A day after a congressional antitrust hearing where lawmakers questioned the CEOs of Amazon, Apple, Alphabet, and Facebook, those companies reported earnings that show they’ve made billions during a pandemic that has put 40 million Americans at risk of eviction.
On Thursday, e-commerce giant Amazon reported $88.9 billion in net sales this financial quarter (up 40 percent since last year) and saw profits hit $5.2 billion, double what Amazon made in the same period last year. This is despite CEO Jeff Bezos’ warning to investors in April that the company would spend $4 billion on "incremental COVID-19 related costs,” hiring close to 175,000 new workers, and projecting a loss of $1.5 billion. The news and subsequent share rally have added another $7.6 billion to Bezos’ net worth, now approaching $200 billion.
Apple also saw sales increase despite the global pandemic and with quarterly sales up 11 percent from last year to $59.7 billion and quarterly profit up 12 percent at $11.2 billion. The news pushed Apple’s stock price up 6 percent, which has already rallied over 35 percent this year and added nearly $400 billion to its market capitalization, currently $1.7 trillion.
Alphabet, Google’s parent company, seemed to be hit the hardest by the coronavirus pandemic based on its earnings report. Google reported a $2.6 billion drop in advertising revenue compared with last year's financial quarter, but still managed to earn $29.9 billion. Alphabet, Google’s parent company, reported $6.4 billion in profit, a 30 percent decrease from this time last year. The company has $17.7 billion cash on hand, down from $18.5 billion at the start of the year. Its share prices still managed to jump (1 percent) and inch its market capitalization closer to $1 trillion.
Facebook reported a huge decline to its revenue growth rate thanks to the pandemic and an advertiser boycott, but still saw growth: revenue increased by 11 percent (down from 25 percent this time last year) to $18.7 billion, while profits increased by around 98 percent to $5.18 billion since this time last year. Three billion people are now on Facebook and its maze of apps, with thanks to the pandemic it is now seeing increases in the number of active users, as well as their usage and engagement with the platform.
Spokespeople for Alphabet and Apple did not respond to a request for comment. Facebook and Amazon spokespeople declined to comment on the record.
Meanwhile in America, the federal eviction moratorium expired last week, meaning 40 million Americans could lose their homes (four times more than during the Great Recession). Because Congress didn't extend unemployment insurance benefits, more than 30 million Americans could see their incomes drop from 50 to 75 percent. Almost 30 million Americans didn’t get enough food to eat last week.
And at the same time as the tech giants reported their still-staggering earnings, we received waves of horrible economic news for the United States: quarterly GDP dropped by 9.5 percent, the steepest drop on record; new jobless claims rose to 1.43 million this week, putting the grand total of unemployed workers at around 17 million; and the federal government continued to refuse to send any new aid to states and municipalities in crisis.
The fact that tech companies are thriving right now can be interpreted in a few ways. First, It can be seen as evidence that these companies enjoy such a strong grip on society that a generational financial catastrophe doesn’t faze them. It also shows how they have further enriched themselves either by disciplining labor and reinforcing their position or by offering products and services as ”solutions” to problems posed by the crisis. It can also be understood as a sign that, actually, the U.S. economy has been in poor shape for a while and these firms appear dynamic and strong because our larger economy is so sluggish and weak.
It’s likely a combination of all the above and more. At the hearing, there were several material admissions by the tech companies that could reasonably be seen as engaging in anticompetitive behavior. The power gained from such behavior would leave them well positioned to both ride out the pandemic and to translate that into some of the stupendous returns that have now been reported. At the same time, we must consider all the ways in which our society subsidizes the industry, the speculative bubbles that keep unprofitable business models operating for years, and the ways in which our economy has become a feeding trough for tech giants despite the immense costs to society.
It’s also hard to reconcile the fact that on Congress took tech giants to task for being threats to economic well-being and democratic politics, but also left Americans alone to face a series of crises that will leave them, even more poor, more sick, more hungry, and more debt-ridden than they were before.
Yes, Congress asked great questions for once. Yes, it was lovely to watch the tech executives stumble over responses as it became clear, as economist Matt Stoller wrote for the Guardian, that "they had not had to deal with being asked for real answers about their business behavior for years, if ever.” But it still remains to be clear what, if anything, will come out of it.
Antitrust enforcement would, undoubtedly, go a long way towards improving our society. But, at times, the discussion around it feels reminiscent of the way “surveillance capitalism” reassigns blame for the negative and immoral outcomes from capitalism as a whole to modern-day surveillance.
These companies reported a combined $28.6 billion in net quarterly profit despite us entering what may be the start of a decade-long depression. They owe, at least, $100 billion in taxes as of last winter. And yet our political economy and imagination is so captured by corporate interests that there seems to be nothing on the horizon but more power for the powerful, and more money too.