    [House Hearing, 116 Congress]
    [From the U.S. Government Publishing Office]

                ONLINE PLATFORMS AND MARKET POWER, PART 6:
                         EXAMINING THE DOMINANCE OF
                      AMAZON, APPLE, FACEBOOK, AND GOOGLE

    =======================================================================

                                    HEARING

                                   before the

                   SUBCOMMITTEE ON ANTITRUST, COMMERCIAL AND
                               ADMINISTRATIVE LAW

                                     of the

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 SECOND SESSION

                                   ----------

                                 JULY 29, 2020

                                   ----------

                               Serial No. 116-94

                                   ----------

             Printed for the use of the Committee on the Judiciary

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

            Available http://judiciary.house.gov or www.govinfo.gov

     ONLINE PLATFORMS AND MARKET POWER, PART 6: EXAMINING THE DOMINANCE OF
                      AMAZON, APPLE, FACEBOOK, AND GOOGLE

                 ONLINE PLATFORMS AND MARKET POWER, PART 6:
                         EXAMINING THE DOMINANCE OF
                      AMAZON, APPLE, FACEBOOK, AND GOOGLE

    =======================================================================

                                    HEARING

                                   before the

                   SUBCOMMITTEE ON ANTITRUST, COMMERCIAL AND
                               ADMINISTRATIVE LAW

                                     of the

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JULY 29, 2020

                                   __________

                               Serial No. 116-94

                                   __________

             Printed for the use of the Committee on the Judiciary

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

            Available http://judiciary.house.gov or www.govinfo.gov

                                 ______

                 U.S. GOVERNMENT PUBLISHING OFFICE
     41-317               WASHINGTON : 2021

                           COMMITTEE ON THE JUDICIARY

                       JERROLD NADLER, New York, Chairman
    ZOE LOFGREN, California              JIM JORDAN, Ohio,
    SHEILA JACKSON LEE, Texas              Ranking Member
    STEVE COHEN, Tennessee               F. JAMES SENSENBRENNER, Jr.,
    HENRY C. ``HANK'' JOHNSON, Jr.,        Wisconsin
      Georgia                            STEVE CHABOT, Ohio
    THEODORE E. DEUTCH, Florida          LOUIE GOHMERT, Texas
    KAREN BASS, California               DOUG COLLINS, Georgia
    CEDRIC L. RICHMOND, Louisiana        KEN BUCK, Colorado
    HAKEEM S. JEFFRIES, New York         JOHN RATCLIFFE, Texas
    DAVID N. CICILLINE, Rhode Island     MARTHA ROBY, Alabama
    ERIC SWALWELL, California            MATT GAETZ, Florida
    TED LIEU, California                 MIKE JOHNSON, Louisiana
    JAMIE RASKIN, Maryland               ANDY BIGGS, Arizona
    PRAMILA JAYAPAL, Washington          TOM McCLINTOCK, California
    VAL BUTLER DEMINGS, Florida          DEBBIE LESKO, Arizona
    J. LUIS CORREA, California           GUY RESCHENTHALER, Pennsylvania
    MARY GAY SCANLON, Pennsylvania,      BEN CLINE, Virginia
      Vice-Chair                         KELLY ARMSTRONG, North Dakota
    SYLVIA R. GARCIA, Texas              W. GREGORY STEUBE, Florida
    JOE NEGUSE, Colorado
    LUCY McBATH, Georgia
    GREG STANTON, Arizona
    MADELEINE DEAN, Pennsylvania
    DEBBIE MUCARSEL-POWELL, Florida
    VERONICA ESCOBAR, Texas

            Perry Apelbaum, Majority Staff Director & Chief Counsel
                      Chris Hixon, Minority Staff Director
                                     ------

                   SUBCOMMITTEE ON ANTITRUST, COMMERCIAL AND
                               ADMINISTRATIVE LAW

                    DAVID N. CICILLINE, Rhode Island, Chair
                        JOE NEGUSE, Colorado, Vice-Chair
    HENRY C. ``HANK'' JOHNSON, Jr.,      F. JAMES SENSENBRENNER, Jr.,
      Georgia                                Wisconsin, Ranking Member
    JAMIE RASKIN, Maryland               KEN BUCK, Colorado
    PRAMILA JAYAPAL, Washington          MATT GAETZ, Florida
    VAL BUTLER DEMINGS, Florida          KELLY ARMSTRONG, North Dakota
    MARY GAY SCANLON, Pennsylvania       W. GREGORY STEUBE, Florida
    LUCY McBATH, Georgia

                           Slade Bond, Chief Counsel
          Douglas Geho, Minority Chief Counsel for Administrative Law

                                 C O N T E N T S

                                  ----------

                                  JULY 29, 2020
                               OPENING STATEMENTS

                                                                       Page
    The Honorable David Cicilline, Chairman, Subcommittee on
      Antitrust, Commercial and Administrative Law...................     2
    The Honorable James Sensenbrenner, Ranking Member, Subcommittee
      on Antitrust, Commercial and Administrative Law................     4
    The Honorable Jerrold Nadler, Chairman, Committee on the
      Judiciary......................................................     5
    The Honorable Jim Jordan, Ranking Member, Committee on the
      Judiciary......................................................     7

                                    WITNESSES

     Jeff Bezos, Chief Executive Officer, Amazon.com, Inc.
        Oral Testimony...............................................    11
        Prepared Testimony...........................................    13
     Sundar Pichai, Chief Executive Officer, Alphabet Inc.
        Oral Testimony...............................................    21
        Prepared Testimony...........................................    23
     Tim Cook, Chief Executive Officer, Apple Inc.
        Oral Testimony...............................................    27
        Prepared Testimony...........................................    29
     Mark Zuckerberg, Chief Executive Officer, Facebook, Inc.
        Oral Testimony...............................................    33
        Prepared Testimony...........................................    35

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Exhibits Used at Hearing.........................................    42
    ``Police Requests for Google Users' Location Histories Face New
      Scrutiny,'' a Wall Street Journal article for the record from
      the Honorable Kelly Armstrong, Member, Subcommittee on
      Antitrust, Commercial and Administrative Law...................    89
    Letter to Apple by Representatives Greg Walden and Cathy McMorris
      Rodgers from the Honorable Kelly Armstrong, Member,
      Subcommittee on Antitrust, Commercial and Administrative Law...    95
    Letter to Google by Representatives Greg Walden and Cathy
      McMorris Rodgers from the Honorable Kelly Armstrong, Member,
      Subcommittee on Antitrust, Commercial and Administrative Law...    98

                                    APPENDIX

    Statement for the record from Paul Rafelson, Executive Director,
      Online Merchants Guild.........................................   169
    Letter to Mark Zuckerberg from Dr. Arthur C. Evans, Jr., Chief
      Executive Officer, American Psychological Association..........   212
    Statement for the record from the Leadership Conference on Civil
      and Human Rights...............................................   216
    Statement for the record from Richard Stables, Chief Executive
      Officers, the Kelkoo Group.....................................   223
    Statement for the record from Color of Change....................   225
    Statement for the record from Caitriona Fitzgerald, Interim
      Associate Director and Policy Director, Electronic Privacy
      Information Center.............................................   232
    Statement for the record from Christine Bannan, Policy Counsel,
      New America's Open Technology Institute........................   237
    Statement for the record from Michael Beckerman, Vice President
      and Head of US Public Policy, TikTok...........................   245
    Statement for the record from Dr. Ajintha Pathmanathan, ClinIQ...   251
    Statement for the record from Michael Kleinman and Charanya
      Krishnaswami, Amnesty International............................   263
    Statement for the record from Margrethe Vestager, Executive Vice-
      President, European Commission.................................   267
    Statement for the record from Dirk Van Dongen, President and CEO,
      National Association of Wholesaler-Distributors................   275
    Statement for the record from Jake Ward, President, Connected
      Commerce Council...............................................   278
    Responses to Questions for the Record from Jeff Bezos, Chief
      Executive Officer, Amazon.com, Inc.............................   280
    Responses to Questions for the Record from Sundar Pichai, Chief
      Executive Officer, Alphabet Inc................................   335
    Responses to Questions for the Record from Tim Cook, Chief
      Executive Officer, Apple Inc...................................   395
    Responses to Questions for the Record from Mark Zuckerberg, Chief
      Executive Officer, Facebook, Inc...............................   421
    Documents Referenced by Members at Hearing.......................   437

     ONLINE PLATFORMS AND MARKET POWER, PART 6: EXAMINING THE DOMINANCE OF
                      AMAZON, APPLE, FACEBOOK, AND GOOGLE

                                  ----------

                            WEDNESDAY, JULY 29, 2020

                            House of Representatives

                    Subcommittee on Antitrust, Commercial,
                             and Administrative Law

                           Committee on the Judiciary

                                Washington, DC.

        The subcommittee met, pursuant to call, at 1:05 p.m., in
    Room 2141, Rayburn House Office Building, Hon. David Cicilline
    [chairman of the subcommittee] presiding.
        Present: Representatives Cicilline, Nadler, Johnson,
    Raskin, Jayapal, Demings, Scanlon, Neguse, McBath,
    Sensenbrenner, Jordan, Buck, Gaetz, Armstrong, and Steube.
        Staff Present: Phillip Berenbroick, Counsel; Joseph
    Ehrenkrantz, Special Assistant; David Greengrass, Senior
    Counsel; Madeline Strasser, Chief Clerk; Anthony Valdez, Staff
    Assistant; John Williams, Parliamentarian; Amanda Lewis,
    Counsel, ACAL; Joseph Van Wye, Professional Staff Member, ACAL;
    Lina Khan, Counsel, ACAL; Slade Bond, Chief Counsel, ACAL;
    Catherine Larsen, Special Assistant, ACAL; Chris Hixon,
    Minority Staff Director; David Brewer, Minority Deputy Staff
    Director; Tyler Grimm, Minority Chief Counsel for Policy and
    Strategy; Stephen Castor, Minority General Counsel; Katy
    Rother, Minority Deputy General Counsel and Parliamentarian;
    Ella Yates, Minority Director of Member Services and
    Coalitions; Douglas Geho, Minority Chief Counsel for
    Administrative Law; and Kiley Bidelman, Minority Clerk.
        Mr. Cicilline. The subcommittee will come to order.
        Without objection, the chair is authorized to declare a
    recess at any time.
        We welcome everyone to today's hearing on ``Online
    Platforms and Market Power, Part 6: Examining the Dominance of
    Amazon, Apple, Facebook, and Google.''
        Before we begin, I'd like to remind members that we have
    established an email address and distribution list dedicated to
    circulating exhibits, motions, or other written materials that
    members might want to offer as part of our hearing today. If
    you'd like to submit materials, please send them to the email
    address that has been previously distributed to your offices,
    and we will circulate the materials to members and staff as
    quickly as we can.
        I would also remind all members that guidance from the
    Office of the Attending Physician states that face coverings
    are required for all meetings in an enclosed space, such as
    committee hearings. I expect all members on both sides of the
    aisle to wear a mask except when you are speaking.
        I now recognize myself for an opening statement.
        More than a year ago, this subcommittee launched an
    investigation into digital markets. Our two objectives have
    been to document competition problems in the digital economy
    and to evaluate whether the current antitrust framework is able
    to properly address them.
        In September 2019, the chairmen and ranking members of the
    full committee and the subcommittee issued sweeping, bipartisan
    requests for information to the four firms that will testify at
    today's hearing. Since then, we've received millions of pages
    of evidence from these firms as well as documents and
    submissions from more than 100 market participants. We've also
    conducted hundreds of hours of interviews.
        As part of this investigation, we have held five hearings
    to examine the effects of online market power on innovation and
    entrepreneurship, data privacy, a free and diverse press, and
    independent businesses in the online marketplace. We've held 17
    briefings and roundtables with over 35 experts and stakeholders
    in support of our work.
        This investigation has been bipartisan from the start. It's
    been an honor to work alongside my colleague Congressman Jim
    Sensenbrenner, the subcommittee's ranking member, as well as
    the former ranking member of the full committee, Congressman
    Doug Collins.
        We've worked closely with all members of the subcommittee
    on both sides of the aisle who have taken this work seriously
    and studied these issues carefully. As my colleague Congressman
    Ken Buck recently commented, and I quote, ``This is the most
    bipartisan effort that I've been involved with in 5\1/2\ years
    of Congress,'' end quote.
        The purpose of today's hearing is to examine the dominance
    of Amazon, Apple, Facebook, and Google.
        Amazon runs the largest online marketplace in America,
    capturing 70 percent of all online marketplace sales. It
    operates across a vast array of businesses, from cloud
    computing and movie production to transportation logistics and
    small-business lending. Amazon's market valuation recently hit
    $1.5 trillion, more than that of Walmart, Target, Salesforce,
    IBM, eBay, and Etsy combined.
        Apple is a dominant provider of smartphones, with more than
    100 million iPhone users in the United States alone. In
    addition to hardware, Apple sells services and apps, including
    financial services, media, and games.
        Facebook is the world's largest provider of social
    networking services, with a business model that sells digital
    ads. Despite a litany of privacy scandals and record-breaking
    fines, Facebook continues to enjoy booming profits--$18 billion
    last year alone.
        Lastly, Google is the world's largest online search engine,
    capturing more than 90 percent of searches online. It controls
    key technologies in digital ad markets and enjoys more than a
    billion users across six products, including browsers,
    smartphones, and digital maps.
        Prior to the COVID-19 pandemic, these corporations already
    stood out as titans in our economy. In the wake of COVID-19,
    however, they're likely to emerge stronger and more powerful
    than ever before. As American families shift more of their
    work, shopping, and communication online, these giants stand to
    profit. Locally owned businesses, meanwhile, mom-and-pop stores
    on Main Street, face an economic crisis unlike any in recent
    history. As hard as it is to believe, it's possible that our
    economy will emerge from this crisis even more concentrated and
    consolidated than before.
        These companies serve as critical arteries of commerce and
    communications. Because these companies are so central to our
    modern life, their business practices and decisions have an
    outsized effect on our economy and our democracy. Any single
    action by one of these companies can affect hundreds of
    millions of us in profound and lasting ways.
        Although these four corporations differ in important and
    meaningful ways, we've observed common patterns and competition
    problems over the course of this investigation.
        First, each platform is a bottleneck for a key channel of
    distribution. Whether they control access to information or to
    a marketplace, these platforms have the incentive and ability
    to exploit this power. They can charge exorbitant fees, impose
    oppressive contracts, and extract valuable data from the people
    and businesses that rely on them.
        Second, each platform uses its control over digital
    infrastructure to surveil other companies, their growth,
    business activity, and whether they might pose a competitive
    threat. Each platform has used this data to protect its power
    by either buying, copying, or cutting off access for any actual
    or potential rival.
        Third, these platforms abuse their control over current
    technologies to extend their power. Whether it's through self-
    preferencing, predatory pricing, or requiring users to buy
    additional products, the dominant platforms have wielded their
    power in destructive, harmful ways in order to expand.
        At today's hearing, we'll examine how each of these
    companies have used this playbook to achieve and maintain
    dominance and how their power shapes and affects our daily
    lives.
        So why does this matter? Many of the practices used by
    these companies have harmful economic effects. They discourage
    entrepreneurship, destroy jobs, hike costs, and degrade
    quality. Simply put, they have too much power. This power
    staves off new forms of competition, creativity, and
    innovation. And while these dominant firms may still produce
    some new, innovative products, their dominance is killing the
    small businesses, manufacturing, and overall dynamism that are
    the engines of the American economy.
        Several of these firms also harvest and abuse people's data
    to sell ads for everything from new books to dangerous so-
    called ``miracle'' cures. When everyday Americans learn how
    much of their data is being mined, they can't run away fast
    enough. But, in many cases, there is no escape from the
    surveillance, because there's no alternative. People are stuck
    with bad options.
        Open markets are predicated on the idea that, if a company
    harms people, consumers, workers, and business partners will
    choose another option. We're here today because that choice is
    no longer possible.
        In closing, I'm confident that addressing the problems we
    see in these markets will lead to a stronger, more vibrant
    economy. Because concentrated economic power also leads to
    concentrated political power, this investigation also goes to
    the heart of whether we, as a people, govern ourselves or
    whether we let ourselves be governed by private monopolies.
        American democracy has always been at war against monopoly
    power. Throughout our history, we've recognized that
    concentrated markets and concentrated political control are
    incompatible with democratic ideals. When the American people
    confronted monopolists in the past, be it the railroads or the
    oil tycoons or AT&T and Microsoft, we took action to ensure no
    private corporation controls our economy or our democracy. We
    face similar challenges today.
        As gatekeepers of the digital economy, these platforms
    enjoy the power to pick winners and losers, to shake down small
    businesses, and enrich themselves while choking off
    competitors. Their ability to dictate terms, call the shots,
    upend entire sectors, and inspire fear represent the powers of
    a private government. Our Founders would not bow before a king,
    nor should we bow before the emperors of the online economy.
        And, with that, I now recognize the ranking member of the
    subcommittee, Mr. Sensenbrenner, for his opening statement.
        Mr. Sensenbrenner. Thank you, Mr. Chairman.
        I want to thank the CEOs for quickly working with the
    subcommittee to appear today. The memorial service for John
    Lewis on Monday required our attention. However, this hearing
    is vital to our oversight work, and I appreciate your
    flexibility.
        Throughout my long time in Congress, I have prioritized
    oversight as one of our seminal responsibilities. Part of that
    responsibility is to periodically review the effectiveness of
    our laws. And I think it's a good and timely thing that we are
    now turning our attention to technological innovations, which
    brings us to all of your companies.
        Our country stricken by a pandemic becomes a dramatic
    illustration of the extraordinary reliance Americans have on
    technological innovations. In these unexpected and
    unprecedented times, your companies have provided innovations
    so our Nation can meet a myriad of our daily needs: the
    delivery of groceries, virtual visits with doctors, connecting
    socially distant families, or keeping our small and large
    businesses connected. With that responsibility comes an
    increased scrutiny of your dominance in the marketplace.
        I want to reiterate something I've said throughout this
    investigation: Being big is not inherently bad. Quite the
    opposite. In America, you should be rewarded for success.
        We are here to better understand the role your companies
    have in the digital marketplace and, importantly, the effect
    they have on consumers and the public at large. You lead some
    of today's most powerful companies, and my colleagues and I
    have great interest in what your companies do with that
    accumulated power.
        We also know that the tech marketplace is driven by data.
    So it follows that those who control the data in essence
    control the marketplace. There are broader questions
    surrounding data, however: Who owns the data? What
    responsibilities do companies have to share it with their
    customers or their competitors? What is the fair market value
    of that data? Is there anything monopolistic in acquiring this
    data? And what about monetizing it? These are complex issues
    that Congress, regulators, and even your own companies are
    wrestling with in the current technological landscape, and the
    answers to which we owe the American consumers.
        Since the tech investigation began, we have heard rumblings
    from many who are quick to say your successful companies have
    grown too large. Since this hearing was announced, it seems
    that those complaints have gotten even louder. While I find
    these complaints informative, I don't plan on litigating each
    of these complaints today.
        Antitrust law and the consumer welfare standard have served
    this country well for over a century. Those laws have provided
    the framework and creativity to make way for some of our most
    successful and innovative companies. I will be the first to
    highlight that. However, as the business landscape evolves, we
    must ensure that our existing antitrust laws are applied to
    meet the needs of our country and its consumers.
        I share the concern that market dominance in the digital
    space is ripe for abuse, particularly when it comes to free
    speech. As we know, companies like Facebook, Google's YouTube,
    and Twitter have become the public square of today, where
    political debate unfolds in real-time. But reports that
    dissenting views--often conservative views--are targeted or
    censored is seriously troubling. Conservatives are consumers
    too, and they need the protection of the antitrust laws. The
    power to influence debate carries with it remarkable
    responsibilities.
        So let the facts be our guide here. Your companies are
    large. That's not a problem. Your companies are successful.
    That's not a problem either. But I want to leave here today
    with a more complete picture of how your individual companies
    use your size, success, and power and what it means to the
    American consumer.
        And I yield back the balance of my time.
        Mr. Cicilline. I thank the gentleman.
        The chair now recognizes the distinguished chairman of the
    full committee, the gentleman from New York, Mr. Nadler, for
    his opening statement.
        Chairman Nadler. Thank you, Mr. Chairman.
        I want to thank you, Ranking Member Sensenbrenner, and the
    subcommittee members for the tremendous effort that you have
    all put into this subcommittee's investigation. I appreciate
    your calling this hearing today so that we can hear directly
    from the leaders of Amazon, Apple, Facebook, and Google, and I
    look forward to an important dialogue.
        Today, it is effectively impossible to use the internet
    without using, in one way or another, the services of these
    four companies. I have long believed, with Thomas Jefferson and
    Louis Brandeis, that concentration of power in any form,
    especially concentration of economic or political power, is
    dangerous to a democratic society. That is why we must examine
    these and other companies that play a dominant role in our
    economy and in our society and ensure that our antitrust laws
    give enforcers the tools they need to preserve a healthy
    marketplace. These principles have guided this committee's
    year-long investigation into competition in digital markets,
    and they are the lens through which I approach today's hearing.
        The open internet has delivered enormous benefits to
    Americans, including a surge of economic opportunity, massive
    investment, and new pathways for education online. But there's
    growing evidence that a handful of corporations have come to
    capture an outsized share of online commerce communications.
        From providing the dominant search platform, retail
    platform, and online messaging platform, to providing the
    underlying mapping services and cloud computing on which
    hundreds of thousands of other businesses rely, these dominant
    platforms now comprise the essential infrastructure for the
    21st century.
        By virtue of controlling essential infrastructure, these
    companies have the ability to control access to markets. In
    some basic ways, the problem is not unlike what we faced 130
    years ago when railroads transformed American life, both
    enabling farmers and producers to access new markets but also
    creating a key chokehold that the railroad monopolies could
    exploit.
        Railroads notoriously abused this gatekeeper power in a
    variety of ways. They charged tolls, extorting the producers
    reliant on their rails. They discriminated among farmers,
    picking winners and losers across the economy. And by expanding
    into lines of business that competed directly with producers,
    they could use their dominance in transportation to pay for
    their own services.
        These tactics by the railroads spurred fury and despair
    across the country. Congress initiated investigations to
    document these problems and enacted legislative solutions to
    halt and outlaw these anticompetitive practices in the railroad
    industry and other industries dominated by unregulated
    monopolies and trusts.
        Importantly, congressional oversight and legislative
    reforms during this period did not prevent or encumber the
    inexorable arrival of new technology or human progress.
    Instead, Congress recognized that these powerful new
    technologies had reshaped the balance of power in our economy
    and that it was the role of Congress to ensure that the new
    monopolists could not abuse their power.
        Today, the digital economy poses similar challenges. While
    the underlying technology is dramatically different, of course,
    new digital intermediaries have the ability to control access
    to critical markets. If you are an independent merchant,
    developer, or content producer, you are increasingly reliant on
    these powerful intermediaries to access markets and consumers.
    Across the economy, many businesses live in fear of exclusion
    from these platforms, a fact that some companies have shared
    with the committee over the past year during this
    investigation.
        The subcommittee's current review of competition in the
    digital marketplace continues a long tradition in this
    committee of oversight of the antitrust laws and our economy.
    From the days of Chairman Emanuel Celler, the House Judiciary
    Committee and its Antitrust Subcommittee have conducted
    careful, fact-based inquiries into industrial sectors showing
    signs of consolidation and anticompetitive conduct. This has
    continued on a bipartisan basis over the years, from Chairmen
    Brooks and Hyde to Chairmen Sensenbrenner and Conyers and
    others.
        As a 1950 report from the then-named Subcommittee on
    Monopoly Power described our mandate, quote, ``It is the
    province of this subcommittee to investigate factors which tend
    to eliminate competition, strengthen monopolies, injure small
    businesses, or promote undo concentration of economic power, to
    ascertain the facts, and to make recommendations based on those
    findings.''
        Following in this proud tradition, our investigation has
    held hearings with industry and government witnesses,
    consultations with subject matter experts, and the careful and
    at times painstaking review of large volumes of evidence
    provided by industry participants and regulators.
        While ultimately it is the responsibility of the antitrust
    enforcement agencies to enforce the law, Congress has an
    obligation to assess whether existing antitrust laws and
    competition policies and the will to enforce those laws and
    policies are adequate to address the competition issues facing
    our country and to take action if they are found to be lacking.
        Given the dominant role that these four companies play in
    our economy and our society, it is only reasonable that our
    careful examination of the antitrust laws begin with them.
        I appreciate the participation of all of our witnesses
    today. Our investigation would not be complete--indeed, it has
    hardly begun--without hearing directly from the decisionmakers
    of these companies. And I look forward to their testimony and
    to today's discussion.
        I yield back the balance of my time.
        Mr. Cicilline. I thank the gentleman.
        And I now recognize the ranking member of the full
    committee, the gentleman from Ohio, Mr. Jordan, for his opening
    statement.
        Mr. Jordan. Thank you, Mr. Chairman.
        And I also want to thank the ranking member of this
    subcommittee, Mr. Sensenbrenner. I'm not sure how many more
    committee hearings this subcommittee or the full committee are
    going to have this Congress, but I want to thank Jim for his
    great work for the constituents of his district in Wisconsin
    for this many years and for the work he has done for this
    entire committee.
        I'll just cut to the chase: Big Tech's out to get
    conservatives. That's not a suspicion. That's not a hunch.
    That's a fact.
        July 20, 2020, Google removes the homepages of Breitbart
    and The Daily Caller. Just last night, we learned Google has
    censored Breitbart so much traffic had declined 99 percent.
        June 16, 2020, Google threatens to demonetize and ban The
    Federalist.
        April 19, 2020, Google and YouTube announce a policy
    censoring content that conflicts with recommendations of the
    World Health Organization. Now, think about that. The World
    Health Organization, an organization that lied to us, the
    organization that shilled for China, and if you contradict
    something they say--they can say whatever they want. They can
    lie for China. They can shill for China. You say something
    against them, you get censored.
        June 29, 2020, Amazon bans President Trump's account on
    Twitch after he raises concerns about defunding the police.
        June 4, 2020, Amazon bans a book critical of the
    coronavirus lockdowns written by a conservative commentator.
        May 27, 2020, AmazonSmile won't let you give to the Family
    Research Council and the Alliance Defense Fund, but you can
    give to Planned Parenthood.
        Facebook, June 19, 2020, takes down posts from President
    Trump's reelection campaign.
        November 1, 2018, Facebook silences a pro-life
    organization's advertisement.
        May 19, 2016, former Facebook employees admit Facebook
    routinely suppresses conservative views.
        And I haven't even mentioned Twitter, who we actually
    invited, Mr. Chairman. We asked for you guys to invite them as
    one of our witnesses. You guys said no. I haven't even
    mentioned them.
        Two years ago, they shadow banned two members of this
    committee. Four Members of Congress were shadowed banned 2
    years ago. Four-hundred-and-thirty-five in the House, 100 in
    the Senate, 535. Only four--only four--Gaetz, Meadows, Nunes,
    Jordan--only four get shadowed banned.
        And, of course, what did Mr. Dorsey tell us? He said, oh,
    it was just a glitch in our algorithm. Just a glitch. I asked
    him, what did you put in the algorithm, the names ``Gaetz,''
    ``Meadows,'' ``Nunes,'' ``Jordan''? I mean, if I had a nickel
    for every time I heard it was just a glitch, I wouldn't be as
    wealthy as our witnesses but I'd be doing all right. We've
    heard that excuse time and time again.
        May 28, Twitter censors President Trump's tweet on the
    riots in Minneapolis.
        May 29, 2020, Twitter censors the White House for quoting
    the President's comments about the riots in Minneapolis.
        June 23, 2020, Twitter censors the President again for
    saying he'll enforce the rule of law against any autonomous
    zone in Washington, D.C. You can tweet all you want about the
    autonomous zone that happened in Seattle, but the President
    tweets that he's not going to have one in Washington, D.C.--oh,
    oh, oh, nope, you can't do that. You get banned, you get
    censored.
        Dozens of examples--oh, I forgot one. I forgot one. Just
    last week, July 21, July 21, here's what Twitter did. The
    leader of Iran, the Islamic Republic of Iran--this is from the
    largest state sponsor of terrorism. Twitter allows this tweet:
    Quote, ``The Islamic Republic of Iran will never forget the
    martyrdom of Soleimani and will definitely strike a reciprocal
    blow in the United States.''
        So you can threaten the citizens of this great country, the
    leader of the largest state sponsor of terrorism, that's just
    fine. But, oh, the President says he's not going to allow some
    autonomous zone in D.C., and he gets censored.
        Mr. Jordan. All kinds of examples, most of them from this
    year. And that's what's, I think, critical for us all to
    understand: most of them from this year, an election year. And
    that's what concerns me and so many Americans.
        Because we saw what Google did in 2016. We all know about
    the email the day after the election, where top executives at
    Google--email chain where they talked about the silent donation
    Google made to the Clinton campaign. Now, thank goodness, it
    wasn't enough and, in spite of their efforts to help Clinton,
    President Trump won.
        But we're 97 days before an election. And the power, as the
    previous chairman and ranking member have said, the power these
    companies have to impact what happens during an election, what
    American citizens get to see prior to their voting, is pretty
    darn important. That's why this committee hearing's important.
        Look, we all think the free market's great. We think
    competition's great. We love the fact that these are American
    companies. But what's not great is censoring people, censoring
    conservatives, and trying to impact elections. And if it
    doesn't end, there has to be consequences. There has to be
    consequences. That's what I'm concerned about and, I think,
    what so many Americans are concerned about.
        So I look forward to hearing from our witnesses, Mr.
    Chairman.
        And before I yield back, Mr. Chairman, we have a
    colleague--I would ask unanimous consent that Mr. Johnson, the
    ranking member of the Constitution Subcommittee, be allowed to
    participate in today's hearing, which is our customary practice
    for subcommittee hearings.
        Mr. Cicilline. The gentleman makes a unanimous consent
    request----
        Mr. Raskin. Mr. Chairman, I would object.
        Mr. Cicilline. Objection is heard.
        I now have the pleasure of introducing today's witnesses--
    --
        Mr. Jordan. Mr. Chairman, why are we not allowing--it is
    customary.
        Mr. Cicilline. Mr. Jordan, there was a unanimous consent
    request. Objection was heard. I now will introduce our
    witnesses.
        It is now my pleasure----
        Mr. Jordan. This has never happened in the history of the
    Judiciary Committee.
        Mr. Cicilline. It is now my pleasure to introduce today's
    witnesses.
        Our first witness is Jeff Bezos, the chief executive
    officer----
        Mr. Jordan. And this is----
        Mr. Cicilline. Mr. Jordan, I have the time.
        Mr. Jordan. But this is the ranking member of the--we're
    talking about people's liberties here, and we've got the
    ranking member----
        Mr. Cicilline. Mr. Jordan, you made a unanimous consent
    request. Objection was heard. Those are our rules.
        Mr. Jordan. The objection was not----
        Mr. Cicilline. It is now my pleasure to introduce today's
    witnesses.
        Mr. Jordan [continuing]. Law professor----
        Mr. Cicilline. Our first witness is Jeff Bezos----
        Mr. Raskin. Put your mask on.
        Mr. Cicilline [continuing]. The chief executive officer of
    Amazon.com. Mr. Bezos founded Amazon in----
        Mr. Jordan. I'm still speaking----
        Mr. Cicilline. Excuse me. I'm going to remind members of
    this committee, unless you are speaking, our rules require you
    to wear a mask, according to the Attending Physician.
        Mr. Jordan. I'm still----
        Mr. Cicilline. No, I'm speaking about another member of
    this committee.
        I'll begin again.
        It is now my pleasure to introduce today's witnesses.
        Our first witness is Jeff Bezos, the chief executive
    officer of Amazon.com. Mr. Bezos founded Amazon in 1994 as an
    online bookstore. Since then, Amazon has grown to be the
    largest online retailer on the internet. Mr. Bezos also
    oversees his company's expansion into areas including cloud
    computing, digital streaming, and artificial intelligence. Mr.
    Bezos received his bachelor's of science from Princeton
    University.
        Our second witness, Sundar Pichai, is the chief executive
    officer of both Alphabet and its subsidiary, Google. Mr. Pichai
    joined Google in 2004 and has helped manage a number of
    successful products, including Google Chrome, Gmail, and the
    Android operating system. Mr. Pichai also oversaw the company's
    popular search products. Prior to his time at Google, Mr.
    Pichai worked in management consulting at McKinsey. Mr. Pichai
    received a degree in metallurgical engineering from the Indian
    Institute of Technology, a master's degree from Stanford
    University, and an MBA from the Wharton School at the
    University of Pennsylvania.
        Our third witness is Tim Cook, the chief executive officer
    of Apple. Mr. Cook joined Apple in 1998 and served as its chief
    operational officer under Steve Jobs. In 2011, Mr. Cook was
    named CEO. While at Apple, he has overseen their expansion into
    new markets through the launch and development of products and
    services like Apple Pay, Apple Watch, iCloud, Apple Card, and
    HomePod. Prior to joining Apple, Mr. Cook served as the
    director of North American fulfillment for IBM. Mr. Cook
    received a bachelor of science from Auburn University and an
    MBA from Duke University's Fuqua School of Business.
        The last witness at today's hearing is Mark Zuckerberg,
    founder, chairman, and CEO of Facebook. Mr. Zuckerberg
    initially launched Facebook in order to help connect college
    students at his school more easily. Since then, the company has
    grown into the world's largest social media platform, with 1.7
    billion global daily active users. Mr. Zuckerberg attended
    Harvard University, leaving in 2005 to focus full-time on
    developing Facebook.
        We welcome all of our distinguished witnesses and thank
    them for participating in today's hearing.
        And now we'll begin by swearing you in. And before I do
    that, I want to also remind you that you are the only ones from
    your respective companies invited to testify today and that, in
    accordance with normal House practice and section G of the
    House remote committee proceeding regulations, your sworn
    testimony must be your own. Please let me know if at any point
    in the hearing you wish to mute yourself so you can confer with
    your counsel.
        So will you please unmute your microphones and raise your
    right hands?
        Do you swear or affirm under penalty of perjury that the
    testimony you're about to give is true and correct to the best
    of your knowledge, information, and belief, so help you God?
        Mr. Bezos. Yes.
        Mr. Pichai. I do.
        Mr. Zuckerberg. Yes.
        Mr. Cook. I do.
        Mr. Cicilline. Let the record show the witnesses answered
    in the affirmative.
        Thank you, and you may remain seated.
        Please note that your written statements will be entered
    into the record in their entirety. Accordingly, I ask that you
    summarize your testimony in 5 minutes. To help you stay within
    that time, there is a timing light in Webex. When the light
    switches from green to yellow, you have 1 minute to conclude
    your testimony. When the light turns red, it signals your 5
    minutes have expired.
        Mr. Bezos, you may begin.

     TESTIMONY OF JEFF BEZOS, CHIEF EXECUTIVE OFFICER, AMAZON.COM,
     INC.; SUNDAR PICHAI, CHIEF EXECUTIVE OFFICER, ALPHABET INC.;
        TIM COOK, CHIEF EXECUTIVE OFFICER, APPLE INC.; AND MARK
          ZUCKERBERG, CHIEF EXECUTIVE OFFICER, FACEBOOK, INC.

                        TESTIMONY OF JEFF BEZOS

        Mr. Bezos. Thank you, Chairman Cicilline, Ranking Member
    Sensenbrenner, and members of the subcommittee.
        I was born into great wealth, not monetary wealth but,
    instead, the wealth of a loving family, a family that fostered
    my curiosity and encouraged me to dream big.
        My mom, Jackie, had me when she was a 17-year-old high
    school student in Albuquerque. Being pregnant in high school
    was not popular. The school tried to kick her out, but she was
    allowed to finish after my grandfather negotiated terms with
    the principal. She couldn't have a locker, no extracurriculars,
    and couldn't walk across the stage to get her diploma. She
    graduated and was determined to continue her education, so she
    enrolled in night school, bringing me, her infant son, to class
    with her throughout.
        My dad's name is Miguel. He adopted me when I was 4. He was
    16 when he came to the U.S. from Cuba by himself shortly after
    Castro took over. My dad didn't speak English, and he did not
    have an easy path. What he did have was grit and determination.
    He received a scholarship to college in Albuquerque, which is
    where he met my mom.
        Together with my grandparents, these hardworking,
    resourceful, and loving people made me who I am.
        I walked away from a steady job on Wall Street into a
    Seattle garage to found Amazon, fully understanding that it
    might not work. It feels like just yesterday I was driving the
    packages to the post office myself, dreaming that one day we
    might afford a forklift.
        Customer obsession has driven our success, and I take it as
    an article of faith that customers notice when you do the right
    thing. You earn trust slowly, over time, by doing hard things
    well, delivering on time, offering everyday low prices, making
    promises and keeping them, and making principled decisions,
    even when they are unpopular.
        And our approach is working. Eighty percent of Americans
    have a favorable impression of Amazon overall. Who do Americans
    trust more than Amazon to do the right thing? Only their
    doctors and the military.
        The retail market we participate in is extraordinarily
    large and competitive. Amazon accounts for less than 1 percent
    of the $25 trillion global retail market and less than 4
    percent of U.S. retail. There's room in retail for multiple
    winners. We compete against large, established players like
    Target, Costco, Kroger, and, of course, Walmart, a company more
    than twice Amazon's size.
        Twenty years ago, we made the decision to invite other
    sellers to sell in our store, to share the same valuable real
    estate we spent billions to build, market, and maintain. We
    believed that combining the strengths of Amazon's store with
    the vast selection of products offered by third parties would
    be a better experience for customers and that the growing pie
    of revenue and profits would be big enough for all. We were
    betting that it was not a zero-sum game. Fortunately, we were
    right. There are now 1.7 million small and medium-size
    businesses selling on Amazon.
        The trust customers put in us every day has allowed Amazon
    to create more jobs in the United States over the past decade
    than any other company--hundreds of thousands of jobs across 42
    states. Amazon employees make a minimum of $15 an hour, more
    than double the federal minimum wage. And we offer the best
    benefits--benefits that include comprehensive health insurance,
    401(k) retirement, and parental leave, which includes 20 weeks
    of paid maternity leave.
        More than any place on Earth, entrepreneurial companies
    start, grow, and thrive here in the U.S. We nurture
    entrepreneurs and startups with stable rule of law, the finest
    university system in the world, the freedom of democracy, and a
    deeply accepted culture of risk-taking.
        Of course, this great Nation of ours is far from perfect.
    Even as we remember Congressman John Lewis and honor his
    legacy, we're in the middle of a much-needed race reckoning. We
    also face the challenges of climate change and income
    inequality, and we're stumbling through the crisis of a global
    pandemic.
        Still, with all of our faults and problems, the rest of the
    world would love even the tiniest sip of the elixir we have
    here in the U.S. Immigrants like my dad see what a treasure
    this country is. They have perspective and often can see it
    even more clearly than those of us who were lucky enough to be
    born here.
        It is still day one for this country, and even in the face
    of today's humbling challenges, I have never been more
    optimistic about our future.
        I appreciate the opportunity to appear before you today,
    and I'm very happy to take your questions.
        [The statement of Mr. Bezos follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Cicilline. Thank you, Mr. Bezos.
        Mr. Pichai, you are now recognized for 5 minutes.

                       TESTIMONY OF SUNDAR PICHAI

        Mr. Pichai. Thank you, Mr. Chairman, Ranking Member
    Sensenbrenner, and members of the subcommittee.
        Before I start, I know this hearing was delayed because of
    the ceremonies to honor the life of your colleague,
    Representative John Lewis. Because of his courage, this world
    is a better place. He'll be deeply missed.
        At its heart, a discussion about competition is a
    discussion about opportunity. This has never been more
    important, as the global pandemic poses dual challenges to our
    health and our economy.
        Expanding access to opportunity through technology is
    personal to me. I didn't have much access to a computer growing
    up in India, so you can imagine my amazement when I arrived in
    the U.S. for graduate school and saw an entire lab of computers
    to use whenever I wanted.
        Accessing the internet for the first time set me on a path
    to bring technology to as many people as possible. It inspired
    me to build Google's first browser, Chrome. I'm proud that, 11
    years later, so many people experience the web through Chrome
    for free.
        Google takes pride in the number of people who choose our
    products. We are even prouder of what they do with them. From
    the 140 million students and teachers using G Suite for
    education to stay connected during the pandemic, to the 5
    million Americans gaining digital skills through Grow with
    Google, to all the people who turn to Google for help, from
    finding the fastest route home to learning how to cook a new
    dish on YouTube.
        Google's work would not be possible without the long
    tradition of American innovation, and we are proud to
    contribute to its future. We employ more than 75,000 people in
    the U.S. across 26 States. The Progressive Policy Institute
    estimated that in 2018 we invested more than $20 billion in the
    U.S., citing us as the largest capital investor in America that
    year and one of the top five for the last 3 years.
        One way we contribute is by building helpful products.
    Research found that free services like Search, Gmail, Maps, and
    Photos provide thousands of dollars a year in value to the
    average American, and many are small businesses using our
    digital tools to grow.
        Stone Dimensions, a family-owned stone company in Pewaukee,
    Wisconsin, uses Google My Business to draw more customers.
    Gil's Appliances, a family-owned appliance store in Bristol,
    Rhode Island, credits Google Analytics with helping them reach
    customers online during the pandemic. Nearly one-third of
    small-business owners say that without digital tools they would
    have had to close all or part of their business during COVID.
        Another way we contribute is by being among the world's
    biggest investors in research and development. At the end of
    2019, our R&D spend had increased tenfold over 10 years, from
    $2.8 billion to $26 billion, and we have invested over $90
    billion the last 5 years. Our engineers are helping America
    remain a global leader in emerging technologies like artificial
    intelligence, self-driving cars, and quantum computing.
        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. Competition drives us to
    innovate, and it also leads to better products, lower prices,
    and more choices for everyone. For example, competition helped
    lower online advertising costs by 40 percent over the last
    decade, with savings passed down to consumers.
        Open platforms like Android also support the innovation of
    others. Using Android, thousands of mobile operators build and
    sell their own devices without paying any licensing fees to us.
    This has enabled billions of consumers to offer cutting-edge
    smartphones, some for less than $50. Whether building tools for
    small businesses or platforms like Android, Google succeeds
    when others succeed.
        Competition also sets higher standards for privacy and
    security. I've always believed that privacy is a universal
    right. And Google is committed to keeping your information
    safe, treating it responsibly, putting you in control. And
    we've long supported the creation of comprehensive Federal
    privacy laws.
        I've never forgotten how access to technology and
    innovation changed the course of my life. Google aims to build
    products that increase access to opportunity for everyone, no
    matter where you live, what you believe, or how much money you
    earn. We are committed to doing this responsibly, in
    partnership with lawmakers, to ensure every American has access
    to the incredible opportunity technology creates.
        Thank you.
        [The statement of Mr. Pichai follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Cicilline. Thank you, Mr. Pichai.
        Mr. Cook is now recognized for 5 minutes.

                         TESTIMONY OF TIM COOK

        Mr. Cook. Chairmen Cicilline and Nadler, Ranking Members
    Sensenbrenner and Jordan, members of the subcommittee, thank
    you for the opportunity to offer testimony.
        Before I begin, I want to recognize the life and legacy of
    John Lewis. I join you in mourning not only a hero but someone
    I knew personally, whose example inspires and guides me still.
    Every American owes John Lewis a debt, and I feel fortunate to
    hail from a state and a country that benefited so profoundly
    from his leadership.
        My name is Tim Cook. I've been Apple's CEO since 2011 and a
    proud employee of this uniquely American company since 1998. At
    Apple, we make ourselves a promise and our customers a promise;
    it's a promise that we'll only build things that make us proud.
    As Steve put it, we only make things that we'd recommend to our
    family and friends.
        You can try to define this difference in a lot of ways. You
    can call it the seamless integration of hardware and software.
    You can call it simplicity of design or a great ecosystem. All
    of those things are true. But if you want to put it simply,
    products like iPhone just work. When customers consistently
    give iPhone a 99 percent satisfaction rating, that's the
    message they're sending about the user experience.
        But we also know that customers have a lot of choices and
    that our products face fierce competition. Companies like
    Samsung, LG, Huawei, and Google have built successful
    businesses with different approaches. We're 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.
        What does motivate us is that timeless drive to build new
    things that we're proud to show our users. We focus
    relentlessly on those innovations, on deepening core principles
    like privacy and security, and on creating new features.
        In 2008, we introduced a new feature of the iPhone called
    the App Store. Launched with 500 apps, which seemed like a lot
    at the time, the App Store provided a safe and trusted way for
    users to get more out of their phone.
        We knew the distribution options for software developers at
    the time didn't work well. Brick-and-mortar stores charged high
    fees and had limited reach. Physical media, like CDs, had to be
    shipped and were hard to update.
        From the beginning, the App Store was a revolutionary
    alternative. App Store developers set prices for their apps and
    never pay for shelf space. We provide every developer with
    cutting-edge tools like compilers, programming languages, and
    more than 150,000 essential software building blocks called
    APIs.
        The App Store guidelines ensure a high-quality, reliable,
    and secure user experience. They are transparent and applied
    equally to every developer.
        For the vast majority of apps, developers keep 100 percent
    of the money they make. The only apps that are subject to a
    commission are those where the developer acquires a customer on
    an Apple device and where the features or services would be
    experienced and consumed on an Apple device.
        In the App Store's more-than-10-year history, we have never
    raised a commission or added a single fee. In fact, we've
    reduced it for subscriptions and exempted additional categories
    of apps.
        I'm here today because scrutiny is reasonable and
    appropriate. We approach this process with respect and
    humility. But we make no concession on the facts. What began as
    500 apps is now more than 1.7 million, only 60 of which are
    Apple software. 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.
        The App Store's economic contributions are significant. The
    ecosystem is responsible for 1.9 million jobs in all 50 states,
    and it facilitated $138 billion in commerce in the U.S. in 2019
    alone.
        I share the committee's belief that competition promotes
    innovation, that it makes space for the next great idea, and
    that it gives consumers more choices. Since Apple was founded,
    these things have defined us. The first Mac brought opportunity
    and possibility into the home. The iPod helped musicians and
    artists to share their creations and be paid fairly for it.
    This legacy does much more than make us proud; it inspires us
    to work tirelessly to make sure tomorrow will be even better
    than today.
        Thank you very much. I look forward to responding to your
    questions.
        [The statement of Mr. Cook follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Cicilline. Thank you, Mr. Cook.
        Mr. Zuckerberg is now recognized for 5 minutes.

                      TESTIMONY OF MARK ZUCKERBERG

        Mr. Zuckerberg. Thank you.
        Before I begin, I want to add my voice to those honoring
    Congressman John Lewis and his service to our country. America
    has lost a real hero who never stopped fighting for the rights
    of every person.
        Chairman Cicilline, Ranking Member Sensenbrenner, members
    of the subcommittee, thank you for the opportunity to testify.
        The tech industry is an American success story. The
    products we build have changed the world and improved people's
    lives. Our industry is one of the ways that America shares its
    values with the world and one of our greatest economic and
    cultural exports.
        Facebook is part of this story. We started with an idea: to
    give people the power to share and connect. And we've built
    services that billions of people find useful.
        I'm proud that we've given people who've never had a voice
    before the opportunity to be heard and given small businesses
    access to tools that only the largest players used to have.
        Since COVID emerged, I'm proud that people have used our
    services to stay in touch with friends and family who they
    can't be with in person and to keep their small businesses
    running online when physical stores are closed.
        I believe that Facebook and the U.S. tech industry are a
    force for innovation and empowering people, but I recognize
    that there are concerns about the size and power of tech
    companies.
        Our services are about connection, and our business model
    is advertising, and we face intense competition in both. Many
    of our competitors have hundreds of millions or billions of
    users. Some are upstarts, but others are gatekeepers 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. The most
    popular messaging service in the U.S. is iMessage. The fastest
    growing app is TikTok. The most popular app for video is
    YouTube. The fastest growing ads platform is Amazon. The
    largest ads platform is Google. And for every dollar spent on
    advertising in the U.S., less than 10 cents is spent with us.
        We're here to talk about online platforms, but I think the
    true nature of competition is much broader. When Google bought
    YouTube, it could compete against the dominant player in video,
    which was the cable industry. When Amazon bought Whole Foods,
    it could compete against Kroger's and Walmart. When Facebook
    bought WhatsApp, we could compete against telcos who used to
    charge 10 cents a text message but not anymore. Now, people can
    watch video, get groceries delivered, and send private messages
    for free. That's competition.
        New companies are created all the time, all over the world,
    and history shows that if we don't keep innovating, someone
    will replace every company here today. And that change can
    often happen faster than you expect. Of the 10 most valuable
    companies a decade ago, only 3 still make that list today. And
    if you look at where the top technology companies have come
    from, a decade ago, the vast majority were American. Today,
    almost half are Chinese.
        Aside from competition, there are other serious issues
    related to the internet, including questions about elections,
    harmful content, and privacy. And while these are not antitrust
    issues and are not specifically the topic of today's hearing, I
    recognize that we are often at the center of these discussions.
        We build platforms for sharing ideas, and important debates
    play out across our services. I believe that this ultimately
    leads to more progress, but it means we often find ourselves in
    the middle of deep disagreements about social issues and high-
    stakes elections.
        I personally don't believe that private companies should be
    making so many decisions about these issues by themselves. And
    that's why, last year, I made the case that there needs to be
    new regulation for the internet.
        Facebook stands for a set of basic principles: giving
    people voice and economic opportunity; keeping people safe;
    upholding democratic traditions like freedom of expression and
    voting; and enabling an open and competitive marketplace. These
    are fundamental values for most of us but not for everyone in
    the world--not for every company we compete with or the
    countries they represent. And as global competition increases,
    there is no guarantee that our values will win out.
        I am proud of the services we build and how they improve
    people's lives. We compete hard. We compete fairly. We try to
    be the best. That's what I was taught matters in this country.
    And when we succeed, it's because we deliver great experiences
    that people love.
        Thank you, and I look forward to answering your questions.
        [The statement of Mr. Zuckerberg follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Cicilline. Thank you.
        And I thank the witnesses for your opening statements.
        Before I begin recognizing members for questioning under
    the 5-minute rule, without objection, I'm going to enter into
    the hearing record the documents and exhibits majority members
    will be referencing in their questioning today. These materials
    have been distributed to the witnesses.
        [The information follows:]

         MR. CICILLINE FOR THE OFFICIAL RECORD

    =======================================================================

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Cicilline. I will now recognize myself for 5 minutes.
        Mr. Pichai, over 85 percent of all online searches go
    through Google. Every online company in the United States
    depends on Google to reach users. A business may sink or swim
    based on Google's decisions alone.
        Numerous online businesses told us that Google steals their
    content and privileges its own sites in ways that profit Google
    but crush everyone else. Most businesses asked to stay
    anonymous due to fears that Google would retaliate against
    them.
        One entrepreneur, Brian Warner, told us his website was
    thriving until Google stole his content. After Google's
    decision, traffic to his website dropped by 80 percent. He had
    to downsize his business and lay off half his staff. He told
    us, and I quote, ``If someone came to me with an idea for a
    website or a web service today, I'd tell then to run--run as
    far away from the web as possible. Launch a lawn-care business
    or a dog-grooming business, something Google can't take away as
    soon as he or she is thriving.''
        So my first question, Mr. Pichai, is why does Google steal
    content from honest businesses?
        Mr. Pichai. Mr. Chairman, with respect, I disagree with
    that categorization.
        Just last week, I met with many small businesses. In fact,
    today, we support 1.4 million small businesses, supporting over
    $385 billion in economic activity.
        We see many businesses thrive, particularly even during the
    pandemic. An example: Kettle Kings in Texas, which sells
    kettlebells, they've really expanded----
        Mr. Cicilline. Mr. Pichai, I have a limited amount of time,
    so I don't want to interrupt you, but my question is very
    specific.
        We've heard throughout this investigation that Google has
    stolen content to build your own business. These are consistent
    reports. And so your testimony that that doesn't happen is
    really inconsistent with what we've learned during the course
    of the investigation.
        But I'll move on to a new question.
        Mr. Pichai, most Americans believe that when they enter a
    search query that what Google shows are the most relevant
    results. But, increasingly, Google just shows whatever is most
    profitable for Google, be it Google Ads or Google's own sites.
        And so my question, Mr. Pichai: Isn't there a fundamental
    conflict of interest between serving users who want to access
    the best and most relevant information and Google's business
    model, which incentivizes Google to sell ads and keep users on
    Google's own sites?
        Mr. Pichai. We have always focused on providing users the
    most relevant information. And we rely on that trust for users
    to come back to Google every day.
        In fact, the vast majority of queries in Google, we don't
    show ads at all. And we show ads only for a small subset of
    queries where the intent from users is highly commercial. For
    example, they may be looking for something like TV sets or so
    on. So----
        Mr. Cicilline. But, Mr. Pichai, what is the value of the
    part that you do use the Google Ads for? I mean, it's a
    substantial part of your business. What's the actual value?
    $200 billion? $300 billion?
        Mr. Pichai. You know, in terms of revenue, it's around
    $100-plus billion.
        Mr. Cicilline. Okay.
        Mr. Pichai. But----
        Mr. Cicilline. That's a lot of money, Mr. Pichai.
        Let me move on.
        Really, Mr. Pichai, it's Google's business model that is
    the problem. Our documents show that Google evolved from a
    turnstile to the rest of the web to a walled garden that
    increasingly keeps users within its sites.
        Emails show that, over a decade ago, Google started to fear
    competition from certain websites, web pages that could divert
    search traffic and revenue from Google. These documents show
    that Google staff discussed the ``proliferating threat,'' is
    how it was described, that these web pages posed to Google. Any
    traffic lost to other sites was a loss in revenue. One of
    Google's memos observed that certain websites were getting, and
    I quote, ``too much traffic,'' so Google decided to put an end
    to that.
        Mr. Pichai, you've been at Google since 2004. Were you
    involved in these discussions about the threat from vertical
    search?
        Mr. Pichai. Congressman, without knowing the specifics, you
    know, I'm not really clear of the context.
        But, definitely, when we look at vertical searches, it
    validates the competition we see. For example, when users come
    looking to shop online, independent studies show that over 55
    percent of product searches originate with Amazon and over 70
    percent originate with the major e-commerce companies.
        In the few categories which are commercial in nature, we
    see vigorous competition, be it travel, be it real estate. And
    we are working hard for----
        Mr. Cicilline. Well, let me ask very specifically, Mr.
    Pichai: The evidence that we collected shows that Google
    pursued a multipronged attack.
        First, Google began to steal other web pages' content. For
    example, in 2010, Google stole restaurant reviews from Yelp to
    bootstrap its own rival local search business.
        Mr. Pichai, do you know how Google responded when Yelp
    asked you to stop stealing their reviews?
        Well, I'll tell you. Our investigation shows that Google's
    response was to threaten to delist Yelp entirely. In other
    words, the choice Google gave Yelp was: Let us steal your
    content, or effectively disappear from the web.
        Mr. Pichai, isn't that anticompetitive?
        Mr. Pichai. Congressman, you know, when I run the company,
    I am really focused on giving users what they want. We conduct
    ourselves to the highest standard. Happy to engage, understand
    the specifics, and answer your questions further.
        Mr. Cicilline. Thank you.
        And I just have one final series of questions, Mr. Pichai.
    Did Google ever use its surveillance over web traffic to
    identify competitive threats?
        Mr. Pichai. 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. But we are
    really focused on improving our products, and that's how----
        Mr. Cicilline. I appreciate that, Mr. Pichai.
        Google's own documents and numerous interviews with
    companies affected by this conduct show that Google did just
    that, which is very disturbing and very anticompetitive.
        In addition to stealing content, Google also began to
    privilege its own sites. An investigative report published just
    yesterday found that 63 percent of web searches that start on
    Google also end somewhere on Google's own websites.
        And, to me, that's evidence that Google is increasingly a
    walled garden which keeps users on Google sites even if Google
    doesn't have the most relevant information. And it's
    economically catastrophic for other companies online.
        And so my time is running out, but, Mr. Pichai, I'll just
    end by saying, the evidence seems very clear to me. As Google
    became the gateway to the internet, it began to abuse its
    power. It used its surveillance over web traffic to identify
    competitive threats and crush them. It has dampened innovation
    and new business growth. And it's dramatically increased the
    price of accessing users on the internet, virtually ensuring
    that any business that wants to be found on the web must pay
    Google a tax.
        And, with that, I recognize the ranking member of the
    subcommittee, Mr. Sensenbrenner, for his first round of
    questions.
        Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
        I've been in Congress 42 years. That's coming to an end at
    the end of this year. I'm breathing a sigh of relief. But
    during that period of time, during the decade of the 1990s and
    the 2000s, you know, I was involved, as chairman of the Science
    Committee and chairman of this committee, in trying to make the
    net universal, you know, and open it up to everybody.
        And one of the theses that we used is that the net should
    end up becoming basically the debate on issues, not only in our
    country but throughout the world. And in exchange for that,
    this committee and the Congress gave internet service providers
    immunity, so if somebody said something defamatory in what they
    posted, the ISPs could not be a part of a lawsuit for
    defamation.
        Now, after hearing Mr. Jordan give a long line of
    censorship of conservative viewpoints, you know, I am concerned
    that the people who manage the net--and the four of you manage
    a big part of the net--you know, are ending up using this as a
    political screen.
        Conservatives are consumers too. And the way the net was
    put together, in the eyes of Congress, is that everybody should
    be able to speak their mind.
        Mr. Zuckerberg, Mr. Jordan's litany of censorship zeros in
    on Facebook. Exactly what are your standards in, quote,
    ``filtering out'' political speech that maybe some people out
    there don't agree with?
        Mr. Zuckerberg. Congressman, thank you for the opportunity
    to address this.
        Our goal is to offer a platform for all ideas. We want to
    give everyone in the world a voice to share their experiences
    and ideas. A lot of that is day-to-day things that happen in
    their lives; some of it is political. And, frankly, I think
    that we've distinguished ourselves as one of the companies that
    defends free expression the most.
        We do have community standards around things that you can
    and cannot say. I think you would likely agree with most of
    them. They ban categories of harm such as promoting terrorist
    propaganda, child exploitation, incitement of violence, some
    more legalistic things like intellectual property violations.
    And they also ban things like hate speech that could lead to
    dehumanizing people and----
        Mr. Sensenbrenner. Now, if I----
        Mr. Zuckerberg [continuing]. Encouraging violence down the
    road.
        Mr. Sensenbrenner [continuing]. May ask a specific question
    of you. It was reported that Donald Trump, Jr., got taken down
    for a period of time because he put something up on the
    efficacy of hydroxychloroquine.
        Now, I wouldn't take it myself, but there still is a debate
    on whether it is effective either in treating or preventing
    COVID-19, and I think that this is a legitimate matter of
    discussion. And it would be up to a patient and their doctor to
    determine whether hydroxychloroquine was the correct
    medication, you know, given the circumstances.
        Now, why did that happen?
        Mr. Zuckerberg. Congressman, well, first, to be clear, I
    think what you might be referring to happened on Twitter. So
    it's hard for me to speak to that. But I can talk to our
    policies about this. We do prohibit content that will lead to
    imminent risk of harm, and stating that there's a proven cure
    for COVID when there is, in fact, none might encourage someone
    to go take something that could have some adverse effect. So we
    do take that down.
        We do not prohibit discussion around trials of drugs or
    people saying that they think that things might work or
    personal experiences with experimental drugs. But if someone is
    going to say that something is proven when, in fact, it is not,
    that could lead people to make the decision----
        Mr. Sensenbrenner. Wouldn't that be up to somebody on the
    other side of the issue to say that this is not proven? And,
    you know, I know as a fact that, you know, for people with
    certain conditions, it's contraindicated, and they shouldn't
    take it on that. But wouldn't that be up to somebody else, you
    know, to say, ``Okay, what somebody posted on this really isn't
    true, and here's what the facts are,'' rather than having
    Twitter or Facebook take it down?
        Mr. Zuckerberg. Congressman, in general I agree with you,
    and we do not want to become the arbiters of truth. I think
    that that would be a bad position for us to be in and not what
    we should be doing.
        But on specific claims, if someone is going to go out and
    say that hydroxychloroquine is proven to cure COVID when, in
    fact, it has not been proven to cure COVID and that statement
    could lead people to take a drug that in some cases some of the
    data suggests that it might be harmful to people, we think that
    we should take that down. That could cause imminent risk of
    harm.
        Mr. Sensenbrenner. Thank you. I yield back.
        Mr. Cicilline. I thank the gentleman.
        I now recognize the distinguished chair of the full
    Judiciary Committee, Mr. Nadler, from New York for 5 minutes.
        Mr. Nadler. Thank you, Mr. Chairman.
        Mr. Zuckerberg, I want to thank you for providing this
    information during our investigation. However, the documents
    you provided tell a very disturbing story, and that story is
    that Facebook saw Instagram as a powerful threat that could
    syphon business away from Facebook. And so, rather than compete
    with it, Facebook bought it. This is exactly the type of
    anticompetitive acquisition that the antitrust laws were
    designed to prevent.
        Now, let me explain what I mean. Mr. Zuckerberg, you have
    written that Facebook can likely always just buy any
    competitive startups. In fact, on the day Facebook bought
    Instagram, which you describe as a threat, you wrote, quote,
    ``One thing about startups is you can often acquire them,''
    closed quote. Mr. Zuckerberg, you were referring to companies
    like Instagram in that quote, weren't you?
        Mr. Zuckerberg. Congressman, I don't have the exact
    document in front of me, but I have always been clear that we
    viewed Instagram both as a competitor and as a complement to
    our services. In the growing space around--after smartphones
    started getting big, and they competed with us in the space of
    mobile cameras and mobile photo sharing, but at the time,
    almost no one thought of them as a general social network. And
    people didn't think of them as competing with us in that space.
        And, you know, I think that the acquisition has been wildly
    successful. We were able to, by acquiring them, continue
    investing in it and growing it as a stand-alone brand that now
    reaches many more people than I think either Kevin, the
    cofounder, or I thought would be possible at the time while
    also incorporating some of the technology into making
    Facebook's photos--sharing products better. So, yes.
        Mr. Nadler. Okay. Now, in early 2012, when Facebook
    contemplated acquiring Instagram, a competitive startup, you
    told your CFO that the nascent Instagram could be very
    disruptive to us. And in the weeks leading up to the deal, you
    described Instagram as a threat, saying that, quote,
    ``Instagram can meaningfully hurt us without becoming a huge
    business,'' unquote.
        Now, Mr. Zuckerberg, what did you mean when you described
    Instagram as a threat, as disruptive, and when you said that
    Instagram could meaningfully hurt Facebook? Did you mean that
    consumers might switch from Facebook to Instagram?
        Mr. Zuckerberg. Congressman, thanks for the opportunity to
    address this. At the time, there was a small but growing field
    of----
        Mr. Nadler. Did you mean that consumers might switch from
    Facebook to Instagram? That was my question.
        Mr. Zuckerberg. Thanks. Congressman----
        Mr. Nadler. Yes or no? Did you mean that?
        Mr. Zuckerberg. In the space of mobile photos and camera
    apps, which was growing, they were a competitor. I've been
    clear about that.
        Mr. Nadler. Okay. Fine.
        Mr. Zuckerberg. And----
        Mr. Nadler. Fine. In February of that year, in February
    2012, you told Facebook's chief financial officer that you were
    interested in buying Instagram. He asked you whether the
    purpose of the deal was to neutralize a potential competitor or
    to integrate their products with ours in order to improve our
    services.
        You answered that it was a combination of both, saying:
    What we're really buying is time. Even if some new competitors
    springs up, those products won't get much traction since we'll
    already have their mechanics deployed at scale.
        Mr. Zuckerberg, what did you mean when you answered that
    the purpose of the deal was to neutralize a potential
    competitor?
        Mr. Zuckerberg. Congressman, well, those aren't my words,
    but, yes, I've been clear that Instagram was a competitor in
    the space of mobile photo sharing. There were a lot of others
    at the time that competed with apps like VSCO Cam and PicPlease
    and companies like Path.
        It was a subset of the overall space of connecting that we
    exist in. And by having them join us they certainly went from
    being a competitor in the space of being a mobile camera to an
    app that we could help grow and help get more people to be able
    to use and be on our team, and I think that that's been wildly
    successful.
        Mr. Nadler. Reclaiming my time. Well, Mr. Zuckerberg,
    mergers and acquisitions that buy off potential competitive
    threats violate the antitrust laws. In your own words, you
    purchased Instagram to neutralize a competitive threat. If this
    was an illegal merger at the time of the transaction, why
    shouldn't Instagram now be broken off into a separate company?
        Mr. Zuckerberg. Well, Congressman, I think the FTC had all
    of these documents and reviewed this and unanimously voted at
    the time not to challenge the acquisition. I mean, 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.
        A lot of the competitors that Instagram competed with in
    mobile sharing, I'm including companies like Path, which were
    hot at the time and had great founders and entrepreneurs
    running them, like Dave Morin and I worked closely with him, I
    mean, I don't even think Path exists today. It was not a
    guarantee that Instagram was going to succeed.
        The acquisition has done wildly well, largely not just
    because of the founders' talent but because we invested heavily
    in building up the infrastructure and promoting it and working
    on security and working on a lot of things around this, and I
    think that this has been an American success story.
        Mr. Nadler. Well, thank you. Mr. Zuckerberg, you're making
    my point.
        In closing, Mr. Chairman, I want to end where I began.
    Facebook, by Mr. Zuckerberg's own admission and by the
    documents we have from the time, saw Instagram as a threat that
    could potentially syphon business away from Facebook. And so,
    rather than compete with it, Facebook bought it. This is
    exactly the type of anticompetitive acquisition that the
    antitrust laws were designed to prevent. This should never have
    happened in the first place. It should never have been
    permitted to happen, and it cannot happen again.
        I yield back.
        Mr. Cicilline. Thank you, Mr. Chairman. I would remind the
    witness that the failures of the FTC in 2012, of course, do not
    alleviate the antitrust challenges that the chairman described.
        And, with that, I'm going to recognize the gentleman from
    Colorado and, again, thank him for co-hosting one of the most
    important hearings we had along with Mr. Neguse in Colorado
    that I think was very critical in this investigation. And
    you're recognized for 5 minutes, Mr. Buck.
        Mr. Buck. Thank you, Mr. Chairman. And I want to offer my
    appreciation to you for the bipartisan way that you have
    approached the subcommittee's investigation.
        I want to start by saying that capitalism is the greatest
    instrument for freedom this world has ever seen. Capitalism has
    given the United States the freedom and means to defeat the
    Soviet Union, beat back fascism, and put a man on the moon.
        This economic system has lifted millions out of poverty. It
    has made America the freest, most prosperous nation in the
    world. Our witnesses have taken ideas born out of a dorm room,
    a garage, a warehouse and built these dreams into four of the
    biggest power players in the digital global economy. You have
    all enjoyed the freedom to succeed.
        Now, let me be clear: I do not believe big is necessarily
    bad; in fact, big is often a force for good. However, I want to
    address one particularly disturbing issue. Mr. Pichai, in
    October 2018, Google dropped out of the running for a Pentagon
    contract to complete the joint enterprise defense
    infrastructure, or JEDI contract, which was valued at more than
    $10 billion. Google's stated reason for removing itself from
    the bidding process is that the U.S. military's project did not
    align with Google's corporate values and principles.
        This is the same U.S. military that fights for our freedoms
    and stands as a force for good across the globe. These are the
    same soldiers, sailors, and airmen that sacrificed their lives
    to ensure you have the freedom to build your company and set
    your corporate policies without fear of government
    interference, unlike in Communist China.
        I also find it very interesting that only months after
    making this decision to withdraw from the JEDI contract, Marine
    General Joseph Dunford, the Chairman of the U.S. Joint Chiefs
    of Staff, warned the Senate Armed Forces Committee that the
    Chinese military was directly benefiting from Google's work.
        It made me wonder, what values Google and Communist Red
    China had in common? I asked myself, self, is it that the
    Chinese Communist Party imprisons Uighur Muslims in
    concentration camps like is shown on the chart behind me? Could
    it be that China forces slaves to work in sweatshops? Maybe
    they align on the design to suppress free speech in Hong Kong.
        Did Google agree with CCP's decision to lie to the world
    about the COVID-19 pandemic? Then I thought about Google's
    dragonfly experiment. I wondered if perhaps you agreed with the
    Chinese Government's use of technology platforms to spy on its
    own people and enforce draconian security laws. Maybe it's that
    your company is aligned with the Chinese Communist Party's
    corporate espionage policies where the strategy is to steal
    whatever can't be produced domestically.
        These values that allow Google to work with the Chinese
    military but not the U.S. military help explain why Google
    wouldn't think twice about blatantly stealing a competitor's
    product, right down to the watermark, without any hint of
    attribution.
        Mr. Pichai, during our field hearing in my home state of
    Colorado, I heard a story that sounded so brazen and contrary
    to free market principles that I thought it must have been
    straight from the Chinese Communist Party's corporate espionage
    playbook.
        Google took advantage of a company that relied on your
    search engine to build its brand and compete. Google
    misappropriated lyrics from Genius Media Group's website and
    published those lyrics on Google's own platform. However,
    Genius caught Google in the act, quite literally red-handed.
        When Genius suspected this corporate theft was occurring,
    the company incorporated a digital watermark in its lyrics that
    spelled out ``red-handed'' in Morse code. Google's lyric boxes
    contained the watermark showing that your company stole what
    you couldn't or didn't want to produce yourself.
        After Google executives stated that they were investigating
    this problematic behavior, Genius created another experiment to
    determine the scope of the misappropriation. It turns out that,
    out of 271 songs where the watermark was applied, 43 percent
    showed clear evidence of matching. Your company, which
    advertises itself as a doorway to freedom, took advantage of
    this small company, all but extinguishing Genius' freedom to
    compete.
        Google is supposed to connect people to information. Your
    corporate values once stood for freedom, a platform that let
    capitalism flourish and helped bring countless people across
    the globe out of poverty.
        My question to you, Mr. Pichai, do you think that Google
    could get away with following China's corporate espionage
    playbook if you didn't have a monopolistic advantage in the
    market?
        Mr. Pichai. Congressman, I want to be able to address the
    important concerns you raised. First of all, we are proud to
    support the U.S. Government. We recently signed a big project
    with the Department of Defense where we are bringing our world-
    class zero trust-based cybersecurity approach to help protect
    our networks from cybersecurity attacks.
        We have projects underway with the Navy, with the
    Department of Veterans Affairs. Happy to follow up and explain
    more. We have a very limited presence in China. We don't offer
    any of our services, Search, Maps, Gmail, YouTube, et cetera,
    in China.
        And with respect to music, we license content fair, in
    fact, we license content from other companies, and so this is a
    dispute between Genius and the other companies in terms of
    where the source of the content is. But, again, happy to engage
    and explain what we do here further.
        Mr. Buck. Thank you. I yield back, Mr. Chairman.
        Mr. Cicilline. I thank the gentleman.
        I now recognize the gentleman from Georgia, Mr. Johnson,
    for 5 minutes.
        Mr. Johnson. Thank you, Mr. Chairman.
        Mr. Cook, with over 100 million iPhone users in the United
    States alone, and with Apple's ownership of the App Store
    giving Apple the ability to control which apps are allowed to
    be marketed to Apple users, you wield immense power over small
    businesses to grow and prosper.
        Apple is the sole decisionmaker as to whether an app is
    made available to app users through Apple's App Store. Isn't
    that correct?
        Mr. Cook. Sir, the App Store--thank you for the questions.
    The App Store is a feature of the iPhone much like the camera
    is and the chip is, and so what the----
        Mr. Johnson. Yeah. My point is--and I'm sorry to interrupt,
    but I want to get to the point. The point is that Apple is the
    sole decisionmaker as to whether an app is made available to
    app users through the Apple store. Isn't that correct?
        Mr. Cook. If it's a native app, yes, sir. If it's a web
    app, no.
        Mr. Johnson. All right. Okay. Thank you. Thank you. And
    throughout our investigation, we've heard concerns that rules
    governing the App Store review process are not available to the
    app developers. The rules are made up as you go. They are
    arbitrarily interpreted and enforced and are subject to change
    whenever Apple sees fit to change them. And developers have no
    choice but to go along with the changes or, more, they must
    leave the App Store. That is an enormous amount of power.
        Also, the rules get changed to benefit Apple at the expense
    of app developers, and the App Store is said to also
    discriminate between app developers with similar apps on the
    Apple platform and also against small app developers versus
    large app developers. So, Mr. Cook, does Apple not treat all
    app developers equally?
        Mr. Cook. Sir, we treat every developer the same. We have
    open and transparent rules. It's a rigorous process. Because we
    care so deeply about privacy and security and quality, we do
    look at every app before it goes on. But those apps--those
    rules apply evenly to everyone. And as you can tell by going
    from----
        Mr. Johnson. Some developers are favored over others
    though. Isn't that correct?
        Mr. Cook. That is not correct. And as you can tell from
    going from just 500----
        Mr. Johnson. Sir, I'll give you example. Baidu has two App
    Store employees assigned to help it navigate the App Store
    bureaucracy. Is that true?
        Mr. Cook. I don't know about that, sir.
        Mr. Johnson. Well, you don't have other app developers who
    have that same access to Apple personnel, do you?
        Mr. Cook. We do a lot of things with developers including
    looking at their beta test apps regardless of whether they're
    small or large.
        Mr. Johnson. Okay. Well, let me ask you this question:
    Apple has negotiated exceptions to its typical 30 percent
    commission for some apps like Amazon Prime. Is that--is a
    reduced commission such as the one that Amazon Prime gets
    available to other app developers?
        Mr. Cook. It's available to anyone meeting the conditions,
    yes.
        Mr. Johnson. Okay. Well, let me ask you this: Apple
    requires all app developers to use Apple's payment processing
    system if those developers want to sell their goods or services
    to Apple users through Apple's App Store. Isn't that correct?
        Mr. Cook. That is correct because it's----
        Mr. Johnson. And by processing payments for apps that you
    allow into the App Store, you collect their customer data and
    you use that data to inform Apple as to whether Apple should--
    whether or not it would be profitable for Apple to launch a
    competing app. Isn't that correct?
        Mr. Cook. Sir, 84 percent of the apps are charged nothing.
    The remaining 16 percent either pay 15 or 30 depending upon the
    specifics. If it's in the second year of a subscription, as an
    example, it only pays 15 percent. If you look back at history--
    --
        Mr. Johnson. Well, what's to stop Apple from increasing its
    commission to 50 percent?
        Mr. Cook. Sir, we have never increased commissions in the
    store since the first day it operated in 2008.
        Mr. Johnson. There's nothing to stop you from doing so, is
    there?
        Mr. Cook. No, sir, I disagree strongly with that. There's a
    competition for developers just like there's a competition for
    customers, and so the competition for developers, they write
    their apps for Android or Windows or Xbox or PlayStation.
        So we have fierce competition at the developer side and the
    customer side, which is essentially--it's so competitive I
    would describe it as a street fight for market share in the
    smart phone business.
        Mr. Johnson. Has Apple ever retaliated against or
    disadvantaged a developer who went public about their
    frustrations with the App Store?
        Mr. Cook. Sir, we don't--we do not retaliate or bully
    people. It's strongly against our company culture.
        Mr. Cicilline. The time of the gentleman has expired.
        The chair now recognizes the gentleman from Florida, Mr.
    Gaetz.
        Mr. Gaetz. Mr. Zuckerberg in his written testimony made the
    claim that Facebook is an American company with American
    values. Do any of the rest of you take a different view, that
    is to say that your companies don't embrace American values?
    It's great to see that none of you do.
        Mr. Pichai, I'm worried about Google's market power, how it
    concentrates that power, and then ultimately how it wields it.
    Project Maven was a collaboration between Google and the
    Department of Defense that Google pulled out of, citing ethical
    concerns, and you made the decision to pull out of that joint
    venture following receipt of a letter from thousands of your
    employees saying that Google should not be in the business of
    war.
        My question, Mr. Pichai is, did you weigh the input from
    your employees when making the decision to abandon that project
    with the United States military?
        Mr. Pichai. Congressman, thanks for your concern. As I said
    earlier, we are deeply committed to supporting the military and
    the U.S. Government. We have undertaken several projects since
    then. We do take our employees' input into account, but it's
    one input. We make decisions based on a variety of factors. As
    a company, we were new in the cloud space at that time. Since
    then we have----
        Mr. Gaetz. Thank you. That is a sufficient answer, that you
    did take their feedback into account. And, in fact, some of
    your Googlers have recently sent you a letter where they've
    asked you to exit other partnerships as a consequence of
    ethical concerns.
        They've asked you to stop doing business with American law
    enforcement, saying that police broadly uphold white supremacy
    and that Google should not be engaged in any services to
    police. And as you well know, you provide some of the most
    basic services to police, like email, but you also provide
    services that help keep our cops safe when they're doing their
    job.
        And so my question is here, in front of Congress and the
    American people, will you take the pledge that Google will not
    adopt the bigoted antipolice policy that is requested in the
    most recent letter?
        Mr. Pichai. Congressman, we have a long track record of
    working with law enforcement when it is supported by due
    process and the law. We push back against over broad requests.
    We are transparent about the requests we get. But we have a
    long history of following the law and cooperating with law
    enforcement.
        Mr. Gaetz. I understand the history. I'm asking about the
    future. To the law enforcement that are watching today, can
    they rest assured that, under your leadership, Google will not
    adopt these bigoted antipolice policies?
        Mr. Pichai. Congressman, we have committed to continuing to
    work with law enforcement in a way that's consistent with law
    and due processes in the U.S.
        Mr. Gaetz. Well, I greatly appreciate that, and I know that
    will be very comforting to the police who utilize your
    services.
        You mentioned earlier in the discussion about China that
    your engagement in China was very limited. But yet Google has
    an AI China center. The Chinese Academy of Sciences has
    published a paper that enhanced the targeting capabilities of
    China's J-20 fighter aircraft.
        You collaborate with Chinese universities that take
    millions upon millions of dollars from the Chinese military. As
    a matter of fact, one of your Googlers, Fei-Fei Li, while under
    your employ, was cited in Chinese state media saying, ``China
    is like a sleeping giant; when she wakes, she will tremble the
    world.''
        The former Secretary of Defense, Mr. Shanahan, said that
    the lines have been blurred in China between commercial and
    military application. And as Mr. Buck cited, General Dunford
    says that your company is directly aiding the Chinese military.
    And Peter Thiel, who actually serves on Mr. Zuckerberg's board
    at Facebook, said that Google's activities with China are
    treasonous. He accused you of treason.
        So why would an American company with American values so
    directly aid the Chinese military but have ethical concerns
    about working alongside the U.S. military on Project Maven? And
    I understand your point about cybersecurity and those things,
    but Project Maven was a specific way to ensure that our troops
    are safe on the battlefield. And if you have no problem making
    the J-20 Chinese fighter more effective in its targeting, why
    wouldn't you want to make America as effective?
        Mr. Pichai. Congressman, with respect, we are not working
    with the Chinese military. It's absolutely false. I had a
    chance to meet with General Dunford personally. We have
    clarified what we do in China compared to our peers. It's very,
    very limited in nature. Our AI work in China is limited to a
    handful of people working on open-source projects. I'm happy to
    share and engage with your office to explain our work in China
    further.
        Mr. Gaetz. Gosh, I mean, when the Chairman of the Joint
    Chiefs of Staff says that an American company is directly
    aiding China, when you have an AI center, when you're working
    with universities, and when your employees are talking about
    China trembling the world, it seems to really call into
    question your commitment to our country and our values.
        I see my time is expired. I hope we have an additional
    round, Mr. Chairman.
        Mr. Cicilline. I thank the gentleman.
        I now recognize the gentleman from Maryland, Mr. Raskin,
    for 5 minutes.
        Mr. Raskin. Thank you, Mr. Chairman.
        Mr. Zuckerberg, as you know, the proliferation of fake
    Facebook accounts was a key tool in the strategy of Russian
    interference in the American election in 2016. American law
    enforcement, the Senate, the House, have all found that
    Vladimir Putin engaged in a sweeping and systematic campaign to
    undermine American democracy in 2016 and to work for a victory
    for Donald Trump.
        In his remarkable book ``Mind'' blank--and I'm being polite
    here--``Cambridge Analytica and the Plot to Break America,''
    whistleblower Christopher Wylie, who worked for several years
    at Cambridge Analytica recounts how the Russian assault on
    America in Cambridge Analytica's research depended on Facebook,
    quote: ``When Cambridge Analytica launched in the summer of
    2014, Steve Bannon's goal was to change politics by changing
    culture. Facebook's data, algorithms, and narratives were his
    key weapons. The Cambridge Analytica team used these tools to
    identify people who exhibited the three traits in what they
    called the dark triad: narcissism, Machiavellianism, and
    psychopathy.
        They then proceeded to bombard and activate these people, a
    small percentage of the American public, but still millions of
    people with increasingly dark and manipulative messages from
    fake Facebook pages, both to get them to vote for Trump but,
    more importantly, to activate them as racist and white
    nationalists.''
        And they go on to describe--he goes on to describe the
    remarkable success of this campaign, both electorally but also
    politically in the country in terms of sowing the terrible
    racial and ethnic divisions that you see in America today. So
    they waged a mass campaign of psychological warfare to polarize
    America around race and religion and to activate racists and
    anti-Semites. And it worked splendidly for them, but it didn't
    work so well for America.
        So, Mr. Zuckerberg, which parts of this narrative have you
    addressed or are you planning to address, or do you just see
    that essentially as the cost of being a forum in a marketplace
    for ideas? Is there nothing that can be done about the use of
    Facebook to engender social division in America?
        Mr. Zuckerberg. Congressman, thank you.
        Since 2016, there have been a lot of steps that we've taken
    to protect the integrity of elections. We've hired, I think
    it's more than 30,000 people to work on safety and security.
    We've built up AI systems to be able to find harmful content,
    including being able to find more than 50 different networks of
    coordinated and authentic behavior, basically nation-states
    trying to interfere in elections around the globe, not just----
        Mr. Raskin. Let me just pause you there for a second
    because I'm interested in that. The Stop Hate for Profit
    campaign is a coalition that includes the Color of Change, the
    Anti-Defamation League and other civil rights groups, and
    they're targeting Facebook right now for a boycott because of
    the rapid spread of hate messages online, the presence of
    boogaloo and other right-wing extremist groups trying to
    infiltrate and disrupt Black Lives Matter protests and the fact
    that alt-right racist and anti-Semitic content flourishes on
    Facebook. So they're asking you to remove these pages and
    essentially to join the movement for civil rights by not
    allowing that kind of content. Their boycotters include a lot
    of big companies, including Patagonia, Levi's, McDonalds, VW,
    Heineken, and so on. But you seem not to be that moved by their
    campaign, and I just wonder what you think about what they're
    asking you to do?
        Mr. Zuckerberg. Congressman, thanks. We're very focused on
    fighting against election interference, and we're also very
    focused on fighting against hate speech. And our commitment to
    those issues in fighting them go back years before this recent
    movement.
        Since 2016, the defenses that the company has built up to
    help secure elections, not just in the U.S. but around the
    world, I think are some of the most advanced that any company
    or government has in the world now. We routinely now
    collaborate with law enforcement and intelligence agencies and
    are able to sometimes identify threats coming from other
    countries before governments are even able to.
        In terms of fighting hate, we've built really sophisticated
    systems. Our goal is to identify it before anyone even sees it
    on the platform. And we've built AI systems, and as I
    mentioned, have tens of thousands of people working on safety
    and security with the goal of getting this stuff down so that
    way--before people even see it.
        And, right now, we're able to proactively identify 89
    percent of the hate speech that we take down before I think
    it's even reported by other people. So I want to do better than
    89 percent. I'd like to get that to 99 percent. But we have a
    massive investment here. We invest in billions of dollars----
        Mr. Raskin. Because my time is almost out, can you just
    address the proliferation of fake accounts? I understand
    annually you get 6.5 billion fake accounts produced there, but
    in some sense, you have a profit motive that's linked to that
    because that's what's reported to your investors, the number of
    accounts. Are you working zealously to try to ferret out these
    fake accounts that are used to spread hate and disinformation?
        Mr. Cicilline. The gentleman's time has expired, but the
    witness may answer the question.
        Mr. Zuckerberg. Congressman, absolutely. We work hard on
    this. We take down billions of fake accounts a year. A lot of
    that is just people trying to set up accounts to scam people
    for commercial reasons. A very small percent of that are
    nation-states trying to interfere in elections, but we are very
    focused on trying to find those.
        Having fake and harmful content on our platform does not
    help our business. It hurts our business. People do not want to
    see that stuff, and they use our services less when they do. So
    we are aligned with people in order to take that down, and we
    invest billions of dollars a year in doing so.
        Mr. Raskin. I yield back. Thank you.
        Mr. Cicilline. The committee will stand in recess for 10
    minutes while we fix a technical feed with one of our
    witnesses.
        [Recess.]
        Mr. Cicilline. The committee will come back to order.
        I now recognize the gentleman from North Dakota, Mr.
    Armstrong, for 5 minutes.
        Mr. Armstrong. Google has received criticism about bias
    against conservatives and content moderation. There were
    threats of demonetizing the Federalist and numerous other
    complaints of viewpoint suppression. As a result, a significant
    portion of the American public has lost trust in your company.
        A lack of public confidence in a product usually means
    there is economic harm to the company, but that just isn't the
    case with Google. So I think it's a legitimate question as to
    whether Google's market power insulates it from loss of revenue
    normally associated with offending half the people who use your
    product. I also think it's a legitimate question to ask if
    other attempts to regulate your industries have worked.
        So, Mr. Pichai, Google has restricted advertising analytics
    or the portability of user data related to advertising due to
    compliance with the General Data Protection Regulation.
    Specifically, in 2018, Google restricted the ability to export
    the Double ID, a cookie-based identifier that compiles
    individual user data and creates profiles through Google data
    transfer. Is that correct?
        Mr. Pichai. Congressman, I'm not familiar with the
    specifics of the particular issue, but happy to follow up more
    once I understand it better.
        Mr. Armstrong. So you're not particularly familiar with how
    you're complying with GDPR?
        Mr. Pichai. Congressman, we have long been working to
    comply with GDPR. We think it's an important regulation, and,
    you know, we have--we are in full compliance, to the extent of
    my knowledge. I just meant not aware of the specific issue with
    the identifier you mentioned there, but happy to understand it
    better and follow up.
        Mr. Armstrong. All right. So, in order to comply with GDPR,
    Google must retain control over more user data and restrict the
    ability to combine this user data with other platforms to
    conduct cross-platform analysis. It seems as if that ultimately
    limits the ability of advertisers to make comparisons between
    Google-based campaigns and non-Google-based campaigns. Would
    you agree with that?
        Mr. Pichai. In all these ecosystems, we are balancing
    between users, advertisers, and publishers. We deeply care
    about the privacy and security of our users, and so, when we
    serve these ecosystems, we have to take that into account. We
    have to comply with important laws and regulations in every
    country we operate in. And so that's the delicate balance we
    are constantly striking, but we are focused on our users and
    trying to do the best we can.
        Mr. Armstrong. And I just want to be perfectly clear, I
    personally believe that just the market power consolidation is
    significant, but I also want to be clear that when we're moving
    forward to regulate this, that we aren't actually squeezing out
    competition in our quest to do something, because I've said
    that before in this hearing and I'll say it again: Usually in
    our quest to regulate big companies, we end up hurting small
    companies more.
        And I'm a strong privacy advocate, but the consequences of
    GDPR have been to further entrench large established actors
    like Google, leading to regulatory capture that exasperates
    competition concerns. And Google's digital ad market share has
    increased since the implementation of GDPR. Do you know that to
    be correct?
        Mr. Pichai. Congressman, to just give you a sense of the
    robust competition we see, ad prices have fallen down by 40
    percent in the past 10 years. And, in fact, in the U.S.,
    advertising as a share of GDP has come down from 1.4 percent in
    1992, less than 1 percent today.
        So we see robust competition in the marketplace. And as I
    said earlier, you know, we have to comply with regulation, we
    have to interpret it strictly, and we have to balance the
    ecosystem. But our utmost care is ensuring privacy and security
    of our users as we serve these markets.
        Mr. Armstrong. And I'm glad you mentioned privacy, because
    I would be remiss if I didn't deal with this issue, because it
    is so relevant. And I think, generally speaking, outside of the
    political issues and the biases with all of this, and this is
    for essentially all four of our witnesses, I think one of our
    bigger concerns when we talk about data and value--and that
    data having value, and privacy, which is where people really
    get concerned with how the digital age is moving forward.
        And there are news reports that law enforcement has made
    increasing use of what are called geo-fence warrants, and these
    geo-fence warrants allow authorities to compel technology
    companies to disclose location records for any device in a
    certain area at a particular time. Court filings suggest that
    Google received about 1,500-percent increase in geo-fence
    requests from 2017 to 2018 and a 500-percent increase from 2018
    to 2019.
        Unless--and so the Fourth Amendment requires probable cause
    and specificity, and that's not what these are. These warrants
    are essentially for any person in an area at a particular time,
    and geo-fence warrants require neither. So, unless a company by
    particularized information and identifying a subject, geo-
    warrants are essentially general warrants.
        I believe that location information should be considered as
    a contents of the Electronic Communications Act under the
    historic Communications Act. Do you agree?
        Mr. Pichai. You know, happy to understand more. We deeply
    care about--this is why we issue transparency reports because
    we think it's an important area for Congress to have oversight.
    And we recently made a change by which we automatically delete
    location activity after a certain period of time by default for
    our users. So we are happy to engage with your office,
    Congressman, and engage more.
        Mr. Armstrong. And I'm using you because these are going on
    in Virginia and New York, I think, right now, but, I mean, this
    equates for everything. I think people would be terrified to
    know that law enforcement could grab general warrants and get
    everybody's information anyway. So it requires Congress to act,
    and it requires everybody that is a witness in this hearing to
    be willing to work too because it is the single most important
    issue I think we are going to----
        Mr. Cicilline. The time of the gentleman is expired, but I
    believe he has a unanimous consent request.
        Mr. Armstrong. I do. I have a unanimous consent request for
    Wall Street Journal article, ``Police Requests for Google
    Users' Location Histories Face New Scrutiny.''
        Mr. Cicilline. Without objection.

      MR. ARMSTRONG FOR THE OFFICIAL RECORD

    =======================================================================

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Armstrong. And then I have two letters, the letters are
    from Congressman Walden and Congresswoman McMorris Rodgers. The
    first letter is to Mr. Cook of Apple. The second letter is to
    Mr. Pichai of Google.
        Mr. Cicilline. Without objection, both may be entered into
    the record.
        [The information follows:]

      MR. ARMSTRONG FOR THE OFFICIAL RECORD

    =======================================================================

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Cicilline. I now recognize the gentlelady from
    Washington, Ms. Jayapal.
        Ms. Jayapal. Thank you, Mr. Chairman.
        And thank you all for being with us.
        Mr. Bezos, in July 2019, your employee Nate Sutton told me
    under oath in this committee that Amazon does not, quote, ``use
    any specific seller data when creating its own private brand
    product.'' So let me ask you, Mr. Bezos, does Amazon ever
    access and use third-party seller data when making business
    decisions? And just a yes or no will suffice, sir.
        Mr. Bezos. Thank you for the question. I know it's an
    important topic, and I also want to thank you for representing
    us. I can't answer that question yes or no. What I can tell you
    is we have a policy against using seller-specific data to aid
    our private label business, but I can't guarantee you that that
    policy has never been violated.
        Ms. Jayapal. Mr. Bezos, you're probably aware that an April
    2020 report in The Wall Street Journal revealed that your
    company does access data on third-party sellers both by
    reviewing data on popular individual sellers and products and
    by creating tiny product categories that allowed your company
    to categorically access detailed seller information in a
    supposedly aggregate category. Do you deny that report?
        Mr. Bezos. I'm familiar with The Wall Street Journal
    article that you're talking about, and we continue to look into
    that very carefully. I'm not yet satisfied that we've gotten to
    the bottom of it, and we're going to keep looking at it. It's
    not as easy to do as you would think because some of the
    sources in the article are anonymous, but we continue to look
    into it.
        Ms. Jayapal. I'll take that as you're not denying that;
    you're looking into it. I will tell you, a former Amazon
    employee in third-party sales and recruitment told this
    committee, quote, ``There's a rule, but there's nobody
    enforcing or spot checking. They just say, don't help yourself
    to the data. It's a candy shop. Everyone can have access to
    anything they want.''
        Do category managers have access to nonpublic data about
    third-party products and businesses?
        Mr. Bezos. Here's what I can tell you. We do have certain
    safeguards in place. We train people on the policy. We expect
    people to follow that policy the same way we would any other.
    It's a voluntary policy. As far as I'm aware, no other retailer
    lists their----
        Ms. Jayapal. So there's no----
        Mr. Bezos [continuing]. User data at all. And then I think
    we have----
        Ms. Jayapal. So there's no actual enforcement of that
    policy?
        Mr. Bezos. Oh, no, I was going to say----
        Ms. Jayapal. So it's voluntary, and there's no actual
    enforcement, so maybe that answers my----
        Mr. Bezos. Sorry. No, I think I may have misspoke. I'm
    trying to say that Amazon's--the fact that we have such a
    policy is voluntary. I think no other retailer even has such a
    policy.
        Ms. Jayapal. Well, that's----
        Mr. Bezos. 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. I recognize
    this----
        Ms. Jayapal. Well, there's numerous reports and the
    committee has conducted interviews with former employees who
    confirm that there are employees who do have access to that
    data and are using it. And so my next question was going to be,
    if you thought you were actually enforcing these rules, do you
    think that it's working?
        And, again, I would just say that there's credible
    reporting that's documented breaches of these rules that you
    have put into place. And the committee has interviewed
    employees that typically--say that these breaches typically
    occur.
        Let's talk about aggregate data for a minute. Your rules do
    allow for you to access combined data on a product when there
    are only one or two sellers in the marketplace, correct?
        Mr. Bezos. Yes, aggregate data is allowed under our
    policies; that is correct.
        Ms. Jayapal. Okay. And interviews with former employees
    have made it clear that that aggregate data essentially allows
    access to highly detailed data in those product categories.
    There's the example of Fortem, a small business that had no
    direct competitors except for Amazon Warehouse Deals, a resale
    clearance account that only sold 17 units.
        An Amazon employee accessed a detailed sales report on
    Fortem's product with information on how much the company spent
    on advertising per unit and the cost to ship each trunk. And
    then Amazon launched its own competing products in October
    2019.
        That's a major loophole. And I go back to the general
    counsel's statement to this committee very clearly that there
    was no access to this data, that Amazon does not use that data
    for its own benefit. And I'm now hearing you say, well, you're
    not so sure that that's going on.
        And the issue that we're concerned with here is very
    simple. You have access to data that far exceeds the sellers on
    your platforms with whom you compete. You can track consumer
    habits, interests, even what consumers clicked on but then
    didn't buy.
        You have access to the entirety of sellers' pricing and
    inventory information, past, present, and future, and you
    dictate the participation of third-party sellers on your
    platform. So you can set the rules of the game for your
    competitors but not actually follow those same rules for
    yourself. Do you think that's fair to the mom-and-pop third-
    party businesses who are trying to sell on your platform?
        Mr. Bezos. I appreciate that question, and I like it a lot
    because I really wanted a chance to address that. I'm very
    proud of what we have done for third-party sellers on this
    platform. We started our third-party platform 20 years ago, and
    we had zero sellers on it.
        Ms. Jayapal. The question I'm asking----
        Mr. Bezos [continuing]. eBay I'm sorry. Go ahead.
        Ms. Jayapal. I'm so sorry. My time is expiring. And the
    question I wanted to ask you is that you have access to data
    that your competitors do not have. So you might allow third-
    party sellers onto your platform, but if you're continuously
    monitoring the data to make sure that they're never going to
    get big enough that they can compete with you, that is actually
    the concern that the committee has.
        And, you know, I think your company started in my district.
    I want to thank you for that. I want to thank you for the work
    that you've done and say that the whole goal of this
    committee's work is to make sure that there are more Amazons,
    that there are more Apples, that there are more companies that
    get to innovate and small businesses that get to thrive, and
    that is what we're trying to get at. That is why we need to
    regulate these marketplaces so that no company has a platform
    so dominant that it is essentially a monopoly.
        Thank you, Mr. Chairman. I yield back.
        Mr. Cicilline. The time of the gentlelady has expired.
        I just want to remind the witnesses, we appreciate the
    gratitude for the questions and your description of them as
    good questions, but we'll just assume that they're good
    questions and you're happy to answer them so we can make sure
    we're making good use of your time.
        And, with that, I recognize the gentleman from Florida, Mr.
    Steube.
        Mr. Steube. Thank you, Mr. Chairman.
        Mr. Pichai, I would like to start with you, and I'm just
    going to illustrate my question with a factual incident that
    actually occurred to me. Several months ago my wife called and
    said, ``Hey, there's a good article on The Gateway Pundit that
    you should read.''
        So out of curiosity--I was up here in Washington. Out of
    curiosity, I Googled Gateway Pundit. And it didn't show up on
    the first page, and it didn't show up on the second page. There
    was a bunch of different blogging sites about how there were
    disagreements with what was on The Gateway Pundit.
        But I actually had to type in GatewayPundit.com to get to
    it. Interestingly, Google didn't allow me to get to the actual
    website. That was a couple months ago. Before this hearing was
    set to be heard, before this hearing was noticed, before you
    knew that you would be appearing before us today and that this
    is an issue that obviously conservatives and Republicans have
    had.
        Last week, after this was noticed, this hearing was
    noticed, I did the exact same thing here in the Capitol. And
    wouldn't you know it, I Googled Gateway Pundit, and that was
    the very first website that came up.
        Now, this isn't from a constituent in my district. This
    isn't from somebody telling me, this isn't a news report. I
    actually physically did this on my laptop here in the Capitol
    several months ago and then today. So, clearly, something had
    happened between not being notified that you were going to be
    appearing before our committee and then, last week, knowing
    that you would be appearing before our committee and suddenly
    conservative websites are now at the top of the bar when you
    search for them.
        So was there anything done at Google between a couple of
    months ago and last week or the week before you appearing today
    that has changed your approach to silencing conservative
    websites?
        Mr. Pichai. Congressman, we approach our work with a deep
    sense of responsibility without--in a nonpartisan way. We want
    to serve all our users, no matter where they are. In fact, it's
    in our long-term business incentive to do so. And I believe on
    our platforms, including YouTube, there are more conservative
    voices than ever before, and we believe in freedom of
    expression.
        On the specific issue, you know, I will have to look into
    it. You know, I obviously wasn't aware of it. We do--it could
    be a number of reasons. We constantly get reports from both
    sides of the aisle----
        Mr. Steube. So, if you're going to look into it for me, is
    there--can I expect a response from you say in the next 2 weeks
    as to why that occurred?
        Mr. Pichai. Congressman, we'll do our best to follow up,
    and I'll engage with your office to respond on that
        Mr. Steube. Okay. We'll follow up on that. I've got a
    similar question. So I've been in elected politics for almost
    10 years, and when I was in the Florida Senate and the State
    Senate, I never had a problem with my campaign emails being
    marked as spam or going to junk folders or anything along those
    lines. And we had 30,000, 40,000, 50,000 people on our email
    list.
        And suddenly I get elected to Congress and I'm now up here
    in Washington, D.C., and my parents who have a Gmail account
    aren't getting my campaign emails. My supporters, just last
    week, one of my supporters called me and said, ``Hey, I just
    want you to know this, that my Gmail account suddenly is taking
    your campaign emails that I've received for almost 10 years and
    suddenly they're going to spam and junk folders.'' This appears
    to only be happening to conservative Republicans.
        I don't see anything in the news or anything in the press
    or other Members on the other side of the aisle talking about
    their campaign emails getting thrown into junk folders in
    Gmail. So my question is, is why is this only happening to
    Republicans? And it's a fact it's happening, because I can have
    my supporters testify that they've received my emails for 8
    years, 8, 9 years, and suddenly this last year all of their
    Gmail--my campaign emails in their Gmail are going to their
    spam folder. So, if you could give me some clarification on
    that, I would appreciate it.
        Mr. Pichai. In Gmail, we are focused on what users want,
    and users have indicated they want us to organize their
    personal emails, emails they receive from friends and family,
    separately. And so all we have done is we have a tabbed
    organization, and, you know, the primary tab has emails from
    friends and family and the secondary tab has other
    notifications and so on. These things are applied----
        Mr. Steube. Okay. Well, it was my father who is not
    receiving now my campaign emails, so clearly that familial
    thing that you're talking about didn't apply to my emails.
        Mr. Pichai. Our systems probably are not able to understand
    that your campaign--I mean that it's your father. Obviously, we
    don't have that context there. We just apply it neutrally
    across, you know, all organizations and, you know----
        Mr. Steube. Well, what assurances can you give me that
    there's--my time is short. One last question. What assurances
    can you give me that any bias amongst your employees isn't
    influencing your spam folder algorithms?
        Mr. Pichai. Congressman, there's nothing in the algorithm
    which has anything to do with political ideology, and, you
    know, we do get complaints across the aisle. For example, the
    World Socialist Review complained in January of this year that,
    you know, their site wasn't found in Google Search results.
        And so we get complaints. We look into it, but, you know,
    we approach our work in a nonpartisan way, and it's in our
    long-term incentive to serve users across the country. And
    today that's why we invest in our raters in 49 States across
    the U.S. so that we can capture all viewpoints.
        Mr. Cicilline. Thank you. The gentleman's time is expired.
        I now recognize the gentlelady from Florida, Mrs. Demings,
    for 5 minutes.
        Mrs. Demings. Thank you so much, Mr. Chairman.
        And let me just say just for the record: I'm a Democrat
    from Florida, and I've had--heard complaints about my emails
    going into spam as well. And I'm sure other Democratic Members
    have had the same experiences, unfortunately.
        Mr. Pichai, in 2007 Google purchased DoubleClick, the
    leading provider of certain advertising tools. Is that correct?
        Mr. Pichai. That is correct, Congresswoman.
        Mrs. Demings. When Google proposed the merger alarm bells
    were raised about the access to data Google would have,
    specifically the ability to connect users' personal identity
    with their browsing activity. Google, however, committed to
    Congress and to the antitrust enforcers that the deal would not
    reduce user privacy.
        Google's chief legal adviser testified before the Senate
    Antitrust Subcommittee that Google wouldn't be able to merge
    this data even if it wanted to, given contractual restrictions.
    But in June of 2016, Google went ahead and merged its data
    anyway, effectively destroying anonymity on the internet.
        Mr. Pichai, you became CEO of Google in 2015. Is that
    correct?
        Mr. Pichai. That's right.
        Mrs. Demings. Okay. And this change was made in 2016. Is
    that correct?
        Mr. Pichai. That's my understanding.
        Mrs. Demings. Okay. Thank you for that. Did you sign off on
    this decision to combine the sets of data with--that Google had
    told Congress would be kept separate?
        Mr. Pichai. Congresswoman, any changes we made, you know,
    we complied----
        Mrs. Demings. Mr. Pichai, with all due respect, please, did
    you sign off on the decision or not?
        Mr. Pichai. I review at a high level all important
    decisions we make. We deeply care about privacy and security of
    our users, and we----
        NEW LINE: [continuing]. And we provide user consent for----
        Mrs. Demings. So you signed off on the decision?
        Okay. You signed off on the decision.
        Practically, this decision meant that your company would
    not combine all of--would now combine, for example, all of my
    data on Google, my search history, my location from Google
    Maps, information from my emails, from Gmail, as well as my
    personal identity with the record of almost all of the websites
    I visited. That is absolutely staggering.
        According to an email from a DoubleClick executive, that
    was exactly the type of reduction in user privacy that Google's
    founders had previously worried would lead to a backlash. And I
    quote, they were unwavering on the policy due to philosophical
    reasons, which is Larry and Sergey's fundamentally not wanting
    users associated with a cross-site cookie. They were also
    worried about a privacy storm as well as damage to Google's
    brand. So, in 2007, Google's founders feared making this change
    because they knew it would upset their users, but in 2016,
    Google didn't seem to care.
        Mr. Pichai, isn't it true that what changed between 2007
    and 2016 is that Google gained enormous market power. So. While
    Google had to care about user privacy in 2007, it no longer had
    to in 2016? Would you agree that what changed was Google gained
    enormous market power?
        Mr. Pichai. Congresswoman, this is an important issue, if I
    could explain. You know, we today make it very easy for users
    to be in control of their data. We have simplified their
    settings. They can turn ad personalization on or off. We have
    combined most of activity settings into three groupings. We
    remind users to go do a privacy checkup. 1 billion users have
    done so, and 20 million people do it----
        Mrs. Demings. Okay, Mr. Pichai, thank you so much for that.
    I am concerned that Google's bait and switch with DoubleClick
    is part of a broader pattern where Google buys up companies for
    the purposes of surveilling Americans, and because of Google's
    dominance users have no choice but to surrender.
        In 2019, Google made over 80 percent of its total revenue
    through selling of ad placement. Is that correct, Mr. Pichai?
        Mr. Pichai. You know, a majority of the business----
        Mrs. Demings. About 80 percent? Yeah, okay.
        And because Google sells behavioral ads, ads targeted to
    each of us as individuals, the more user data that Google
    collects, the more money Google can make. More user data means
    more money. Is that correct?
        Mr. Pichai. In general, that's not true. For example
    there's common sites, when you type----
        Mrs. Demings. More user data, not the more money Google
    collects?
        Mr. Pichai. Most of the data we need is built into the----
        I'm sorry, please. So you're saying that the more user data
    does not mean the more money that Google can collect?
        Mr. Pichai. Congresswoman, most of the data today we
    collect is to help users and provide personal experiences back.
    Ad data is not relevant at that time at all----
        Mrs. Demings. Okay. Thank you so much, Mr. Pichai.
        Mr. Chairman, I yield back.
        Mr. Cicilline. I thank the gentlelady.
        The chair now recognizes the ranking member of the full
    committee, Mr. Jordan, for 5 minutes.
        Mr. Jordan. Thank you, Mr. Chairman.
        Mr. Pichai, is Google going to tailor its features to help
    Joe Biden win the 2020 election?
        Mr. Pichai. Congressman, we approach our work--you know, we
    support both campaigns today. We think political ads is an
    important part of free speech in democratic societies, and we
    engage with campaigns, you know, according to law, and we
    approach our work in a nonpartisan way.
        Mr. Jordan. It was a yes or no question. Can you assure
    Americans today you won't tailor your features to help Joe
    Biden in the upcoming election?
        Mr. Pichai. You know, we support work that campaigns do. I
    just want to make sure I am answering that clearly.
        Mr. Jordan. We understand that. We all do all kinds of
    online social media, all kinds of that kind of--that outreach,
    that communication. This is a simple question: Can you today
    assure Americans you will not tailor your features in any way
    to help--specifically help one candidate over another? And what
    I'm concerned about is you helping Joe Biden over President
    Trump.
        Mr. Pichai. We won't do any work, you know, to politically
    tilt anything one way or another. It's against our core values,
    Congressman.
        Mr. Jordan. But you did it in 2016. There's an email in
    2016 that was widely circulated amongst the executives at your
    company that got public where Ms. Eliana Murillo, head of your
    multicultural marketing, talks about the silent donation Google
    made to the Clinton campaign, and you applauded her work. She
    points that out in the email.
        I'm just curious, if you did it in 2016, I want to make--
    and, you know, in spite of the fact you did it in 2016
    President Trump won, I just want to make sure you're not going
    to do it again in 2020?
        Mr. Pichai. Congressman, I recall our conversation at that
    time, and I appreciate your concern. We didn't find any
    evidence of such activity, and I took the opportunity after our
    conversation to reinforce to the company--we realize even an
    appearance could be improper, so we have clearly communicated
    to our employees any personal political activity, while it's
    their right, needs to happen on their own time and resources
    and should avoid any use of company time.
        Mr. Jordan. Well, of course, everyone has got their First
    Amendment rights to campaign for who they want. What they can't
    do is configure your features to help one candidate over the
    other. So you might not have found any evidence, but here's
    what she wrote to the email to a number of key executives in
    your company, quote, ``We push to get out the Latino vote with
    our features.'' Second quote, ``We push to get out the Latino
    vote with our features in key states.''
        It seems to me those last three words are the real
    qualifier here. That is electioneering when you're trying to
    increase the Latino vote in key states. And she'd already
    communicated that she was supporting Clinton, that she wanted
    Clinton to win.
        So, when she talks about increasing the Latino vote, which
    she assumes is going to help candidate Clinton, and she's doing
    that in key states--it's one thing if you're going to increase
    the Latino vote around the country. If you're just a good,
    corporate citizen, you're urging people to vote. It's quite
    another when you're focusing on in key states. And you know
    what those key states were? Nevada and Florida, the swing
    states. So, again, I want to make sure this isn't going to
    happen in 2020.
        Mr. Pichai. I can assure you that we complied with laws in
    2016. As a company, any work we do around elections is
    nonpartisan. Users do come to us for understanding where
    polling places are, where to vote, which is the date to vote,
    what the voting hours are. We have committed to providing that
    information, and I can assure you that we'll approach our work
    in a nonpartisan----
        Mr. Jordan. So, Mr. Pichai, here's the question I think's
    on so many Americans' minds. They saw the list that we read
    here earlier on in our opening statements, all the things
    Google has done. Google is siding with the World Health
    Organization over anyone who disagrees with them, even though
    the World Health Organization obviously lied to America,
    obviously shills for China. Google's siding with them; YouTube
    is siding with them.
        We have the history of all the things Google has done and
    the history of what happened in 2016 in the election, where
    they obviously, according to one--your multicultural marketing
    executive tried to help Clinton. And here we are, 97 days
    before the election, and we want to make sure it's not going to
    happen again.
        Can you give us two assurances: one, you're not going to
    try to tailor your features, configure your platform in a way
    to help Joe Biden; and, second, that you're not going to use
    your search engine to silence conservatives? Can you give us
    those two assurances today?
        Mr. Pichai. Congressman, on our search engine,
    conservatives have more access to information than ever
    before----
        Mr. Jordan. And we appreciate that. That wasn't the
    question. Can you assure us today you're not going to try to
    silence conservatives? And can you assure us today you're not
    going to try to configure your features, as Ms. Murillo said
    you did for Clinton in 2016--can you assure us today you're not
    going to do the same thing for Joe Biden in 2020?
        Mr. Pichai. You know, you have my commitment. It's always
    been true, and we'll continue to conduct ourselves in a neutral
    way.
        Mr. Jordan. Appreciate it.
        I yield back.
        Mr. Cicilline. The chair now recognizes the gentlelady from
    Pennsylvania, Ms. Scanlon.
        Ms. Scanlon. Thank you, gentlemen. I'd like to redirect
    your attention to antitrust law rather than fringe conspiracy
    theories.
        Mr. Bezos, our investigations----
        Mr. Jordan. Mr. Chairman, we have the email. There is no
    fringe conspiracy----
        Mr. Cicilline. Excuse me.
        Mr. Raskin. It's not your time.
        Mr. Cicilline. Mr. Jordan, you do not have the time.
        Mr. Jordan. But--but--but----
        Mr. Cicilline. Please be respectful of your colleague.
        Mr. Jordan [continuing]. When someone directly----
        Mr. Cicilline. She controls the time.
        Mr. Jordan [continuing]. Directly----
        Mr. Raskin. Put your mask on. Put your mask on.
        Mr. Jordan. Mr. Raskin----
        Mr. Cicilline. Mr. Jordan----
        Mr. Jordan [continuing]. If you want to talk about masks--
    --
        Mr. Cicilline. Mr. Jordan, Ms. Scanlon holds the time.
        Mr. Jordan [continuing]. Why would the Deputy Secretary of
    the Treasury unmask Michael Flynn's name, Mr. Raskin?
        Mr. Cicilline. Ms. Scanlon----
        Mr. Jordan. And what I want to know is----
        Mr. Cicilline. Ms. Scanlon----
        Mr. Jordan. When someone comes after my motives for asking
    questions, I get a chance to respond.
        Mr. Cicilline. The gentlelady is recognized.
        Ms. Scanlon. Thank you, Mr. Chairman.
        Mr. Bezos, our investigation uncovered documents that show
    that Amazon sometimes doesn't play fairly, crossing the line
    from robust competition to predatory pricing to destroy rivals
    rather than outcompete them.
        And let's take the example of Quidsi, which used to own
    diapers.com and provided online baby care products. In 2009,
    your team viewed diapers.com as Amazon's largest and fastest
    growing online competitor for diapers. One of Amazon's top
    executives said that diapers.com keeps the pressure on pricing
    on us. And strong competition from diapers.com meant that
    Amazon was having to work harder and harder so that customers
    didn't pick diapers.com over Amazon. And the customers we're
    talking about were hard-working families, single parents with
    babies and young children.
        Now, because diapers.com was so successful, Amazon saw it
    as a threat. The documents that we've obtained show that Amazon
    employees began strategizing about ways to weaken this company,
    and, in 2010, Amazon hatched a plot to go after diapers.com and
    take it out.
        In an email that I reviewed--and we've got these up on the
    slides--one of your top executives proposed to you a, quote,
    ``aggressive plan to win,'' end quote, against diapers.com, a
    plan that sought to undercut their business by temporarily
    slashing Amazon prices. We saw one of your profit-and-loss
    statements, and it appears that, in 1 month alone, Amazon was
    willing to bleed over $200 million in diaper profit losses.
        Mr. Bezos, how much money was Amazon ultimately willing to
    lose on this campaign to undermine diapers.com?
        Mr. Bezos. Thank you for the question.
        I don't know the direct answer to your question. This is
    going back in time, I think, maybe 10 or 11 years or so. You
    could give me, maybe, the dates on those documents.
        Ms. Scanlon. Okay.
        Mr. Bezos. But what I can tell you is that the idea of
    using diapers and products like that to attract new customers
    who have new families is a very traditional idea. We didn't
    invent----
        Ms. Scanlon. Sure. Well, let's delve into this----
        Mr. Bezos [continuing]. That idea. Neither did diapers.com.
        Ms. Scanlon [continuing]. A little further. I'm sorry. You
    know I only have a few minutes here, so I just----
        Mr. Bezos. Of course.
        Ms. Scanlon [continuing]. Want to press on.
        Mr. Bezos. Please.
        Ms. Scanlon. Your own documents make clear that the price
    war against diapers.com worked, and within a few months it was
    struggling, and so then Amazon bought it.
        After buying your leading competitor here, Amazon cut
    promotions, like Amazon.mom, and the steep discounts it used to
    lure customers away from diapers.com and then increased the
    prices of diapers for new moms and dads.
        Mr. Bezos, did you personally sign off on the plan to raise
    prices after Amazon eliminated its competition?
        Mr. Bezos. I don't remember that at all.
        Ms. Scanlon. Okay. Thank you.
        Mr. Bezos. What I remember is that we matched competitor
    prices, and I believe we followed diapers.com--again, this is
    11 years ago, so you're asking a lot of my memory--but I
    believe we followed diapers.com.
        I can also tell you, after we bought diapers.com----
        Ms. Scanlon. I understand that. Okay.
        Mr. Bezos [continuing]. We put more than----
        Ms. Scanlon. Just moving on----
        Mr. Bezos [continuing]. $300 million into trying----
        Ms. Scanlon. Reclaiming my time, sir. I'm----
        Mr. Bezos [continuing]. To make it successful.
        Ms. Scanlon [continuing]. Sorry.
        So you said that Amazon focuses excessively on customers.
    So how would customers, especially single moms, new families,
    how would they benefit when the prices were driven up by the
    fact that you eliminated your main competitor?
        Mr. Bezos. Well, I don't agree--with great respect, I don't
    agree with the premise. At the same time, you should recognize,
    in context, diapers is a very large product category sold in
    many, many places----
        Ms. Scanlon. Right, but this was----
        Mr. Bezos [continuing]. Not just at Amazon and diapers.com.
        Ms. Scanlon [continuing]. The online diaper market.
        Mr. Bezos. It sold at----
        Ms. Scanlon. Now, we do have evidence----
        Mr. Bezos. It sold at drugstores and Costco----
        Ms. Scanlon [continuing]. That these predatory--I'm sorry,
    Mr. Bezos----
        Mr. Bezos [continuing]. And Kroger and Walmart----
        Ms. Scanlon [continuing]. I need to push on here.
        Mr. Bezos. Of course. Sorry.
        Ms. Scanlon. The evidence we've collected suggests that
    predatory practices weren't unique here. In 2013, it was
    reported that you instructed Amazon employees to approach
    discussions with certain business partners, and I quote, ``the
    way a cheetah would pursue a sickly gazelle.''
        Is the gazelle project still in place? And does Amazon
    pursue similar predatory campaigns in other parts of its
    business?
        Mr. Bezos. I cannot comment on that because I don't
    remember it.
        What I can tell you is that we are very, very focused on
    the customer, as you started----
        Ms. Scanlon. Okay. Well, I'm concerned with----
        Mr. Bezos [continuing]. And, of course, that does include--
    --
        Ms. Scanlon [continuing]. The customers as well, especially
    those families----
        Mr. Bezos [continuing]. Bargaining very hard with vendors
    and suppliers to get the lowest prices----
        Ms. Scanlon [continuing]. In my district.
        Mr. Bezos [continuting]. So that we can offer those to
    customers.
        Ms. Scanlon. I'm sorry, Mr. Bezos. I'm almost out of time.
        I'm concerned too, because, especially with the current
    pandemic, one of the biggest needs I'm seeing at the food
    drives and the giveaways that we're having to run in my
    district is that families don't have diapers, and we have to
    collect them to give them out. So it certainly is something
    that has a really hard impact on families, and I'm really
    concerned that pricing might have been driven up here by this
    tactic.
        And I yield back.
        Mr. Cicilline. The gentlelady yields back.
        I would just announce that votes have been called, but
    we're going to continue with the hearing, so I invite
    colleagues to vote. You know, it's a rolling vote, so vote
    according to your own schedule.
        I now recognize the gentleman from Colorado, Mr. Neguse,
    for 5 minutes.
        Mr. Neguse. Thank you, Mr. Chairman.
        And I want to thank each of the witnesses today for your
    testimony.
        Mr. Zuckerberg, in 2004, when you had launched Facebook,
    it's fair so say, I think you'd agree with me, that you had
    quite a few competitors. Would you agree with that?
        Mr. Zuckerberg. Congressman, yes.
        Mr. Neguse. Myspace, Friendster, Google's Orkut, Mixi, Psy
    World, Yahoo! 360, AOL's Bebo, they were all competitors?
        Mr. Zuckerberg. Congressman, those were some of the
    competitors at the time, and it's only gotten a lot more
    competitive since.
        Mr. Neguse. Well, let's talk about that. Because, by 2012,
    Mr. Zuckerberg, none of those companies that I just identified
    existed. You're certainly aware of that. They were all
    basically gone. Facebook, in my view, I think, was in a
    monopoly by then.
        I wonder whether you would agree with that. I take it you
    don't?
        Mr. Zuckerberg. Congressman, that's correct, I don't. We
    face a lot of competitors in every part of what we do, from
    connecting with friends privately, to connecting with people in
    communities, to connecting with all your friends at once, to
    connecting with all kinds of user-generated content. And I
    would bet that you or most people here have multiple apps for
    each of those on your phones, multiple----
        Mr. Neguse. Well, Mr. Zuckerberg, let's--why don't we dig
    into this a bit further. So you and I clearly disagree about
    that.
        In 2012--I'm looking at a document that was produced by
    Facebook in response to the subcommittee's investigation. It's
    a presentation prepared for Sheryl Sandberg to deliver to the
    board of directors of a major telecommunications firm, boasting
    that, quote, ``Facebook is now 95 percent of all social media
    in the United States.'' The title of the slide is even, quote,
    ``The Industry Consolidates As It Matures.''
        So, as I look at that graph, I, you know, certainly think
    most folks would concede that Facebook was a monopoly as early
    as 2012. But, nonetheless, I understand that we disagree on
    that point.
        Would you agree with me that Facebook, its strategy since
    that time, to essentially protect what I describe as a monopoly
    but obviously what you would describe as market power, that
    Facebook has been engaged in purchasing competition, in some
    cases replicating competition, and in some cases eliminating
    competition? Would that be a fair statement?
        Mr. Zuckerberg. Congressman, the space of people connecting
    with other people is a very large space, and I would agree that
    there were different approaches that we took to addressing
    different parts of that space, but it's all in service of
    building the best services----
        Mr. Neguse. And I----
        Mr. Zuckerberg [continuing]. For people to help connect----
        Mr. Neguse. I appreciate that, Mr. Zuckerberg. I appreciate
    the latter point. It sounds like you are conceding that at
    least some of those strategies were what I identified, and so I
    want to talk a little bit about that.
        In 2014--here's an email. It's from Facebook's current
    chief financial officer, describing the company's acquisition
    strategy as, quote, ``a land grab'' and saying that ``we are
    going to spend 5 to 10 percent of our market cap every couple
    of years to shore up our position.'' And my sense of the facts
    is that that is, in fact, what has occurred.
        Facebook, as you conceded--you conceded earlier that
    Instagram was a competitor of Facebook's. You acquired
    Instagram in 2012. Instagram is now the sixth-largest social
    media platform in the world. Is that right?
        Mr. Zuckerberg. Congressman, I'm not sure what rank it is,
    but it's certainly grown beyond our wildest expectations.
        Mr. Neguse. I can represent to you that the statistics
    demonstrate--the empirical data shows it's the sixth-largest.
        In 2014, Facebook bought its competitor WhatsApp. Is that
    correct?
        Mr. Zuckerberg. Congressman, yes, WhatsApp was also both a
    competitor and complementary. They competed with us in the
    space of mobile messaging, which is a growing and important
    space and is, again, one part of the global space of how people
    connect more broadly.
        Mr. Neguse. Understood. And, at that time, WhatsApp had
    over 400 million monthly users, a clear path towards 1 billion
    monthly active users. And WhatsApp is now the second-largest
    social media platform in the world, with 2 billion users
    worldwide, more than Facebook Messenger. And, of course, your
    company owns WhatsApp.
        Facebook also tried to buy other competitive startups. In
    fact, as Chairman Nadler noted, you did tell one of Facebook's
    senior engineers in 2012 that you can, quote, ``likely just buy
    any competitive startup, but it'll be a while before we can buy
    Google.''
        Do you recall writing that email?
        Mr. Zuckerberg. Congressman, I don't specifically, but it
    sounds like a joke.
        Mr. Neguse. Well, it certainly--I don't take it as a joke,
    you know, as I review the email. It was in regards to having
    just closed the Instagram sale. And the response from this
    individual, this engineer, to you was, quote, ``Well played.''
        Your response was, ``Thanks. One reason people
    underestimate the importance of watching Google is that we can
    likely always just buy any competitive startups, but it'll be a
    while before we can buy Google.''
        And given the purchases that Facebook had made previous to
    this and the attempted purchases--my understanding is that
    Facebook made several overtures to Snapchat, for example, which
    rebuffed those efforts--clearly demonstrates, in my view, that
    that email was not made in jest.
        But here's why I ask these questions, Mr. Zuckerberg. It
    strikes me that, over the course of the last several years,
    Facebook has used its market power to either, you know,
    purchase or replicate the competition. And Facebook, Facebook
    Messenger, WhatsApp, and Instagram are the most now downloaded
    apps of the last decade. Your company, sir, owns them all. And
    we have a word for that; that word is ``monopoly.''
        With that, I would yield back, Mr. Chairman.
        Mr. Cicilline. I thank the gentleman.
        I now recognize the gentlelady from Georgia, Mrs. McBath,
    for 5 minutes.
        Mrs. McBath. Thank you, Mr. Chairman.
        Mr. Bezos, you referred to third-party sellers today as
    ``Amazon's partners'' and that your success depends on their
    success.
        But, over the past year, we've heard a completely different
    story. As part of this investigation, we've interviewed many
    small businesses, and they use the words like ``bullying,''
    ``fear,'' and ``panic'' to describe their relationship with
    Amazon.
        And I'm going to share the story of a small-business owner
    who is also a wife and a mother, so you can understand how this
    is actually affecting the lives of everyday people and why this
    truly matters.
        [Video played.]
        Mrs. McBath. So, Mr. Bezos, after Amazon delisted this
    small business without any apparent reason or notice, she told
    us that they sent more than 500 separate communications to
    Amazon, including to you, Mr. Bezos, over the past year, and
    there was not a single meaningful response.
        Do you think this is an acceptable way to treat someone
    that you described as both a partner and a customer?
        Mr. Bezos. No, Congresswoman. And I appreciate you showing
    me that anecdote, and I would like to talk to her. It does not
    at all, to me, seem like the right way to treat her, and I'm
    surprised by that. And it's not the systematic approach that we
    take, I can assure you.
        I don't even understand what's going on in that anecdote,
    because we would love for third-party sellers to sell books----
        Mrs. McBath. Well, respectfully, sir----
        Mr. Bezos [continuing]. On the website. So I don't
    understand it, but I would like to understand it better. And--
    --
        Mrs. McBath. That's the point, sir.
        Mr. Bezos [continuing]. With your permission, I would like
    to get in touch with your office.
        Mrs. McBath. I think, though, that you're missing the
    point. This is not just about one business. I'm concerned that
    this is a pattern of behavior. And, basically, this pattern of
    behavior has to change.
        Mr. Bezos, my question is simply: Are you willing to make
    sure, going forward, that, you know--the numerous sellers that
    we've talked to, they have problems just like this. And there
    are more sellers who have told us that they have exhausted all
    of their options before finally reaching out to you directly as
    a last resort, but they're still waiting for your response.
        So what do you have to say to the small businesses who are
    talking to Congress because you simply won't listen to them?
        Mr. Bezos. Well, I'd say that's not acceptable. If we
    aren't listening to you, I'm not happy about that at all.
        And I--but, you know, if you would allow me to disagree a
    little bit with a piece of this, I do not think that's
    systematically what's going on. And the evidence that I would
    suggest would be useful for you to consider in that regard is
    that third-party sellers, in aggregate, are doing extremely
    well on Amazon. They grew from--you know, 20 years ago it was
    zero, and today it's 60 percent----
        Mrs. McBath. Great. Okay.
        Mr. Bezos [continuing]. Of sales.
        Mrs. McBath. Thank you very much.
        Mr. Bezos. Third-party sellers are growing even faster----
        Mrs. McBath. Thank you so much.
        Mr. Bezos [continuing]. Than first-party retail. So----
        Mrs. McBath. Mr. Bezos, you said----
        Mr. Bezos. Thank you.
        Mrs. McBath. Thank you so much.
        You said that sellers have many other attractive options to
    reach customers, but that's not at all what we found in our
    investigation. According to eMarketer, a source Amazon cited in
    submissions to this committee, Amazon has nearly seven times
    the market share of its closest e-commerce competitor. One
    seller told us that, and I quote, ``Amazon continues to be the
    only show in town. No matter how angry sellers get, they have
    nowhere else to go.''
        So are you saying that these people aren't being truthful
    when they say that Amazon is the only game in town?
        Mr. Bezos. Yeah, Congresswoman, with great respect, I do
    disagree with that. I believe that there are a lot of options.
    And some of them are not even listed on that chart. I just
    looked at it briefly, but I didn't see some that I know of, for
    example.
        So I think there are a lot of----
        Mrs. McBath. Okay. Thank you----
        Mr. Bezos [continuing]. Things in this dynamic.
        Mrs. McBath. All right. Thank you for that.
        Mr. Bezos. There are more and more every day.
        Mrs. McBath. Mr. Bezos, my time is short.
        If Amazon didn't have monopoly power over these sellers, do
    you think they would choose to stay in a relationship that is
    characterized by bullying, fear, and panic?
        Mr. Bezos. With all respect, Congresswoman, I do not accept
    the premise of your question. That is not how we operate the
    business.
        Mrs. McBath. Okay. All right.
        Mr. Bezos. And, in fact, we work very hard to----
        Mrs. McBath. Thank you for that.
        Mr. Bezos [continuing]. Provide a fantastic pool for
    sellers----
        Mrs. McBath. Thank you for that.
        Mr. Bezos [continuing]. And that's why they've been
    successful.
        Mrs. McBath. Thank you for that.
        Mr. Bezos, I'm going to close with giving the bookseller
    the opportunity to finally be heard by you.
        [Video played.]
        Mrs. McBath. With that, I yield back the balance of my
    time.
        Mr. Cicilline. I thank the gentlelady.
        We've now concluded our first round.
        I now recognize myself for 5 minutes.
        Mr. Bezos, according to your testimony, the marketplace is
    competitive. But Amazon controls as much as 75 percent of all
    online marketplace sales. And eMarketer, a source you cited to
    us in submissions to this committee, reports that Amazon has
    nearly seven times the market share of its closest competitor.
        Isn't it true that small businesses have no real option but
    to rely on Amazon to connect with customers and make online
    sales?
        Mr. Bezos. No, sir. With great respect, I do have a
    different opinion on that. I believe there are a lot of options
    for small sellers. I believe Amazon is a great one, and we've
    worked very hard. I think we are the best one.
        Mr. Cicilline. Well, Mr. Bezos----
        Mr. Bezos. We have a lot of different programs that help
    sellers. But----
        Mr. Cicilline. Thank you.
        Mr. Bezos [continuing]. We are not the only option.
        Mr. Cicilline. There are 2.2 million active sellers as of
    yesterday. About 37 percent of those sellers rely on Amazon as
    their sole source of income. That is over 800,000 people
    relying on Amazon to feed their families, put their kids
    through school, and keep a roof over their heads.
        Mr. Bezos, you have referred to third-party sellers as both
    your partners and customers. But isn't it true that Amazon
    refers to third-party sellers as ``internal competitors''?
        Mr. Bezos. I think in--it wouldn't surprise me. In some
    ways, we are competing. And they're also competing with each
    other.
        Mr. Cicilline. Well, that's right.
        Mr. Bezos. And the marketplace does allow that.
        Mr. Cicilline. Your own document, Mr. Bezos, Amazon's own
    documents that you produced refer to the very same sellers that
    you've described as Amazon partners as ``internal
    competitors.''
        In fact, we've heard from third-party sellers again and
    again during the course of the investigation that Amazon is the
    only game in town. One small-business owner we interviewed
    described it this way, and I quote: ``We're stuck. We don't
    have a choice but to sell through Amazon.'' Another said, and I
    quote, ``They've never been a great partner, but you have to
    work with them.''
        During this investigation, we have heard so many
    heartbreaking stories of small businesses who sunk significant
    time and resources into building a business and selling on
    Amazon, only to have Amazon poach their best-selling items and
    drive them out of business.
        So I want to talk to you about one company that really
    stood out from the rest. I want you to pay close attention to
    how they described your partnership, Mr. Bezos. We heard from a
    small apparel company that makes and sells what they call
    ``useful apparel'' for people who work on their feet and with
    their hands, like construction workers and firefighters.
        This particular business discovered and started selling a
    unique item that had never been a top seller for the brand.
    They were making about $60,000 a year on just this one item.
    One day, they woke up and found that Amazon had started listing
    the exact same product, causing their sales to go to zero
    overnight. Amazon had undercut their price, setting it below
    where the manufacturer would generally allow it to be sold so
    that, even if they wanted to, they couldn't match the price.
        Here's how the apparel company described working with
    Amazon, and I quote: ``Amazon strings you along for a while
    because it feels so good to get that paycheck every week. And
    in the past, for lack of a better term, we called it `Amazon
    heroin' because you just kept going and you had to get your
    next fix, your next check. But, at the end of the day, you find
    out that this person, who was seemingly benefiting you, making
    you feel good, was just ultimately going to be your downfall,''
    end quote.
        So, Mr. Bezos, this is one of your partners. Why on Earth
    would they compare your company to a drug dealer?
        Mr. Bezos. Sir, I have great respect for you and this
    committee, but I completely disagree with that
    characterization.
        What we have done is create in the store a place--if you go
    back in time, we sold only our own inventory. It was a very
    controversial decision inside the company to invite third-party
    sellers to come into what is really our most valuable retail
    real estate, our product detail pages.
        We did that because we were convinced that it would be
    better for the consumer, it would be better for the customer--
    --
        Mr. Cicilline. Well, Mr. Bezos----
        Mr. Bezos [continuing]. To have all of that selection. And
    I think we were right, and I think it's worked----
        Mr. Cicilline. Reclaiming my time----
        Mr. Bezos [continuing]. Out well for the customer and----
        Mr. Cicilline [continuing]. Unfortunately, this is one of--
    --
        Mr. Bezos [continuing]. Third-party sellers and for----
        Mr. Cicilline. Reclaiming my time, Mr. Bezos, this is one
    of many small companies that have told us during this year-long
    investigation that they were mistreated, abused, and tossed
    aside by Amazon.
        Now, Mr. Bezos, you say that Amazon is only focused on
    doing what's best for the customer--you just said it again--and
    also third-party sellers.
        But how is that possible, when you compete directly with
    third-party sellers with your own products that undercut the
    competition? Isn't it an inherent conflict of interest for
    Amazon to produce and sell products on its platform that
    compete directly with third-party sellers, particularly when
    you, Amazon, set the rules of the game?
        Mr. Bezos. Thank you. No, I don't believe it is. We have--
    the consumer is the one ultimately making the decisions.
    They're making the decisions about what to buy, what price to
    buy it at, who to buy it from. And our--what we try to do is
    make it an easy----
        Mr. Cicilline. That's not the question, Mr. Bezos. The
    question is, is there an inherent conflict of interest? Because
    you are a data company. You know when customers put something
    in their cart, when they take it out. Traditional brick-and-
    mortar stores, like a grocery store, where competition occurs,
    don't have that.
        And so I just want to follow up, finally, on an answer to
    the question that you gave to Congresswoman Jayapal. You said
    that you can't guarantee that the policy of not sharing third-
    party sellers' data with Amazon's own line hasn't been
    violated; you couldn't be certain.
        Can you please explain that to me? Can you list examples of
    where that policy has been violated?
        Because it's particularly concerning to me, Mr. Bezos,
    that--shouldn't third parties know for sure that data isn't
    being shared with your own line, their competitors? Why should
    a third-party seller list their product on Amazon if they're
    just going to be undercut by Amazon's own product as a result
    of data you take from them?
        Mr. Bezos. Sir, I think what I want you to understand, and
    I think is important to understand, is that we have a policy
    against using individual seller data to compete with our
    private-label products. And----
        Mr. Cicilline. You couldn't assure Ms. Jayapal that that
    policy isn't violated routinely.
        Mr. Bezos. Well, we are investigating that. And I do not
    want to sit here and I do not want to go beyond what I know
    right now. But we are--as a result of that Wall Street Journal
    article, we are looking at that very carefully----
        Mr. Cicilline. Thank you, Mr. Bezos.
        Mr. Bezos [continuing]. And we want to get this back, and
    we will surely share them with you.
        Mr. Cicilline. Thank you. And we look forward to that.
        The evidence we've collected shows that Amazon is only
    interested in exploiting its monopoly power over the e-commerce
    marketplace to further expand and protect this power. This
    investigation makes clear that Amazon's dual role as a platform
    operator and competing seller on that platform is fundamentally
    anticompetitive. And Congress must take action.
        And, with that, I recognize the gentleman from Wisconsin,
    the ranking member of the subcommittee, Mr. Sensenbrenner, for
    5 minutes.
        Mr. Sensenbrenner. Well, Mr. Chairman, I think that the
    history proves that Congress does a poor job in picking winners
    and losers. And I've looked over a lot of the material that has
    been assembled. I've been working with the chairman for over a
    year on this bipartisan investigation. And I have reached the
    conclusion that we do not need to change our antitrust laws.
    They have been working just fine. The question here is the
    question of enforcement of those antitrust laws.
        Now, we've heard a lot about the Facebook acquisition of
    Instagram. That happened in 2012. Obama's FTC signed off on
    that. So, regardless of what you think happened at that time,
    the fact is that this acquisition did pass the smell test of
    the regulators involved. Now, maybe they made a mistake, or
    maybe something else happened. I don't know. But the fact is
    that there is not a problem with the law.
        Now, you know, back about 35 years ago, AT&T was broken up
    because it was determined that one-stop shops were
    monopolistic. And AT&T, because you had to get your long-
    distance service from your local phone company, that was
    monopolistic. So the Baby Bells were spun off.
        A whole lot has happened since then. There were mergers and
    acquisitions in the telecom industry. Technology advanced a
    huge amount. And guess what? We're back to exactly where we
    were in 1984. So this goes to show that congressional pressure
    is not the best.
        Now, using the AT&T example, which I think was a big flop
    and counterproductive, let me ask Mr. Bezos, you know, say the
    AT&T example was applied to Amazon and you were required to
    spin stuff off. So you might have no more one-stop shop, but
    you have to go to separate places for books or groceries or
    videos or electronics. How are the consumers helped by that?
        Mr. Bezos. Sir, thank you. They would not be.
        Mr. Sensenbrenner. Right.
        Mr. Bezos. That's very clear.
        Mr. Sensenbrenner. Now, Mr. Pichai, let me ask about
    Google. If you were forced to split up your business lines,
    say, spin off ad tech and YouTube, can you describe what
    happens to consumers there?
        Mr. Pichai. Congressman, today, consumers in most of the
    areas we are dealing with, they see prices free or falling, and
    they get more choice than ever before. So I think it serves
    them well.
        Mr. Sensenbrenner. And you're right there.
        So, you know, I'm not going to be on this committee in the
    next Congress. I am going to put my feet up and become a
    ``senior, statesman.''
        But, you know, let me say that we have heard a whole lot of
    complaints about Big Tech. Some of them are political in
    nature, and I share the complaints and the concern of Mr.
    Jordan and others. And others talk about allegedly
    anticompetitive activity.
        It seems to me that it's not for Congress that legislates
    to toss all of our antitrust laws and the precedent that has
    been established through litigation over the last 100-plus
    years, but it's something where we ought to go back to the
    regulators, to the enforcers, have them look at this stuff, and
    have them make a determination on whether or not the law has
    been violated. I think the law is good on that, and we don't
    need to throw it all in the wastebasket.
        But there are some matters of concern that we have heard
    from both sides of the aisle that I think need to be addressed.
    And if it requires an agency like the FTC to say that they've
    made mistakes in the past, so be it. We're all human; we all
    make mistakes. And even government agencies do that.
        I yield back.
        Mr. Cicilline. The gentleman yields back.
        I now recognize the gentlelady from Washington, Ms.
    Jayapal.
        Ms. Jayapal. Thank you, Mr. Chairman.
        Mr. Zuckerberg, in March of 2012, you suggested by email to
    your management team that moving faster in copying other apps
    could, quote, ``prevent our competitors from getting
    footholds.''
        Sheryl Sandberg responded that, quote, ``it is better to do
    more and move faster, especially if that means you don't have
    competitors build products that take some of our users.''
        Facebook's product management director added that, quote,
    ``I would love to be far more aggressive and nimble in copying
    competitors.''
        Has Facebook ever taken steps to prevent competitors from
    getting footholds by copying competitors?
        Mr. Zuckerberg. Congresswoman, I view it as our job to
    understand what people are finding valuable in all of the
    services that they use. And, certainly, if someone----
        Ms. Jayapal. Do you copy your competitors?
        Mr. Zuckerberg. Congresswoman, we've certainly adapted
    features that others have led in, as others have copied and
    adapted features that we've led in.
        Ms. Jayapal. I'm not concerned about others. I'm just
    asking you, Mr. Zuckerberg.
        Since March of 2012, after that email conversation, how
    many competitors did Facebook end up copying?
        Mr. Zuckerberg. Congresswoman, I can't give you a number of
    companies who have----
        Ms. Jayapal. Was it less than five?
        Mr. Zuckerberg. Congresswoman, I don't know. I----
        Ms. Jayapal. Less than 50? Any estimates?
        Your team was making a plan. How did it play out?
        Mr. Zuckerberg. Congresswoman, I'm not sure I agree with
    the premise here. Our job is to make sure that we build the
    best services for people to connect with all the people they
    care about. And a lot of that is done by innovating and by
    building new things that are----
        Ms. Jayapal. Thank you.
        Mr. Zuckerberg [continuing]. Leading the way internally----
        Ms. Jayapal. Thank you, Mr. Zuckerberg. Let me go on.
        Has Facebook ever threatened to clone the products of
    another company while also attempting to acquire that company?
        Mr. Zuckerberg. Congresswoman, not that I would--not that I
    recall.
        Ms. Jayapal. And I'd like to just remind you that you are
    under oath, and there are quotes from Facebook's own documents.
        Prior to acquiring Instagram, Facebook began developing a
    similar product called Facebook Camera, correct?
        Mr. Zuckerberg. Congresswoman, that's correct. I've said
    multiple times that we were competing in the space of building
    mobile cameras with Instagram. That's what they did at the
    time. Their competitive set was companies like what we were
    building with Facebook Camera----
        Ms. Jayapal. Great.
        Mr. Zuckerberg [continuing]. And VSCO Cam and----
        Ms. Jayapal. Thank you, Mr.----
        Mr. Zuckerberg [continuing]. We were certainly competing
    with that.
        Ms. Jayapal. Thank you, Mr. Zuckerberg.
        Did you ever use this very similar Facebook Camera product
    to threaten Instagram's founder, Kevin Systrom?
        Mr. Zuckerberg. Congresswoman, I'm not sure what you would
    mean by ``threaten.'' I think it was public that we were
    building a camera app at the time. That was a well-documented
    thing.
        Ms. Jayapal. Let me tell you that Mr.--in a chat, you told
    Mr. Systrom that Facebook was, quote, ``developing our own
    photo strategy, so how we engage now will also determine how
    much we're partners versus competitors down the line.''
        Instagram's founder seemed to think that was a threat. He
    confided in an investor at the time that he feared you would
    go--that you would go into, quote, ``destroy mode'' if he
    didn't sell Instagram to you.
        So let's just recap. Facebook cloned a popular product,
    approached the company you identified as a competitive threat,
    and told them that if they didn't let you buy them up, there
    would be consequences.
        Were there any other companies that you used this same
    tactic with while attempting to buy them?
        Mr. Zuckerberg. Congresswoman, I want to respectfully
    disagree with the characterization. I think it was clear that
    this was a space that we were going to compete in, one way or
    another. I don't view those conversations as a threat in any
    way. I was trying to figure out----
        Ms. Jayapal. I'm just using the documents and the testimony
    that the committee has collected from others.
        Did you warn Evan Spiegel, the founder of Snapchat, that
    Facebook was in the process of cloning the features of his
    company while also attempting to buy Snapchat?
        Mr. Zuckerberg. Congresswoman, I don't remember those
    specific conversations.
        But that was also an area where it was very clear that we
    were going to be building something. People want to be able to
    communicate privately. They want to be able to communicate with
    all of their friends at once. And we're going to make sure that
    we build the best products in all of the spaces that we can
    around helping people stay connected with the people they care
    about.
        Ms. Jayapal. I appreciate that, Mr. Zuckerberg. I think the
    question, again, here is, when the dominant platform threatens
    its potential rivals, that should not be a normal business
    practice.
        Facebook is a case study, in my opinion, in monopoly power,
    because your company harvests and monetizes our data, and then
    your company uses that data to spy on competitors and to copy,
    acquire, and kill rivals. You've used Facebook's power to
    threaten smaller competitors and to ensure that you always get
    your way. These tactics reinforce Facebook's dominance, which
    you then use in increasingly destructive ways.
        So Facebook's very model makes it impossible for new
    companies to flourish separately. And that harms our democracy,
    it harms mom-and-pop businesses, and it harms consumers.
        Mr. Chairman, I yield back.
        Mr. Neguse [presiding]. The gentlewoman yields back.
        The gentleman from Colorado, Mr. Buck, is recognized for 5
    minutes.
        Mr. Buck. Thank you, Mr. Chairman.
        Mr. Bezos, thank you for being here today. I'm concerned
    that you've used Amazon's dominant market position to unfairly
    harm competition. We've heard from a number of companies that
    Amazon uses proprietary data from third-party companies to
    launch its own private-label products, meets with startups to
    discuss investing in the product and then uses the proprietary
    data from these meetings to create its own private-label
    products, and allows the sale of counterfeit items through its
    web platform.
        During this subcommittee's field hearing in Boulder this
    January, PopSockets' CEO and inventor, David Barnett, detailed
    how Amazon allowed counterfeit products to appear on Amazon's
    marketplace ahead of PopSockets' products. Mr. Barnett told
    CNBC that PopSockets found at least 1,000 counterfeit products
    for sale on Amazon's marketplace, which Amazon allegedly failed
    to remedy until PopSockets agreed to a nearly $2 million
    marketing deal with Amazon.
        We've also seen troubling reports in The Wall Street
    Journal detailing Amazon's use of third-party sellers'
    proprietary data to develop and market its own competitive
    private-label products.
        The Wall Street Journal also reported last week that
    Amazon's venture capital fund used meetings with unsuspecting
    startup companies to gain access to secret proprietary product
    information and financial details. Amazon then reportedly used
    that information to launch competing products, often with
    disastrous results for the original startup company.
        There are many examples of this behavior, but one
    allegation in the Journal's reporting sticks out in particular.
    In 2011, Amazon contacted Vocalife, LLC's inventor about the
    possibility of investing in the speech-detection technology.
    Vocalife's founder accepted the meeting, thinking this was the
    company's big break.
        After displaying Vocalife's microphone technology and
    providing proprietary information, including engineering data,
    to Amazon employees, the relationship came to an abrupt halt.
    Amazon employees allegedly stopped responding to emails before
    the technology eventually found its way into the Amazon Echo
    device.
        These allegations are serious, especially because the size
    and scope of these practices couldn't happen without Amazon's
    monopolistic control of the marketplace.
        I'm also concerned that, given Amazon's allowance of
    counterfeit goods on its marketplace, especially counterfeit
    goods from China, that Amazon's marketplace may be knowingly or
    unknowingly furthering China's use of forced and slave labor
    conditions.
        This is especially important following recent reports that
    at least 80 global companies that sell on the Amazon
    marketplace, including Nike, Starbucks, and Samsung, have ties
    to Chinese factories that use enslaved Uighur Muslims.
        Following these concerning reports, Senator Hawley
    introduced an important bill last week requiring American
    businesses to certify that their supply chain does not rely on
    forced labor. I will be introducing the House companion bill
    later this afternoon.
        While I do not expect you to have intimate knowledge of the
    legislation, I do want to ask all four of our witnesses a
    simple yes-or-no question.
        Will you certify here today that your company does not use
    and will never use slave labor to manufacture your products or
    allow products to be sold on your platform that are
    manufactured using slave labor?
        Mr. Cook, you were kind enough to visit with me on the
    phone. I think we briefly discussed this issue. If you----
        Mr. Cook. Yes.
        Mr. Buck [continuing]. Can, give a yes-or-no answer. And I
    understand you haven't read the details of the bill. But would
    you agree to this idea?
        Mr. Cook. I would love to engage on the legislation with
    you, Congressman. But let me be clear: Forced labor is
    abhorrent, and we would not tolerate it in Apple. And so I
    would love to get with your office and engage on the
    legislation.
        Mr. Buck. Thank you.
        Mr. Pichai.
        Mr. Pichai. Congressman, I share your concern in this area.
    I find it abhorrent as well. Happy to engage with your office
    and discuss this further.
        Mr. Buck. So I really don't want to even engage with my
    office half the time. Will you guys agree that slave labor is
    not something that you will tolerate in manufacturing your
    products or in products that are sold on your platforms?
        Mr. Pichai. I agree, Congressman.
        Mr. Buck. And Mr. Cook?
        Mr. Cook. We wouldn't tolerate it. We would terminate a
    supplier relationship if it were found.
        Mr. Buck. Mr. Zuckerberg?
        Mr. Zuckerberg. I agree, we wouldn't tolerate this, and if
    we found anything like this, we would also terminate any
    relationship.
        Mr. Buck. And Mr. Bezos?
        Mr. Bezos. Yes, I agree completely.
        Mr. Buck. Great. Thank you very much, gentlemen.
        And I yield back.
        Mr. Cicilline [presiding]. I thank the gentleman.
        I now recognize the gentleman from Maryland, Mr. Raskin,
    for 5 minutes.
        Mr. Raskin. Thank you, Mr. Chairman.
        I want to thank Mr. Buck for that excellent line of
    questioning and for the upcoming legislation. I look forward to
    joining that.
        You know, in the 19th century, we had the robber barons. In
    the 21st century, we've got the cyber barons. And we want to
    make sure that the extraordinary power and wealth that you've
    been able to amass is not used against the interests of
    democracy and human rights around the world and not against the
    interests of a free market at home.
        So, Mr. Bezos, let me turn to you. I'm interested in the
    role that you play as a gatekeeper. A lot of consumers want to
    know when the HBO Max app will be available on your Fire
    device. And I understand that negotiations are ongoing but that
    your company is not only asking for financial terms but also
    for content from Warner Media. Is that right? And is that a
    fair way to proceed?
        In other words, is it fair to use your gatekeeper-status
    role in the streaming device market to promote your position as
    a competitor in the video streaming market with respect to
    content?
        Mr. Bezos. I'm not familiar with the details of those
    negotiations. As you said, they're underway right now. I
    predict that the companies will eventually come to an
    agreement. And I think this is kind of--two large companies
    negotiate an agreement; this is kind of normal case of simple
    commerce----
        Mr. Raskin. Right. But here's why I pursue it: Precisely
    because it is a large company, and, in a way, they stand in for
    hundreds of thousands of much smaller companies, who are even
    in a more disadvantageous position with respect to negotiating
    with you.
        I guess, the general proposition, then, you can speak to,
    if you don't know the details of this, which is: Is it okay to
    negotiate not just for financial terms in having someone be
    part of your Fire unit but also to try to extract in that
    negotiation leverage with respect to getting content from them?
        Mr. Bezos. Well, again, I'm not familiar with the details.
    What I would say is I think----
        Mr. Raskin. I'm not asking about that one. In general. In
    general.
        Mr. Bezos. In general, I think that when two companies are
    negotiating, you are negotiating not just the amount of money
    that's going to change hands but also what you're going to get
    in exchange for the amount of money. That is a very fundamental
    way that business works----
        Mr. Raskin. Do you see, at least to outsiders, that would
    look like a structural conflict of interest? Like, you're using
    your control over access to people's living rooms essentially,
    you're using that in order to obtain leverage in terms of
    getting creative content that you want. And are you essentially
    converting power in one domain into power in another domain
    where it doesn't belong?
        Mr. Bezos. I think what I should do is offer to get you
    information. I'll get it to your office for you. Because I'm
    not familiar enough with this, and I could imagine that there
    would be scenarios, if we're just talking in the abstract,
    where it would be inappropriate, and I could imagine scenarios
    where it would be very normal business----
        Mr. Raskin. Okay.
        Mr. Bezos [continuing]. And very appropriate.
        Mr. Raskin. Fair enough.
        I want to talk about an emerging market, smart homes. And I
    want to start with the hub of the smart home, smart speakers.
    Does Amazon price the Echo device below cost?
        Mr. Bezos. Not its list price, but it's often on promotion,
    and sometimes when it's on promotion it may be below cost, yes.
        Mr. Raskin. Well, several other companies did tell us, in
    fact, that Amazon is pricing Echo devices way below cost,
    making it nearly impossible for them to compete, and
    aggressively discounting Alexa-enabled speakers as a strategy
    to own the smart home.
        Like many markets we've heard about today, smart speakers
    with voice assistants, like Alexa, along with the myriad of
    smart-home appliances that Alexa can interact with, make up the
    next ecosystem or platform for tech companies to lock in
    customers.
        Would you say the smart-home market, for which the Echo,
    Ring security system, and other smart devices operate, is a
    winners-take-all market, yes or no?
        Mr. Bezos. No, I wouldn't, especially if we're able to
    succeed at what we want, which is, we would like--our vision
    for this is that smart-home speakers should answer to different
    wake words. So, you know----
        Mr. Raskin. So, when considering the acquisition of----
        Mr. Bezos [continuing]. On a case-by-case basis. And I
    think in that--just if I could, because I think it's important.
    If we could achieve that, then I think you would get really
    good behavior on the part of----
        Mr. Raskin. Okay.
        Mr. Bezos [continuing]. You know, competitive voice agents
    helping you.
        Mr. Raskin. When you were looking at acquiring Ring, you
    wrote to your executive team, quote, ``We're buying market
    position, not technology. And that market position and momentum
    is very valuable.''
        So, if smart homes are not a market with lock-in effects,
    why would a leading market position and momentum be so very
    valuable?
        Mr. Bezos. Sir, market position is valuable in almost any
    business, and it's one of the primary things that one would
    look at in an acquisition.
        There are multiple reasons that we might buy a company.
    Sometimes we're trying to buy some technology or some IP.
    Sometimes it's a talent acquisition. But the most common case
    is market position, that the company has traction with
    customers, they've built a service, maybe they were the first
    mover. There could be any number of reasons why they have that
    market position. But that's a very common reason to acquire a
    company.
        Mr. Raskin. Well, once a company becomes dominant in a
    market, it can favor its own products and services. Alexa-
    enabled smart speakers make up over 60 percent of the smart-
    speaker market.
        Mr. Bezos, when I ask Alexa to play my favorite song, Prime
    Music is the default music player. Is that right?
        Mr. Bezos. If you're--I think that's true if you're a Prime
    member, yes.
        Mr. Raskin. And a New York Times report found that, when
    users say, ``Alexa, buy batteries,'' Alexa responds, ``Would
    you like to buy double A AmazonBasics batteries?''
        So has Alexa ever been trained to favor Amazon products
    when users shop by voice?
        Mr. Cicilline. The time of the gentleman has expired, but
    the witness may answer the question.
        Mr. Bezos. I don't know if it's been trained in that way.
    I'm sure there are cases where we do promote our own products,
    which is, of course, a common practice in business. You know,
    so it wouldn't surprise me if Alexa sometimes does promote our
    own products.
        Mr. Raskin. Thank you, and I yield back.
        Mr. Cicilline. The chair recognizes the gentleman from
    Florida, Mr. Gaetz, for 5 minutes.
        Mr. Gaetz. Mr. Pichai, during our prior discussion earlier
    today, you said that Google doesn't work with the Chinese
    military. That answer was deceptive, because Google works with
    many of the entities that work with the Chinese military in
    common collaboration.
        And just one example would be Tsinghua University, where
    Jeff Dean, who is the head of Google AI, served on the Computer
    Science Advisory Committee for the university, and then the
    university takes nearly $15 million from China's Central
    Military Commission.
        So you can see how, even if you don't literally show up at
    the offices of the Chinese military, if you're all showing up
    at the same place, working together on AI, that would lead to
    my concern.
        But I want to talk about search, because that's an area
    where I know Google has real market dominance.
        On December 11, you testified to the Judiciary Committee,
    and in response to a question from my colleague Zoe Lofgren
    about Search, you said, ``We don't manually intervene on any
    particular search result.''
        But leaked memos obtained by The Daily Caller show that
    that isn't true. In fact, those memos were altered December 3,
    just a week before your testimony, and they describe a
    ``deceptive news blacklist'' and a process for developing that
    blacklist, approved by Ben Gomes, who leads Search with your
    company, and also something called a fringe ranking, which
    seems to beg the question, you know, who gets to decide what's
    fringe?
        And, in your answer, you know, you said to Ms. Lofgren that
    there is no manual intervention of search. That was your
    testimony. But now I'm going to cite specifically from this
    memo from The Daily Caller. It says--or that, I'm sorry, that
    The Daily Caller obtained from your company.
        It says, ``The beginning of the workflow starts when a
    website is placed on a watchlist.'' It continues, ``This
    watchlist is maintained and stored by Ares, with access
    restricted to policy and enforcement specialists.'' It sort of
    does beg the question who these enforcement specialists are.
        ``Access to the listing can also be shared on a need-to-
    know basis to enforce or enrich the policy violations. The
    investigation of the watchlist is done in the tool Athena, the
    Ares manual review tool.''
        So you said to Congresswoman Lofgren that there was no
    manual review tool, and then your documents indicate that there
    is a manual review tool. So help us understand the
    inconsistency.
        Mr. Pichai. Congressman, there are two parts to this.
        In general, you know, we algorithmically approach our
    search results. We have robust policies to do so. And we test
    it both with user feedback and we use raters to validate. Last
    year alone, we ran over 300,000 experiments and launched around
    3,000 improvements to Search.
        And we don't manually tune. The question last time was in
    the context of, is there someone behind the curtain manually
    tuning an individual search result? We don't. We generally
    approach it algorithmically.
        We, however, in order to comply with the law in every
    country we operate in--for example, there may be an actor or a
    website identified as interfering in elections, and we then
    have to put that site on a list so that that doesn't appear in
    our search results against queries. So other examples would be
    violent extremism----
        Mr. Gaetz. And is that done manually, Mr. Pichai? That
    process you described, is that done manually?
        Mr. Pichai. And we could get reports from law enforcement
    agencies. You know, we are complying with--or it's a known--
    DMCA-based copyright violation
        Mr. Gaetz. There is either a manual component or there is
    not a manual component. Which is it?
        Mr. Pichai. For creating those lists, that process can
    involve manual portions, too.
        Mr. Gaetz. Okay. Great. Well, that is sort of the concern
    that I have. You've now said something different today than you
    said to Ms. Lofgren, because you've confessed that there is a
    manual component to the way in which you blacklist content. And
    it seems to be no coincidence that sites like Gateway Pundit,
    The Western Journal, American Spectator, Daily Caller, and
    Breitbart receive ire or negative treatment as a consequence of
    your manual tooling.
        And it also seems noteworthy that whistleblowers at your
    own company have spoken out. You said that one of the reasons
    you maintain this manual tool is to stop election interference.
    I believe it is, in fact, your company that is engaging in
    election interference. And it's not just my view. Mike Wacker
    came out and was a whistleblower, indicating that the manual
    blacklist targets that Google specifically goes after are those
    who support President Trump, who hold a conservative viewpoint.
    And he left your company in 2019 because he was speaking out
    against these ``outrage mobs.''
        So can you see how, when you empower individuals, some of
    the same individuals that Project Veritas has exposed as
    labeling people as terrorists who say ``Make America Great
    Again'' or who support the President, that, in fact, can be the
    very election interference that we're concerned about and that
    you're using your market dominance in search to accomplish that
    election interference?
        Mr. Pichai. Congressman, with respect, I strongly disagree
    with that characterization. We don't approach this work with
    any political viewpoint. We do that to comply with law, known
    copyright violations, in very narrow circumstances. And we have
    to do that to comply with the law. And, in many cases, those
    requests can come from law enforcement agencies----
        Mr. Gaetz. Your own employees are saying----
        Mr. Cicilline. The time of the gentleman----
        Mr. Gaetz [continuing]. You're doing it for a different
    reason.
        Mr. Cicilline. The time of the gentleman has expired.
        Mr. Gaetz. Your own employees are saying it's political
    bias.
        I yield back.
        Mr. Cicilline. Thank you, Mr.----
        Mr. Gaetz. Oh, I'm sorry. May I be recognized for a
    unanimous consent request?
        Mr. Cicilline. Yes.
        Mr. Gaetz. Mr. Chairman, just, given the productivity of
    our discussion, I'd request that we be permitted a third round
    of questioning.
        Mr. Cicilline. Without objection.
        I now recognize the chairman of the full committee, Mr.
    Nadler.
        Chairman Nadler. Yeah. You know, the documents prove--the
    news and journalism industry in this country are in economic
    free fall. Over 200 counties in America no longer have a local
    newspaper, and tens of thousands of journalists have been laid
    off in recent years.
        The reason journalism is in free fall is that Google and
    Facebook now capture the vast majority of digital ad revenue.
    Although news publishers produce valuable content, it is Google
    and Facebook that increasingly profit off their content.
    Publishers have told us that Google and Facebook maintain their
    dominance in these markets in part through anticompetitive
    conduct as well as conflict of interest.
        Mr. Zuckerberg, in 2015, Facebook reported high and quickly
    growing rates of video viewership on its platform. Based on
    these metrics, news publishers fired hundreds of journalists,
    choosing instead to boost their video divisions.
        In 2018, it was discovered that Facebook had inflated these
    metrics and had known about the inaccuracies several years
    before Facebook publicly disclosed this.
        Mr. Zuckerberg, did you know that these metrics were
    inflated before they were publicly released?
        Mr. Zuckerberg. Congressman, no, I did not. And we regret
    that mistake and have put in place a number of other measures
    since then to make sure that we----
        Chairman Nadler. And do you realize the harm that this
    caused journalists across the country?
        Mr. Zuckerberg. Congressman, I certainly know how important
    it is that the metrics that we report are accurate, and we've
    put in place additional measures to make sure we can audit
    those.
        Chairman Nadler. And what do you have to say to the
    journalists who lost their jobs because of Facebook's
    deception?
        Mr. Zuckerberg. Well, Congressman, I disagree with that
    characterization and also your description of what----
        Chairman Nadler. Okay. Reclaiming my time.
        Google, meanwhile, maintains its dominance in part through
    aggregating data from across its products and services.
        Mr. Pichai, I understand that Google collects user data on
    users' browsing activity through its Chrome browser. Does
    Google use that data for its own purposes, either in
    advertising or to develop and refine its algorithms?
        Mr. Pichai. Mr. Chairman, we do use data to improve our
    products and services for our users. Anytime we do it, we
    believe in giving users choice, control, and transparency; we
    make it very clear. And we give them simplified settings to
    choose how would they like their data to be used.
        Chairman Nadler. So you do use the data that you get from
    these companies for your purposes.
        Mr. Pichai. My understanding was whether we use data in
    general to improve our products and services. And, you know, we
    do use data to show ads, but we give users a choice; they can
    turn ads personalization on or off. And----
        Chairman Nadler. No, this--obviously, the use of this data
    from all these companies gives you a tremendous advantage over
    them and over any competitor.
        Does the ability to make money in any way affect Google's
    algorithm in terms of what news appears in a typical user's
    search results?
        Mr. Pichai. The way we rank our search results, you know,
    we don't take into account a commercial relationship that we
    have.
        Chairman Nadler. Okay. But Facebook and Google have gravely
    threatened journalism in the United States. Reporters have been
    fired. Local newspapers have been shut down. And now we hear
    that Google and Facebook are making money over what news they
    let the American people see. This is a very dangerous
    situation.
        And, unfortunately, my time has expired and I have to yield
    back.
        Mr. Cicilline. I thank the gentleman for yielding.
        I now recognize the gentleman from Florida, Mr. Steube, for
    5 minutes.
        Mr. Steube. Thank you, Mr. Chairman. I'm just going to pick
    up where I left off.
        Mr. Pichai, there are rioting groups that are going
    unchecked with the posting of what I would contend is very
    violent video. Yet, yesterday, I was sent a YouTube video about
    doctors discussing hydroxychloroquine and discussing the not-
    dangers of children returning to school, and when I clicked on
    the link, it was taken down.
        And then I was sent a different link on YouTube, and it was
    taken down. I just checked again, just to make sure, and it
    says that this video has been removed for violating YouTube's
    community guidelines.
        How can doctors giving their opinion on a drug that they
    think is effective for the treatment of COVID-19 and doctors
    who think it's appropriate for children to return back to
    school violate YouTube's community guidelines, when all of
    these videos of violence are all posted on YouTube?
        Mr. Pichai. Congressman, we believe in freedom of
    expression. And there is a lot of debate on YouTube about
    effective ways to deal with COVID. We allow robust debate.
        But in the area, during a pandemic, we look to local health
    authorities--so, for example, in the U.S., it would be CDC--for
    guidelines around medical misinformation in a narrow way which
    could cause harm in the real world.
        And so, for example, if there are aspects of a video and if
    it explicitly states something could be a proven cure, and that
    doesn't meet CDC guidelines, you know, we would remove that
    video----
        Mr. Steube. But it's free expression of speech. And you
    have these doctors who are giving their opinion as doctors. And
    I don't understand why YouTube and, therefore, Google thinks
    it's appropriate to silence physicians and their opinion of
    what can help and cure people with COVID-19.
        I'm going to switch quickly to Mr. Zuckerberg.
        I think at this point it's fairly obvious that technology
    platforms have been stifling conservative news and opinions.
    You employ a panel of content moderators. Can you explain how
    Facebook chooses who these moderators are?
        Mr. Zuckerberg. Thanks, Congressman. We do hire a lot of
    people around the world to work on safety and security. Our
    team is more than 30,000 or 35,000 people working on that now.
    We certainly try to do this in a way that is neutral to all
    viewpoints. We want to be a platform for all ideas. I don't
    think you build a social product with the goal of giving people
    a voice if you don't believe that people being able to express
    a wide variety of things is ultimately valuable for the world.
    And we try to make sure that our policies and our operations
    ultimately reflect and carry that out.
        Mr. Steube. Is there an ideological diversity amongst the
    content moderators?
        Mr. Zuckerberg. Congressman, I don't think we choose to
    hire them on the basis of an ideology. They're hired all over
    the world. There is certainly a bunch in the U.S. There's
    diversity in where they're hired, but certainly we don't want
    to have any bias in what we do, and we wouldn't tolerate it if
    we discovered that.
        Mr. Steube. So you don't specifically hire, say,
    conservative moderators and Democrat or liberal moderators so
    that there's a balance in your content moderators?
        Mr. Zuckerberg. Congressman, in terms of the 30,000 to
    35,000 people or more at this point who are doing safety and
    security review, that is correct. In terms of the people
    setting the policies, I think it is valuable to have people
    with a diversity of viewpoints involved so we can make sure
    that we have the different viewpoints represented in the policy
    development process.
        And we also consult with a number of outside groups
    whenever we develop new policies to make sure that we're taking
    into account all perspectives.
        Mr. Steube. What are some of those outside groups that
    would be conservative leaning?
        Mr. Zuckerberg. Congressman, I need to get back to you with
    a list of specific groups, but it would depend on what the
    topic is that we're talking about.
        Mr. Steube. Yeah. Can you just think of one? I mean, you
    said that you reach out to outside groups. Can you think of one
    conservative outside group that you reach out to and use as a
    content moderator?
        Mr. Zuckerberg. Oh, Congressman, I'm talking about
    different external stakeholders and groups that are inputs to
    our policy development process. And I'm not involved in those
    conversations directly. So I would have to get back to you with
    specifics on that. But I am quite confident that we speak with
    people across the ideological spectrum when we're developing
    our policies.
        Mr. Steube. I would very much appreciate a followup on
    that.
        Real quickly, can you briefly explain the approval process
    for third-party fact-checkers, and how many fact-checkers does
    Facebook employ?
        Mr. Zuckerberg. Yes, thanks. We work with about 70 fact-
    checking partners around the world, and the goal of the program
    is to limit the distribution of viral hoaxes, so things that
    are clearly false, from getting a lot of distribution. But we
    don't ourselves want to be in the business of determining what
    is true and what is false. That feels like an inappropriate
    role for us to play.
        We rely on an organization called the Poynter Institute,
    and I think it's called the independent fact-checking
    organization that has a set of guidelines of what makes an
    independent fact checker, and they certify those fact-checkers.
    And then any organization that gets certification from that
    group is qualified to be a fact-checking partner within
    Facebook.
        Mr. Cicilline. Thank you. The gentleman's time has expired.
        I'm going to recognize Mr. Johnson for 5 minutes, and then
    we are going to take a short break of the committee.
        Mr. Johnson, you are recognized.
        Mr. Johnson. Thank you, Mr. Chairman.
        Mr. Bezos, Amazon has a significant problem with
    counterfeit products being sold on its platform. Counterfeit
    products not only rip off the owners of legitimate businesses,
    they also can be dangerous. Counterfeit medicine, baby food,
    automobile tires, and other products can kill. Amazon has said
    its fixing its counterfeit problem, but counterfeiting seems to
    be getting worse, not better.
        Amazon is a trillion-dollar company, but Amazon customers
    are not guaranteed that the products purchased on your platform
    are authentic. Amazon acts like it's not responsible for
    counterfeits being sold by third-party sellers on its platform,
    and we've heard that Amazon puts the burden and cost on brand
    owners to police Amazon's site, even though Amazon makes money
    when a counterfeit good is sold on its site.
        More than half of Amazon's sales come from third-party
    seller accounts. Why isn't Amazon more aggressive in ensuring
    that counterfeit goods are not sold on its platform, and why
    isn't Amazon responsible for keeping all counterfeit products
    off of its platform?
        Mr. Bezos. Thank you. This is an incredibly important issue
    and one that we work very hard on. Counterfeits are a scourge.
    They are a problem that is not--does not help us earn trust
    with customers. It's bad for customers. It's bad for honest
    third-party sellers.
        We do a lot to prevent counterfeiting. We have a team of
    more than a thousand people that does this. We invest hundreds
    of millions of dollars in systems that do this. We have
    something called Project Zero, which helps brands serialize
    individual products, which really helps with counterfeiting. We
    have other programs as well----
        Mr. Johnson. I'm glad that you have those features in
    place, but why isn't Amazon responsible for keeping all
    counterfeit products off of its platform?
        Mr. Bezos. We certainly work to do so, Congressman, and we
    do so not just for our own retail products but for third-party
    products as well. We do work closely with brands----
        Mr. Johnson. Thank you. We've heard from numerous third-
    party sellers and brand owners that Amazon has used knockoffs
    as leverage to pressure sellers to do what Amazon wants. For
    example, the founder of Popsockets testified in January that
    Amazon itself was selling knockoffs of its product.
        After reporting the problem, it was only after his company
    committed to spending $2 million on advertisements that Amazon
    appears to have stopped diverting sales to these knockoffs.
    What is your explanation for that business practice?
        Mr. Bezos. That's unacceptable. If that is--if those are
    the facts and if someone somewhere inside Amazon said, you
    know, ``Buy X dollars in ads, and then we'll help you with your
    counterfeit problem,'' that is unacceptable. And I will look
    into that, and we'll get back to your office with that.
        What I can tell you is that we have a counterfeit crimes
    unit. We attempt to prosecute counterfeiters. I would encourage
    this body to pass stricter penalties for counterfeiters and to
    increase law enforcement resources to go after counterfeiters
    because they are bad actors.
        Mr. Johnson. But your company still makes money off of
    counterfeit goods being sold on your platform. Isn't that
    correct?
        Mr. Bezos. If it does, in my view, sir, it would only be in
    the short term. I would much rather lose a sale than lose a
    customer. We make money when the customer comes back.
        Mr. Johnson. All right. Fair enough, sir.
        Making companies pay extra to avoid having their products
    disappear in rankings seems to be so unfair, especially to
    small businesses. The American Dream is threatened when that
    happens. Don't you think so?
        Mr. Bezos. Sir, I'm not exactly sure what you're referring
    to. If you're talking about what we were just talking about a
    second ago, I agree completely.
        Mr. Johnson. No, I'm talking about a totally different
    situation now, where a company that is selling on your platform
    but is not paying anything extra gets buried in the rankings,
    but companies that pay extra are able to get their products
    pushed up and they avoid getting pushed down. Is that an
    acceptable practice?
        Mr. Bezos. Sir, I think what you're referring to is the
    fact that we offer an advertising service basically for third-
    party sellers to drive additional promotion to their products.
    That is a voluntary program. Some sellers use it. Some don't.
    And it's been very effective at helping people promote their
    products.
        Mr. Johnson. With that, I yield back. Thank you.
        Mr. Cicilline. The gentleman yields back.
        The committee will stand in a brief recess.
        [Recess.]
        Mr. Cicilline. The committee will come to order.
        I recognize the gentlelady from Florida, Mrs. Demings, for
    5 minutes. I'm sorry?
        I recognize the gentleman from North Dakota, Mr. Armstrong,
    for 5 minutes.
        Mr. Armstrong. Thank you, Mr. Chairman.
        Mr. Bezos, earlier, my colleague brought up what I think is
    an important issue, and they were discussing Amazon's stated
    policy against using third-party seller information to inform
    business decisions regarding Amazon's private label brands. Ms.
    Jayapal specifically noted that a possible loophole allows
    Amazon to review nonpublic aggregate data to inform private
    brands even in instances where there are only a few third-party
    sellers.
        I just want to drill down on that just a little more. Where
    exactly does Amazon draw the line?
        Mr. Bezos. I'm sorry. Aggregate data would be more than one
    seller. And the--of course you have to remember that the person
    seeing the report would have no way of knowing how many sellers
    are inside that group or what the, you know, what the breakdown
    would be between those sellers. And I would remind you that
    it's not that different from perhaps a bestseller list or a
    product ranking, which we do make public for all.
        Mr. Armstrong. And I just want to be clear, does Amazon
    allow the use of aggregate data to inform private label Amazon
    brands when there are only three sellers for a product?
        Mr. Bezos. Yes, sir.
        Mr. Armstrong. Okay. Does Amazon look at aggregate data
    when there are only two sellers of a product?
        Mr. Bezos. Yes, sir.
        Mr. Armstrong. And am I correct in my understanding that
    Amazon is conducting an internal investigation on the use of
    third-party data?
        Mr. Bezos. Yes. We're basically trying to understand some
    of the anecdotes that we saw in the Wall Street Journal
    article.
        Mr. Armstrong. Will you commit to informing this committee
    on the outcome of that investigation, including on the exact
    circumstances of when Amazon is allowed to view and/or use
    aggregate data?
        Mr. Bezos. Yes. Yes, we will do that.
        Mr. Armstrong. And now I want to move, just really quick,
    music can be used to drive revenue. And obviously there is a
    reason it's important, and I want to talk about Twitch for a
    second. News reports have indicated that Twitch users are
    receiving notice and takedown requests pursuant to the Digital
    Millennium Copyright Act. My understanding is that Twitch
    allows users to stream music but does not license the music. Is
    that correct?
        Mr. Bezos. I'm going to have to ask that I could get back
    to your office with an answer to that question. I don't know.
        Mr. Armstrong. Okay. So that would be great. And then--so
    my--I just have two more questions related to that. If Twitch
    is responding to DMCA notice and takedown requirements, should
    we--or should, one, Twitch consider proactively licensing music
    instead of retroactively adhering to those notices?
        So these are the questions we're interested in. I'm
    primarily concerned about small, up-and-coming musicians,
    different people that aren't necessarily labels, to make it
    easy for them to at least get cease-and-desist notices out as
    well and as we continue to move forward there.
        Mr. Bezos. Yes, Congressman. That is an important issue,
    and I understand it, and we will get--I will get back to your
    office on that.
        Mr. Armstrong. All right. Earlier this year, Google
    announced plans to retire third-party cookies that websites
    attached to users' browsers, and this allows users to be
    tracked across the internet. A consequence of that change is
    that it will put other digital advertising market participants
    at a disadvantage because they can no longer track users.
        And at the very, very danger of being pro-cookie, because
    I'm not when I use my computer as well, but--and I understand
    that there are legitimate privacy concerns with third-party
    cookies, but I do want to focus on the competition aspect.
        Did this asset--action also place Google at a disadvantage,
    or does Google have alternative means of collecting that user
    data to inform its digital advertising activities, Mr. Pichai?
        Mr. Pichai. Congressman, as you rightly pointed out, this
    is an area where we have focused on user privacy, and users
    clearly don't want to be tracked with third-party cookies. In
    fact, other browser vendors, including from Apple and Mozilla
    Foundation have also implemented these changes.
        We are doing it thoughtfully, giving time for the industry
    to adapt because we know publishers depend on revenue in this
    area. But it's an important change, and I think we have to be
    focused on privacy to drive the change forward.
        Mr. Armstrong. But you have other ways of collecting that
    information, correct?
        Mr. Pichai. On our first-party services, you know, we don't
    rely on cookies, and obviously when people come and type into
    search, to give an example----
        Mr. Armstrong. I'm not asking if you rely on cookies. I'm
    asking you, you have other ways of collecting it through Gmail
    or consumer facing platforms, right?
        Mr. Pichai. We don't use data for Gmail for ads,
    Congressman. But to the extent on the services where we provide
    ads and if users have consented to ads personalization, yes, we
    do have data.
        Mr. Armstrong. Thank you. I yield back.
        Mr. Cicilline. The gentleman yields back.
        I now recognize the gentlelady from Florida, Mrs. Demings,
    for 5 minutes.
        Mrs. Demings. Thank you so much, Mr. Chairman.
        Mr. Zuckerberg, during discussions of changing Facebook's
    platform policy in 2012, you said that, and I quote, ``in any
    model, I'm assuming we enforce our policies against competitors
    much more strongly.'' It sounds like Facebook weaponizes its
    policies to target competitors. Why would Facebook enforce its
    policies against competitors more strongly?
        Mr. Zuckerberg. Congresswoman, when we were a much smaller
    company, we saw that----
        Mrs. Demings. This is 2012 now. This was in 2012, so,
    please, go right ahead.
        Mr. Zuckerberg. Sure. We've had policies in the past that
    have prevented our competitors, which at the time we were
    primarily worried about larger competitors, from using our
    platforms to grow and compete with us. So we had some of those
    policies. We continually reviewed them over time and since then
    we've----
        Mrs. Demings. Okay. Mr. Zuckerberg, in 2013, a senior
    Facebook employee identified MessageMe as a fast-growing app on
    Facebook and said that we will restrict their access. Was this
    another example of enforcing Facebook's policies against
    competitors much more strongly, against MessageMe?
        Mr. Zuckerberg. Congresswoman, I'm not familiar with that
    specific example, but we did have that policy. We evaluated it
    since then and changed our policies.
        Mrs. Demings. Okay. Let's move to another one and see if
    you remember this one. In 2014, other Facebook product managers
    openly discuss removing Pinterest's access to Facebook's
    platform tools.
        As one employee said, ``I am 100 percent in favor of the
    idea of moving it from Pinterest, but I am not recommending
    removing it from Netflix going forward.'' Why would Facebook
    product managers want to restrict Pinterest's access to
    Facebook but not Netflix?
        Mr. Zuckerberg. Congresswoman, I'm not familiar with that
    exchange. I don't think I was on that.
        Mrs. Demings. Why do you think--you wouldn't have to be on
    that, but why do you think they made that decision or would
    make a decision like that?
        Mr. Zuckerberg. Well, Congresswoman, as I said, we used to
    have a policy that restricted competitors from using our
    platform, and Pinterest is a social competitor with us. It's
    one of the many competitors that allow people to share----
        Mrs. Demings. Okay. All right. Mr. Zuckerberg, these
    examples and supporting documents strongly suggest that
    Facebook does weaponize its policy--platform policies,
    enforcing them selectively to undermine competitors. But let's
    move on.
        Mr. Cook, I am concerned that Apple's policies are also
    picking winners and losers in the app economy and that Apple
    rules mean Apple apps always win. Mr. Cook, in 2019, Apple
    removed from the Apple Store certain apps that helped parents
    control their children's devices. Do you remember what
    justification Apple cited?
        Mr. Cook. Yes, Congresswoman, I do. It was that the use of
    technology called MDM, mobile device management, placed kids'
    data at risk, and so we were worried about the safety of kids.
        Mrs. Demings. Okay. All right. So you were concerned
    about--that the app basically undermined kids' privacy. But
    another app that used the same tool was AppSure, an app owned
    by the Saudi Arabian Government. Do you recall what Apple's
    position was towards this app?
        Mr. Cook. I'm not familiar with that app.
        Mrs. Demings. Okay. Apple allowed this Saudi app to remain.
    So there are two types of apps. They use the same tool. Apple
    kicks one out and said that that was help--one that was helping
    parents, but keeps the one owned by a powerful government. If
    that is correct, Mr. Cook, that app that supposedly did the
    same thing, why do you--why would you keep the one owned by a
    powerful government?
        Mr. Cook. I'd like to look into this and get back with your
    office. I know----
        Mrs. Demings. Because it sounds like you applied different
    rules to the same apps.
        Mr. Cook. We apply the rules to all developers evenly. What
    we were worried about----
        Mrs. Demings. Did the fact that Apple had its own--Mr.
    Cook, let me just ask you this. Did the fact that Apple had its
    own parental control apps that were competing with these third-
    party apps contribute to Apple's decision to kick them off the
    Apple store? Mr. Cook, what do you think about that?
        Mr. Cook. It did not. There's over 30 parental controls on
    the App Store today. So there's plenty of competition in this
    area. And I would point out that this is not an area where
    Apple gets any revenue at all. We do this because----
        Mrs. Demings. Mr. Cook, I didn't ask you anything about
    revenue. I didn't--that was not my question. But I'm out of
    time, and thank you so much, Mr. Chair. I yield back.
        Mr. Cicilline. I thank the gentlelady for yielding back.
        I now recognize the ranking member of the full committee,
    Mr. Jordan, for 5 minutes.
        Mr. Jordan. Thank you, Mr. Chairman. I would yield to the
    gentleman from Florida, Mr. Gaetz.
        Mr. Gaetz. I thank the gentleman for yielding.
        Mr. Zuckerberg, just as Mr. Pichai gave prior testimony to
    Congress saying there wasn't editorial manipulation on their
    platform, you have previously given testimony to the Congress
    saying that there is not editorial manipulation that
    disadvantages conservatives.
        And just like in the case of Google, there have been
    whistleblowers from Facebook that not only have offered
    evidence indicating your testimony was not truthful, but there
    is even video that suggests that content moderators that you
    employ are out there disadvantaging conservative content.
        I'm wondering if you are familiar with the experiences of
    Zach McElroy and Ryan Hartwig, two people who participated in
    Facebook content review, and what is your response to the very
    damning video evidence and the testimony from them that the
    culture that you lead within Facebook is one that disadvantages
    conservatives and leads to content manipulation?
        Mr. Zuckerberg. So, Congressman, I'm somewhat familiar with
    the concerns that they have raised, and as I've said, we aim to
    be a platform for all ideas. We got into this because we want
    to give everyone a voice. I certainly do not want our platforms
    to be run in a way that has any ideological bias, and I want
    people to be able to discuss a range of issues.
        When people raise concerns like that, we do look into them
    to make sure that everyone in our operation is behaving in
    upholding the standards that we would like. And if the behavior
    that they cited is true, then that would be unacceptable in our
    operation.
        Mr. Gaetz. And in following the release of those videos in
    that evidence from Project Veritas, will you then describe the
    investigation that Facebook undertook to root out these very
    corrosive effects on your platform?
        Mr. Zuckerberg. Congressman, I'd have to get back to you
    with more details on that, but I know that we have ongoing
    training in what we do, and we certainly will look into any
    complaints that come up. And we want to make sure that in how
    we run the content review teams, that it's done in a way that
    reflects the values of the company around giving everyone a
    voice and being a platform for all ideas.
        Mr. Gaetz. I'm concerned that the content review does
    reflect the values of the company, but those values don't, in
    fact, give everyone a voice. They prejudice against certain
    content. And while I appreciate training as a prophylactic
    endeavor to try to guide future content, it seems disingenuous
    for you to suggest that these videos come out that are very
    damning that show the people that you trust with content
    moderation admitting on video that they disadvantage
    conservatives, that they label people who support the President
    as a way to push down their content and limit the reach of that
    content.
        For you to then come to us many months later after that was
    all over the news and the internet and say, well, you know,
    you'll get back to us and you do a little training, it seems to
    suggest that you don't take these allegations and this evidence
    very seriously.
        And so I'll ask the question perhaps in a different way,
    would you revise your prior--you know, in your prior testimony
    to Energy and Commerce, you said that does not happen. It
    cannot happen. Would you at least be willing to acknowledge,
    based on the irrefutable evidence before us that you don't seem
    to have investigated that it is possible that at Facebook your
    employees do have the power to disadvantage conservative
    viewpoints and that they, in fact, have used that power in ways
    that we need to root out?
        Mr. Zuckerberg. Congressman, my testimony in the past and
    today is about what our principles are as a company and what we
    try to do. Of course, when you have tens of thousands of
    employees, people make mistakes, people have some of their own
    goals some of the time, and it's our job in running the company
    to make sure that we minimize errors and that we make sure that
    the company's operations reflect the principles that we intend
    to run it on.
        Mr. Gaetz. And when you fire people as a consequence of
    their politics, do you think that impacts the culture and
    perhaps empowers some of the content moderators to also treat
    people worse as a consequence of their politics?
        Mr. Zuckerberg. Congressman, I'm not sure what you're
    referring to, but I'm not aware of any case where we have fired
    someone because of their politics, and I would say that would
    be an inappropriate thing for us to do.
        Mr. Gaetz. Why did you fire Palmer Luckey?
        Mr. Zuckerberg. Congressman, I'm not sure it's appropriate
    to get into a specific personnel issue publicly, but I can
    assure you it was not----
        Mr. Gaetz. I mean, I could just tell you that Palmer
    Luckey's NDA with you--I only have 10 seconds, but Palmer
    Luckey's NDA with you doesn't allow him to talk to anyone
    except government officials. I'm a government official. I've
    seen the messages where you have specifically directed Mr.
    Luckey to make statements regarding his politics for the
    benefit of your company.
        So I think both in the case of these content moderators and
    in the case of the testimony you just gave regarding Mr. Luckey
    and firing people over their politics, there is serious
    question as to whether or not you're giving truthful testimony
    here or whether it's lying before Congress.
        I see my time is expired, and I'll yield back.
        Mr. Cicilline. The gentleman yields back.
        I now recognize the gentlelady from Pennsylvania, Ms.
    Scanlon.
        Ms. Scanlon. Thank you, Mr. Chairman.
        Mr. Pichai, I wanted to focus a little bit on Google's
    acquisition of YouTube and some of the consequences of that
    move for consumer privacy and competition. Now, Google
    purchased YouTube in 2006 after identifying it as a potential
    rival that could eventually draw business away from Google, and
    it's my understanding Google paid $1.65 billion for that
    acquisition, nearly 30 times its original bid of $50 million.
        So could you tell us why Google was willing to pay so much
    more beyond the initial proposed bid, and was this the result
    of any analysis on the harm Google would suffer if a competitor
    had purchased YouTube?
        Mr. Pichai. Congresswoman, we acquired YouTube in 2006, and
    this was well before my time there as CEO, and I wasn't
    directly involved, but, you know, what I do recall at the time
    is that we saw it as a new emerging area, and we are--our
    mission is to help users with information. We saw an
    opportunity and it wasn't clear. YouTube only had 67 people.
        Ms. Scanlon. Okay. Was Mr. Page in charge of that decision?
        Mr. Pichai. Congresswoman----
        Ms. Scanlon. You don't know, okay.
        Mr. Pichai [continuing]. I wasn't directly involved, but I
    am pretty sure our senior leadership team at that time
    definitely looked into it.
        Ms. Scanlon. Okay. I would encourage the subcommittee to
    take the steps necessary to have us hear from whoever it was in
    charge of that.
        Moving on, Google is now by far the top online site where
    Americans watch videos, including children's videos. And as I'm
    sure you're aware, Federal law prevents companies from
    collecting data on children under 13. However, just last year,
    the Federal Trade Commission found that Google had spent years
    knowingly collecting data on children under 13 on YouTube and
    offering advertisers the ability to target those children
    directly.
        Mr. Pichai, did YouTube use the data it illegally acquired
    to improve its ability to target ads to children?
        Mr. Pichai. We are--you know, we are--this is an area, you
    know, we take it very seriously. I'm a parent too. We have
    invested tremendously. We have a dedicated product for kids in
    YouTube Kids on the main YouTube platform. We make sure we have
    clear policies. We enforce them rigorously.
        Just in Q4 in 2019, we flagged and removed almost close to
    1 million videos potentially for concerns around child safety.
    So it is an area we are investing rigorously, and we'll
    continue to do so.
        Ms. Scanlon. Okay. Well, I'm more concerned about the fact
    that you're investing rigorously in luring in advertisers like
    toy makers Mattel and Hasbro by telling them that YouTube is
    the number one website regularly visited by kids. So that
    sounds like you're targeting the kids and then targeting
    advertisers to bring them on board. Is that correct?
        Mr. Pichai. Today, in the main site of YouTube, we don't
    allow anyone under 13 to create accounts. There are scenarios
    in which there could be family viewing, and today there are
    creators who create content oriented towards families, and as
    part of that, there are advertisers which are interested in
    connecting with those users. But everything we do here we
    obviously comply with all the applicable regulations and it's--
    --
        Ms. Scanlon. Okay. Well, let's look at some of the content
    that is specifically for children. COPPA makes it illegal to
    target those kids, but we've got an issue where content
    creators are in a very difficult position now. So, if a show
    like Sesame Street doesn't want to show ads for junk food on
    YouTube, does YouTube allow it to make that choice?
        Mr. Pichai. Today, we do--you know, we have choices both
    for creators in terms of, you know, tools and preferences, and
    we have extensive tools for advertisers. And above all, for
    users we give the choice, they can either use YouTube as a
    subscription service without seeing those types of ads, or, you
    know, they can use it for free with ads.
        So we give choice, and, you know, for us it is of utmost
    importance that YouTube is a place where people come to learn,
    and, you know, we find increasingly small and medium businesses
    use YouTube to thrive especially even during COVID particularly
    many----
        Ms. Scanlon. Okay. Let's go back to content that's designed
    for children. So, you know, if there's an organization like
    Sesame Street that wants to provide child-centered content but
    they don't want that content to be sullied, shall we say, with
    junk food ads or something, my understanding is that you say
    that the content creators can do that.
        But we've got a recent report from The Wall Street Journal
    that says YouTube hasn't been honoring those requests, and it's
    been making it difficult for independent auditing companies
    like OpenSlate to independently audit that and then report back
    to those content creators about whether or not YouTube is
    honoring those. Is that correct?
        Mr. Pichai. I'm not familiar with the particular report,
    but I'm happy to understand it better and, you know, have my
    office follow up with your staff, Congresswoman.
        Ms. Scanlon. I would appreciate that. And my time is
    expired. I yield back.
        Mr. Neguse [presiding]. The gentlewoman yields back.
        The chair will now recognize himself for 5 minutes.
        Mr. Bezos, thank you for being here today. In your opening
    statement, you--I reviewed your written testimony--you
    indicated, and I'll just quote, that Amazon accounts for less
    than 1 percent of the $25 trillion global retail market and
    less than 4 percent of retail in the U.S., end quote.
        When you refer to retail--I take it based on the empirical
    studies I reviewed--you're referring to a broad definition of
    retail that includes restaurants, bars, gas stations, it's a
    fairly all-encompassing view of retail. I wonder if you know
    what percentage of Amazon's sales are represented in the terms
    of online retail sales, the e-commerce market stream?
        Mr. Bezos. The figures I've seen for--you know, I don't--
    with all respect, I don't accept that e-commerce is a different
    market. But as a different channel, what I've seen is sort of
    30 to 40 percent is the outside studies that I've seen were
    Amazon's share of that e-commerce channel.
        Mr. Neguse. And that's consistent with the data that I have
    seen.
        Mr. Bezos. Okay.
        Mr. Neguse. The latest figure I saw was 40 percent. And so,
    in terms of how we define it, whether it's a stream or a
    channel, nonetheless, I do think that factually it's important.
    It's an important distinction that I want to make sure we clear
    here.
        Obviously, I suspect you understand more than most that the
    early stages of a startup where entrepreneurs are undertaking
    risks to bring up their products and services to market. Over
    the course of our investigation, we've heard directly from
    startups who rely on Amazon services, and that includes
    obviously Representative Jayapal's questions, Representative
    Buck, my colleague from Colorado, with respect to concerns
    about the way in which Amazon uses confidential information.
        But we've also heard that, not just with respect to the
    marketplace but Amazon's cloud computing arm, AWS, the notion
    that that computing arm essentially identifies startups' best
    technologies and rolls out replica products and services. So,
    Mr. Bezos, does Amazon use confidential information that
    companies share via AWS to build competing services?
        Mr. Bezos. No, sir, not that I'm aware of. AWS does often--
    you know, they do keep expanding their services. AWS started,
    you know, 15 years ago. We invented this entire category.
        Mr. Neguse. Let me just clarify that, Mr. Bezos. I
    appreciate that, sorry. Apologies for interrupting. But last
    week one of Amazon's former engineers posted online that he and
    his team, quote, ``proactively identified growing businesses on
    AWS,'' that they built competing products, and that they
    targeted those products to the businesses' customers, and
    there's been public reporting on that strategy. So I guess I
    wonder if you can comment on that and how you would account for
    those statements.
        Mr. Bezos. Well, I think there may be categories--I know
    some--databases of different kinds and so on where we see that
    it's an important product for customers, and we make our own
    product offering in that arena. But it doesn't mean we stop
    servicing the other companies that are also making those
    products. We have competitors using AWS, and we work very hard
    to make them successful. Netflix is one example, Hulu is
    another, and so on.
        Mr. Neguse. I think the concern, Mr. Bezos, with respect,
    is that the pattern emerges across the different components in
    Amazon, whether it's the marketplace or whether it's the cloud
    services I mentioned.
        In addition, there was an article, I'm sure you're aware,
    in The Wall Street Journal regarding the Alexa Fund, that
    according to news reports Amazon's venture capital fund, the
    Alexa Fund, had invested in a number of different companies. I
    believe you're familiar with the Alexa Fund investing, for
    example, in DefinedCrowd Corp.? Does that ring a bell?
        Mr. Bezos. No, sir, I'm afraid it doesn't.
        Mr. Neguse. Okay. Well, I'll represent to you, according to
    The Wall Street Journal, and I'll just quote from them, ``When
    Amazon, Incorporated's venture-capital fund invested in
    DefinedCrowd Corp., it gained access to the technology
    startup's finances and other confidential information. Nearly 4
    years later, in April, Amazon's cloud-computing unit launched
    an artificial intelligence product that does almost exactly
    what DefinedCrowd does, said DefinedCrowd founder and chief
    executive Daniela Braga. Does that refresh your recollection?
    Are you aware of those allegations?
        Mr. Bezos. I read that article, but I didn't remember that
    piece of it. I apologize for that. I don't know the specifics
    of that situation, and I would be happy to get back to your
    office with more information about that.
        Mr. Neguse. Well, I would appreciate it. I certainly would
    welcome that, and to the extent that you all can follow up with
    the subcommittee, with respect to this particular article and
    the different episodes that are referenced both in terms of
    DefinedCrowd Corp. There's also another company called Nucleus
    that you may be familiar with.
        The reason why I ask these questions, the reasons why it
    matters, Mr. Bezos, to me is that we are very concerned about
    this innovation kill zone that seems to be emerging. I
    represent Boulder and Fort Collins, two of the fastest growing
    and most innovative tech hubs in the country.
        And entrepreneurs and founders shared their stories with
    this committee during one of our field hearings, actually a
    field hearing that we held at the University of Colorado Law
    School just earlier this year. And they are extremely dependent
    on big technology firms, including in terms of investment in
    capital, yet they live in constant fear that the platforms
    could steal their core technologies or ideas making it
    impossible to compete because of those existing advantages.
        So I see my time has expired, but we will certainly be
    following up with respect to the episodes that I referenced.
    With that, I would yield back. The gentleman's time is expired.
        And the gentlewoman from Georgia, Mrs. McBath, is
    recognized for 5 minutes.
        Mrs. McBath. Thank you, Mr. Chair.
        Mr. Cook, Facebook acquired WhatsApp in 2014, and at that
    time, Sheryl Sandberg told the board that the deal was critical
    for countering the App Store power of Apple and Google who
    choke off Facebook's access to mobile devices. Was Sheryl
    Sandberg correct? Does Apple have the power to exclude apps
    from the App Store?
        Mr. Cook. If you look at the history of this,
    Congresswoman, we've increased the number of apps from 500 to
    1.7 million. So there's a very wide gate for the App Store, and
    there's fierce competition for developers, and we want every
    app we can on the platform.
        Mrs. McBath. Okay. So, but, Mr. Cook, then what you're
    saying is that Apple can exclude apps from the App Store; in
    fact, it has. In 2018, Apple introduced an app called Screen
    Time, which helps people limit the amount of time they or their
    kids spend on their iPhones. Is that correct?
        Mr. Cook. It sounds right.
        Mrs. McBath. Okay. But before Screen Time existed, there
    were other apps in the App Store that gave parents control over
    the kids' phone usage, apps like OurPact and Kidslox, and
    parents depended on them.
        Soon after you introduced Screen Time, however, you removed
    these competing apps from the App Store. One mother wrote to
    Apple saying, and I quote her, ``I am deeply disappointed that
    you have decided to remove this app and others like it, thereby
    reducing consumer access to much-needed services to keep
    children safe and protect their mental health and well-being.''
        Mr. Cook, why did Apple remove competing apps right after
    you released Screen Time?
        Mr. Cook. We were concerned, Congresswoman, about the
    privacy and security of kids. The technology that was being
    used at that time was called MDM, and it had the ability to
    sort of take over the kid's screen and a third party could see
    it, and so we were worried about their safety.
        Mrs. McBath. Okay. Thank you. I appreciate that.
        Mr. Cook. Today we have----
        Mrs. McBath. I appreciate that, but the timing of the
    removal seems very coincidental. If Apple wasn't attempting to
    harm competitors in order to help its own app, why did Phil
    Schiller, who runs the App Store promote the Screen Time app to
    customers who complained about the removal of rival parental
    control apps?
        Mr. Cook. Congresswoman, I can't see this email. I am
    sorry. My eyes are not good enough to read it. But I see Screen
    Time as just an alternative, that there are over 30 parental
    control apps that are in the App Store today, and so there is
    vibrant competition for parental controls out there.
        Mrs. McBath. Okay. Well, Mr. Cook, the fact is that Apple
    sidelined Screen Time's competition by keeping them out of the
    App Store. And while Apple claims these competitors weren't
    meeting Apple's privacy standards, these app creators say that
    you admitted them back in 6 months later without requiring
    significant privacy changes.
        And, of course, 6 months is truly an eternity for small
    businesses to be shut down, even worse if all the while a
    larger competitor is actually taking away customers. And, you
    know, this is not the first time something like this seems to
    have happened, Mr. Cook. Let me give you another example, you
    know, of the harm that's been caused to your competitors.
        In 2010, Apple introduced an online bookstore called the
    iBookStore where it offered e-books, and the only major
    publisher that didn't agree to join iBookStore was Random
    House. Random House wanted to offer its own e-books through its
    own apps and submitted their apps to be added to the App Store.
        Amidst continued negotiations between Apple and Random
    House, senior VP Eddy Cue said, and I'm quoting him when he
    said, it prevented an app from Random House from going live in
    the App Store. Cue himself cited this app rejection as a factor
    in finally getting Random House to give in and join iBookStore.
        Mr. Cook, is it fair for Apple to use its power over the
    App Store to pressure a business to join Apple's own app?
        Mr. Cook. I can't see the email and so I don't know the
    context of it, but there are many reasons why an app might not
    initially go through the App Store gate, because it may not
    work properly. There may be other issues with it. So it's very
    difficult to see.
        What I would say though on a macro basis, the gate to the
    App Store is very wide. We have 1.7 million apps in it. It has
    become an economic miracle with over $138 billion of commerce
    just in the United States.
        Mrs. McBath. Well, Mr. Cook, I really, really appreciate
    that sentiment, but, you know, I want to say to you that Apple
    enjoys enormous power to control which apps can reach
    consumers. Even some of the largest companies in the country
    fear your power.
        Our evidence suggests that your company has used its power
    to harm your rivals and boost your own business. This is
    fundamentally unfair and harms small businesses that rely on
    you to reach customers and stifles the innovation that is the
    life blood of our economy. Ultimately, it reduces the
    competition and choices that are made available to consumers,
    and that is a great concern to all of us.
        And I yield back.
        Mr. Cicilline [presiding]. The gentlelady yields back.
        That concludes that round. In light of the request of Mr.
    Gaetz for a third round and because many of my colleagues would
    like to get more fulsome answers on a number of issues, we'll
    proceed to a final round, and my expectation is we will
    conclude within the hour. And I'll recognize myself for 5
    minutes.
        Mr. Zuckerberg, we've seen the dominance of several of the
    companies appearing before us today, that it's not just harmful
    to our economy and competition, but it's harmful to the
    founding principles of our democracy. Facebook and Google are
    designed to keep users on their platforms whatever the cost.
    Because disinformation, propaganda, and hateful speech are good
    for engagement, they're good for business.
        But over 100 years ago, the Supreme Court Justice Oliver
    Wendell Holmes, Jr. wrote, ``The most stringent protection of
    free speech would not protect a man in falsely shouting fire in
    a theater and causing panic.''
        My first question is, Mr. Zuckerberg, do you agree with
    that principle, that there are limits to harmful and false
    speech and that are particularly important when it comes to the
    health and safety of the public?
        Mr. Zuckerberg. Congressman, I certainly do, and I actually
    think that our policies go further than just limiting those
    types of things.
        Mr. Cicilline. Well, Mr. Zuckerberg, you have 1 billion
    users and almost 50,000 employees, and so you agree you have a
    responsibility to remove harmful lies from your platform,
    correct?
        Mr. Zuckerberg. Congressman, I think we have a
    responsibility to limit the spread of content that's going to
    be harmful for people. And also if--I'd like to add that I do
    not believe that we have any incentive to have this content on
    our service. People don't like it----
        Mr. Cicilline. Mr. Zuckerberg, with all due respect, except
    that it is often the most engaging. It's the most--it brings
    the most likes or it brings the most activity which, of course,
    produces great profit. So you do have an incentive. The more
    engagement there is, the more money you make on advertising.
        So let me ask you a question. Let me give you some specific
    examples that will illustrate my concerns. These are some of
    the top ten most shared articles on Facebook in 2020: ``Trump
    Suggests `Injection' of Disinfectant to Beat Coronavirus and
    Clean the Lungs,'' ``Coronavirus Hype Biggest Political Hoax in
    History,'' ``U.S. Hospitals Getting Paid More to Label Cause of
    Death As Coronavirus.''
        During the greatest public health crisis of our lifetime,
    don't you agree that these articles viewed by millions on your
    platform will cost lives?
        Mr. Zuckerberg. Congressman, with respect, we certainly
    have policies that prohibit false information about COVID that
    would lead to imminent harm, and we've been quite aggressive
    about taking that down as some of the questioning from the
    other side of the aisle has shown so far.
        Mr. Cicilline. Well, Mr. Zuckerberg----
        Mr. Zuckerberg. I am proud of our efforts here. We've----
        Mr. Cicilline. With all due respect, the problem is
    Facebook is profiting off of and amplifying disinformation that
    harms others because it's profitable. This isn't a speech
    issue. It's about Facebook's business model that prioritizes
    engagement in order to keep people on Facebook's platform to
    serve up more advertisements.
        So I'll ask it very specifically, what are you doing right
    now to protect people from demonstrably false claims related to
    this deadly pandemic?
        Mr. Zuckerberg. Congressman, I'll certainly answer that,
    but I have to disagree with the assertion that you're making
    that this content is somehow helpful for our business. It is
    not what people want to see, and we rank our--what we show in
    News feed is based on what is going to be the most meaningful
    to people and is going to create long-term satisfaction, not
    what's just going to get engagement or clicks today. That is a
    common misperception about the company.
        Mr. Cicilline. Sir, if that's true--if that's true, Mr.
    Zuckerberg, how do you explain that on Monday, the second most
    popular post on Facebook was a Breitbart video claiming that
    you don't need a mask and hydroxychloroquine is a cure for
    COVID, and in the first 5 hours after being posted on Facebook,
    it racked up 20 million views and over 100,000 comments before
    Facebook acted to remove it?
        Mr. Zuckerberg. Well, Congressman, a lot of people shared
    that, and we did take it down because it violates our policies.
    We work with the CDC to----
        Mr. Cicilline. After 20 million people saw it over the
    period of 5 hours. I mean, doesn't that suggest, Mr.
    Zuckerberg, that your platform is so big that, even with the
    right policies in place, you can't contain deadly content?
        Mr. Zuckerberg. Congressman, I don't think so. I think we
    have, on COVID misinformation in particular, a relatively good
    track record of fighting and taking down lots of false content,
    as well as putting up authoritative information. We have built
    a COVID information center----
        Mr. Cicilline. Well, I understand that.
        Mr. Zuckerberg [continuing]. With authoritative information
    from health officials that we have put----
        Mr. Cicilline. Thank you, Mr. Zuckerberg. One more
    question.
        Mr. Zuckerberg [continuing]. And shown more than 2 billion
    people.
        Mr. Cicilline. I appreciate that, Mr. Zuckerberg.
        When a television station runs a false political
    advertisement, they're held liable for that. Why should
    Facebook or any other platform be different? While you may not
    be a publisher, you're responsible maybe not for the first
    posting, but you then take that posting and you apply a set of
    algorithms that decide how you will disseminate that, which is
    a business decision, not a First Amendment decision. And it's
    hard to understand why Facebook shouldn't be responsible for
    those business decisions.
        Mr. Zuckerberg. Congressman, in terms of political ads,
    we've modeled a lot of our policies off of the FCC guidelines
    on broadcasters and their requirements to run political ads
    equally from all different sides----
        Mr. Cicilline. I think these examples unfortunately, Mr.
    Zuckerberg, are just the tip of the iceberg. It's not just
    about COVID. Facebook hosts or enables countless of pages in
    ads that are dedicated to conspiracy theories and calls to
    violence, including content that led to the white supremacist
    rally in Charlottesville in 2017.
        And Facebook gets away with it because you're the only game
    in town. There's no competition forcing you to police your own
    platform. Allowing this misinformation to spread can lead to
    violence, and, frankly, I believe it strikes at the very heart
    of the American democracy.
        And, with that, I now recognize the gentleman from Florida,
    Mr. Gaetz, for 5 minutes.
        Mr. Gaetz. Thank you, Mr. Chairman.
        Mr. Pichai, in 2016, there was an internal Google meeting.
    You attended that meeting along with Sergey Brin. A video of
    that meeting was leaked to Breitbart. And at the meeting, top
    Google executives, including Kent Walker, lamented Trump's
    victory, they compared Trump voters to extremists, and it was
    discussed that there was an intent to make the Trump win a blip
    in the populous movement in American history.
        Now, I know you've testified today in response to my
    questions and Mr. Jordan's questions that you don't intend this
    time to engage in electioneering on behalf of the former Vice
    President. But given the video evidence of senior members of
    your team in your presence saying that they had the intent to
    make the Trump victory a blip, why should we believe that
    testimony today?
        Mr. Pichai. Congressman, we do not have a view on--we
    respect the democratic process. We are deeply committed to it.
    As a company, we take pride in the information we provide to
    help people participate in free elections, and we are deeply
    committed to it, as I said to Congressman Jordan as well.
        Mr. Gaetz. Do you remember that meeting in 2016?
        Mr. Pichai. Congressman, yes, I do. Yes, I do. It was in
    the context of, you know, to the election across both sides,
    there was a lot of opinions. And as you know, elections are
    kind of a polarizing moment generally in the country, and there
    was a lot of rhetoric about certain issues which were affecting
    our employees and----
        Mr. Gaetz. Oh, I understand rhetoric. I guess the question
    is, when the senior members of your team in your presence said
    that they did have the intent to change the outcome in a
    subsequent election and then, since that moment in time, where
    we've seen all of these conservative websites and conservative
    viewpoints censored, you can understand why people would be
    concerned.
        So, after your employees and top executives said in your
    presence that they intended to make the Trump victory a blip,
    what action did you take as the CEO to protect and preserve the
    neutrality of your platform?
        Mr. Pichai. Congressman, no one had a view on, you know,
    ever interfering with elections or so on. But what I can tell
    you is we have made it very clear--about 2 years ago, we
    announced new community guidelines for within Google clearly
    making it clear that, you know, employees can--obviously are
    free to have their political views.
        But none of that should ever--they shouldn't bring that as
    they work on any of our products, and if we found any evidence
    that people are using a political agenda to manipulate any of
    our content platforms, we will take strong enforcement action.
        Mr. Gaetz. Well, unfortunately, we have sort of a string of
    events here. We have the 2016 meeting, where people
    demonstrated their intent to make changes to hurt the
    President. Then we have your testimony today that's a little
    different than your testimony from December where you say
    people can manipulate blacklists.
        And then you have the outcome, where sites like Breitbart
    and Gateway Pundit and others see that disparate treatment. So
    it really doesn't take Sherlock Holmes here to connect the dots
    and see what Google is doing.
        I'm going to move on with my final 90 seconds. Mr. Bezos, I
    am deeply moved by your personal story. I am not here accusing
    you as someone who would ever traffic in hate, but it seems you
    have empowered people who do. And I'm particularly talking
    about the Southern Poverty Law Center.
        The Southern Poverty Law Center, which you allow to dictate
    who can receive donations on your AmazonSmile platform, have
    said the Catholic Family News, Catholic Family Ministries, the
    Federation for American Immigration Reform, the American Family
    Association, the Family Research Council, the Jewish Defense
    League, and even Dr. Ben Carson are extremists and should be
    treated differently.
        Dr. Carson is on the Cabinet and is one of the most
    renowned minds in America. I'm just wondering why you would
    place your confidence in a group that seems to be so out of
    step and seems to take mainstream Christian doctrine and label
    it as hate?
        Mr. Bezos. Sir, it's a good question. We have--for those of
    you that don't know what AmazonSmile is, it's a program that
    allows customers to designate a certain fraction of their
    purchases to go to charity that we then pay for, and they can
    select from any one of millions of charities. And we use the
    Southern Poverty Law Center data to say which charities are
    extremist organizations. We also use the U.S. Foreign Asset
    Office to do the same thing, so those two together----
        Mr. Gaetz. But why? Since they're calling Catholics and
    these Jewish groups hateful groups, why would you trust them?
        Mr. Bezos. Sir, I'm going to acknowledge this is an
    imperfect system.
        Mr. Gaetz. No doubt.
        Mr. Bezos. And I would love suggestions on better--or
    better or additional sources for how to----
        Mr. Gaetz. My suggestion would be a divorce from the SPLC,
    and I see that I'm out of time and I yield back.
        Mr. Cicilline. The gentleman yields back.
        I now recognize the chair--sorry. I recognize the gentleman
    from Georgia, Mr. Johnson.
        Mr. Johnson. Thank you, Mr. Chairman.
        Facebook is dominant, not just in the social media market
    but also in its digital surveillance capabilities. In 2012,
    Facebook had several tools that allowed it to conduct digital
    surveillance, including trackers, Facebook's Like button,
    Facebook login, and a series of application programming
    interfaces, or APIs.
        Mr. Zuckerberg, these tools provide Facebook with insights
    into its competitors' websites and apps. Isn't that correct?
    Yes or no.
        Mr. Zuckerberg. Congressman, I'm--I think broadly the
    answer to what you're saying is, yes.
        Mr. Johnson. All right.
        Mr. Zuckerberg. We--every other company here do market
    research to understand what people are finding valuable and----
        Mr. Johnson. Okay. So you're going beyond the scope of my
    question. I appreciate that answer though.
        Mr. Zuckerberg, a few days before Facebook acquired
    Instagram, a Facebook vice president emailed you suggesting
    ways to improve Facebook's, quote, ``competitive research,''
    end quote. By building a custom model Facebook could improve
    its understanding of its competitors and, quote,``make more
    bold decisions on whether they are friends or foes'', end
    quote.
        Mr. Zuckerberg, how does Facebook improve its competitive
    research to distinguish friends from foe?
        Mr. Zuckerberg. Congressman, I'm not sure exactly what he
    was referring to in that email there, but he is one of the
    people involved in running our analytics organization, and I
    think it's natural that he would, as part of his
    responsibility, be focused on market research and understanding
    more there.
        Mr. Johnson. And, certainly, isn't it true that Facebook,
    after that conversation, purchased the web analytics company
    Onavo in 2013 to give Facebook more capability to monitor its
    competitors?
        Mr. Zuckerberg. Congressman, I think you have the timing
    correct. We purchased Onavo as part of our broader market
    research capacity.
        Mr. Johnson. And that would give you the capability to
    monitor your competitors, correct?
        Mr. Zuckerberg. Congressman, it gave aggregate analytics as
    to what people were using and what people were finding
    valuable, sort of like the type of product you would get from
    Nielsen or Comscore, or some of the other third-party companies
    that provide similar data.
        Mr. Johnson. Well, Mr. Zuckerberg, that acquisition gave
    you nonpublic real-time data about engagement, usage, and how
    much time people spend on apps. And when it became public that
    Facebook was using Onavo to conduct digital surveillance, your
    company got kicked out of Apple's App Store. Isn't that true?
        Mr. Zuckerberg. Congressman, I'm not sure I'd characterize
    it in that way. I think this is part of the problem----
        Mr. Johnson. Well, Onavo did get kicked out of the App
    Store. Isn't that true?
        Mr. Zuckerberg. Congressman, I believe we took the app out
    after Apple changed their policies about protecting VPN apps.
        Mr. Johnson. And it was because of the use of these
    surveillance tools?
        Mr. Zuckerberg. Congressman, I'm not sure that the policy
    was worded that way or that that's exactly the right
    characterization of it, but----
        Mr. Johnson. Okay, well, let me ask you this question. Let
    me ask you this question. After Onavo was booted out of the App
    Store, you turned to other surveillance tools, such as Facebook
    Research app, correct?
        Mr. Zuckerberg. Congressman, in general, yes, we do a broad
    variety of----
        Mr. Johnson. And, also, isn't it true, Mr. Zuckerberg, that
    Facebook paid teenagers to sell their privacy by installing
    Facebook Research app?
        Mr. Zuckerberg. Congressman, I'm not familiar with that,
    but I think it's a general practice to be able to--that
    companies used to have different surveys and give--understand
    data from how people are using different products and what
    their preferences are.
        Mr. Johnson. Facebook Research app got thrown out of the
    App Store too. Isn't that true?
        Mr. Zuckerberg. Congressman, I'm not familiar with that.
        Mr. Johnson. Okay. Well, over nearly a decade, Mr.
    Zuckerberg, you led a sustained effort to surveil smaller
    competitors to benefit the Facebook--to benefit Facebook. These
    were steps taken to abuse data, to harm competitors, and to
    shield Facebook from competition. You tried one thing and then
    you got caught, made some apologies, then you did it all over
    again. Isn't it true?
        Mr. Zuckerberg. Congressman, I respectfully disagree with
    that characterization. I think every company engages in
    research to understand what their customers are enjoying so
    they can learn and make their products better. And that's what
    we were trying to do. That is what our analytics team was
    doing. And I think, in general, that allowed us to make our
    services better for people to be able to connect in a whole lot
    of different ways, which is our goal.
        Mr. Johnson. Did you use that capability to purchase
    WhatsApp?
        Mr. Zuckerberg. Congressman, it was one of the signals that
    we had about WhatsApp's trajectory, but we didn't need it.
    Without a doubt, it was pretty clear that WhatsApp was a great
    product. I already had a relationship with Jan Koum, the
    founder, and----
        Mr. Johnson. And it was a competitor.
        Mr. Cicilline. The gentleman's time has expired.
        I now recognize the gentleman from Florida, Mr. Steube.
        Mr. Steube. Thank you, Mr. Chairman.
        I have a question for all four, a yes-or-no answer. Do you
    believe that the Chinese Government steals technology from U.S.
    companies?
        We'll start with Mr. Cook.
        Mr. Cook. I don't know of specific cases where we have been
    stolen from by the government.
        Mr. Steube. So you don't believe that the Chinese
    Government is stealing technology from U.S. companies? Or
    you're just saying not from yours?
        Mr. Cook. I'm saying I know of no case, ours, where it
    occurred, which is--I can only speak to firsthand knowledge.
        Mr. Steube. Mr. Pichai, do you believe that the Chinese
    Government steals technology from United States companies?
        Mr. Pichai. Congressman, I have no firsthand knowledge of
    any information stolen from Google in this regard.
        Mr. Steub. Mr. Zuckerberg.
        Mr. Zuckerberg. Congressman, I think it's well-documented
    that the Chinese Government steals technology from American
    companies.
        Mr. Steube. Yeah. Thank you.
        Mr. Bezos.
        You're on mute.
        Mr. Cicilline. Mr. Bezos, I believe you're on mute.
        Mr. Bezos. I'm sorry. I was saying I have heard many
    reports of that, and I haven't seen it personally, but I've
    heard many reports of it.
        Mr. Steube. So, of all the different products that Amazon
    carries, you haven't seen that in any of the companies that
    sell products on Amazon or your company yourself?
        Mr. Bezos. Well, certainly, there are knock-off products,
    if that's what you mean, and there are counterfeit products and
    all of that. But the Chinese--if the answer is the Chinese
    Government is stealing technology, that's the thing I have read
    reports of but don't have personal experience with.
        Mr. Steube. It's no secret that Europe increasingly seems
    to have an agenda of attacking large, successful U.S. tech
    companies. Yet Europe's approach to regulation in general, and
    antitrust in particular, seems to have been much less
    successful than America's approach.
        America is a remarkable nursery for innovation and
    entrepreneurship and pursuit of the American Dream. As you all
    know from direct experience, this is a country where it's
    possible to start a company from a garage or a dorm room and
    experience tremendous success.
        Do you have any recommendations on how Congress can better
    protect U.S. firms and U.S. companies from aggression and
    government intervention abroad, not just in Europe but in China
    as well?
        Anybody that would like to chime in. I'll open it up to any
    of you.
        None of you have any recommendations on how Congress can
    better protect U.S. companies like yourself?
        All right. Well, I'll yield the remainder of my time to Mr.
    Gaetz.
        Mr. Gaetz. I thank the gentleman for yielding.
        Mr. Zuckerberg, what is a digital land grab?
        Mr. Zuckerberg. Congressman, I'm not sure what you're
    referring to.
        Mr. Gaetz. Well, in the emails that your company produced
    to the committee, there's one from David Wehner in 2014 where
    he's describing, under the mergers and acquisitions advice
    within the company, that you need to engage in a land grab. And
    he says, ``I hate the word `land grab,' but I think that's the
    best convincing argument, and we should own that.''
        And it goes on to describe a strategy wherein Facebook
    would spend 5 to 10 percent of its market cap each year to
    shore up its market position.
        Does that refresh your recollection?
        Mr. Zuckerberg. Yes, Congressman. Thanks for the
    opportunity to address this and, frankly, to correct the
    record, because I believe that what he was referring to was a
    question that was incoming from investors about whether we
    would continue to acquire different companies. I don't think
    that was--that wasn't referring to an internal strategy; it was
    referring to an external question that we were facing about how
    investors should expect us to act going forward.
        And I think he was discussing the fact that, as mobile
    phones were growing in popularity, there were a lot of new ways
    that people could connect and communicate that were part of
    this overall broader space and market around human connection
    and helping people stay connected and share their experiences
    that were----
        Mr. Gaetz. Okay, but, Mr. Zuckerberg, it seems to be both
    internal and external, because then in an email from you in
    2012, we see a similar sentiment expressed. You write, ``We can
    likely always just buy any competitive startups.''
        So is your desire to limit competition by purchasing your
    competitors consistent with the message to your investors that
    the way you'll run your company is through digital land grabs?
        Mr. Zuckerberg. Congressman, I'm not sure I agree with the
    characterization of how we communicated with investors, but----
        Mr. Gaetz. Your words, Mr. Zuckerberg.
        Mr. Zuckerberg. But I think the broader point is that there
    were a lot of new ways that people can connect that were
    created by smartphones, and we----
        Mr. Gaetz. But this is about your merger and acquisition
    strategy. You went on to say, ``One thing about startups is you
    can often acquire them.''
        So, I mean, I'm not interested in how people connect. I'm
    interested in how you acquire businesses to limit competition.
        Mr. Cicilline. The gentleman's time has expired, but the
    witness may answer the question.
        Mr. Zuckerberg. Congressman, in order to serve people
    better and help people connect in all the ways that we want, we
    innovated and built a lot of new use cases internally and we
    acquired others.
        And that, I think, has been a very successful strategy at
    serving people well. And a lot of the companies that we've been
    able to acquire have gone on to reach and help connect many
    more people than they would've been able to on their own. You
    know----
        Mr. Gaetz. You've grabbed a lot of land, I would say.
        I yield back, Mr. Chairman.
        Mr. Cicilline. Thank you.
        The gentleman yields back.
        I now recognize the chair of the full committee, Mr.
    Nadler, for 5 minutes.
        Chairman Nadler. Thank you, Mr. Chairman.
        Mr. Cook, we've heard from businesses that Apple is
    canvassing the App Store to determine whether it can extract
    commissions from apps that have changed their business models
    in response to the pandemic. Businesses that relied on in-
    person interactions have moved online, and Apple is looking for
    its cut.
        My staff has heard from some of the affected businesses.
    They say you're calling them up, demanding your 30 percent.
    Isn't this pandemic profiteering?
        Mr. Cook. We would never do that, Mr. Chairman. The
    pandemic is a tragedy, and it's hurting Americans and many
    people from all around the world, and we would never take
    advantage of that.
        I believe the cases that you're talking about are cases
    where something has moved to a digital service, which
    technically does need to go through our commission model. But
    in both of the cases that I'm aware of, we are working with the
    developers.
        To sort of zoom out and to give you some historical context
    on this, when we entered the app store market, the cost of
    distributing software was 50 to 70 percent. And so we took the
    rate in half, to 30 percent, and we've held it in that same
    level over time or lowered it.
        It's now responsible for 2 million jobs across America. And
    84 percent of the apps on the store are distributed for free,
    where 100 percent of the proceeds go to the developer. Only
    that 16 percent is subject to a commission of either 15 or 30
    percent.
        Chairman Nadler. And school is about to start around the
    country, and millions of parents and students will attend
    school online. They will rely on apps to talk to teachers,
    tutors, and virtual learning tools.
        Are these online learning tools next on Apple's--are they
    on Apple's list to monetize?
        Mr. Cook. They're not, Mr. Chairman. We would--we will--
    we're very proud of what we've done in education. We are
    serving that market in a significant way, including tons of
    donations. And we will work with the people that happen to move
    from a physical to a virtual world because of the pandemic.
        Chairman Nadler. And----
        Mr. Cook. We've done a lot to address COVID, in general, as
    a company. We've sourced and donated 30 million masks, turning
    our supply chain into something that would be great for
    America. We've designed a face shield and donated 10 million of
    those. We're donating significant----
        Chairman Nadler. Okay.
        Mr. Cook [continuing]. Amounts of money across the U.S.
        Chairman Nadler. Thank you. Thank you.
        Now----
        Mr. Cook. Thank you.
        Chairman Nadler [continuing]. We've heard that Apple is now
    trying to extract commissions from various apps that previously
    didn't pay you anything. You approved, we're told, the email
    app HEY and then, days later, threatened to kick it out of the
    App Store unless it built a way to give you a cut of revenue.
        The COO of Basecamp, maker of the HEY app, testified before
    our committee earlier this year. He was concerned about Apple's
    monopoly over software distribution on iOS devices. And he
    seems to have been right. Apple says services like HEY have
    always been required to cut Apple in, but you previously didn't
    interpret your rules that way--you didn't enforce your rules
    this way.
        So would you comment on this, please?
        Mr. Cook. Mr. Chairman, I would. HEY is in the store today,
    and we're happy that they're there. I believe that they have--a
    version of their product is for free, and so they're not paying
    anything on that.
        I would also say, the 30 percent--I hope you give me a time
    to explain this--or 15 percent is for lots of different
    services, from programming languages, to compilers, to 150,000
    APIs. It has been an economic miracle to allow the person in
    their basement to start a company, a global company, and serve
    175 countries in the world. It is amazing. Likely the highest
    job creator in the last decade.
        Chairman Nadler. I see.
        And you haven't changed the rules in such a way as to make
    apps pay when they weren't paying before?
        Mr. Cook. I know of no case where we've done that. I'm sure
    we've made errors before. We get 100,000 different apps
    submitted a week, and we've got 1.7 million on the store. But
    across that period of time, we've never raised commissions,
    from the first day the App Store went into effect back in 2008.
    We've only lowered them.
        Chairman Nadler. Well, thank you.
        I see my time has expired. I yield back.
        Mr. Cicilline. The gentleman yields back.
        Mr. Cook. Thank you for the question.
        Mr. Cicilline. I now recognize the gentleman from North
    Dakota, Mr. Armstrong.
        Mr. Armstrong. Thank you, Mr. Chairman.
        Mr. Pichai, in 2015, Google announced that it would not
    allow third parties to buy YouTube ads via AdX. That means that
    ad buys on YouTube are conducted only through Google demand-
    side products.
        Google justified this change by citing privacy and user
    experience. My understanding is that Google cited a concern
    that third-party digital ad participants would develop user
    profiles based on this viewing. It is also my understanding
    that, even under the GDPR, you allow users to provide consent
    which would authorize this type of activity.
        It seems that this policy, regardless of the privacy
    concerns, reduced competition for demand-side platforms on
    YouTube. Do you agree?
        Mr. Pichai. Congressman, we are always looking to improve
    the YouTube experience. Part of being able to integrate the
    space while in YouTube, we've been able to innovate with
    something called TrueView ads. So, for users, we give them
    skippable ads. If they find the ads not to be relevant, they
    can skip past those ads.
        And, you know, monetizing YouTube well is what allows--
    today, we have many, literally hundreds of thousands of
    creators earning a livelihood. And many of them are small and
    medium businesses. So we want to support that well, and so we
    are focused on that. Allowing this type of integration is what
    allows us to create that user experience.
        Mr. Armstrong. But after Google stopped allowing third
    parties to buy YouTube ads via AdX, Google limited the
    interoperability of third-party analytics on YouTube. You now
    require the use of ads on Data Hub.
        Again, the justification is based on user privacy. Other ad
    market participants may not have access to that data, but it
    doesn't disappear, does it?
        Mr. Pichai. Congressman, this is consistent with how today
    many services, be it Facebook or Snapchat or Pinterest, you
    work with their ad tools to buy ads on their properties. I
    think we are trying----
        Mr. Armstrong. Well, I understand that, but the excuse is
    privacy. But the data doesn't disappear; you just have greater
    control over it, right?
        Mr. Pichai. Congressman, it's a service we provide to our
    users. We obviously want to make sure we protect the privacy of
    users there.
        We do monetize with ads. We give users a choice of either
    consuming it as a subscription service or using it with ads.
    And we've been very focused on making YouTube a great platform
    for creators, and I think the model is working well. It's
    really helped many small and medium businesses to invest on the
    platform and grow their businesses.
        Mr. Armstrong. So, regardless if the intent was to lessen
    competition or not, the action resulted in smaller competitors
    unable to participate in placing ads on YouTube. Isn't that
    correct?
        Mr. Pichai. Congressman, we see robust choice for, you
    know, advertisers. You know, there are several alternatives.
    There is, obviously, Facebook's suite of products. There is
    Amazon with their ads marketplace. There is companies like
    Snapchat, Pinterest, Twitter that are new competitors who have
    emerged. And this is why we have seen advertising costs decline
    by 40 percent in the last 10 years. And so we see dynamism in
    the marketplace. We are focused on----
        Mr. Armstrong. Yeah, but here is my issue. And there are
    policies that actually protect user privacy: Apple's encryption
    policy. Microsoft just came out on facial recognition policy.
    My concern is that your--the position is that, when we're using
    privacy, we're trying to use privacy and we're using privacy as
    a shield, but what we're really doing and what your company is
    really doing is using it as a cudgel to beat down the
    competition.
        And when we're talking about privacy, it's a great word
    that people care about, but not when it's utilized to control
    more of the marketplace and squeeze out smaller competitors.
        And, with that, I'd yield the remainder of my time to Mr.
    Gaetz.
        Mr. Gaetz. I thank the gentleman for yielding.
        Mr. Bezos, we were cut short in our last discussion. I just
    wanted to give you the chance to clear this up. You don't
    believe Dr. Ben Carson is an extremist, do you?
        Mr. Bezos. No, sir, I don't.
        Mr. Gaetz. So help me understand why you would partner with
    a group that labels him as someone worthy of an extremist
    watchlist.
        Mr. Bezos. Well, I want you to hopefully appreciate, when
    we're trying to make it possible for people to donate to any
    number of--from millions of different charities, and we need to
    have some source of data to use. And while I accept what you're
    saying, that the Southern Poverty Law Center and the U.S.
    Foreign Assets Office are not perfect--and I would like a
    better source if we could get it--that is what we use today.
    But I would happily engage with you----
        Mr. Gaetz. Well, that's breaking news. It's great to hear
    that you do recognize the infirmities in the Southern Poverty
    Law Center.
        And I guess Mr. Zuckerberg and Mr. Pichai's companies use
    them as well.
        Mr. Zuckerberg, do you believe that Dr. Ben Carson is an
    extremist?
        Mr. Zuckerberg. No, Congressman.
        Mr. Gaetz. And so why would you trust the people who think
    he is?
        Mr. Zuckerberg. Congressman, I'm not aware of where we work
    with the organization that you're saying----
        Mr. Gaetz. Oh, the Southern Poverty Law Center?
        Mr. Cicilline. The gentleman's time has expired.
        Mr. Gaetz. Okay. That's all.
        Mr. Cicilline. And I recognize the gentleman from Maryland,
    Mr. Raskin, for 5 minutes.
        Mr. Raskin. Thank you, Mr. Chairman.
        I read Richard Hofstadter's ``The Paranoid Style in
    American Politics,'' so I suppose it's futile to try to cure
    the obsessive persecution complex and victimology of some of
    our colleagues. But they should check out the top-performing
    Facebook link posts by the United States pages today or
    yesterday or any day for the last week, and 7 or 8 out of the
    10 each day are right-wing sites: Ben Shapiro, FOX News, Dan
    Bongino, Ben Shapiro, FOX News, Blue Lives Matter, and so on.
        So, if Facebook is out there trying to repress conservative
    speech, they're doing a terrible job at it. And so I don't
    understand just the endless whining about how Facebook or
    Twitter, or Facebook and Twitter, are somehow discriminating
    against conservatives.
        The removal of Donald Trump and Donald Trump, Jr., from
    Twitter, their tweets, was all about their spreading
    disinformation, false statements about COVID-19. That was an
    absolute public health measure which I hope all of us would
    endorse. We don't want anybody, including the President of the
    United States, spreading false information about COVID-19.
        So I think they essentially destroy their own case when
    they pick that as their cause for going after all of you.
        And I don't understand, for the life of me, the line of
    questioning about electioneering taking place by some of your
    companies. If you're opposed to electioneering by corporations,
    as I am, and you're opposed to Citizens United, then you've got
    no problem.
        Citizens United is what gave corporations the power to go
    out and spend money. And if you don't like the way that some
    companies are spending money, then, you know, either start your
    own company or tell them what's wrong with it. But the idea
    that electioneering is something you're opposed to just strikes
    me as completely inconsistent with the history and the facts.
        So I want to go to Mr. Cook, if we could, but, first, a
    quick question: Are any of your companies benefit corporations,
    and is that something you've considered doing? Is there any
    one--any one of you that have thought about becoming a B corp,
    or a benefit corporation?
        Okay. I take it the answer's ``no'' there.
        Mr. Cook, I'm hung up on this whole 30 percent question
    that several members have talked to you about. And you said
    sometimes it's 15 percent, sometimes it's 30 percent. Can you
    explain when it's 15 and when it's 30 and why it's 15 sometimes
    and why it's 30?
        Mr. Cook. Sure. Thank you for the question, Congressman.
        In eighty-four percent of the time, it's zero. Sixteen
    percent of the time, it's 15 or 30. In the case of--it's 15 if
    it's in the second year of a subscription.
        Mr. Raskin. Okay. So you just graduate from--your first
    year, you're taking no toll, essentially. The second year, it's
    15. And then it's 30 after that. Is that right?
        Mr. Cook. No, no. If it's a subscription product, it's 30
    percent in the first year, and then it drops to 15 in the
    second year and every year thereafter.
        Mr. Raskin. I gotcha. Okay.
        Well, what troubles me is just what one businesswoman told
    me when I was looking at this, which is, she said, I pay around
    25 percent of my income to Uncle Sam, to the government, and
    then I pay 30 percent of my income to Apple. And so I get half
    of it, and it's very hard to make ends meet.
        And I just wonder--you know, look, all of you are in
    business and all of you are tremendously successful at what you
    do, and obviously this model has worked for you. But the
    question is, does this model actually squeeze out the next
    generation of entrepreneurs? And is it an unjust arrangement
    because you're, you know, the 10,000-pound gorilla and they're
    just trying to get started?
        Mr. Cook. No, I don't think so. And, in fact, keep in mind,
    we've gone from 500 apps to 1.7 million. And so there's a lot
    of apps on the store, and a lot of people are making a very
    good living from it----
        Mr. Raskin. And you've said that--forgive me for
    interrupting, but you've said that several times. But that, to
    me, might just underscore the monopoly nature of your business,
    that everybody's got to go through you. There's really no
    alternative.
        And so, I mean, I don't blame you for taking them all, but
    that doesn't mean that the terms that are being dictated are,
    in fact, fair terms. So how would you defend, substantively,
    that bargain?
        Mr. Cook. That whether you look at it from a customer point
    of view or a developer point of view, there are enormous
    choices out there. If you're a developer, you can write for
    Android, you can write for Windows, you can write for Xbox or
    PlayStation. If you're a customer and you don't like the setup,
    the curated experience of the App Store, you can buy a Samsung,
    you can buy----
        Mr. Raskin. Okay. I appreciate that. Forgive me for cutting
    you off. I've got one more final question for Mr. Zuckerberg.
        You spend a lot of your time speaking to our conservative
    colleagues who have this persecution complex that you're
    somehow going after them. Will you have time to meet with this
    broad coalition of civil rights groups that are engaged in a
    boycott because of what they think is the proliferation of hate
    speech and Holocaust revisionism and other affiliated topics on
    Facebook?
        Mr. Zuckerberg. Congressman, yes. I already have taken the
    time to meet with them. I think that the topics that they're
    pushing on are important. On a lot of the goals, we agree.
    These are issues around fighting hate that we have focused on
    for years. And we are committed to continuing to improve the
    way that our company works and just continually getting better
    on these issues.
        Mr. Raskin. I appreciate that, and I will tell them of your
    answer.
        Thank you.
        Mr. Cicilline. Thank you, Mr. Zuckerberg.
        I now recognize the gentleman from Ohio, Mr. Jordan, for 5
    minutes.
        Mr. Jordan. Thank you, Mr. Chairman.
        Mr. Cook, is the cancel culture mob dangerous?
        Mr. Cook. It's something I'm not all the way up to speed
    on. But if you're talking about where somebody with a different
    point of view talks and they're canceled, I don't think that's
    good. I think it's good for people to hear different points of
    view and decide for themselves.
        Mr. Jordan. Yeah, I agree with that.
        And I want to just reference a letter. Bari Weiss, who
    resigned as an editor at The New York Times, she wrote a letter
    explaining why she resigned. And I'll just read three sentences
    for--for all of you, actually.
        She says, first of all, ``My own forays into Wrongthink
    have made me the subject of constant bullying by my colleagues
    who disagree with my views.''
        She then says later in the letter, ``Everyone lives in fear
    of the digital thunderdome. The online venom is excused so long
    as it is directed at the proper targets.'' And those targets
    aren't just conservative. In fact, Ms. Weiss is actually
    center-left. She's not conservative. The targets are anyone who
    disagrees with the mob.
        Are the rest of you concerned about the cancel culture mob
    and what it's up to?
        Mr. Pichai.
        Mr. Pichai. Congressman, I'm sorry. I had momentary
    difficulty hearing.
        But, you know, I can--we've built platforms which allow for
    freedom of expression. And we take pride in the fact that,
    across our platforms, including YouTube, there are more diverse
    voices than ever before. It is something we have committed----
        Mr. Jordan. That's fine. That's fine. I'm just saying, are
    you--I'm concerned about it. And, again, I'm concerned about it
    not just because conservatives get attacked. I'm concerned when
    anyone gets attacked for expressing a viewpoint. I thought we
    had a First Amendment, and yet they constantly get attacked.
        How about you, Mr. Zuckerberg?
        Mr. Zuckerberg. Yes, Congressman, I believe strongly in
    free expression. Giving people a voice is an important part of
    what our services do. And I am very worried about some of the
    forces of illiberalism that I see in this country that are
    pushing against free expression. I think that this is one of
    the fundamental democratic traditions that we have in our
    country, and it's how we make progress over the long term on a
    number of issues. And our company is committed to doing what we
    can to----
        Mr. Jordan. Mr. Bezos.
        Mr. Zuckerberg [continuing]. Protect people's voice.
        Mr. Jordan. Thank you, Mr. Zuckerberg.
        Mr. Bezos.
        Mr. Bezos. Yes, sir, I am concerned in general about that.
    And what I find, and I find a little discouraging, is that it
    appears to me that social media is a nuance-destruction
    machine, and I don't think that's helpful for a democracy.
        Mr. Jordan. Do you agree with the term she used, Ms. Weiss,
    she used, ``digital thunderdome''?
        Mr. Bezos. I see that, yes.
        Mr. Jordan. Yeah, I see it too.
        And I think--I guess my point is, you are four pretty
    important guys leading four of the most important companies on
    the planet, and it would sure be helpful if you spoke out
    against this.
        I mean, Mr. Cook, there was a 1984 Super Bowl ad in black
    and white, had this Big Brother-type figure as the narrator
    saying over the screen to a bunch of these workers--looks like
    it was straight out of the Soviet Union--saying to a bunch of
    these workers, as they're sort of marching along, he says--one
    of the lines that the narrator uses is, ``Our unification of
    thoughts is more powerful a weapon than any fleet or army on
    the Earth.'' And then the ad ends with this lady running in in
    color and smashing the screen, busting the groupthink, busting
    the mobthink.
        Do you remember that ad, Mr. Cook? What company had that
    ad?
        Mr. Cook. I remember it very well. It was Apple versus IBM
    at the time.
        Mr. Jordan. Yeah, but the point was mobthink, cancel
    culture, groupthink is not what this country's about. And we
    are seeing it play out every single--just take the sports
    world, for goodness' sake. In the last few weeks, Drew Brees
    had to bow to the mob simply because he suggested you should
    stand for the anthem. There was a football coach at Oklahoma
    State who wore the, quote, ``wrong'' T-shirt fishing with his
    boys, and he got in all kinds of trouble. James Harden wears a
    mask saying back the police, help the police, support the
    police; he gets attacked.
        Why don't we just let the First Amendment work? That's all
    we're asking.
        And you are four individuals who have so much influence. It
    would sure help if you're out there--if you're out there
    criticizing what the cancel culture mob is doing to this
    country. And people see it every single day. And I hope you'll
    do it. I hope you'll--you all said you disagree with it. I hope
    you'll really speak out against it and be fair with all
    viewpoints.
        I yield back.
        Mr. Cicilline. The gentleman yields back.
        I recognize the gentlelady from Washington, Ms. Jayapal.
        Ms. Jayapal. Thank you, Mr. Chairman.
        Mr. Pichai, I direct my questions to you. Many of us feel a
    deep urgency to protect independent journalism, and I wanted to
    talk a little bit about ad revenue and independent journalism.
        Google makes most of its revenue through selling
    advertising. And Google's advertising exchange is a, quote,
    ``real-time marketplace to buy and sell display advertising
    space,'' correct?
        Mr. Pichai. Yes, Congresswoman, that's correct.
        Ms. Jayapal. And over 2 million websites, including online
    newspapers, use that exchange, correct?
        Mr. Pichai. We are very proud to support publishers, and I
    don't have the exact numbers, but, yes, that seems----
        Ms. Jayapal. Okay. Well, that's an estimate put forth by
    tech expert Dina Srinivasan. And your own website for Google
    Display Network says you have access to over 2 million sites.
        What is Google's share of the ad exchange market?
        Mr. Pichai. Congressman, I'm not exactly familiar. I've
    seen various reports, but, you know----
        Ms. Jayapal. Okay.
        Mr. Pichai [continuing]. We are a popular choice.
        Ms. Jayapal. Great. Let me put it up for you. If you look
    at the screen, you will see that 50 to 60 percent--Google has
    50 to 60 percent, according to the online platforms and digital
    advertising CMA market study that was just released.
        And, in order to buy and sell on these exchanges, websites
    and advertisers go through a middleman, like Google's DV360 and
    Google Ads. If you look at the slide, Mr. Pichai, you can see
    that the share of this buy-side market that Google has is 50 to
    90 percent, according to the same study.
        And I just want to simplify how these exchanges work. So,
    say, in Seattle, Dee's Electronics, a mom-and-pop business,
    wants to buy online ad space in The Seattle Times. Dee's
    Electronics would need to go to a middleman, like Google Ads,
    which would then bid for ad space on an ad exchange.
        And the problem is that Google controls all of these
    entities. So it's running the marketplace, it's acting on the
    buy side, and it's acting on the sell side at the same time,
    which is a major conflict of interest. It allows you to set
    rates very low as a buyer of ad space from newspapers,
    depriving them of their ad revenue, and then also to sell high
    to small businesses who are very dependent on advertising on
    your platform.
        It sounds a bit like a stock market, except, unlike a stock
    market, there's no regulation on your ad exchange market. If
    there were regulation, it would actually prohibit insider
    trading, which means that the broker can't use the data in the
    broker division to buy and sell for their own interest.
    Instead, brokers have to serve the clients, their clients.
        Does Google have a similar obligation to serve its clients,
    the businesses that are selling and buying ad space?
        Mr. Pichai. Congresswoman, if I could explain this for a
    minute. We paid over $14 billion to publishers. We are deeply
    committed to journalism. In this area, on average, we pay out
    69 percent of the revenue when publishers use Google's buy and
    sell side tools. And, you know, out of--it's a low-margin
    business for us. We do it because we want to help support
    publishers----
        Ms. Jayapal. Right.
        Mr. Pichai [continuing]. In this area.
        Ms. Jayapal. No, I understand that, Mr. Pichai. What I'm
    trying to get at is, when any company controls the buy and the
    sell side--I worked on Wall Street a very long time ago. There
    are reasons that insider trading is regulated. And this ad
    exchange is essentially the same thing. And without
    accountability, it isn't meaningful to just care about the
    newspapers. We're seeing them die all over, and ad revenue is a
    big reason.
        Let me put up a graph here that shows that Google's ad
    revenue is increasingly coming from ads on Google-owned sites
    and less so from other websites. Can you explain that trend?
        Mr. Pichai. I can't quite see whether this is net revenue
    or gross revenue. Obviously, when it comes to non-Google
    properties, we share the majority of revenue back to
    publishers, whereas, on our own properties, we obviously--you
    know, we have the inventory.
        But I would need to understand more. I just quickly looked
    at it. I'm not sure I fully grasp the----
        Ms. Jayapal. Okay. We can send it to you and make sure you
    have it.
        You know, Google has not made its search traffic volumes
    public in years, so there's no way for us to know exactly
    what's happening here. And there's no way for businesses to
    verify whether they've been treated fairly or left behind in
    favor of Google-owned companies.
        Is Google steering advertising revenue to Google Search?
        Mr. Pichai. Congresswoman, users come to Google Search. It
    is that traffic and--you know, that's where our source of
    revenue comes from.
        So we are focused on providing users the information they
    are looking for. We work hard to earn that trust. We know
    competition for information is just a click away----
        Ms. Jayapal. Thank you, Mr. Pichai.
        I just want to make the point that independent journalism
    is incredibly necessary to our democracy, and we want to do
    what we can to protect it.
        I want to just ask one last question of Mr. Zuckerberg.
        Over 1,100 companies and organizations pulled their
    advertising business from Facebook as part of the Stop Hate for
    Profit campaign to protest the spread of hate speech and
    disinformation. But you had a staff meeting earlier this month
    where you told employees, ``We're not going to change our
    policies or approach because of a threat to any percent of our
    revenue. My guess is all these advertisers will be back on the
    platform soon enough.''
        Mr. Zuckerberg, are you so big that you don't care how
    you're impacted by a major boycott of 1,100 advertisers?
        Mr. Zuckerberg. No, Congresswoman. Of course we care. But
    we're also not going to set our content policies because of
    advertisers. I think that that would be the wrong thing for us
    to do.
        We've cared about issues like fighting hate speech for a
    long time, and we've invested billions of dollars--and I've
    talked about today how we have tens of thousands of content
    reviewers. We've built AI systems that proactively identify the
    majority--we're now at 89 percent of the hate speech that we
    remove before anyone even reports it to us.
        We're going to continue getting better at that. And I think
    that those investments over time and the results that we put up
    will be recognized by people, since I do believe that they are
    industry-leading.
        And I think that our advertising also is, for a lot of
    small businesses, the most effective or among the most
    effective ways that they can find and reach new customers----
        Ms. Jayapal. Thank you--thank you, Mr. Zuckerberg.
        My time has expired, but I would just say that, I know
    you've commissioned your own civil rights audit. I don't think
    that you've implemented all those recommendations yet. I hope
    you will move quickly to implement those. This is a critical
    time, as we watched the body of John Lewis leave us here in the
    Capitol, that we focus on civil rights.
        Thank you, Mr. Chairman. I yield back.
        Mr. Cicilline. Before I call on the next witness, I want to
    recognize Mr. Pichai, who I think wants to make a correction
    for the hearing.
        Mr. Pichai. The only correction--thanks, Mr. Chairman.
        There was a question earlier about information with respect
    to China. I just wanted to acknowledge on record that I recall
    in 2009 we had a well-publicized cyber attack originating
    there, which did exfiltrate some code from there. I just wanted
    to correct that.
        Mr. Cicilline. Thank you, Mr. Pichai. The record will so
    reflect.
        I recognize the gentlelady from Pennsylvania for 5 minutes.
        Ms. Scanlon. Thank you, Mr. Chairman.
        In March 2020, Amazon announced that it was going to start
    delaying shipments of nonessential products in order to better
    serve customers and meet need while helping to ensure the
    safety of their warehouse workers. In practice, however, it
    appears that this policy was applied selectively, as Amazon
    appeared to continue to designate its own products as essential
    even as it delayed competing products from third-party sellers.
        So the essential items were supposed to include household
    staples, medical supplies, high-demand products, and that many
    factors were considered when determining eligibility to be
    essential. But we've had several employees report that Amazon
    continued to ship nonessential items like hammocks, fish tanks,
    pool floaties, et cetera.
        Mr. Bezos, were Amazon devices like Fire TV, Echo speakers,
    and Ring doorbell designated as essential during the pandemic?
        Mr. Bezos. I don't know the answer to that question. What I
    can tell you is that we had--there was no playbook for this. We
    moved very quickly. Demand went through the roof. It was like
    having a holiday selling season, but in March. And we had to
    make a lot of decisions very rapidly.
        Ms. Scanlon. Okay.
        Mr. Bezos. Our goal was to limit it to essential supplies,
    but I'm sure we did not do that perfectly.
        Ms. Scanlon. Okay.
        I know the Ring doorbell has two competing products,
    including Arlo and--Eufy maybe? Do you know if they were
    designated as essential?
        Mr. Bezos. I do not.
        Ms. Scanlon. Okay.
        Are you able to testify to Congress today whether Amazon's
    profit was a factor in giving an ``essential'' classification
    distinction?
        Mr. Bezos. No, not to my knowledge. We were working to
    achieve two objectives. One was to get essential products to
    customers, and the second was to keep our frontline employees
    safe. And we did a tremendous amount of work in both
    categories, and that's what we were focused on. We were not
    focused on profitability at that time.
        Ms. Scanlon. Pushing out the elusive Clorox Wipe, I guess.
        But, at any rate, moving along, let's talk about the fees
    that Amazon charges sellers. According to a recent report,
    seller fees netted Amazon almost $60 billion in 2019, nearly
    double the $35 billion in revenue from AWS, Amazon's massive
    cloud-computing division.
        Five years ago, Amazon took an average of 19 percent of
    each sale made by a third party on its site. Today, Amazon
    keeps an average of 30 percent. Doesn't Amazon's ability to
    hike those fees so steeply suggest that Amazon enjoys market
    power over those sellers?
        Mr. Bezos. No, Congresswoman, I don't believe so. I think
    what you're seeing there, when you see that go from 19 to 30
    percent, is that more and more sellers are taking advantage of
    the incremental services that we offer.
        And a big piece of that is Fulfillment by Amazon, which is
    probably the greatest invention that we ever created for
    sellers. And it's working for sellers. That's why, today, 60
    percent of sales are going through third-party sellers, up from
    zero 20 years ago.
        Ms. Scanlon. Right. But I think a little more concerning is
    the 11-percent hike.
        Since 2014, Amazon's revenue from seller fees has grown
    almost twice as fast as its overall sales. So seller fees now
    account for 21 percent of Amazon's total revenue.
        Mr. Bezos, aren't seller fees now effectively subsidizing
    Amazon's retail division?
        Mr. Bezos. Congresswoman, no, I don't believe so. I think
    what you're seeing there, when you see these fees going up,
    what's really happening is that sellers are choosing to use
    more of our services that we make available.
        There are, you know, previously, perhaps, they were
    shipping their own products from their own fulfillment centers.
    So they would've had costs doing that. If you're operating your
    own fulfillment center and buying transportation services to
    the customer through the postal service or through UPS or
    whoever it would be, you----
        Ms. Scanlon. Okay. So let's talk a little bit about the
    fulfillment centers.
        Mr. Bezos [continuing]. Have those fees anyway. But now
    you're doing that with Fulfillment by Amazon.
        Ms. Scanlon. Right.
        Mr. Bezos. Yes, please. Go ahead. Sorry.
        Ms. Scanlon. Okay. So we've got Fulfillment by Amazon. And,
    a year ago, we asked whether a merchant who was enrolled in
    Fulfillment by Amazon, also known as FBA, is a factor in
    whether they can be awarded the Buy Box. And, at that time,
    Amazon said no.
        But the evidence is indicating and your own documents are
    showing that being enrolled in that program is a major factor,
    and it effectively forces sellers to pay for fulfillment
    services from Amazon if they want to make sales.
        Mr. Bezos, has Amazon's big Buy Box algorithm ever favored
    third-party sellers who buy fulfillment services from Amazon
    over other sellers?
        Mr. Bezos. I think, effectively, the Buy Box--maybe
    directly or indirectly--I'm not sure if it's direct, but,
    indirectly, I think the Buy Box does favor products that can be
    shipped with Prime. So especially if you're a Prime member, the
    Buy Box is trying to pick the offer--if we have multiple offers
    from multiple sellers for the same item, a customer wants to
    buy that item, the Buy Box is trying to pick the offer that we
    predict the customer would most like. That includes price,
    delivery speed, and if you're a Prime member, it includes
    whether the item is eligible for Prime.
        And so, I think at least indirectly----
        Ms. Scanlon. Thank you, Mr. Bezos. I think my time has
    expired.
        Mr. Cicilline. The gentlelady's time has expired.
        Before I recognize our last two colleagues, I think Mr.
    Zuckerberg would like to clarify something for the record as
    well.
        Mr. Zuckerberg. Chairman, thank you.
        In response to Congressman Johnson's question before, I
    said that I wasn't familiar with the Facebook research app,
    when I wasn't familiar with that name for it. But I just want
    to be clear that I do recall that we used an app for research,
    and it has since been discontinued. And I would be happy to
    follow up with his staff on any more details that he would like
    on that.
        Mr. Cicilline. Thank you, Mr. Zuckerberg.
        Mr. Zuckerberg. Thank you.
        Mr. Cicilline. The record shall so reflect.
        I recognize the gentleman from Colorado, Mr. Neguse.
        Mr. Neguse. Thank you, Mr. Chairman.
        Good afternoon, Mr. Cook. I wanted to direct a few
    questions to you and wanted to talk a little bit about the App
    Store and app development.
        So, just taking a step back, my understanding from your
    testimony today is that, essentially, Apple has to operate by
    the same rules that the app developers operate by, in terms of
    being able to access the App Store. Is that correct?
        Mr. Cook. We have 60 apps on the App Store. They go through
    the same rules that the 1.7 million do.
        Mr. Neguse. Okay. So here's, kind of, why I ask that
    question. My understanding is the App Store review guidelines
    tell app developers not to submit copycat apps. Is that
    correct?
        Mr. Cook. I'm not totally familiar, but I believe that's
    the case, because we were getting a number of apps that were
    essentially the same thing, like sort of a cookie cutter.
        Mr. Neguse. And I can represent to you, Mr. Cook, we've
    reviewed--our subcommittee staff has obviously reviewed the
    guidelines, and they--precisely. They say that app developers
    should have original ideas, that copycat ideas aren't fair, and
    Apple's customers don't want those.
        On the other hand, the app developer agreement, which you
    require every developer to agree to, does give Apple the right
    to copy other apps.
        And so I guess the question is, why one rule for the
    developers that compete with you and the opposite rule for
    Apple?
        Mr. Cook. Congressman, I'm not familiar with that, but I
    could follow up with your office on it.
        Mr. Neguse. Well, I would appreciate if you could follow up
    with our office. My understanding, again, is that the app
    developer agreement explicitly says that Apple can use any
    information that an app developer provides to Apple for any
    purpose.
        And so, obviously, you have complaints from any number of,
    you know, app developers who have testified before our
    committee--and I, as I said, represent the State of Colorado.
    We heard from a company called Tile, which said that Apple had
    access to confidential information about the apps distributed
    by the App Store. And, given that, juxtaposed against this
    language in the exclusive agreement, you can understand why we
    would have concerns about anticompetitive conduct.
        Mr. Cook. Yeah, Congressman, we run the App Store to help
    developers, not hurt them. We respect innovation. It's what our
    company is built on. We would never steal somebody's IP.
        But I will follow up with your office on more detail on
    this.
        Mr. Neguse. Well, and I appreciate that, Mr. Cook. Because
    I think, to the extent that Apple were willing to commit--and I
    intend to ask Mr. Pichai a similar line of questioning, because
    I believe this is consistent across multiple different
    platforms. To the extent Apple was willing to commit within the
    developer agreement to say that, while you have access to that
    data, that you are not going to use that data and are not
    permitted to use that data to replicate your own app, a copycat
    app, if you will, that would certainly, in my view, be a
    reflection of a step away from any type of anticompetitive
    conduct. And it sounds like you'll follow up, and we can learn
    more with respect to that issue.
        Mr. Pichai, similarly, there was an article just today, or,
    excuse me, yesterday, from The Verge. The title is, ``Google
    reportedly keeps tabs on usage of rival Android apps to develop
    competitors.''
        And I'll quote from the article. ``Google said that the
    data doesn't give information about how people behave while
    they're using individual apps, but it wouldn't say whether it
    had been used to develop competing apps.''
        So I guess, first, I take it you would confirm that Google
    does have access to confidential information or, ultimately,
    competitively sensitive information about apps on the Android
    devices?
        Mr. Pichai. Congressman, if I could clarify this, today we
    have an API, which is available for other developers as long as
    users consent. This gives us system health metrics. This is how
    we can launch digital well-being features on Android. This is
    how we understand which apps are using battery and we can give
    a dashboard which shows, you know, maybe for crashing or
    quality control or for battery usage or for digital well-being.
        So, at a high level, this data is available through a
    public API, and other developers can avail as long as the users
    give consent to it.
        Mr. Neguse. So, Mr. Pichai, I just want to clarify. Again,
    I'll quote from this article. The article refers to this data
    as ``sensitive data about other apps, including how often
    they're opened and for how long they're used.''
        I'm not asking how you use that information. I'm just
    asking whether or not, in fact, what the article alleges is
    correct, that you do have access to that data.
        Mr. Pichai. Yeah, with user consent, and the APIs exist.
    Yes, we do.
        Mr. Neguse. And does Google----
        Mr. Pichai. And it's critical for us to have access to that
    so that we can maintain the--you know, this is how we
    understand and we can, you know, improve resource usage of
    applications----
        Mr. Neguse. Understood.
        Mr. Pichai [continuing]. Just like----
        Mr. Neguse. My time's limited. Sorry. I just want to get to
    this core question: Given that Google does have access to that
    data, does Google use that data to develop competing apps?
        And if your answer is no, will Google commit to making the
    necessary changes within its Android developer app agreements
    to ensure that developers have that sense of clarity that, in
    fact, the data will not be used for Google to be able to
    develop a competing application?
        Mr. Pichai. Congressman, like other businesses today, we do
    look at trends. And, you know, in fact, in Play Store, we do
    publish the number of installs of application, and we give
    ranges. And so there's a wide variety of ways by which we try
    to understand what's happening in the market. But I appreciate
    your concern about making sure there's clarity in this area,
    and we'll continue to invest and give more clarity.
        Mr. Neguse. Yeah, just I must, I guess--I want to just
    follow up very quickly, Mr. Chairman, if you're willing.
        So I guess I'm wondering if you can just answer that
    fundamental question: Does Google use that information to
    develop competing apps?
        I understand the purposes you've described in terms of how
    you use the information. I'm just asking if one of those, in
    fact, is to develop competing apps.
        Mr. Cicilline. The gentleman's time has expired, but the
    witness may answer the question.
        Mr. Pichai. Congressman, because we try to understand
    what's going on in market and we are aware of, you know,
    popularity of apps, you know, I don't want to--I want to be
    accurate in my answer.
        But, in general, the primary use for that data is to
    improve the health of Android. But, you know, any data we get,
    we have user consent for it, and we make it available through
    an API to other developers as well.
        Mr. Cicilline. The gentleman's time has expired.
        I now recognize the gentlelady from Georgia, Mrs. McBath.
        Mrs. McBath. Thank you, Mr. Chairman.
        And, gentlemen, thank you so much for spending so much of
    your time with us today. We really appreciate it.
        And many of you have mentioned John Lewis today and his
    fight for equality and that I know that all my colleagues and I
    will carry on.
        Very quickly, can each of you simply commit to improving
    racial and gender equity at your companies, including Black
    leadership and women in your senior ranks? Just a yes-or-no
    answer, please.
        Mr. Zuckerberg?
        Mr. Zuckerberg. Yes.
        Mrs. McBath. Mr. Cook?
        Mr. Cook. Yes. I am very personally committed.
        Mrs. McBath. Thank you.
        Mr. Bezos?
        Mr. Bezos. Absolutely, yes.
        Mrs. McBath. Thank you.
        Mr. Pichai?
        Mr. Pichai. Yes. And we've made public commitments to this
    regard.
        Mrs. McBath. Thank you so much.
        Mr. Zuckerberg, in 2004, there were dozens of social media
    companies. Facebook distinguished itself from the competitors
    by focusing specifically on privacy. You had a short, clear
    privacy policy; it was just 950 words. It made a promise to
    users, and I quote, ``We do not and will not use cookies to
    collect private information from any user.''
        And you said ``will not.'' That's a commitment about the
    future. And that was 2004. Mr. Zuckerberg, today, does Facebook
    use cookies to collect private information on users?
        Mr. Zuckerberg. Congresswoman, my understanding to that is,
    no, we're not using cookies to collect private information
    about people who use our services, and I believe we've upheld
    that commitment.
        Mrs. McBath. Okay. Thank you.
        So, Mr. Zuckerberg, do you think that your company would be
    as successful if it had started with today's cookies policy in
    place?
        Mr. Zuckerberg. Congresswoman, I'm not sure exactly what
    you're referring to, but, in general, cookies are not a big
    part of how we're collecting information. We've primarily used
    them to make sure that someone can stay logged in on the web.
    We use them, to some degree, for security to make sure that you
    don't have someone trying to log in under a lot of different
    accounts for one computer or something like that.
        Mrs. McBath. So, Mr. Zuckerberg, once again, you do not use
    cookies.
        Mr. Zuckerberg. Congresswoman, just to make sure----
        Mrs. McBath. Yes or no?
        Mr. Zuckerberg [continuing]. I'm clear--we do use cookies.
    We do use cookies.
        Mrs. McBath. Okay.
        Mr. Zuckerberg. Yes, we do use cookies.
        Mrs. McBath. Okay. So, Mr. Zuckerberg, the bottom line here
    is that you broke a commitment to your users. And who can say
    if you may or may not do that again in the future? The reality
    is that Facebook's market power grew and Facebook sacrificed
    its user policy.
        Mr. Bezos, my colleagues have touched on counterfeit goods,
    and I share their concerns very deeply. I'm also concerned
    about stolen goods. Mr. Bezos, are stolen goods sold on Amazon?
        Mr. Bezos. Congresswoman, not to my knowledge, although,
    you know, there are more than a million sellers, and so I'm
    sure that there have been stolen goods----
        Mrs. McBath. Really, Mr. Bezos?
        Mr. Bezos [continuing]. Sold on Amazon.
        Mrs. McBath. Really, Mr. Bezos?
        Mr. Bezos. I'm sorry?
        Mrs. McBath. There's not? You don't believe that there is?
    That surprises me.
        Mr. Bezos. No, I just said, with over a million sellers,
    I'm sure that it has happened. But, certainly, I don't think
    it's a large part of what we're selling.
        Mrs. McBath. Okay. So, Mr. Bezos, basically, then, you're
    saying ``yes.''
        Mr. Bezos. I guess so.
        Mrs. McBath. Okay.
        So I want to ask you about information that you require
    from sellers to prevent the sale of stolen goods. Do you
    require a real name and address, yes or no?
        Mr. Bezos. For sellers?
        Mrs. McBath. Once again, do you require a real name and
    address from sellers?
        Mr. Bezos. I believe we do. But let me get back to your
    office with a--I'd rather give you the accurate answer, but I
    think we do.
        Mrs. McBath. All right. And I am aware that you are. So,
    yes, you do require a name and address.
        Do you require a phone number, yes or no?
        Mr. Bezos. I don't know if it's required. I think we often
    have it. But I don't know.
        Mrs. McBath. So, briefly, then, how do you verify that each
    of these pieces of information is accurate?
        Mr. Bezos. I don't know the answer to your question.
        Mrs. McBath. So you don't know how many people work on
    seller verification before the seller is allowed to sell on
    Amazon?
        Mr. Bezos. No, Congresswoman, I don't.
        Mrs. McBath. Okay. Then I'm going to ask you, sir, will you
    commit to reporting all sales of stolen and counterfeit goods
    to law enforcement and to victims to track large-scale
    offenders engaged in organized retail crime?
        Mr. Bezos. To the degree that we're aware of it, we will
    certainly pursue it. In fact, I would encourage----
        Mrs. McBath. Sir, can you just make a blanket commitment--
    can you just make a blanket commitment, whether you're aware of
    it or not?
        Mr. Bezos. A blanket commitment to what? Sorry,
    Congresswoman. I'm trying to be helpful.
        Mrs. McBath. Reporting all sales of stolen and counterfeit
    goods to law enforcement and to victims to track large-scale
    offenders engaged in organized retail crime.
        Mr. Bezos. I see no reason why, if we're aware of stolen
    goods, we wouldn't report it. We would want the correct law
    enforcement authorities to be involved.
        Mrs. McBath. Okay. Thank you so much.
        I yield back my time.
        Mr. Cicilline. I thank the gentlelady for yielding back.
        I want to thank the witnesses for their testimony today and
    my colleagues on both sides of the aisle.
        I also want to acknowledge the extraordinary work of our
    team, led by Slade Bond, Lina Khan, Amanda Lewis, Phil
    Berenbroick, Anna Lenhart, and Joe Van Wye, who have done an
    extraordinary job throughout this investigation and in
    preparation for our hearing today.
        Today, we had the opportunity to hear from the
    decisionmakers at four of the most powerful companies in the
    world. This hearing has made one fact clear to me: These
    companies, as they exist today, have monopoly power. Some need
    to be broken up. All need to be properly regulated and held
    accountable.
        We need to ensure the antitrust laws first written more
    than a century ago work in the digital age. When these laws
    were written, the monopolists were men named Rockefeller and
    Carnegie. Their control of the marketplace allowed them to do
    whatever it took to crush independent businesses and expand
    their own power.
        Well, the names have changed, but the story is the same.
    Today, the men are named Zuckerberg, Cook, Pichai, and Bezos.
    Once again, their control of the marketplace allows them to do
    whatever it takes to crush independent business and expand
    their own power. This must end.
        This subcommittee will next publish a report on the
    findings of our investigation. We will propose solutions to the
    problems before us.
        As the great American Supreme Court Justice Louis Brandeis
    once said, ``We must make our choice. We may have democracy, or
    we may have wealth concentrated in the hands of a few, but we
    can't have both.''
        This concludes today's hearing.
        Thank you again to our witnesses for attending.
        Without objection, all members will have 5 legislative days
    to submit additional written questions for the witnesses or
    additional materials for the record.
        Mr. Cicilline. And, without objection, this hearing is
    adjourned.
        [Whereupon, at 6:33 p.m., the subcommittee was adjourned.]

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