential internal presentation from 2006, Google generates an alarm on the “orthogonal threat” posed by social networks and other websites with “high entertainment value”, such as YouTube.
“… The team developed an opinion that these social networking sites will ultimately pose a threat to our research as people will spend more time on those sites and could ultimately do most of the research from search boxes available there. They are not direct competitors, but they can replace us in end users’ time-off. “
The presentation goes on to argue that Google should “own the search box on entertainment sites” and develop its own social network solution so that those sites don’t win. In the same year, Google announced its YouTube reference acquisition.
Other email chains over the same period captured Google’s internal thinking ahead of buying YouTube.
“YouTube’s value to us would be an intelligent team and a platform from which we could build (perhaps enough to justify an acquisition on its own), but we would really be able to preserve their community once we start reviewing and pulling copyright or inappropriate content? If anything, it is likely to cast a low light on Google, “wrote the then director of the product Hunter Walk, at an interesting time foreshadowing the current content moderation problems of Google.
After entering into a $ 200 million deal for the company and having dried up YouTube, Google eventually continued to buy the now ubiquitous video sharing platform for $ 1.65 billion.
You can read and search the documents here:
House Antitrust Subcommittee… of ProWellTech on Scribd