Google stands the most to lose: Analyst on tech hearing

Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Sundar Pichai of Google and Apple's Tim Cook are preparing to answer for their companies’ practices before Congress. Beacon Policy Advisors Senior Research Analyst Sam McGowan joins Yahoo Finance’s On The Move panel to weigh in.

Video Transcript

ADAM SHAPIRO: But we're going to be watching the big tech hearing. Again, we will stream that here on Yahoo Finance starting at about 12:00 noon. The House Judiciary Committee is going to hold this hearing with the big tech CEOs. And to help us understand what is at stake and what to look for, we invite into the stream Sam McGowan. He's Beacon Policy Advisors senior research analyst, joining us from Massachusetts.

And one of the things that you've pointed out we should pay attention to is that the companies and their, quote, "respective behavior" focused on legitimate antitrust issues could make these hearings a little bit harder for the CEOs to come out of this unscathed. What do you mean by that?

SAM MCGOWAN: Hey, thanks for having me. So specifically what we mean by that is that Republicans, you know, on the House Judiciary Committee, especially at the subcommittee level, they've talked a lot about this anti-conservative bias that these platforms allegedly engage in. And the Democrats, on the other hand, their concerns primarily have to do with actual business practices, you know, competition concerns, that is.

And so the big issue that could play out at this hearing is that Republicans want to talk about this anti-conservative bias. And you have Democrats who want to talk about some of the actual antitrust issues that these companies are involved in.

JULIE HYMAN: Sam, it's Julie here. So I always struggle with these hearings. And I think a lot of people do because there is this element of theater. Maybe that's the crux of the thing. But when you talk about the actual business practices or I should say alleged business practices of these companies, there are ongoing investigations by various regulatory agencies into many of these companies. What do you think concretely will come out today evidence-wise that could maybe lend itself to those investigations?

SAM MCGOWAN: I don't think there's going to be anything necessarily new in terms of anything that we learn out of this hearing. I think the big thing that we could learn, you know, potentially is that what are Democrats' priorities. And that's big in case Joe Biden wins in November and the Democrats regain unified control of Congress.

Now, in terms of at the company level and what we could potentially gain out of this hearing, there's going to be a lot of talk about Facebook's acquisitions, their acquisitions of WhatsApp, Instagram, and other nascent competitors. Now, we have to remember those were all approved by regulators back when those deals came out.

And then Google, you know, they're going to be talking about Google's dominance in the ad tech marketplace, search. And then Apple, it's going to be-- a lot of the focus will be on the App Store and the fees that they charge there. And then with Amazon, you know, you could have questions about how they use the data that they gather on third party sellers and that sort of thing.

DAN HOWLEY: I want to ask about whether or not you read the opening statements from these CEOs and, you know, what you thought of them. From our perspective or my perspective at least, they definitely had an almost nationalist bent to them, basically saying, you know, we're all for America, rah, rah, rah. Did you notice anything different?

SAM MCGOWAN: Yeah, definitely. That's a great point. I think from Amazon's perspective, you know, they want to champion themselves as an American success story. Google, the same thing. Sundar, their CEO, you know, he was talking about how he didn't receive a computer until he first came to America. And those are the sorts of stories that I think will sit well with basically all the members, regardless of their party, but especially Republicans who, you know, they believe in the free market. And that's something that's hard to knock them for, especially in the case of Amazon, where these companies have displayed kind of American ingenuity.

And especially with the coronavirus, they're going to definitely be pressing that and talking about how they are coming to the rescue, so to say. But that's a good point.

ADAM SHAPIRO: You know, it's interesting because when you read the Bezos statement, it does read like "American Gothic" almost, where he's talking about his parents, his step dad and his mom putting up the money. They could have lost everything. But when you look at all of these companies, who stands the most to lose out of these hearings?

SAM MCGOWAN: I think-- now, they're definitely not going to go easy on any of the CEOs. But looking at the investigations that are underway at the DOJ, the FTC, and the state level with respect to the state attorneys general, really, we believe that Google stands the most to lose at this point. In terms of where the investigation is at the moment for Google, it's moving along very quickly. It's definitely moving along a lot faster than antitrust investigations have moved in the past.

And we think, you know, with 50 state AGs ready to bring a case against Google sometime in the fall and then the DOJ also potentially going to move on a case, you have kind of definitely real risks right now and I would say higher risks than Apple, for sure, given that the focus currently is on Google and to some degree Facebook. But Google, I would say, is going to get peppered the most. But they're definitely not going to go easy on any of the other companies as

ADAM SHAPIRO: And we will be watching. Want to remind everybody that you can watch that hearing live here on the stream at Yahoo Finance. We're going to start at 12:00 noon.