EVENT

Online Platforms and Market Power

"Our founders would not bow before a king. Nor should we bow before the emperors of the online economy,” Rep. David Cicilline (D-RI), the chairman of the House Judiciary antitrust subcommittee, said in the opening of Wednesday’s five-hour hearing. 

The event was occasionally derailed by interruptions, grandstanding, non-sequiturs...and once by Jeff Bezos being on mute. But Congress’s tech chops are improving and the subcommittee did its homework. The 13-month investigation has so far produced 1.3 million documents. 

• Reps grilled Bezos, Tim Cook, Sundar Pichai, and Mark Zuckerberg on competition, market power, acquisitions, bias, content moderation, privacy, and more. 
• Worth noting: Some of those issues can’t be addressed through antitrust policy. 

Flash-forward 24 hours...Wall Street was unfazed by potential antitrust action and excited to pounce following the closing bell Thursday. After blowout earnings reports, Big Tech added hundreds of billions in market cap in after-hours trading last night. 

What nobody talked about

Research wasn’t an overarching theme of the hearing, but Pichai did note that Google’s annual R&D spend increased tenfold to $26 billion, from 2009–2019. 

Consider how FAMGA companies have evolved over the decade: In 2010, they were relatively specialized in the domains of search, social, e-commerce, and devices. Today, thanks to greater R&D spend, acquisitions, and aggressive hiring strategies, they’re all AI companies with tentacles in every category of emerging technology.

Taking it global

Members of the anti-breakup camp (including Mark Zuckerberg) say antitrust action would hurt American tech competitiveness on the global stage, especially vis-à-vis China.  

At least one U.S. senator has discussed balancing domestic regulation and global competition. “I’m not in the break-’em-up category–yet...These are all global companies. Frankly, to have them replaced by Alibaba or Baidu or Tencent–Chinese companies may not be the better alternative,” Sen. Mark Warner (D-VA) told CNBC Wednesday. 

Bottom line: Washington is scrutinizing the online emperors and Congress could eventually put more tech regulation in the pipeline. But don’t hold your breath for an AWS or App Store spin-off. 

AI

Sharing the TikTok Recipe?

ByteDance’s secret sauce has a key ingredient: its personalized recommendation engine.  

On Wednesday, TikTok CEO Kevin Mayer said the company will let experts “examine the actual code that drives our algorithms.” It’s a response to critics who say that even if TikTok isn’t sharing user data, the Chinese government could manipulate the secretive machinery that promotes—or suppresses—content on ByteDance apps. 

TikTok wants to create its own brand and distance operations from parent company ByteDance. But it may be impossible to unwind the tech stacks currently in place, since R&D and core development are concentrated in China. 

The plot thickens

CFIUS, the U.S. panel that reviews M&A for national security risks, is investigating ByteDance, U.S. Treasury Secretary Steve Mnuchin said this week. His department is preparing a recommendation for the White House on how to proceed with TikTok.

Outside the Beltway, some ByteDance investors are seeking to acquire TikTok for $50 billion, which represents a 50x multiplier of the app’s projected 2020 revenue, Reuters reported Wednesday.

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HARDWARE

Game of Phones

The new Game of Phones episode didn’t garner the ratings of the blockbuster antitrust hearing, so I can’t blame you for missing it. The latest: 

House Huawei is thriving on its home turf. The company controls nearly half the smartphone market in China and in Q2 shipped nearly 56 million handsets, per Canalys, making it the world’s leading smartphone vendor for the first time. 

• Takeaway: Huawei is doing A-OK without Google software. 

House Samsung, on the other hand, is warming to a Google alliance. The two are in talks to prominently feature the Gundle (Google service bundle) on Samsung devices, Bloomberg reported. This could lead to the banishment of Bixby, Samsung’s voice assistant.  

• Takeaway: Samsung has struggled to develop its own mobile OS and apps. Getting some $ from Google to pre-install its (better) services may just work.

On the horizon, 5G is coming. Huawei and Samsung have plenty of devices on the market, but the 5G iPhone (whenever it comes) will pose stiff competition.

BITS & BYTES

Stat: China’s Ministry of Industry and IT says "there is absolutely no doubt that 5G smartphones will exceed 100 million units by the end of this year." Already, 5G handset shipments in China have surpassed 86 million. House Huawei has 60% of the 5G device market.

Quote: “Our old preferences have been debunked during the pandemic.”—Zillow CEO Dan Spaulding. The real estate company will let 90% of its employees WFH indefinitely.  

Read: A transcript of the Facebook-Instagram acquisition negotiations.

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WHAT ELSE IS BREWING

• Qualcomm and Huawei struck a deal after a long-running patent beef. Huawei will license Qualcomm’s tech and give the chipmaker $1.8 billion in back payment. 
• Apple is producing flagship iPhones in India, Nikkei reports. 
• Telegram filed an antitrust complaint against Apple in the EU, saying the company must “allow users to have the opportunity of downloading software outside of the ‌App Store‌."
• Snap released its first diversity report.
• Walmart launched its own voice assistant. Ask Sam is only available among Walmart employees for now.

GOING PHISHING

Three of the following news stories are true, and one...I made up. Can you spot the odd one out?

1. The Weeknd is holding an AR concert in TikTok. 
2. Wawa, a U.S. convenience store chain, is putting sandwich-making robots in four New Jersey locations.
3. Quibi, the struggling streaming service, received 10 Emmy nominations.
4. A China-backed cyber group allegedly hacked the Vatican.

TECH THINGAMABOBS

For another legit tech newsletter: From new COVID-19 developments to the technologies changing our world, get a glimpse of the future with WIRED's daily newsletter. 

For network effects: Seeing Networks reveals the actual physical infrastructure that comprises a city’s networked objects. It’s like bird-spotting for telecommunications equipment and cable lines. For now, it has resources for NYC and Phoenix.

ICYMI

Catch up on the top Emerging Tech Brew stories from the past few editions: 

• Online learning status update
• NBA will use Microsoft Teams to display digital fans
• AT&T announces nationwide 5G network

GOING PHISHING ANSWER

Wawa didn’t put sandwich-making robots in any stores.