Top executives at Facebook Inc., Alphabet Inc., Amazon.com Inc. and Apple Inc. are gearing up to defend their business practices on Capitol Hill, but analysts and industry observers largely expect more bark than bite from lawmakers.
Facebook CEO Mark Zuckerberg, Alphabet CEO Sundar Pichai, Amazon CEO Jeff Bezos and Apple CEO Tim Cook are set to testify virtually at a July 29 U.S. House judiciary antitrust subcommittee hearing examining whether these companies have outsize market influence and whether their business activities have harmed consumers. While experts note the hearing presents some headline risk for the companies in the near term, they say it is not likely to result in any meaningful policy change anytime soon.
Wedbush Securities analyst Daniel Ives said Washington's increased scrutiny on large tech companies presents some "near-term uncertainty" and "headline risk," but overall, he anticipates fines to be the most likely outcome of the investigations, rather than significant business model changes.
"We remain firmly bullish on FAANG names, however are keeping a close eye on this anti-trust momentum building against big tech," he wrote.
The July 29 hearing is part of a broader investigation launched by the subcommittee in June 2019 exploring competition in the digital marketplace.
Senior committee aides recently told reporters that the intention of the hearing and the committee's investigation is to document competition problems online and to assess whether the current antitrust laws and enforcement levels are adequate.
Alphabet's Google LLC unit faces an investigation from the U.S. Department of Justice and several state attorneys general into the company's potentially monopolistic behavior in the online advertising marketplace. The DOJ is reportedly preparing to file an antitrust lawsuit against Google as early as this summer, with the state attorneys general likely to file a similar case in the fall.
Amazon and Facebook also face probes by the U.S. Federal Trade Commission.
For Amazon, the FTC is examining the company's relationship with third-party sellers, which account for more than half of Amazon's total unit sales online.
Facebook already reached a $5 billion settlement agreement with the FTC in 2019 related to violations of a 2012 order regarding the social platform's user data practices. Facebook is also under a separate antitrust investigation by a group of state attorneys general.
Apple, meanwhile, has come under fire by regulators and lawmakers across the globe for its App Store policies, such as its charging a 30% commission to app developers that both developers and companies allege have resulted in fewer choices and higher prices for consumers.
Though Isaac Boltansky, director of policy research at independent investment firm Compass Point, noted that the July 29 hearing should be a "blockbuster event," he doubts it will alter the trajectory of policy.
"There will be a considerable amount of tough talk [at the July 29 hearing], but our sense is that the majority of the lawmakers will be distracted by the bright lights or confounded by the multitude of potential topics," Boltansky wrote in a report.
Carl Szabo, vice president and general counsel of NetChoice, a trade association that promotes free expression and free enterprise on the internet, noted in an interview that it could be difficult for regulators to prove big tech has caused consumers harm — a key evaluation tool used in antitrust cases — given the continued popularity of tech services.
"This is going to be much more political theater than it is enforceable antitrust law," he said.