News Information and Media Site: Byers Market: Tim Cook may go to Washington after all

July 2, 2020

By DYLAN BYERS in Los Angeles &

AHIZA GARCÍA-HODGES in San Francisco

Good morning. 🇭🇰 Hong Kong, a beacon of globalism and capitalism, "seems near death" in the wake of China's new security law, Axios' Bryan Walsh writes. The incursion points "to a more dangerous and divided world... defined by borders and nationality."

🇹🇼 What's next: The security law "has raised fears that China will move more aggressively to bring Taiwan, too, under its control," NYT's Javier C. Hernández and Steven Lee Myers report.

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Antitrust watch

Tim Cook will join antitrust hearing, lawmakers say

Moving the Market: Tim Cook has joined Jeff Bezos, Sundar Pichai and Mark Zuckerberg in agreeing to take part in a House Judiciary hearing on antitrust later this month, Democratic lawmakers tell us. Apple is not commenting on the news.

• The big picture: The hearing would be a landmark moment in the regulatory battle between Washington and Silicon Valley, and would mark the first time that the heads of America's big four tech firms testified together before Congress.

The backstory: The House Judiciary antitrust subcommittee, which is chaired by David Cicilline, D-R.I., has been conducting an investigation into the big four tech firms, reviewing whether their market power poses a threat to competition and harms consumers.

• Representatives from Facebook, Google and Amazon told House lawmakers last month that their CEOs would be willing to testify on the condition that all four chief executives were present.

• Apple did not signal that Cook would be willing to testify, a move that may reflect his belief that Apple does not deserve to be tied in with Amazon, Google and Facebook in the antitrust debate.

• Apple did not comment yesterday, either.

The latest: Cicilline first told NYT's Kara Swisher yesterday that all four CEOs had agreed to testify at the hearing. The office of Rep. Jerry Nadler, D-N.Y., confirmed that news as well.

• "It's the first major look at antitrust in this industry in 50 years," Cicilline told Swisher. "We know it is impossible to properly conclude this without hearing from the decision makers themselves."

What's next: The hearing is set to take place later this month, but there's no exact date yet. Given the coronavirus pandemic, the hearing would almost certainly take place virtually, with the four CEOs appearing from home.

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Boycott watch

Mark Zuckerberg digs heels

Big in the Bay: "Mark Zuckerberg told employees he was reluctant to bow to the threats of a growing ad boycott, saying in private remarks that 'my guess is that all these advertisers will be back on the platform soon enough,'" The Information's Alex Heath reports.

• In a video town hall last Friday, "Zuckerberg said the boycott is more of a 'reputational and a partner issue' than an economic one... [and] noted that large advertisers participating in the boycott make up a small portion of Facebook's overall revenue."

• "We're not gonna change our policies or approach on anything because of a threat to a small percent of our revenue, or to any percent of our revenue," the Facebook chief said.

The big picture: Facebook critics won't like it, but Zuckerberg is probably right on all fronts. Advertisers will almost certainly come back (when have they not?) and the boycott is still barely a dent in Facebook's overall ad revenue (see this great WSJ infographic).

• Finally, Zuckerberg is genuine when he says he won't cave to revenue pressure. Facebook may announce more policy changes, but as I pointed out last week, most of these are likely to reflect internal deliberations that predate the boycott.

• Oh/and: Facebook stock rose 5 percent yesterday, erasing what damage the boycott did to its share price last week.

What's next: Zuckerberg, Sheryl Sandberg and Chris Cox will meet with the civil rights groups who organized the boycott. The groups say they "look forward to the opportunity to continue the dialogue."

🔥 Hot boycott take 🔥

Politico's Jack Shafer says the boycott gives CEOs who have always been aware of Facebook's content problems "a chance to claim a higher moral standing in the public's eyes at a very, very low price."

• July is "a historically slow sales month" that this year comes "during a recession" and a "semi-quarantine." It's "like asking a casual drinker to observe Lent by giving up alcohol in a dry county."

Noam Galai/Getty

False starts

Apple re-closes 30 stores

Sign of the times: With the coronavirus pandemic still on the rise, Apple said Wednesday that it would re-close 30 stores, including 15 in its home state of California. The move brings the second round of total Apple store closures to 77.

• "Due to current COVID-19 conditions in some of the communities we serve, we are temporarily closing stores in these areas," Apple spokesperson Nick Leahy said in a statement.

• Apple was one of the first major retailers to close its stores amid the coronavirus pandemic, temporarily shuttering all retail stores outside of greater China in mid-March.

The big picture: Apple's move comes as states and cities across the country are hitting pause on re-opening plans. California Governor Gavin Newsom has ordered Los Angeles, Sacramento and other counties to close bars and suspend in-restaurant dining.

Market Links

• Jeff Bezos' wealth soars to $171.6b (Bloomberg)

• Jack Dorsey takes action on another Trump tweet (Axios)

• Jason Kilar faces headwinds at WarnerMedia (Information)

• Ed Henry is fired over sexual misconduct charge (NBC)

• Mary Trump gets a green light for publication (NBC)

Jeff Haynes/Getty

🏀 Sports report

Will the show actually go on?

Talk of TV Land: Sports leagues that have devised elaborate plans to return to play amid the coronavirus pandemic are unlikely to keep the disease at bay entirely, experts tell us. That inconvenient truth has raised major questions about the viability of the games.

• "Having a case is almost inevitable," a source familiar with the plans developed by the NBA and MLB says. "The whole strategy is to minimize the chance of being shut down again, but they're fully prepared to have some players become infected."

The big picture: While no league has yet backed off plans to restart, few signs are pointing in the right direction. New cases continue to crop up daily across nearly all professional and amateur sports, and some athletes have said they intend to sit out the season.

• The successful return of sports would boost national morale, as well as the sports, media and advertising industries. But each league's plan has vulnerabilities, and even the most comprehensive plans, such as the NBA's, aren't guaranteed to work.

• With the bubble models being followed by the NBA, MLS and NHL, there's still the risk of outside infection from hotel and transportation staff. Models that don't use a bubble, like those proposed by MLB and the NFL, rely on players self-isolating responsibly.

What's next: NBA Commissioner Adam Silver has said repeatedly that even with a thorough plan, there's no guarantee that play will resume. "[It's] never 'full steam no matter what,'" he said in an interview with Time on Tuesday. "One thing we're learning about this virus is that much is unpredictable."