NYU professor and author Professor Scott Galloway has outlined seven antitrust questions Tim Cook may be asked when he appears before Congress on Wednesday.

Apple is one of four tech giants due to be grilled by the House Judiciary Committee – alongside Amazon, Facebook, and Google – and Galloway is well-qualified to discuss the antitrust issues around all of them …

Back in 2018, he wrote the NYT and USA Today bestselling book The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google (Apple Books, Amazon). In it, he opens with some hard-hitting questions.

We know these companies aren’t benevolent beings, yet we invite them into the most intimate areas of our lives. We willingly divulge personal updates, knowing they’ll be used for profit. Our media elevate the executives running these companies to hero status-geniuses to be trusted and emulated. Our governments grant them special treatment regarding anti-trust regulation, taxes, even labor laws. And investors bid their stocks up, providing near-infinite capital and firepower to attract the most talented people on the planet or crush adversaries.

So, are these entities the Four Horsemen of god, love, sex, and consumption? Or are they the Four Horsemen of the apocalypse? The answer is yes to both questions. I’ll just call them the Four Horsemen.

How did these companies aggregate so much power? How can an inanimate, for-profit enterprise become so deeply ingrained in our psyche that it reshapes the rules of what a company can do and be? What does unprecedented scale and influence mean for the future of business and the global economy? Are they destined, like other business titans before them, to be eclipsed by younger, sexier rivals? Or have they become so entrenched that nobody-individual, enterprise, government, or otherwise-stands a chance?

Galloway has now written a blog post listing four key antitrust questions he thinks need to be put to all of the tech giants, with a further three for Apple specifically. The first four share a common theme: are the companies now so large that they make it almost impossible for smaller players to compete?

Q: Messrs. Bezos, Cook, Pichai, Zuckerberg, your firms have added greater market capitalization in the last five years than the largest retailers and CPG firms have in total. This is a large portion of the entire consumer economy. If you were public servants, would you be concerned that too many of the spoils are being registered by increasingly fewer firms and people?

Q: Your market capitalization per employee is thousands of times higher than that of other companies in your sectors. Do you think your companies contribute to income inequality?

Q: Since the onset of the pandemic, nearly every sector, other than big tech and companies deemed too big to fail, has shed substantial value. Instead, since the beginning of the year, your firms and Microsoft have increased in value by an average of 35%, while the remaining 495 firms in the S&P 500 are down 5%. Every firm, sector, and economy appears to have incurred a transfer in value and power to your firms. Should we be concerned that your considerable advantage pre-Covid is now unassailable?

Q: Small business formation is at a multi-decade low. The fastest-growing sectors receive scant funding from investors. Why should someone invest in a search engine right now, or a music streaming business, or a social media platform, or an e-commerce firm, given the sizes of your companies?

And the three antitrust questions for Apple specifically:

Q: Mr. Cook, monopoly rent is when a monopoly producer lacks competition and thus can sell its goods and services at a price far above what the otherwise competitive market price would be, at the expense of consumers. Our information age is often called “the app economy,” denoting how important apps have become to commerce and consumption. Your firm and Google dominate the app ecosystem, with 62% and 38% shares, respectively. Every media company that wants to reach a consumer online must pay you a toll or rent. Do you think any of these firms believe that paying you this rent is a choice?

Q: Apple TV+ is offering consumers $1 billion in original content for every .80c a month the consumer spends on your Apple TV+ streaming video service. Isn’t it your opportunity to differentiate your $1,300 phones and fund Apple TV+ from the revenues of an unrelated product that allows you to offer a media product at well below cost? In sum, isn’t Apple guilty of “dumping,” that is, buying market share with unfeasibly low prices?

Q: Spotify is consistently rated as a superior music service to your Apple Music, yet Apple Music is growing faster than Spotify in the US. Isn’t this a function of you owning the rails, and being able to levy a 30% tax on a competitor while illegally reducing their discoverability in the app store?

Galloway supports each question with illustrative graphics. You can see these – and the specific antitrust questions he wants to see put to the three other tech giants – in the blog post.

The hearing was postponed last week when it turned out to clash with a memorial service for the acclaimed civil rights leader Rep. John Lewis, and is now set to go ahead on July 29, starting at 12 noon ET. The coronavirus crisis means that Cook and the other CEOs will be allowed to give evidence via video link.

Photo: Bloomberg

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