The House Small Business Committee took its turn at running Big Tech through another Hill gauntlet at a hearing Thursday (Nov. 14) entitled “A Fair Playing Field? Investigating Big Tech’s Impact on Small Business.”
That question mark in the title loomed large over the proceedings.
Committee chair Nydia Velázquez (D-N.Y.) started the hearing by praising Amazon and Google for agreeing to send witnesses, and pointing to the two empty chairs for no-shows Facebook and Apple. To the latter, she said, their absence not only impeded Congress’ mission but “speaks volumes about the companies’ commitment to transparency and their very own customers,” adding ominously: “You reap what you sew.”
As to the issue of Big Tech’s impact on small business, she said that while tech platforms can be beneficial, Big Tech’s grip on the daily lives and the competitive landscape is “astounding and also concerning.” She pointed out thta Apple, Microsoft, Facebook, Google and Amazon are worth a collective 4.3 trillion dollars.
Ranking member Steve Chabot (R-Ohio) tried to take a little sting out of Velazquez’s criticism of the no-shows, saying “it’s not alwasy easy to answer when Congress calls,” but also thanked the witnesses who had “taken the time out of their busy schedules,” to appear.
As to small business concerns, about things like privacy and intellectual property, Chabot readily conceded them, but added: “By and large the development of these digital platform products and services from Tech giants has been a boon for the millions of individual smalls businesses that probably never would have existed without them.”
Dharmesh Mehta, VP, worldwide customer trust and partner support at Amazon, said that third-party sellers now represent over half of all Amazon sales. Invest over $15 billion to help selling partners run their businesses.
Mehta said Amazon lowers barriers to entry for entrepreneurs–one knock on Big Tech is that it has been buying up entrepreneurial startups before they become competitors. He said empowering third-party selling, including by small businesses (SMBs) has created a better customer experience than Amazon could have provided on its own. He said Amazon now has over 1.9 million such “business partners,” and “they are thriving.”
Erica Swanson, head of community engagement, for business development arm, Grow with Google, told the committee that her company is committed to the goal of helping small businesses grow and thrive.
She said Google supports the success of small business here and abroad, including through Grow with Google’s free training programs for small businesses and their employees.
She also pointed out that Google provides free business profiles where small businesses can list their Web sites, and Marketfinder, the free service that helps small businesses identify and adapt to overseas markets.
Those resources are also curated in Google for Small Business, an online tool that helps small businesses create a personalized marketing plan.
She said since, Grow with Google has trained three million Americans in all 50 states.
Velazquez asked Mehta whether Amazon does not have an inherent advantage over other businesses when it both provides the platform for those small businesses and sells its own products in competition.
He pointed out that other major market retailers, Wal Mart, Target, Trader Joe’s, Costco, have a private label business that competes with others in their store.
He said Amazon’s private label represents only about 1% of total sales, while for the others that figure is anywhere from 18% to a whopping 85% (likely Trader Joe).
But Velazquez said that research shows that Amazon is consistently “winning the BUY box” that adds its products to the surfers cart, and that it is designed to favor Amazon. She did not Mehta a chance to answer that one.
Velazquez said Google has more than 90% of search and small businesses can’t survive if they can’t be found. When Walmart, Verizon, Amazon spend millions to get their ads on the first page, doesn’t that crowd out small businesses, she asked Swanson.
Swanson said there were a number of ways that small businesses can be “discovered online,” both paid and unpaid.
Velazquez stopped her to point out that there is clearly an advantage for those paying to be on the first page. Swanson countered that depending on how it was listed, a small business could appear on the first page in organic search.