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QUEST MEANS BUSINESS

Facebook's Zuckerberg Back Before Congress For Antitrust Hearing; Amazon CEO Bezos Gives First-Ever Congressional Testimony; Google, Apple CEOs Push Back Against Antitrust Claims; Kodak Stocks Soars On $765 Govt. Pharma Loan. Aired 3-4p ET

Aired July 29, 2020 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[15:00:00]

ZAIN ASHER, CNN HOST: Boeing loses more than $2 billion in just three months. Coming to you live from New York, it is Wednesday, July 29th. I am

Zain Asher, in for my colleague, Richard Quest, and this is QUEST MEANS BUSINESS.

Good evening. Tonight, a historic grilling for the Titans of tech. Amazon's Jeff Bezos, Apple's Tim Cook, Google's Sundar Pichai and Facebook's Mark

Zuckerberg, they have all been gathered virtually, of course, because of the pandemic for the most important antitrust hearing in front of the U.S.

Congress in more than two decades.

These executives represent 60 percent of the total market cap on the S&P 500 combined. Their companies are worth nearly $5 trillion. Lawmakers

allege they have become too vast and far too powerful and abused their positions to keep competition out.

And now, the pandemic has worsened the role that they play in our society. Stock prices soared as work, retail, and social interactions has turned

more online than ever before. In their opening remarks, each CEO insisted they do indeed face competition.

(BEGIN VIDEO CLIP)

JEFF BEZOS, CEO, AMAZON: The retail market we participate in is extraordinarily large and competitive. Amazon accounts for less than one

percent of the $25 trillion global retail market and less than four percent of U.S. retail. There is room in retail for multiple winners.

SUNDAR PICHAI, CEO, GOOGLE: Just as America's technology leadership is not inevitable. Google's continued success is not guaranteed. New competitors

emerge every day and today, users have more access to information than ever before.

MARK ZUCKERBERG, CEO, FACEBOOK: Many of our competitors have hundreds of millions or billions of users. Some are upstarts, but others are gate

keepers with the power to decide if we can even release our apps in their App Stores to compete with them.

In many areas, we are behind our competitors.

TIM COOK, CEO, APPLE: Companies like Samsung, LG, Huawei and Google have built successful businesses with different approaches. We are okay with

that.

Our goal is the best, not the most. In fact, we don't have a dominant share in any market or in any product category where we do business.

(END VIDEO CLIP)

ASHER: This is the biggest antitrust hearing since the days of Bill Gates and Microsoft 22 years ago. In the end, Microsoft settled with the U.S.

government and was forced to change.

Today, some accuse America's most powerful tech CEOs of running monopolies once again.

Let's start Amazon. This is Jeff Bezos's first time in a hearing like this. Lawmakers are concerned that because Amazon both operates the marketplace

and sells its own products in that same marketplace, it abuses the data it collects to root out any smaller competition.

Apple is the most valuable company in the world and it is new to this level of antitrust scrutiny in the U.S. The issue here is the App Store where

Apple takes a 30 percent cut from sales. Some say that that's simply too high and Apple is abusing its position because it doesn't let other App

Stores compete.

Google runs the world's most dominant search engine and sells the most online ads. Critics allege that its search results favors its own services

like YouTube and Maps.

And Facebook has the smallest market cap of the four, but sits at the crux of many thorny political issues from an antitrust perspective, Facebook's

aggressive acquisition strategy is under fire.

They talked a lot about Instagram during the hearing. After buying up that particular app and WhatsApp, lawmakers fear the data Facebook collects on

billions of users allows it to quash rivals.

With me now, Nicholas Thompson is the editor-in-chief of "Wired," Donie O'Sullivan follows this information, politics and tech for us here at CNN.

So Donie, let me start with you. How high was the stake here for these four CEOs? How well did they do?

DONIE O'SULLIVAN, CNN BUSINESS REPORTER: Yes, this is a huge day for them. Of course, we have seen before that Congress makes a lot of noise about

regulating the tech industry, but sometimes hasn't delivered frankly.

I thought one of the most substantive items we have seen so far in this hearing that is still ongoing is this committee -- today's hearing is

really just a part of a much wider, broader, months' long investigation by this committee, and as part of that, they have obtained documents from

these companies.

And Mark Zuckerberg was asked by the Democratic representative, Jerry Nadler about internal Facebook communications from 2012. That's the year

Facebook bought Instagram. And in those e-mails, Zuckerberg describes Instagram as being potentially very disruptive. And in another e-mail,

another Facebook employee mentions neutralizing a potential competitor.

So Nadler's question to Zuckerberg was to say, you know, isn't this just an example of Facebook rather than competing fairly with a possible competitor

that they just swallowed them up and that they just acquired them?

Zuckerberg of course pointed out that the F.T.C. at the time raised no objections to that acquisition.

So, I think we are going to see more of these internal communications not just from Facebook, but from other companies come out in the hours ahead

which should be quite enlightening.

[15:05:28]

ASHER: Nicholas, obviously, there was some talk about conservative bias and misinformation. Donie, actually just brought up some questions asked by

Jerry Nadler. Just wondering whether you thought, overall, we are only about an hour and a half into this hearing, but did you think that

lawmakers -- when it comes to antitrust and competitive issues, are lawmakers asking the right questions?

NICHOLAS THOMPSON, EDITOR-IN-CHIEF, "WIRED": No, they are not. I was pretty disappointed. I thought because this was a specific subcommittee,

it's the antitrust subcommittee, they are writing a report on antitrust, I thought this hearing would very focused on the law. I thought it would be

really focused on antitrust.

And instead, we have had diversions into hydroxychloroquine, we've had diversions into political bias. We have had a lot of talk about China,

disagreements with China. Those are all tangential to antitrust, they are not at the core.

We have had some moments as was just described with Jerry Nadler where the representatives have asked about market power and abuse of market power.

And in particular, the question with Instagram, which is do these companies have so much data, in fact so much secret data that they are able to

identify and kill or crush competitors before those competitors even know how fast they are growing?

That is a huge question, and at the very least, we know from the Instagram documents that someone on the committee is on it, even if the others are

asking about hydroxychloroquine or what else.

ASHER: Okay, and Donie, that question that Mark Zuckerberg had to field on the acquisition of Instagram and quashing competition, how good of a job

did he do of answering that question, do you think?

O'SULLIVAN: Well, I mean, he brought up that the F.T.C. at the time approved it. But now the F.T.C. has a very different makeup and dynamic, so

I think drawing attention to that may not have been the wisest move on Zuckerberg's part.

But to Nicholas's point, you know, I mean, I think we are going to see more and more sort of partisan questions as the evening continues here.

We are likely to hear from Republicans talking about perceived or alleged anti-conservative bias, and we are probably going to hear from Democrats

asking Zuckerberg why he doesn't do more about Trump, how Trump uses his platform.

Zuckerberg did come out fighting, though, I thought, in his opening statements. He name checked several of his competitors, including YouTube,

Apple, and TikTok, saying, you know, that in certain areas they have a bigger market share than Facebook has.

And one other interesting point, I thought, in Zuckerberg's written testimony was that he highlighted that Facebook was proudly an American

company, which is worth remember -- you know, writing that in the context now of when we think about the Chinese-owned app, TikTok and the U.S.

government and the Trump administration potentially considering banning that, and Facebook launching a TikTok competitor.

You know, all these thing are related and I think we might hear more questions about China.

ASHER: Nicholas, are these companies, just in your opinion, heavily guilty of abusing their on line dominance? And what do you expect? What sort of

concrete changes do you hope or do you anticipate to come out of this hearing?

THOMPSON: Are they heavily guilty? I would say they are pretty guilty, more than moderately guilty, but maybe less than heavily guilty and it

differs for each of them.

I do think Google is quite guilty of rejiggering its search results to favor its products. I think Amazon is very guilty, maybe even heavily

guilty of identifying data from its marketplace and allowing itself to create competitive products.

I think Apple is very guilty of using its market power in the App Store for predatory pricing. I think Facebook is reasonably guilty of acquiring

companies for the sole purpose of crushing them though actually, their antitrust violations at the moment are relatively minor.

So, there is a different spectrum of guiltiness. They are all pretty guilty.

ASHER: Okay, different shades of guilty.

THOMPSON: Yes.

ASHER: Fifty shades of guilt. All right, Nicholas Thompson, live for us. I understand you are going to be joining us a little bit later on in the

show. Donie, we have to leave it there. Thank you so much. Appreciate it.

O'SULLIVAN: Thank you.

ASHER: All right, the growth of these four companies during the pandemic has only heightened concerns about their competitive edge. The S&P 500 is

roughly even on the year. During the same time, Amazon's shares have risen about 60 percent. Apple is up closer to 30 percent, far behind Amazon, but

well above the index.

Then we have Facebook and Alphabet, the parent company of Google of course, both opened the day up some 13 percent on the year. We must also note the

S&P 500 includes the value of these tech giants.

[15:10:19]

ASHER: If you were to subtract them from the index, these margins would actually look much wider. Former F.T.C. Commissioner Mozelle Thompson joins

us live now from Delaware.

So, Mozelle, let's just start with Amazon. During this pandemic, when people are obviously relying on the online marketplace much more, how has

Amazon been able to use the pandemic to really strengthen their power even more, do you think?

MOZELLE THOMPSON, FORMER FEDERAL TRADE COMMISSIONER: Well one thing -- there are a couple of things. One is that people are in isolation, so they

are not going out to the grocery stores or shopping and if they need goods and services they -- Amazon is really easy to use. It's right in front of

them and they have ramped up their delivery services so it makes it really easy to get those goods and services.

So that makes them extremely popular, and I have seen very little complaints about their delivery and access to goods, and even for producers

and small companies and small businesses who wouldn't normally get access to consumers in the way that they are getting it right now -- so I actually

think that Amazon has actually strengthened their position as providing important services to people.

ASHER: Our correspondent, Donie O'Sullivan was just talking about Jerry Nadler's question about Facebook buying up Instagram and how that really

strengthened Facebook's sort of dominance in the marketplace for them. Will that practice -- that practice of these companies buying up their

competition, buying up the likes of an Instagram or a WhatsApp, will that be much harder do you think, going forward?

M. THOMPSON: Well, it depends not necessarily on what the Congressman thinks, but what the regulators think and what the law enforcers think.

You know, acquihires are common throughout industry, but especially in technology. The idea of buying companies, including their talent is

actually a pretty common fixture in the industry for decades.

I'm not sure if the comment that was made by Congressman Nadler means they really disapprove of that. And if so, I am not sure that that necessarily

makes it easier for younger companies, younger upstarts, who actually acquire the kind of lift they need in order to get the attention to be in

the marketplace.

The other thing, too, that I thought was interesting in his -- in the questions is this. It's not the fact that you thought that you had, under

the law -- that they were a competitor. It's when you also thought that they had some sort of strategic advantage for you.

In the case of Instagram, the fact that they were involved in photo sharing, and that was a hot new issue, and that they thought they could

acquire talent to essentially jump start photo sharing on their platform is pretty significant.

So it doesn't necessarily have to be that there is just this broad swath of eyeballs as competitors, it is whether they actually complimented the

business aims that you had. That's the important law enforcement question there is there.

So, to the extent your prior commenters talked about well, that might have been a got-cha moment, I was truly struck at how it wasn't.

ASHER: Okay, and just talking about Apple, I mean, we are going to be talking about Apple a little bit later on in the show, but what does Apple

-- one of the sort of big issues with Apple is how there is not a level playing field for app developers that are relying on its online store.

What does Apple need to do? What does Tim Cook need to do from this point forward to change that? To really make things fair for developers?

M. THOMPSON: Well, one of the problems here is that for app developers, anybody who has a platform, whether it is Android or whether it is Apple,

they are going to extract a price or for that matter, if you want to be on an application on cable, you are going to have to have a price.

So none of those have been determined by any government to be essential services like a utility. Until that happens, then you are always going to

be at some mercy of somebody else's platform to get eyeballs. I'm not sure whether Tim Cook is going to feel it necessary to be more transparent than

Apple has been about what that means.

I think that that would be a good start.

ASHER: And it is a similar story for third-party sellers that are relying on the Amazon platform, of course. Because the fear is that Amazon can

actually use data from third-party sellers to actually strengthen their own brands and compete unfairly.

M. THOMPSON: Well, one of the challenges you have is there is so much data out there now, whether it is -- that you don't necessarily have to get

performance information from people on your platform. You can actually -- Amazon could sit down and buy that from Google advertisers. Okay?

[15:15:33]

M. THOMPSON: So that's the challenge. I think what would be helpful for Amazon is if -- if they are also a little bit more transparent about access

to their own goods and services and how that competes with others so that it doesn't necessarily come up as the -- if you want a voice command

hardware, that theirs doesn't come up first. I think that -- or at least a clearer understanding to the public of what that means.

ASHER: All right, Mozelle Thompson, we will have you in about 15 minutes, I believe. Thank you so much for joining us and we will have more coverage

of the Big Tech hearing in Washington later on this hour looking into the antitrust accusations against Amazon, Facebook, Apple and Google.

But first, the Fed has a warning about the U.S. economy as it announces its decision on interest rates. That's next.

(COMMERCIAL BREAK)

ASHER: The Federal Reserve warns the U.S. economic recovery is under threat from resurgence of coronavirus. It just announced it is leaving

interest rates unchanged, near zero.

Wall Street had been expecting the decision. Right now, the Dow is up triple digits on the news. The Fed Chair, Jerome Powell says the pace of

recovery will heavily depend on government relief efforts.

(BEGIN VIDEO CLIP)

JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: We have seen some signs in recent weeks that the increase in virus cases and the renewed measures to

control it are starting to weigh on economic activity.

For example, some measures of consumer spending based on debit card and credit card use moved down since late June, while recent market indicators

point to a slowing in job growth especially among smaller businesses.

A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.

(END VIDEO CLIP)

ASHER: All right, let's bring in CNN's Paul La Monica. So, Paul, the Fed has announced that they are leaving interest rates unchanged. How long do

we expect interest rates to remain at these low levels? What sort of concrete sign of recovery is the Fed waiting for before, you know, it

changes course?

[15:20:10]

PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, I think the Fed, Zain, is going to be waiting for real evidence that the economy is going to hit

bottom, and we are not going to get that any time soon. We are going to get a GDP number for the second quarter, the first estimate on that tomorrow

morning and it is going to be brutally bad.

I mean expectations of about 35 percent contraction. The hope is that that is the worst of it, but as Chair Powell just talked about during this press

conference, it was a sober realization of the fact that there are increasing cases of coronavirus in many states in the U.S. now, and I think

we are not out of the woods yet.

So with that in mind, you have got to think the Fed is going to keep rates near zero through at least the rest of this year and 2021, and possibly

even through 2022. This is going to be a very slow recovery that will take years and the Fed doesn't want to make the mistake of taking its foot off

the gas with regards to stimulus before we have an actual recovery.

ASHER: Right, and so Fed Chair Jerome Powell also talked the travel sector just how that industry has been decimated by the coronavirus and the fact

that there are lots of travel jobs that simply are not going to come back.

We've got earnings from Boeing and they reported a $2.4 billion quarterly loss and 65 percent dip in revenue from their commercial airlines unit. You

and I both know that Boeing was already in dire straits before the pandemic. Now, what sort of future does it face?

LA MONICA: Yes, Boeing clearly has a lot of challenges that it needs to go through. The numbers were extremely bad, a worse than expected loss.

Revenues plunging. You have concerns about orders drying up for Boeing jets.

And obviously, because of the issues related to safety with the 737 MAX, Boeing needs to be extremely careful before they can get those planes back

in the air, but even if we get to a point where Boeing's safety issue aren't a concerns, as you point out, are people going to be traveling and

flying anywhere in a meaningful way?

And that's probably not going to happen any time soon as long as we have COVID-19 as a major threat in the United States. So Boeing faces the

challenges of a terrible economy, as well as its own self-inflicted wounds with the 737 MAX problems.

ASHER: All right, Paul La Monica live for us there. Thank you so much.

The head of Heathrow Airport is calling on the British government to create a new testing routine for passengers returning from high risk countries.

The CEO, John Holland-Kaye says a system is needed to open up travel and boost the economy. Here is our Anna Stewart with more.

(BEGIN VIDEOTAPE)

ANNA STEWART, CNN REPORTER: He described the U.K.'s current travel policy as a game of quarantine roulette. The CEO of Heathrow Airport is urging the

government to allow for a coronavirus testing scheme to reduce the quarantine time imposed on these people traveling into the U.K. from

countries deemed high risk.

(BEGIN VIDEO CLIP)

JOHN HOLLAND-KAYE, CEO, HEATHROW AIRPORT: We can see that other countries have gone to other ways of doing this. They have started to -- France from

the beginning of June were doing trials of testing on departure and on arrival and then they went down to a single test, but we are not calling

for that here.

We are calling for a double test, once on arrival and the second after five days or eight days, where people would stay in quarantine until they had

had two tests that showed that they didn't have the disease. And then they would be allowed out earlier than otherwise would be the case.

(END VIDEO CLIP)

STEWART: This proposal could reduce the quarantine period for those people who test negative on both tests from 14 days to just seven.

The dual testing scheme is designed to mitigate the risk that someone travels into the U.K., tests negative despite having caught the virus which

could be in its incubation phase.

John Holland-Kaye told Sky News that Heathrow Airport could have a testing facility up and running within two weeks. However, it needs the cooperation

of the U.K. government. He says the continued reliance on blanket quarantines and nationwide lockdowns could have a devastating impact on the

aviation sector and the wider economy.

Anna Stewart, CNN.

(END VIDEOTAPE)

ASHER: We will return to Washington in just a moment where four of the world's most powerful tech CEOs are taking antitrust questions from

Congress. That's next.

(COMMERCIAL BREAK)

[15:27:38]

ASHER: Hello, everyone. I'm Zain Asher. There is more QUEST MEANS BUSINESS in a moment when we will return to the Big Tech hearing in Washington

discussing how lawmakers have been grilling the CEOs of Facebook, Amazon, Apple and Alphabet.

And the former Director of the C.D.C. says that the U.S. action on coronavirus was too little too late to prevent the outbreak.

Before that, though, this is CNN, and on this network, the facts always come first.

The U.S. is soon expected to have 150,000 coronavirus deaths. The latest tally by Johns Hopkins University is just shy of that number. California

just reported 197 COVID related deaths in a single day, that's a new daily record for that state.

U.S. Congressman Louie Gohmert tested positive for the coronavirus. The Texas Republican has often refused to wear a mask while on Capitol Hill. He

was scheduled to accompany President Trump to Texas today on board Air Force One.

Oregon's Governor says Federal officers are leaving Portland. They have been involved in violent clashes with protestors there for several weeks.

The Department of Homeland Security says it will remain a presence there until Federal property is no longer under threat.

The Chief Executive Carrie Lam is warning Hong Kong it is on the brink of a large scale coronavirus outbreak and people should remain home if all

possible. The city's strictest lockdown measures so far begin today restricting gatherings to only two people and expanding mandatory mask

wearing to include outdoor public places.

Back to our top story this hour. Some of the biggest tech CEOs in the U.S. appear before Congress for an antitrust hearing. Facebook's Mark Zuckerberg

is the youngest of the four, but he has the most recent experience on Capitol Hill. That was apparent as he deflected accusations that he had

broken competition laws by buying Instagram.

(BEGIN VIDEO CLIP)

ZUCKERBERG: I think with hindsight, it probably looks like obvious that Instagram would have reached the scale that it has today, but at the time

it was far from obvious.

It was not a guarantee that Instagram was going to succeed. The acquisition has done wildly well, Largely because -- not just because of the founder's

talent, but because we invested.

(END VIDEO CLIP)

ASHER: Former FTC Commissioner Mozelle Thompson is back with us now. So, Mozelle, is it true that Instagram may not have succeeded if it wasn't for

Facebook?

MOZELLE THOMPSON, FORMER COMMISSIONER, FTC: I can't predict that. But I do think that Facebook had a significant role in making Instagram what it is,

not only in terms of scalability, but also economic investment. And also, with personnel, people who they hire to bring in to essentially make

Instagram big and more prominent. So, there are substantial investment. And there's no question, to me, that there's some synergies involved, because

Facebook new (AUDIO GAP) as it did it already, and that DNA is also going over to Instagram to make them more successful.

ASHER: So, Facebook obviously owns Instagram and WhatsApp as well. Basically, has completely neutralized competition. About 3 billion people

use at least a company that Facebook owns. Facebook or a company that owns every single month. TikTok has about 800 million monthly users. Twitter and

Snapchat, or Snap, the parent company, about 200 million. What needs to change for Facebook's dominance to shrink slightly? What needs to change to

make the landscape that much more fairer?

THOMPSON: Well, I think one thing is that if consumers feel that they're not getting value out of using the platform, so the products that Facebook,

Instagram, and WhatsApp offers. And whether there's another company that provides things that might be of greater value. TikTok is growing really

fast. And don't forget, these are also platforms that are not available in China. So, that they have their own homegrown network works. So, there's

still a lot of competition out there.

And -- but I do think that what you hear a little bit in the -- in the congressmen questions today is there are some people who believe that big,

by its very nature, is bad. And some who are going back, drilling down to the question of, well, are consumers better off or not? I would like to

hear a little bit more about that discussion, but I'm not sure that a format like this is designed to really produce that kind of information.

ASHER: OK. So, what questions should lawmakers be asking of Facebook when it comes to competition and antitrust?

THOMPSON: Well, one of the things for Facebook, I think, is to sit down and think about how are they going to provide their customers with service if

they say that they want -- if Facebook says that consumers don't like the information they're getting, how can they get better info information from

people posting on Facebook? How does that actually happen? So, that it's not just bad news or faulty news, but better news and better quality news.

That's a very interesting question. And Facebook is taking a hands off of everything. Then, the question is, is does Facebook become a platform for

only the most shrilled voices, in which case, it will become less valuable for the majority of people who use it?

ASHER: We are heading in, of course, the 2020 election season, have less than 100 days to go. Just in terms of misinformation because that's

obviously a topic of the day because there were a lot of concerns, of course, in 2016. How much progress has Facebook made this time around

compared to 2016 in terms of tackling misinformation, and what do they need to do to restore people's trust in this country?

THOMPSON: Well, I think that they've -- Mark Zuckerberg talked a bit about that about hiring 30,000 people and putting a lot more money into

artificial intelligence to determine fake news, or manipulated systems for news. I don't think that as long as you have a platform, I don't care

whether it's the newspaper or the radio, or for that matter, social media, which moves even faster, that you can have a totally perfect system. But

you also have -- you also have the other side of the equation, too. What you see is a split within Congress. Some people who don't like the fact

that Facebook is going through and looking for these things and perhaps censoring or acting as a gatekeeper. And some who believes that they should

be more aggressive in being a gatekeeper. There's not a consensus on that in the United States.

ASHER: All right. Mozelle Thompson live for us there, thank you so much, appreciate it. A few companies have prospered through the COVID-19 pandemic

quite like Amazon. It's helped solidify CEO Jeff Bezos as the world's richest man. He argued today that his company is not the dominant power it

seems. Asked about company policy on using third-party data, Bezos had this heated exchange.

[15:35:13]

(BEGIN VIDEO CLIP)

JEFF BEZOS, CEO, AMAZON: It's a voluntary policy. As far as I'm aware, no other retailer --

(CROSSTALK)

UNIDENTIFIED FEMALE: So, there's no -- so, there's no actual -- there's no actual enforcement --

BEZOS: -- at all. And I think we have --

UNIDENTIFIED FEMALE: There's no actual enforcement of that policy?

BEZOS: Oh, no, they -- I was going to --

UNIDENTIFIED FEMALE: So, it's voluntary and there's no actual enforcement. So, maybe that answers my --

BEZOS: No, no, no. Sorry. No, I think -- I think I may have misspoke. I'm trying to say that Amazon is -- the fact that we have such a policy is

voluntary. I think no other retailer even has such a policy. Our enforcement of that policy, we would treat that like any internal policy.

And if we found that someone violated it, we would take action against them.

(END VIDEO CLIP)

ASHER: OK. So, some confusion there in terms of that question and how he answered. Clare Sebastian is joining us live now from New York. So, Clare,

there are a lot of people in this country don't even know what Jeff Bezos' voice sounds like. He's certainly never appeared before Congress before.

How well did he do, do you think, so far, because it's still ongoing?

CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes. Still ongoing. Zain, so far, he's only had two rounds of questioning. It took an hour and 57

minutes for him to get the first one. He was the very last of the four CEOs to be questioned. You know, he was -- he was a little halting, I'd say, a

little hesitant. In some ways, perhaps you can tell that this is his first time testifying before Congress. But I did think that that exchange that

you just played, which was longer than that, it was one of the most substantive parts of the hearing in all. Because he really did make some

news. He said that while they do have this policy, that Amazon cannot use third-party seller data -- by the way, third-party sellers make up more

than half of the sales on their platform. They can't use data from those sellers to inform their own private label brands, which now, of course,

compete with third-party sellers.

He said, while that policy exists, he cannot guarantee it's never been violated. He said, of course, you know, if they do find a violation, they

will act on it, but he couldn't guarantee that hadn't happened. And this is a very well-briefed committee there. The Congresswoman who was interviewing

him and they said that they had spoken to former Amazon employees who had said that they knew of instances where this had happened, and there was a

Wall Street Journal investigation on this. So, I thought it was interesting that he didn't have, you know, a concrete answer on whether there had been

violations and that he admitted that there might have been, even though Amazon, by the way, is reportedly being investigated on this matter by two

U.S. states and the European Union. And so, that was a crucial exchange.

ASHER: And on top of that, Clare, a lot of third-party sellers have said that their profits have actually shrunk. So, aside from the misuse of their

data, their profits have actually shrunk because they end up spending a lot of money and giving a lot of money to Amazon to spend on things like

fulfillment, on advertising, that sort of thing, which actually, they say is essential to be able to compete on Amazon on that platform. So, how does

Jeff Bezos defend that?

SEBASTIAN: Well, he hasn't been asked specifically about that yet, but I will say, Zain, from my own reporting on this matter, you're absolutely

correct. There are a lot of strings attached that go with selling on Amazon. And there have been problems. And I've reported on issues with

counterfeits on the platform in the past, and even companies that have experienced real problems with their products being copied by other sellers

illegally. It still say they can't afford not to be on the platform. And this gets to another sort of part of the antitrust argument around Amazon.

They have argued today, Jeff Bezos, in his opening statement, he said that they're only about one percent of the overall global retail market. But

according to e-marketer, they're expected to get 38 percent of the online retail market this year. Their closest competitor, Walmart, is less than

six percent. So, you can really see that under those circumstances when you have the number of eyeballs that you have on Amazon, it's kind of hard not

to be there. And that gives Amazon a whole lot of power. And that's what I think that the Congress is trying to get out today.

ASHER: All right. Clare Sebastian live for us there. Thank you so much. Appreciate it. Google like Facebook dominates a significant portion of the

online ad market as well as search. Earlier, CEO Sundar Pichai was asked whether Google is misusing its position on the web from a privacy

perspective.

(BEGIN VIDEO CLIP)

REP. DAVID CICILLINE (D-RI): Did Google ever use its surveillance over web traffic to identify competitive threats?

SUNDAR PICHAI, CEO, GOOGLE: Congressman, just like other businesses, we try to understand trends from, you know, data, which we can see, and we use it

to improve our products for our users.

(END VIDEO CLIP)

ASHER: Apple, meantime, has been accused of abusing its power of its App Store by charging certain developers commissions of up to 30 percent.

Speaking earlier, CEO Tim Cook said, Apple does not have any monopoly in any market.

(BEGIN VIDEO CLIP)

TIM COOK, CEO, APPLE: We don't have a dominant share in any market or in any product category where we do business. If Apple is a gatekeeper, what

we've done is open the gate wider. We want to get every app we can on the store, not keep them off.

(END VIDEO CLIP)

[15:40:01]

ASHER: Nicholas Thompson is editor in chief of Wired. He joins me live now from New York via Skype. So, you heard Tim Cook there say, Listen, if Apple

is a gatekeeper, all we've done is open the gate wider. We don't have any monopoly. Is that true?

NICHOLAS THOMPSON, EDITOR IN CHIEF, WIRED (via Skype): It's partially true of the four companies out there, it is the hardest to make the claim that

Apple has a specific monopoly. However, it very clearly has a duopoly with Google on the most important platform in the world, which is phone

operating systems. And this gets to the heart of the App Store question. Tim Cook said, Oh, we compete with lots of app stores. We compete with

PlayStation and Xbox. But really, there are two. There's the Google Play Store, and there's Apple's App Store. And so, they can have predatory

pricing there without fear of competition.

ASHER: So, Apple's argument, as well, just the way that they have traditionally defended themselves is that, you know, we only have 15

percent of the global market when it comes to smartphone. So, we're not dominant in that sense. Yes, we are more dominant in the U.S. But globally,

it's only 15 percent. Is that a fair and valid argument in all of this?

N. THOMPSON: It is a fair and valid argument and it's also a massively incomplete. What's so interesting is when you watch all of these tech CEOs,

the argument they make in this congressional hearing is consistently, oh, we're tiny. We're threatened by everybody. And then, you watch them in non-

congressional settings. There's just a reference to a presentation that Sheryl Sandberg made to her board, where she said, Oh, we are the absolute

dominant company. We're the only place that's going to get your money. So, what's clear is that, in this hearing, they are dialing back. They are

recasting the statistics in the way to make them seem meek and small, which is completely different from truth of the situation.

ASHER: So, in terms of Google, obviously, Sundar Pichai is there in the hot seat. A lot of people believe that Google has used its search engine

dominance to sort of gear people towards its products. For example, YouTube. Have lawmakers done a good job of asking the right questions of

Pichai in all of this?

N. THOMPSON: No, I've been most disappointed with the questions to Pichai. They have been tinged with all these strange allegations about Communist

China and Google abandoning the U.S. military. The questions to him have been the most random and the most off topic. There's been a couple of

moments where Congresspeople have actually pushed on the things that matter. Because Google use its dominant search position to advantage its

other products, but not enough and not in a repeated way, that would actually get us new information or get us closer to real answers.

ASHER: OK. So, the questions, you haven't been wowed by the questions, but in terms of Pichai's actual answers, has he done a good job of defending

his company?

N. THOMPSON: You know, Pichai's strategy has been to ask for more time to say he'll follow up. And then, to give, you know, vague statements saying

their company does have values, it does adhere to standards. It does have lots of competitors. I have seen no answers of Pichai's that I was terribly

impressed with. So, unfortunately, I was hoping for a hearing where there were great questions and great answers. And I haven't seen either yet.

ASHER: You walked away disappointed. Nicholas Thompson, we have to leave it there. The hearing is still ongoing, I believe. Hopefully, I'll just have

to catch up.

N. THOMPSON: But I'm very happy with your question.

ASHER: Good. I like to hear that. Thank you so much. Nicholas, good to have you on the program. All right. When we return, the former U.S. Surgeon

General and ex-head of the CDC, David Satcher, joins me to discuss the U.S. response to COVID, and the race for a vaccine, that's next.

(COMMERCIAL BREAK)

ASHER: Shares of Kodak are skyrocketing for a second day after a massive government loan helped breathe new life into the former film giant. The

stock is up around 400 percent. Yes, that is right, 400 percent after rising 200 percent yesterday. President Trump is granting Kodak a $765

million loan under the Defense Production Act. That will help it ramp up production on pharmaceutical reducing America's dependency on foreign drug

makers. Kodak CEO spoke earlier today to our Julia Chatterley.

(BEGIN VIDEO CLIP)

JIM CONTINENZA, EXECUTIVE CHAIRMAN & CEO, KODAK: We're in this business just not in a large way. And this is a chance for us to expand. And then,

when you look at Eastman Business Park, we have 1200 acres, we have several facilities, what we'll be putting into this entity, as we build out that

will help lower the cost. We have our own power, steam, rail, waste treatment, chemical treatment. It's just, you know, utilizing the part

which lowers the cost greatly, and it's doing something that's in our DNA, we've been doing for 100 years.

JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR: The White House Chief Advisor, Peter Navarro, said, by the time this thing ramps up, 25 percent of the

active pharmaceutical ingredients for generics we need in the United States are going to be going to be right at this facility. That's incredible. How

quickly can you do that?

CONTINENZA: Well, it takes about three years to build out. We proximate three to 3-1/2 years. But during this time, we'll still be manufacturing.

We'll be manufacturing in batch manufacturing, moving to continuous manufacturing. So, it'll be a combination of two items.

CHATTERLEY: And where do you see the biggest bottlenecks?

CONTINENZA: You know, again, it'll be in the build out when we transition over from the batch to the continuous. That'll probably be our biggest

bottleneck. But we're prepared for it. And then from there, we'll innovate and continue to get more efficiencies out of it.

CHATTERLEY: So, there are a number of companies in the United States that perhaps could have handled this, too. What about your relationship with the

U.S. administration, why do you think they specifically came to you guys, and said, Look, we're going to rely on you to build this out?

CONTINENZA: OK, and I think we're the best position to do it. Again, find another company has been with chemicals for over 100 years, and has the

facilities sitting there, ready to go, and is doing it today? I would say we're probably the best suited. I know they looked at several. We weren't

the only one, I can guarantee that. And you'd have to, you know, again, you heard Dr. Navarro yesterday, Navarro yesterday state, you know, how they

made this decision. They looked at others and we are most suited, invested to do this.

(END VIDEO CLIP)

ASHER: The CEO of Kodak there. Now, Russia is sprinting to the finish line in the global race for a vaccine and the scientific shortcuts. Moscow is

taking to get there first. We'll explain it all. Next.

(COMMERCIAL BREAK)

[15:50:00]

ASHER: Russia says it plans to approve the world's first COVID vaccine in less than two weeks. But experts are warning that a safe and effective

vaccine is still far, far off. And many are concerned a push from the Kremlin to be first means that corners were cut. CNN's Matthew Chance has

this exclusive report from Moscow.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Russian officials are calling it a Sputnik moment, a technological leap like the

unexpected launch into space of the first satellite back in the 1950s. And now, Russian officials say it's the Coronavirus vaccine that's being

launched into the global pandemic to highlight Russian scientific achievement. And this is the clearest indication we've had yet as to when

that Russian vaccine will be approved for use. Russian officials telling CNN, they're working towards the date of August the 10th, perhaps even

earlier, extraordinarily quick, partly according to Russian officials because the technology they're using, they've used successfully in the past

on other vaccines, but also undeniably because human trials would still be incomplete when the vaccine is approved.

Russian officials tell CNN that third phase human trials would be conducted only in parallel with the vaccination of front line medical workers, risky,

of course, but given the acute Coronavirus problem in Russia, which is the fourth highest number of infections in the world, it's apparently a risk

that the authorities here are willing to take. Now, there is, of course, enormous skepticism around the world about the effectiveness and the safety

of this Russian vaccine.

Russia -- critics say Russia's push for it comes amid political pressure from the Kremlin and allegations that Russian spies hacked U.S. Canadian

and British labs for vaccine secrets. Also, no test data has been released by Russia so far. But Russian officials now tell me that that data will be

made available for publication and peer review early next month, which will undoubtedly attract a great deal of international scrutiny. Matthew Chance,

CNN, Moscow.

(END VIDEOTAPE)

ASHER: All right. Back to our top story of the hour, the tech hearings in Washington are still ongoing. Four of the world's biggest tech CEOs are

being grilled, as I speak. Let's get a final word now from Nicholas Thompson, editor in chief of Wired. He is back with us from Bovina, New

York. So, Nicholas, what changes going forward, what concrete difference do you anticipate these hearings will make?

OK. It looks as though we are having trouble with Nicholas's audio. He was about to tell me what sort of concrete changes we anticipate these hearings

will make that are happening right now in Washington, DC. Unfortunately, we only have five minutes left of the show, so we don't have time to go back

to him. But we are going to go for a quick break, and we'll be back on the other side of this.

(COMMERCIAL BREAK)

[15:55:00]

ASHER: All right, it is the last few minutes of trade on Wall Street. Let's take a look and see how the numbers are doing right now. As I mentioned

earlier in the show, several times the heads of the world's biggest tech companies are testifying in antitrust hearings before Congress that is

actually pushing tech stocks higher. You can see the Dow is up about 150 points, partly lifted by the Federal Reserve coming out and saying that

they anticipate interest rates will be kept near zero for the foreseeable future. That is QUEST MEANS BUSINESS, I'm Zain Asher. "THE LEAD," with my

colleague, Jake Tapper, is next. You're watching CNN.

END

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