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Big Tech's giants set to testify at congressional hearing on their power, influence – CBC.ca

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Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Google’s Sundar Pichai and Apple’s Tim Cook are all set to answer for their companies’ practices before Congress Wednesday as a House panel caps its year-long investigation of market dominance in the tech industry.

Critics question whether the companies — which have grown increasingly powerful after gobbling up scores of rivals — stifle competition and innovation, raise prices for consumers and pose a danger to society.

The four CEOs are testifying remotely for a hearing Wednesday at 12 p.m. ET by the House’s judiciary subcommittee on antitrust.

In its bipartisan investigation, the panel collected testimony from mid-level executives of the four firms, competitors and legal experts, and pored over more than a million internal documents from the companies.

A key question is whether existing competition policies and century-old antitrust laws are adequate for oversight of the tech giants, or if new legislation and enforcement funding is needed.

Subcommittee chairman Rep. David Cicilline, a Rhode Island Democrat, has called the four companies monopolies, although he said breaking them up should be a last resort. While forced breakups may appear unlikely, the wide scrutiny of Big Tech points toward possible new restrictions on its power.

Bezos has never testified to Congress

The companies face legal and political offensives on multiplying fronts, from Congress, the Trump administration, federal and state regulators and European watchdogs. The Justice Department and the Federal Trade Commission have been investigating the four companies’ practices.

For Bezos, who presides over an e-commerce empire and ventures in cloud computing, personal “smart” tech and beyond, it will be his first-ever appearance before Congress.

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Previewing his written testimony in a blog post Tuesday, Bezos traces his origins as a “garage inventor” who came up with the concept of an online bookstore in 1994.

He addresses the issue of Amazon’s power in what he describes as a huge and competitive global retail market. The company accounts for less than four per cent of retail in the U.S., Bezos maintains. He affirms his rebuff to critics who call for the company to be broken up: Walmart is more than twice Amazon’s size, he says.

Bezos initially declined to testify unless he could appear with the other CEOs. He’ll likely face questioning over a Wall Street Journal report that found Amazon employees used confidential data collected from sellers on its online marketplace to develop competing products. At a previous hearing, an Amazon executive denied such an accusation.

In the wake of George Floyd’s death and protests against racial injustice, Facebook’s handling of hate speech has recently drawn more fire than issues of competition and privacy, especially after Facebook’s refusal to take action on inflammatory posts by Donald Trump that spread misinformation about voting by mail and, critics said, encouraged violence against protesters.

Zuckerberg has said the company aims to allow as much free expression as possible unless it causes imminent risk of specific harms or damage. “We believe in values — democracy, competition, inclusion and free expression — that the American economy was built on,” he says in his testimony prepared for the hearing.

“I understand that people have concerns about the size and perceived power that tech companies have,” Zuckerberg’s statement says. “Ultimately, I believe companies shouldn’t be making so many judgments about important issues like harmful content, privacy and election integrity on their own. That’s why I’ve called for a more active role for governments and regulators, and updated rules for the internet.”

Google ad dominance questioned

Looking at Google, European regulators have concluded that the company manipulated its search engine to gain an unfair advantage over other online shopping sites in the e-commerce market, and fined Google, whose parent is Alphabet Inc., a record $2.7 billion US. Google has disputed the findings and is appealing.

Attorneys general in 50 states and territories, led by Texas, launched an antitrust investigation of Google in September, focused on its online advertising business.

“Google operates in highly competitive and dynamic global markets, in which prices are free or falling, and products are constantly improving,” Pichai says in his written testimony. “Competition in ads — from Twitter, Instagram, Pinterest, Comcast and others — has helped lower online advertising costs by 40 per cent over the last 10 years, with these savings passed down to consumers through lower prices.”

Apple, whose iPhone is the third-largest-selling phone in the world, faces EU investigations over the fees charged by its App Store and technical limitations that allegedly shut out competitors to Apple Pay.

“Apple does not have a dominant market share in any market where we do business,” Cook says.

He is making the case that the fees Apple charges apps to sell services and other goods are reasonable, especially compared with what other tech companies collect. In over a decade since the App Store launched, “we have never raised the commission or added a single fee,” Cook says in his testimony.

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

Companies in this story: (TSX:T)

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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