12 BARRON’S August 3, 2020
Google. Conceivably, they might halt
some minor acquisition, but there’s
nothing that’s going to go to court.”
Melamed says that there was no
clear legislative agenda evident from
lawmakers’ questions, which covered
a range of perceived grievances and
didn’t delve into whether antitrust
laws need to be adjusted.
Over about 5 ½ hours, socially
distanced, masked committee mem-
bers grilled Alphabet’s Sundar Pi-
chai, Amazon’s Jeffrey Bezos, Apple’s
Timothy Cook, and Facebook’s Mark
Zuckerberg, who were beamed onto
monitors set up throughout the
chamber in the Capitol.
Committee members frequently
interrupted the CEOs to ask ques-
tions covering everything from Face-
book’s advertising practices and ac-
quisition strategies to the fairness of
Google’s search results, and whether
Amazon used its third-party seller
data to develop competing products.
Apple’s perceived dominance
through its app store received much
less attention.
Despite digressions, both political
parties managed to get their digs in.
“The companies as they exist today
have monopoly power,” subcommit-
tee chairman David Cicilline (D., R.I.)
said as he adjourned the session.
“Some need to be broken up. All need
to be properly regulated.”
Republican ranking member
James Sensenbrenner (R.,-Wis.) said
that “as the business landscape
evolves, we must ensure that our ex-
Tech Grilling:
More Bluster
Than
Substance
The biggest U.S. tech companies
are unlikely to face an antitrust
assault, observers conclude after
congressional hearings.
“I’ve long
thought and
continue to
think
[antitrust
regulation]
isn’t going to
be a major
threat to
these
companies.”
Stanford law Prof.
Douglas Melamed
W
ednesday’s interrogation of
four tech titans by the U.S.
House Judiciary Subcom-
mittee on Antitrust marked
a concerted display of bipartisan hos-
tility toward some of the largest tech-
nology companies in the world.
But lawmakers failed to score deci-
sive points, particularly with regard
to the companies’ alleged violations
of antitrust law, and shares ofAlpha-
bet(ticker: GOOGL),Amazon.com
(AMZN),Apple(AAPL), andFace-
book(FB) rallied on the day.
“I’ve long thought and continue to
think [antitrust regulation] isn’t going
to be a major threat to these compa-
nies,” says Douglas Melamed, a Stan-
ford University law professor and for-
mer general counsel of Intel. “They
aren’t going to bust up Facebook or
By MAX A. CHERNEY
isting antitrust laws are applied to
meet the needs of our country and its
consumers.”
Yet, several observers say the hear-
ing lacked antitrust content, with
only about a fifth of the questions
relating directly to antitrust law, ac-
cording to former Justice Department
antitrust attorney Avery Gardiner.
“They got very close to some impor-
tant issues and then didn’t pursue
them,” she says.
Baron Funds portfolio manager
Michael Lippert says he is much
more concerned with European anti-
trust activity than U.S. threats.
“There’s a lot of bluster, but I don’t
think there is a lot that can be done
under our laws,” he says.
I
nvestors seem to agree. In addi-
tion to Wednesday’s strong
showing, Facebook, Amazon,
and Apple all surged on Friday
after they posted strong second-
quarter earnings. “I don’t think in-
vestors were all that worried after
yesterday, and they won’t be until
they get a better sense about a spe-
cific risk area,” Michael Cuggino,
president of the Permanent Portfolio
Family of Funds toldBarron’son
Thursday. (For more on earnings, see
Tech Trader on page 29.)
For the moment, the stocks’ per-
formance will be governed by
whether the companies continue to
see strong growth. T. Rowe Price
portfolio manager Joseph Fath notes
that becauseMicrosoft(MSFT) con-
tinued to innovate, its shares outper-
formed the S&P 500 by more than
900% during the years when the
government pursued an antitrust
case against it. In the near term, he
says, an antitrust threat won’t dent
tech industry earnings.B Graeme Jennings/Pool/AFP/Getty Images
Amazon.com Chief Executive Jeffrey Bezos and the CEOs of Apple, Alphabet, and Facebook testified
Wednesday via video before the U.S. House Judiciary Subcommittee on Antitrust.
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