What we just learned about Big Tech’s future

The Big Story

What we learned from the battle of Webex

In the moment, there were parts of Wednesday's hearing that felt brutal. Jeff Bezos wilting under pressure from Matt Gaetz and saying Amazon should do better than use the Southern Poverty Law Center; Sundar Pichai repeatedly not having good answers as to why Google deserved to be entrusted with so much user data. The members of the antitrust subcommittee were remarkably prepared and ready to pounce.

But the folks who prepare CEOs like these for hearings like these say there's really only one goal in a Congressional hearing: Get out alive. Don't say anything that'll get you in trouble, that'll stick to you forever either in the court of opinion or in an actual courtroom.

• And if that's the bar, all four CEOs cleared it neatly. Congress got its shots in, four of the world's most powerful men sat there and took it, and then they got to close their Webex windows and … I don't know, throw a gallon of zinc on their face and go surfing.

If you want to dig deep into what we can take away from the hearing, I have two Protocol stories for you. Here's the whole crew on what we learned today about the Democrats' case, and Emily Birnbaum and Issie Lapowsky on what comes next in the antitrust saga. We also have a good rundown of the questions the CEOs didn't answer. And our friend Nancy Scola at POLITICO has a good piece on which parts of the hearing might stick around after all.

What jumped out to me more than anything was that there's a fundamental, maybe unsolvable disconnect between the tech companies and the regulators. The tech CEOs are saying, we're doing our best, we're huge, of course there are going to be bad things, but the bad stories you're hearing are the exception and not the rule.

• And that may well be true! But that doesn't actually address the lawmakers' issues, which are that these stories exist and they are not unique.
• Facebook can take down billions of pieces of bad content before anyone sees them and will still miss millions of pieces. Apple can have millions of apps that are thriving on the platform and still treat a lot of them badly. Companies want credit for the things they get right, Congress wants accountability for what they miss.

It's also clear that when we talk about how large these companies are, we're really talking about two separate things. There are questions of market share and market cap, the sway these companies have in the world. But also, do these companies just have too many employees?

• Zuckerberg and Bezos in particular admitted several times that while their policies don't allow certain things, they couldn't guarantee that rogue employees didn't flout the rules or tweak a system without their knowledge. "Of course when you have tens of thousands of employees," Zuckerberg said, "people make mistakes. People have some of their own goals some of the time."
• Think about this in light of the Twitter hack from a few weeks ago. If these companies want to be this big, and still be accountable, they're going to have to build systems — human and machine — that are easier to understand and hold accountable.

I don't think there's much the CEOs will have to answer for or change immediately as a result of Wednesday's hearing. But it's clear that an era is coming that will require more transparency, more checks and balances, and more proof beyond just saying "we're trying our hardest." And the CEOs who testified are going to have to lead the charge, whether they want to or not.

More Hearing

The devil's in the documents

Far more compelling (and in many cases damning) than the hearing itself was all the evidence the subcommittee put out after the hearing was over. Starting with the conversations just before Facebook bought Instagram, a billion-dollar deal the committee was very interested in.

• Benchmark's Matt Cohler, chatting with Kevin Systrom, warned him that Facebook would "go into destroy mode" if Instagram turned down his acquisition offer. If they didn't join Facebook, Systrom said, "bottom line I don't think we'll ever escape the wrath of mark."
• Meanwhile, Zuckerberg was emailing with his team about the acquisition, saying he was interested in Instagram in part because he wanted to "neutralize a competitor." This phrase was thrown back at Zuckerberg by the committee over and over. And over.

There's much more in the documents, too, which will be interesting to anyone who wants to know what it's like in the room where it happens:

• In 2011, Apple considered raising its App Store commission to 40%, with Eddy Cue saying, "I think we may be leaving money on the table" at 30%.
• You can also read the 2016 email from Eddy Cue to Jeff Bezos, detailing their special rev-share deal to get Prime Video to come to Apple devices. (And the one that undoes Tim Cook's assertion that "we apply the rules to all developers equally.") They went surprisingly deep on the integration details, too!
• There's a lot of Steve Jobs correspondence in here, too, and you can practically watch Apple tighten the reins on the rules of the App Store.

Ultimately, documents like these will be the legacy of these hearings: They're what really illuminates how the tech industry works. And if you run a tech company? I'd be thinking hard about your email policy right now, and how you communicate important and unpleasant information with your team.

If you're in the mood for some not-light reading, scroll through the 113 pages of Apple correspondence. It's good stuff. (I even make an appearance — first person to send me a screenshot gets a Protocol mug.)

Video Chat

Trillion-dollar companies, 10-cent backgrounds

Sorry, last thing on the hearing. Can we talk about everyone's video-chat setup? Obviously Wednesday was a rough day for Webex, between the delays and the outage that caused a 10-minute recess. But also, for four dudes worth a couple hundred billion dollars, you'd think they'd have better video-chat rigs.

• Jeff Bezos: Terrible lighting, my friend. Ask your favorite Twitch star about ring lights. Also, why is everything at a 25-degree angle, like you're calling us from a sinking ship?
• Mark Zuckerberg: This whole "sitting in front of a featureless wall, slightly overlit" thing isn't working anymore. You're definitely in Hawaii — maybe show us a window?
• Tim Cook: Water the plants, Tim, they look sad. And that iPad in front of you has a much better webcam than whatever Mac product you used.
• Sundar Pichai: The best of the bunch, by far. Strong old-school office vibes. And pulling the camera back a bit goes a long way.
• Also, all four of you: Buy a better microphone! You'll seem much more impressive when you don't sound like you're on a phone call from 1997.

It was also surprisingly odd to see these four men – who are known for their t-shirts, bomber jackets and extremely strong vest game — actually wearing suits. But forget the sartorial advice. Get a good light, a nice microphone, and a big stack of important-seeming books, and you'll blow Congress out of the water.

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People Are Talking

Before Wednesday's hearing, Kevin Mayer made his first public statement as TikTok chief, and it's a doozy:

• "Without TikTok, American advertisers would again be left with few choices. Competition would dry up and so too will an outlet for America's creative energy. We are not political, we do not accept political advertising and have no agenda – our only objective is to remain a vibrant, dynamic platform for everyone to enjoy."

On Protocol: Intuit CTO Marianna Tessel said AI could have the same effect on busywork as the spreadsheet once did:

• "We know that our customers have to enter receipts, get forms, categorize transactions — a lot of that needs to happen as part of your day-to-day running of your financial lives or your business. We have used AI to automate a lot of that and eliminate work for our customers so they can focus on what they love to do."

On Protocol: AR glasses are coming sooner than you think, Niantic COO Megan Quinn said:

• "I think the next inflection point, as it relates to new form factors and potentially new experiences that those form factors unlock, is somewhere in the 12 to 24 month range."

Think Tesla's sky-high stock is a fluke? Volkswagen CEO Herbert Diess thinks otherwise:

• "It confirms to me that in five to ten years, the most valuable company in the world will be a mobility company — that could be Tesla, Apple or Volkswagen AG."

Number of the Day

4.1

That's the percentage of Snap employees who are Black, according to the company's first-ever diversity report. (Which it released mid-hearing, maybe hoping people wouldn't notice.) The report is rough in general: Women make up 32.9% of Snap's workforce, and only 16.1% of its tech teams. The company's senior leadership team is 74.2% white. The company laid out plans to help improve those numbers, but acknowledged there's a lot left to do.

In Other News

• Google Cloud announced three big new deals: Keurig Dr. Pepper, Wipro and Orange. All three are big wins for Google in an ever more competitive cloud market.
• Don't miss this story from Wired about how a group of hackers took fake news to a whole new level — by planting it on very real news sites.
• Emmy nominated tech execs are in for a disappointment, because the awards show is going to be virtual. And it may be taking place, in part, in your house instead.
• Walmart launched its own voice assistant, "Ask Sam." Right now it's an informational tool for Walmart employees, but it's further proof that the future isn't one assistant for everything. It's tons of assistants, for anything you can think of.
• Qualcomm and Huawei signed a big deal after a long fight over licensing fees: Huawei will license Qualcomm's tech, and give it $1.8 billion to cover back payments. The two companies working together surely won't make the Trump administration happy.
• Kodak had a monster day Wednesday, but definitely not for the reason you think. Trump announced the company's working to produce ingredients for generic drugs, which makes absolutely no sense given recent history but actually fits with Kodak's legacy. It's sold drugs before.
• Those mysteriously dropped charges against the Twitter employees accused of helping Saudi Arabia access the platform? Turns out there were new, bigger charges in the wings.

One More Thing

'The thing about smoking meat is that it takes a long time'

If the hearing had been 5.5 hours of this, I would have watched it twice.

A MESSAGE FROM HEY

Email's overwhelming, but it doesn't have to be. Introducing HEY — a radical refresh of email. Screen your emails like you screen your calls, block spy pixel tracking, merge threads together, newsfeed-style reading, and much more. Try it today at HEY.com.