[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.]
APPENDIX
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