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What you need to know about the U.S. House Antitrust meeting examining Apple

Credit: WikiCommons

Several CEOs of major tech companies, including Apple's Tim Cook, are expected to testify at a House Judiciary Antitrust Subcommittee hearing scheduled for July 24. Here's what you should know about it.

After a postponement, the meeting is currently scheduled for 12 p.m. Eastern (9 a.m. Pacific) on Wednesday, July 29 at the Rayburn House Office Building in Washington, D.C. Participants will have the option to appear virtually due to the ongoing COVID-19 pandemic.

Here are some other key facts about the testimony you should know about.

What it's about

The testimony on Monday is titled "Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Facebook, Google and Apple." It's part of a broader investigation by the U.S. House Judiciary Committee that was launched in June 2019. Specifically, the probe is an antitrust investigation that has examined dominant technology companies and platforms.

The goal of the probe is to determine where or not dominant tech companies like Apple, Google or Amazon have leveraged their power and positions to unfairly deter and stifle competition.

Apple is being scrutinized for its App Store policies.

Much of the spotlight concerns the company's 15% to 30% cut of in-app purchases made through its payment platforms. Other topics include the so-called "Sherlocking" of third-party apps, a term used to describe the company apparently "borrowing" features from apps on the marketplace and incorporating them into first-party apps.

Apple is also being looked at by antitrust officials in Europe. And, recently, the company's App Store policies stirred controversy in a dustup with Basecamp-created email client Hey.

Who is testifying

Apple CEO Tim Cook was called to testify before the committee, though he was reportedly reluctant to agree. Subsequently, the house threatened to subpoena the Apple chief executive.

Since then, the Apple executive has apparently spent most of July consulting with the company's government affairs team.

Along with Cook, Facebook CEO Mark Zuckerberg, Amazon CEO Jeff Bezos and Alphabet and Google CEO Sundar Pichai are also set to testify before the U.S. House subcommittee.

As far as why, the House says that the executives' testimonies will be critical to wrapping up its investigation.

"Since last June, the Subcommittee has been investigating the dominance of a small number of digital platforms and the adequacy of existing antitrust laws and enforcement. Given the central role these corporations play in the lives of the American people, it is critical that their CEOs are forthcoming. As we have said from the start, their testimony is essential for us to complete this investigation," the House said in a statement.

Who is grilling the tech CEOs?

The U.S. House Subcommittee Antitrust, Commercial and Administrative Law will spearhead the hearings on Monday. It's a subgroup of the broader U.S. House Committee on the Judiciary.

Currently, there are 13 representatives who sit on the committee, including Chair Rep. David Cicilline and Vice Chair Rep. Joe Neguse. The full U.S. House Committee on the Judiciary is headed up by Rep. Jerrold Nadler.

Notably, Rep. Cicilline has been critical of Apple's App Store policies in the past. In an interview alongside Hey app CTO David Heinemeier Hansson, Rep. Cicilline likened Apple's App Store fees to "highway robbery."

Rep. Cicilline also told CNBC that he hopes to introduce new regulations to "reform the digital marketplace and empower antitrust enforcers."

Since the start, the investigation has been a bipartisan effort between Democrats and Republicans in both the antitrust subcommittee and the larger Judiciary Committee.

There may be conflicts of interest for some representatives related to the investigations. According to Business Insider, at least three lawmakers own stock in one or more of the companies involved. Doing so is not illegal, but could undermine public trust in the probe.

Rep. Jim Sensenbrenner, ranking member of the Antitrust Subcommittee, owns nearly $100,000 in stock between Apple, Amazon, Facebook and Alphabet. Reps. Zoe Lofgren and Steve Chabot, members of the House Judiciary Committee, also own stocks in the companies.

Why this matters

Major tech companies have been under antitrust scrutiny in the U.S. for years now. For example, in July 2017, the U.S. Department of Justice launched its own antitrust probe into the alleged monopolization of Apple and Google.

The goal of the House's investigation is to determine whether or not existing laws are adequate enough to foster competition in the technology industry. Alongside the Department of Justice probe, it's likely that the investigation will play into a broader push to police major tech firms.

Unlike the investigations by the Justice Department, the House's probe won't result in enforcement action. But it could result in regulations and proposals to curb alleged anticompetitive behaviors in the digital marketplace.

There has also been a groundswell of calls to break up major tech companies from activists and lawmakers.

The hearing will be a major step in the investigations by the House and Justice Department. And it's likely that the results of the probes will be used to justify — or protest — the breaking up of dominant technology companies.

In that interview with CNBC, Rep. Cicilline said he hoped to complete a report on the group's investigation by early April, but the ongoing coronavirus pandemic has pushed back those plans until sometime in the fall.