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Zuckerberg, Bezos and Cook are About to Get Their Emails Raided by Congress

Last Updated September 23, 2020 1:01 PM
Sam Bourgi
Last Updated September 23, 2020 1:01 PM

Leaders of Silicon Valley’s powerful elite have been ordered by Congress to hand over reams of documents including emails and financial statements as part of a widening bipartisan probe of the technology industry.

Congress Probing Big Tech for Monopoly

mark zuckerberg
Facebook is one of several big-tech firms under scrutiny by the U.S. House Judiciary. | Source: AFP PHOTO / JOSH EDELSON

As The Wall Street Journal reports , the House Judiciary Committee has asked Amazon.com Inc., Facebook Inc., Apple Inc. and Google parent Alphabet Inc. to hand over sensitive documents as part of an investigation into the monopolistic practices of major technology firms. The documents requested include executive communications and information about competitors, mergers and other important business decisions.

Among the dozens of executives named, Amazon founder Jeff Bezos, Facebook creator Mark Zuckerberg and Apple CEO Tim Cook were the most notable. Congress is also requesting information on Google’s early leaders, including Larry Page and Sergey Brin.

The companies have until Oct. 14 to produce the documents, which may become public as the investigation unfolds.

Rare Bipartisan Support

Silicon Valley’s growing monopoly of online commerce has united both parties in Congress – a rarity in today’s fractured political landscape. As Committee Chairman Jerrold Nadler stated per WSJ, the new request was initiated amid “growing evidence that a handful of corporations have come to capture an outsized share of online commerce and communications.”

Ultimately, the probe will assist the Judiciary Committee in determining whether anti-competitive behavior is occurring.

The technology giants are already subject to sweeping antitrust reviews by the Justice Department.

In July, Facebook was ordered  by the Federal Trade Commission (FTC) to pay an unprecedented $5 billion fine over privacy breaches tied to the Cambridge Analytica scandal. The FTC had accused Facebook of using “deceptive disclosures and settings” to erode user privacy and mine personal data that were then packaged and sold to firms.

Tech Stocks Subject to Sector Rotation

Facebook, Amazon and Alphabet are part of a much broader technology industry that has vastly outperformed the S&P 500 Index this year. That could soon change as markets rotate from momentum stocks and into value plays.

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The S&P 500’s information technology index has outperformed the broader market by a wide margin in 2019. | Chart: Fidelity Research

The so-called sector rotation began earlier this month just before U.S.-China trade optimism propelled the stock market back toward record highs. Even factoring the broad gains, shares tied to transport, commodities, retail and banking have outperformed  technology, REITs and defensive plays.

The best technology stocks could still lead, especially if semiconductors rebound on any meaningful resolution to the tariff war. According to a recent analysis  by Goldman Sachs, technology companies with visible revenue growth (i.e., subscriptions, services) are likely to perform well in this environment.