Small tech companies plead, 'Help us, Congress' against Big Tech

Four small-tech executives on Friday called on the U.S. government to help regulate Big Tech companies as their monopolistic practices continue to develop during a House antitrust subcommittee hearing.

Sonos CEO Patrick Spence, Popsockets founder David Barnett, Tile Vice President Kirsten Daru and Basecamp CTO David Heinemeier Hansson joined forces at the hearing to speak out against the Big Four tech companies: Google, Amazon, Facebook and Apple.

"Soon, every company will be competing with Big Tech," Heinemeier Hasson said in his opening statement. "Help us, Congress. You're our only hope."

The executives detailed personal experience with Google's search engine and advertising dominance, Facebook's privacy problem in relation to targeted advertising, Amazon's massive counterfeit problem and Apple's stifling App Store practices. These anti-competitive behaviors, according to the executives, have made it harder for tech startups to develop and become successful.

And the antitrust legislation that has been introduced in Congress has mostly focused on harm to consumers rather than smaller tech companies.

The hearing comes a day after the New York Times reported that Sonos is suing Google for stealing its multiroom speaker technology. Sonos executives said that Google then undermined Sonos devices by coming out with its own wireless speakers seemingly based on Sonos' blueprint designs, according to the Times report.

"We had [the speaker technology] ready," Spence said at the hearing. "We showed it to Google and Amazon. Amazon said yes. Google has said, 'If you're going to do that, Assistant will not be available at all.'"

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Spence said the difference between normal competition and this kind of monopolistic behavior practiced by the Big Four is the "predatory pricing and infringing [of intellectual property]," clarifying later that the Big Four are selling their products "below market value because they want to knock competitors out."

"What I think is that with this level of power, with this few firms, Congress should act. But I don't see that happening," he added.

Spece, Barnett, Daru and Heinemeier Hansson all said it is impossible to fight back against the Big Four without losing a significant amount of money and without government assistance.

"It would be great if the government at some level stepped in and said, 'Massive companies that are systematically violating intellectual property rights of small players are targets for the government,'" Barnett said during the end of the hearing.

Ticker	Security	Last	Change	Change %
SONO	SONOS INC.	12.95	+0.05	+0.39%

The Popsockets founder added that he spent at least $7 million in 2019 fighting smaller competitors.

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"Imagine what it would cost to fight Amazon. ... The government needs to step in," he said, adding that Amazon should be broken into two companies -- one that runs the marketplace and one that sells on it, which is the same policy idea that 2020 presidential candidate Sen. Elizabeth Warren (D-Mass.), a strong critic of Big Tech, has suggested.

Rep. Ken Buck (R-Colo.) said part of the solution "has to be that public policymakers have access" to small tech companies' side of the story. Friday's hearing was the first significant step toward highlighting the challenges these companies face beneath the shadow of the Big Four with on-the-record testimony.

Rep. David Cicilline (D-RI) closed out the hearing somewhat ominously when he said, "We do not expect you will suffer retaliation for coming forward, but if you do, it will be of great interest to the committee."

The House Judiciary Antitrust Subcommittee is expected to release a report regarding the anti-competitive practices of Big Tech companies and the concerns that go with them, along with proposed legislation, in the first half of 2020, according to Reuters.

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The Big Four have come under increasing scrutiny over anti-competitive practices in the last several years since the 2016 U.S. presidential election. Executives from Google, Amazon, Facebook and Apple have all had their turns testifying before Congress and have faced a number of state and federal probes.

These companies have argued that they welcome competition but say companies can only be world leaders in tech -- especially compared to China -- if they operate on a large scale.

FOX Business' Matthew McNulty contributed to this report.