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




 
  PROPOSALS TO STRENGTHEN THE ANTITRUST LAWS AND RESTORE COMPETITION 
                                 ONLINE

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

                                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

                               __________

                            OCTOBER 1, 2020

                               __________

                           Serial No. 116-91

                               __________

         Printed for the use of the Committee on the Judiciary
         
         
         
         
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]          
         


      Available via the World Wide Web: http://judiciary.house.gov
      

                           ______                       


             U.S. GOVERNMENT PUBLISHING OFFICE 
42-250              WASHINGTON : 2020       

      
      
                       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
HAKEEM S. JEFFRIES, New York         KEN BUCK, Colorado
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

                              ----------                              

                            OCTOBER 1, 2020
                           OPENING STATEMENTS

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................     3
The Honorable Jerrold Nadler, Chairman, Committee on the 
  Judiciary......................................................     4
The Honorable Jim Jordan, Ranking Member, Committee on the 
  Judiciary......................................................     6

                               WITNESSES

William Baer, Visiting Fellow--Governance Studies, Brookings 
  Institution
    Oral Testimony...............................................     9
    Prepared Testimony...........................................    12
Zephyr Teachout, Associate Professor of Law, Fordham University
    Oral Testimony...............................................    18
    Prepared Testimony...........................................    20
Michael Kades, Director of Markets and Competition Policy, 
  Washington Center for Equitable Growth
    Oral Testimony...............................................    26
    Prepared Testimony...........................................    28
Sabeel Rahman, President, Demos
    Oral Testimony...............................................    93
    Prepared Testimony...........................................    95
Christopher Yoo, John H. Chestnut Professor of Law, 
  Communication, and Information Science, University of 
  Pennsylvania Carey Law School
    Oral Testimony...............................................   103
    Prepared Testimony...........................................   105
Rachel Bovard, Senior Director of Policy, Conservative 
  Partnership Institute
    Oral Testimony...............................................   110
    Prepared Testimony...........................................   112
Tad Lipsky, Antonin Scalia Law School, George Mason University
    Oral Testimony...............................................   124
    Prepared Testimony...........................................   126
Sally Hubbard, Director of Enforcement Strategy, Open Markets 
  Institute
    Oral Testimony...............................................   136
    Prepared Testimony...........................................   138

                                APPENDIX

Statement for the record from Consumer Reports...................   209
Letter from Demand Progress Education Fund and Americans for 
  Financial Reform Education Fund................................   211
Statement for the record from Public Knowledge...................   217
Statement for the Record from Jason Boyce, Founder and CEO, 
  Avenue7Media...................................................   222


  PROPOSALS TO STRENGTHEN THE ANTITRUST LAWS AND RESTORE COMPETITION 
                                 ONLINE

                              ----------                              


                       THURSDAY, OCTOBER 1, 2020

                        House of Representatives

     Subcommittee on Antitrust, Commercial, and Administrative Law

                       Committee on the Judiciary

                            Washington, DC.

    The subcommittee met, pursuant to call, at 1:06 p.m., in 
Room 2141, Rayburn Office Building, Hon. David Cicilline 
[chairman of the subcommittee] presiding.
    Present: Representatives Cicilline, Nadler, Johnson of 
Georgia, Raskin, Jayapal, Demings, Scanlon, Neguse, McBath, 
Sensenbrenner, Jordan, Buck, Armstrong, and Steube.
    Staff present: David Greengrass, Senior Counsel; Madeline 
Strasser, Chief Clerk; Cierra Fontenot, Staff Assistant; John 
Williams; Phillip Berenbroick, Counsel; Catherine Larson, 
Special Assistant; Anna Lenhart, Technologist; Amanda Lewis, 
Counsel, Antitrust, Commercial, and Administrative Law; Joseph 
Van Wye, Professional Staff Member, Antitrust, Commercial, and 
Administrative Law; Lina Khan, Counsel, Antitrust, Commercial, 
and Administrative Law; Slade Bond, Chief Counsel, Antitrust, 
Commercial, and Administrative Law; Chris Hixon, Minority Staff 
Director; Tyler Grimm, Minority Chief Counsel for Policy and 
Strategy; Ella Yates, Minority Director of Member Services and 
Coalitions; Douglas Geho, Minority Chief Counsel for 
Administrative Law; and Kiley Bidelman, Minority Clerk.
    Mr. Cicilline [presiding]. 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 to explore Proposals 
to Strengthen Antitrust Laws and Restore Competition Online.
    Before I begin, I would 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 would 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 like to 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.
    Since June 2019, the Antitrust Subcommittee has conducted a 
bipartisan investigation into the state of competition in 
digital markets. From the beginning of this process, we 
promised to perform a top-to-bottom review, including 
examination of the business practices and dominance of the 
largest technology platforms: Amazon, Apple, Google, and 
Facebook. Over the past 15 months, we have collected nearly 1.3 
million internal documents and communications, a hearing record 
that totals 1,800 pages, testimony from 30 witnesses, 
submissions from more than 40 antitrust experts of every 
political persuasion, and interviews with more than 240 market 
participants, former employees of the investigated platforms, 
and other interested parties. Similar to prior congressional 
investigations, we did not set out with any preordained outcome 
in mind, and we have followed the facts. We have also worked to 
preserve bipartisan cooperation throughout this process. As my 
colleague and friend, Ken Buck, said before our last hearing, 
and I quote, ``This is the most bipartisan effort I have been 
involved with in 5-and-a-half years in Congress.'' Let us 
continue our work in the same spirit during today's hearing, 
the 7th and final hearing that we will hold to conclude the 
subcommittee's investigation.
    At our last hearing in July, we took the testimony of the 
chief executive officers of the four leading digital platforms: 
Jeff Bezos, Tim Cook, Mark Zuckerberg, and Sundar Pichai. For 
almost 6 hours, we pressed them for answers about their 
business practices, including about the evidence we uncovered 
that they have exploited, entrenched, and expanded their power 
in anti-competitive and abusive ways. To put it simply, their 
answers were evasive, they were nonresponsive, and they raised 
new questions about whether they believe their companies are 
beyond oversight. These four corporations differ in important 
ways, but our investigation has identified three problems that 
each present.
    First, each platform now serves as a gatekeeper over a key 
channel of distribution. By controlling access to markets, 
these giants are able to pick winners and losers throughout our 
economy. Not only do they wield tremendous power, but they are 
also able to abuse it by charging exorbitant fees, imposing 
oppressive contracts, and extracting valuable personal data 
from the people and businesses that rely on them. Second, each 
platform uses their gatekeeper position to protect their own 
power. By controlling the infrastructure of the digital age, 
they have surveilled other businesses to identify potential 
rivals and ultimately bought out, copied, or cut off their 
competitive threats. Third, these platforms have abused and, it 
seems, will continue to abuse their control to expand their 
power in the marketplace. Whether it is through self-
preferencing, predatory pricing, or requiring users to buy 
additional products, the dominant platforms have used their 
power in destructive ways in order to grow even bigger.
    Each of these American companies have contributed immense 
technological breakthroughs and economic value to our country 
over the past several decades. They were founded on shoestring 
budgets in dorm rooms and garages and are a testament to our 
core values as a country. But in an effort to promote and 
continue this new economy, Congress and antitrust forces allow 
these firms to regulate themselves with little oversight. As a 
result, the internet has become highly concentrated, less open, 
and more hostile to innovation and entrepreneurship. To put it 
simply, these once scrappy underdog startups have grown into 
the kinds of monopolies we last saw more than a century ago 
during the time of oil barons and railroad tycoons. We stand at 
a crossroads, there is no doubt about that. As part of this 
hearing, we will discuss paths forward for addressing these 
competition problems.
    Today's hearing also concerns broader questions about the 
overall rise of market power in our economy and potential 
solutions to arrest this concerning trend. In March, 
Subcommittee Ranking Member Sensenbrenner and I sent bipartisan 
requests for submissions from antitrust and competition policy 
experts with a diverse range of views on these matters. We 
requested comments on several questions as part of our review, 
including whether existing laws and enforcement levels are 
adequate to prohibit monopolization and anti-competitive 
mergers and acquisitions in today's economy. In response, we 
received 38 submissions from dozens of leading experts, 
including several of the witnesses testifying at today's 
hearing, which we have made public in connection with today's 
hearing. We are joined today by several leading experts in this 
field who will offer their thoughts on potential remedies for 
the problems that we have identified over the past 15 months.
    In closing, I thank our esteemed witnesses for their 
testimony at today's hearing. And before I conclude, I just 
want to take a brief moment to recognize the outstanding career 
of the ranking member of the subcommittee, my friend and 
colleague, Jim Sensenbrenner. It has been a tremendous pleasure 
working with you this Congress. As part of your distinguished 
career, you have left an indelible mark on this committee, on 
the United States Congress, and on our country. You have never 
hesitated to work across party lines in the service of 
hardworking Americans, which is a quality that I hope endures 
on this subcommittee in your absence following your retirement 
from the Congress. As an incoming chairman, I looked to you for 
leadership at the beginning of the Congress. You have been a 
great source for advice and wisdom to me over the past 2 years. 
I thank you for your friendship and for your incredible service 
to this committee and to our country. And with that, it is my 
great privilege to recognize the ranking member of the 
subcommittee for purposes of making his opening statement. Mr. 
Sensenbrenner.
    Mr. Sensenbrenner. Thank you very much, Mr. Chairman, and 
thank you for your wonderful words. Looking back at 42 years, 
you know, I have tried my best to identify issues, seeing where 
bipartisan agreement can be made, and then moving forward. And 
during my chairmanship, we were tremendously productive on a 
bipartisan basis, and since then I have kind of picked and 
chosen my issues, and this has been one of them.
    This investigation has been very informative for us to 
better understand the tech ecosystem. When we began this 
process more than a year ago, I was very interested to learn 
about some of the country's largest and most successful 
companies. These companies--Google, Facebook, Amazon, and 
Apple--are ubiquitous in today's America, but grasping their 
influence in size and, more importantly, what they do with that 
influence in size was something that Congress needed to 
examine. Examination on the state of antitrust in the state of 
the tech world is wrapping up, and we have heard from 
academics, enforcers, competitors, and notably the big four 
tech companies themselves. The record is extensive. So we find 
ourselves today hearing from a panel of witnesses who will tell 
us exactly what we should do about all this. The size of this 
panel reflects the diverse opinions of what is to be done.
    At our last hearing, I didn't believe we needed to change 
the country's antitrust laws or abandon the consumer welfare 
standard. It has been my experience after 42 years in Congress 
that this body is ill-suited to micromanage the economy, and 
probably even worse at predicting what it will look like in the 
future. I remain skeptical of proposals that break up these 
companies, mandate a one-size-fits-all data standard, or create 
a government-run ``public option.'' It appears to me that this 
would ultimately stifle innovation and be more harmful to 
consumers. The question we should be answering is whether the 
law is inefficient to protect the consumer.
    I believe the American people have been well served by our 
antitrust framework for decades. By contrast, I don't think 
that overly-burdensome regulations that break up these 
companies or having the government insert itself in their 
operations is the right course of action. Where we need to see 
improvement is in the enforcement of existing law. However, it 
should be noted that enforcement is starting to work. For more 
than a year, the DOJ and FTC have been conducting their own 
antitrust investigations into the big tech companies. It is 
being reported that as a result of this investigation, DOJ is 
readying a case against Google. Let us keep in mind as we 
consider whether a drastic overhaul of antitrust is warranted 
to meet the goals of the consumer welfare standard.
    I do want to take a moment to thank Chairman Cicilline for 
the courtesies that he extended to me during this process in an 
effort to keep this investigation bipartisan. I do truly 
believe in the friendship we have developed, and while we 
ultimately disagree on the future of antitrust laws and the 
tech companies, I can say that it has been a pleasure to know 
you and to work with you on this. I also want the record to 
reflect that the next time we go to dinner, it is Chairman 
Cicilline's turn to buy, and I yield back.
    Mr. Cicilline. Thank you, Mr. Ranking Member. I now 
recognize the chairman of the full committee, the gentleman 
from New York, Mr. Nadler, for his opening statement.
    Chairman Nadler. Thank you, Mr. Chairman, for holding 
today's hearing. It has been a pleasure to take part in this 
historic and bipartisan process. As we approach the final 
months of this session, I want to take a moment to reflect on 
the subcommittee's substantial efforts during this Congress.
    The subcommittee has taken a number of concrete steps 
forward in support of its critical mission to promote open and 
fair markets for the American people with an appropriate focus 
on consumers and workers as well as small- and medium-sized 
businesses who are struggling to stay afloat. During the 116th 
Congress, we have favorably reported out of the Judiciary 
Committee nearly a dozen bipartisan bills developed by the 
Antitrust Subcommittee, all of which passed with unanimous 
support. These include a bipartisan package of bills that ban 
various types of anti-competitive conduct by branded drug 
companies, which are vital to stop the skyrocketing cost of 
prescription drugs. We were able to enact one of these bills, 
the CREATES Act, into law last year. This act, which was 
sponsored by Subcommittee Chairman Cicilline and Senator 
Patrick Leahy, will cut drug prices by billions of dollars by 
removing entry barriers for generic competitors.
    Over the past year, we have also enacted several other 
important laws that originated with this subcommittee, 
including laws to ensure that small businesses, veterans, and 
consumers have access to a fresh start through the bankruptcy 
system. This work is more important than ever as our Nation 
continues to grapple with the devastating economic effects of 
the COVID-19 pandemic. We also passed out of the House for the 
very first time the Forced Arbitration Injustice Repeal Act, or 
the FAIR Act, which restores the rights of every American and 
small business to their day in court by ending forced 
arbitration. This important legislation was championed by 
Courts and Intellectual Property Subcommittee Chairman Johnson. 
Just 2 days ago, the Judiciary committee voted out a bill that 
I sponsored to help address the student loan debt crisis. That 
legislation makes student loan debt dischargeable in 
bankruptcy, fixing a great injustice that burdens millions of 
Americans. I am deeply proud of these efforts, and I look 
forward to continuing our work towards enacting laws that will 
promote competition, access to the courts, and a fair 
bankruptcy process, among the subcommittee's other important 
work.
    Turning to today's hearing, over the past 15 months, the 
Antitrust Subcommittee has undertaken a historic bipartisan 
investigation of competition in the digital marketplace. As I 
made clear at the subcommittee's last hearing, I had 
significant concerns about consolidation and its harmful 
effects. The investigational record bore this out. Each of the 
major companies that were part of this investigation in its own 
way exerts dominant control in the digital marketplace that has 
been cause for great concern. As we approach the end of this 
investigation, with the benefit of our six hearings and 
substantial record, my belief that we must modernize and 
reinvigorate enforcement of the antitrust laws is stronger than 
ever. We must modernize our antitrust laws to meet the 
challenges of our modern economy. We must ensure that our 
enforcement agencies have the tools, resources, and the will to 
vigorously enforce the law to protect consumers and promote 
competition.
    This investigation has also made clear to me that beyond 
fixing the antitrust laws, we must use our oversight authority 
to shore up the antitrust enforcement agencies' ability and 
will to enforce those laws. In some instances, the lack of 
enforcement may come down to a lack of will. Our antitrust 
enforcers should not pull punches. We must ensure that the 
leadership at these agencies is committed to robust 
enforcement. It is also important to adequately staff and 
resource the agencies as antitrust cases have become more 
resource intensive and agency staff are faced with 
investigating some of the wealthiest companies of all time.
    I look forward to hearing from our witnesses and to 
discussing how we can work together on these important matters 
going forward. I thank the chairman for holding this hearing 
and for his leadership of this important investigation. I also 
want to thank the ranking member, Mr. Sensenbrenner, the 
chairman emeritus of the full committee, for his many years of 
service to this committee and to the House. He will be sorely 
missed next Congress. With that, 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. Big Tech is out to get 
conservatives. That is not a suspicion. That is not a hunch. It 
is a fact. I said that 2 months ago at our last hearing. It is 
every bit as true today. Democrats have said that they want to 
take a serious look at the size, power, and influence of these 
companies. They have refused our repeated requests that this 
include an evaluation of how platforms are censoring speech. 
Maybe it is because the left isn't being censored. We never 
hear about Mother Jones being demonetized. We don't hear about 
Young Turks' videos being taken down. We don't hear about the 
Daily Coast being censored. Nope, this only happens to 
conservatives.
    Google tried to demonetize The Federalist. Amazon censors 
the Family Research Council. YouTube blocks videos from Senator 
Blackburn. Twitter censors the President, but they let the 
leader of Iran post a statement where he says they will strike 
a blow against American citizens. At the last hearing, our 
concerns were dismissed as ``conspiracy theories,'' despite 
this mounting evidence of biased actions against conservatives. 
Even though you are seeking to radically rewrite antitrust 
laws, Silicon Valley continues to use its power to carry your 
water. In fact, the vast majority of political contributions 
from the very firms you are targeting go to Democrats. You have 
even denied Republicans, and, more importantly, the American 
people the opportunity to hear from Twitter at the last hearing 
held by this subcommittee. Twitter, I will remind you, shadow 
banned four members of Congress. Four hundred thirty-five in 
the House, 100 in the Senate, 535. Four, only four, four 
conservative Republicans get shadow banned by Twitter, but when 
we asked you to bring them in, you said, nope, can't do that.
    The root cause of Big Tech censoring conservatives lies 
with the defects in how the law governing liability online has 
been applied and interpreted. Rather than stimulating open 
debate and free exchange of ideas, Section 230 of the 
Communications Decency Act has given license to platforms to 
target particular viewpoints, particularly, as I pointed out, 
those of conservatives. In fact, the ``otherwise objectionable 
provision'' has been abused by the platforms as a catch-all 
term used to discriminate against any content they find 
disagreeable.
    Congress has an obligation to ensure that the rules in 
place governing accountability online and providing protections 
for the moderation of content are applied fairly and without 
undue bias against certain ideologies. Today, a dozen 
Republican members of this committee introduced legislation to 
update the liability platforms could face when they insert 
their own opinionated editorial decisions into what content 
stays up and what content comes down. Our bill amends the 
Communications Decency Act 230 to provide needed clarifications 
and transparent rules of the road. Importantly, we replace the 
vague ``otherwise objectionable category'' with narrowly-
tailored categories, and make clear that decisions to remove or 
restrict content are immune from liability only in certain 
specific instances, that reasons for these editorial decisions 
must be made on an objectively-reasonable basis, not the 
subjective standard that is in current law. The legislation 
also makes clear that decisions to remove content must actually 
be done in good faith based on predictable criteria.
    Under the new law, platforms would be required to have 
publicly-available terms of service that state plainly how 
content modernization decisions are being made. And if content 
is taken down, the platform now must supply the provider of 
that content with notice explaining the basis for restricting 
the censorship and provide them with an opportunity to respond. 
This is commonsense reform, and I hope, as the ranking member 
mentioned, I hope we can move on in a bipartisan basis. Free 
speech should not be a Republican or Democrat issue. It is a 
matter at the very heart of our democracy, and I look forward 
to today's discussion.
    I want to thank our witnesses for appearing, and I, too, 
want to thank Ranking Member Sensenbrenner, former Chairman 
Sensenbrenner, for his decades of work in the United States 
Congress for the American people. With that, I yield back.
    Mr. Cicilline. The gentleman yields back. It is now my 
pleasure to introduce today's witnesses.
    Our first witness is Bill Baer. Mr. Baer is a Visiting 
Fellow in Governance Studies at the Brookings Institution. He 
is the only person to have led antitrust enforcement at both 
U.S. antitrust agencies as Assistant Attorney General from 2013 
to 2016, and director of the Bureau of Competition at the 
Federal Trade Commission from 1995 to 1999. Mr. Baer was twice 
named the best competition lawyer in the world by the Global 
Competition Review, and by the National Law Journal as one of 
the decade's most influential lawyers. He received the FTC's 
Miles W. Kirkpatrick Lifetime Achievement Award in 2015. Mr. 
Baer received his B.A. from Lawrence University and his J.D. 
from Stanford Law School where he served as senior article 
editor of the Stanford Law Review.
    Our second witness is Zephyr Teachout. She is an Associate 
Professor of Law at Fordham University. Professor Teachout is 
an expert on antitrust, election, and constitutional law. She 
was the first director of the Sunlight Foundation and serves on 
the board of the Open Markets Institute. She has written dozens 
of law review articles and two books, including Corruption in 
America: From Ben Franklin's Snuff Box to Citizens United. 
Professor Teachout received her B.A. from Yale University and 
her J.D. from Duke Law School.
    Our third witness is Michael Kades, the Director of Markets 
and Competition Policy at the Washington Center for Equitable 
Growth. Prior to joining Equitable Growth, Mr. Kades served as 
an attorney at the Federal Trade Commission for 20 years. 
During his time at the Commission, he was also an attorney 
advisor to Chairman Jon Leibowitz and the deputy trial counsel. 
Mr. Kades is a graduate of Yale University and the University 
of Wisconsin Law School.
    Sabeel Rahman, our 4th witness, is the president of Demos. 
Demos is a group dedicated to fighting for a just, inclusive, 
multiracial democracy. Mr. Rahman is also an associate 
professor of law at Brooklyn Law School. His writings on 
democracy, economic power, and inequality have been published 
in The Atlantic, The New Republic, the Boston Review, Dissent, 
and The Washington Post. His first book, Democracy Against 
Domination, won the Dahl Prize for scholarship on the subject 
of democracy. Professor Rahman received his master's degree 
from the University of Oxford and both his law degree and 
doctorate from Harvard University.
    The fifth witness at our hearing today is Christopher Yoo, 
Professor of Law, Communication, Computer, and Information 
Science at the University of Pennsylvania Law School. He is a 
frequently-cited scholar on administrative and regulatory law, 
with his primary research focusing on ways to connect more 
people to the internet, the internet's routing architecture, 
and network neutrality. He has written more than 100 scholarly 
works and regularly testifies before Congress, the FCC, the 
FTC, and the Department of Justice. Professor Yoo received his 
A.B. from Harvard University and his J.D. from Northwestern Law 
School.
    Rachel Bovard, our sixth witness, is the Senior Director of 
Policy at the Conservative Policy Institute. She has more than 
10 years of experience working in policy in Washington, D.C. In 
2006, she served as Senator Rand Paul's legislative director. 
She went on to work on the Senate Steering Committee under both 
Senator Pat Toomey and Senator Mike Lee as policy director. She 
has also served as Director of Policy Services for the Heritage 
Foundation, and in 2013, she was named one of the National 
Journal's Most Influential Women in Washington Under 35. Ms. 
Bovard received her B.A. from Grove City College and her 
master's from George Washington University.
    Our seventh witness, Tad Lipsky, is the Assistant Professor 
and Director of the Competition Advocacy Program at the Global 
Antitrust Institute at Antonin Scalia Law School. Prior to 
joining the Global Antitrust Institute, Professor Lipsky served 
as acting director of the FTC's Bureau of Competition from 
February 2017 to July 2017. Over his storied career in 
antitrust law, Professor Lipsky has served as the Coca-Cola 
Company's chief antitrust lawyer, the first international 
officer of the American Bar Association Section on Antitrust 
Law, and as the co-chair of the International Competition 
Policy Working Group of the U.S. Chamber of Commerce. Professor 
Lipsky received his master's and J.D. from Stanford University.
    Our last witness, Sally Hubbard, is the Director of 
Enforcement Strategy at the Open Markets Institute. Prior to 
her time with Open Markets, Ms. Hubbard was the senior editor 
of antitrust enforcement and regulation of tech platforms at 
the Capitol Forum. She has also spent 7 years as the Assistant 
Attorney General at the New York State Office of the Attorney 
General's Antitrust Bureau. Ms. Hubbard earned her bachelor of 
arts at the College of William and Mary and her J.D. at New 
York University School of Law.
    So as you can see, we have a very distinguished panel, and 
I am grateful for their presence today. We welcome all of you 
and thank you for your participation. And I will begin by 
swearing in our witnesses, and I ask our witnesses testifying 
in person to rise, and ask our witnesses testifying remotely to 
turn on their audio and make sure I can see your face and your 
raised hand while I administer the oath.
    Do each of you swear or affirm under penalty of perjury 
that the testimony you are about to give is true and correct to 
the best of your knowledge, information, and belief, so help 
you God?
    [A chorus of ayes.]
    Mr. Cicilline. Thank you. Let the record show the witnesses 
answered in the affirmative. Thank you all. You may be seated.
    Please note that your written statement 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 as well as before 
you. 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. I would also remind you 
that you are the only ones from your respective companies 
invited to testify today, and, in accordance with normal House 
practice and Section G of the House Remote Committee 
Proceedings Regulations, I will assume that your sworn 
testimony is your own. Please let me know if at any point the 
hearing you wish to mute yourself so you can confer with your 
counselor or other individuals.
    Mr. Baer, you may begin.

    TESTIMONIES OF WILLIAM BAER, VISITING FELLOW, GOVERNING 
   STUDIES, BROOKINGS INSTITUTE; ZEPHYR TEACHOUT, ASSOCIATE 
  PROFESSOR OF LAW, FORDHAM UNIVERSITY SCHOOL OF LAW; MICHAEL 
 KADES, DIRECTOR OF MARKETS AND COMPETITION POLICY, WASHINGTON 
 CENTER FOR EQUITABLE GROWTH; SABEEL RAHMAN, PRESIDENT, DEMOS; 
      CHRISTOPHER YOO, JOHN H. CHESTNUT PROFESSOR OF LAW, 
     COMMUNICATION, AND INFORMATION SCIENCE, UNIVERSITY OF 
 PENNSYLVANIA CAREY LAW SCHOOL; RACHEL BOVARD, SENIOR DIRECTOR 
  OF POLICY, CONSERVATIVE PARTNERSHIP INSTITUTE; TAD LIPSKY, 
 ANTONIN SCALIA LAW SCHOOL, GEORGE MASON UNIVERSITY; AND SALLY 
    HUBBARD, DIRECTOR OF ENFORCEMENT STRATEGY, OPEN MARKETS 
                           INSTITUTE

                   TESTIMONY OF WILLIAM BAER

    Mr. Baer. Thank you, Chairman Cicilline, Chairman Nadler, 
Ranking Members Sensenbrenner and Jordan. I appreciate the 
opportunity to appear today, and thank you for the courage and 
tenacity this subcommittee has shown in tackling the role of 
antitrust law in the 21st century. I bring the perspective of 
someone who has been privileged to serve on the front lines of 
antitrust enforcement in four different Administrations, twice 
at the FTC, and most recently as head of antitrust at the 
Department of Justice. That experience teaches me that in many 
cases, our antitrust laws have been successful and forces for 
good. But too often antitrust jurisprudence has fallen short 
and failed to protect consumers and competition as much as it 
can and as it should.
    My submission makes four basic points. Antitrust 
enforcement does need to be based on an analytically sound, 
fact-based framework, but we can't let the perfect be the enemy 
of the good, and many courts have held enforcement to an 
effective standard of proof that is unrealistic and 
inconsistent with the plain language of our antitrust statutes. 
If the courts are unwilling to step back from this overreach, 
legislation may well be needed to reset the balance. And 
finally, I do believe more resources are needed if antitrust 
enforcement is to fulfill its role as the economic cop on the 
beat.
    Now, I was on the scene in the 70s as The Chicago School 
came to narrow dramatically the focus of antitrust, mostly to 
price fixing and a few mergers to monopoly or near monopoly. 
The Chicago School, as former FTC chair, Robert Pitofsky, put 
it, it really overshot the mark. We went from a place in the 
1960s when Supreme Court Justice Stewart complained that the 
only consistency he could find in Supreme Court antitrust 
decisions was that the government always wins. We went from 
there to a 25-year dark age where the government invariably 
lost. Now, we moved the needle somewhat in the 90s, convincing 
the courts to block merger consolidations involving office 
supply superstores, drug wholesalers, and the sustained efforts 
by the government to challenge behavior by Microsoft and Toys 
``R'' Us that limited competitive opportunities for rivals. 
These modest successes have continued over the last couple of 
decades as some courts have recognized the anti-competitive 
impact of hospital consolidation and anti-competitive 
agreements involving pay-for-delay understandings between 
generic manufacturers and brand names. But looking back at the 
cases where the government prevailed in the last couple of 
decades helps explain why concentration and market power have 
actually increased. Invariably when the government won an 
antitrust challenge, the government's evidence was 
overwhelming.
    Merger to monopoly or near monopoly are transparently bad 
conduct by dominant firms. In close cases, the government 
typically lost, or enforcers never brought, the case in the 
first place out of fear that the courts would rule against and 
make more bad law. How did we get there? In my view, the fear 
of getting it wrong warped antitrust enforcement. Antitrust 
jurisprudence today is too cautious, too worried about the 
effects of over enforcement, so-called Type I errors. Bias 
against enforcement has caused many courts to demand a level of 
proof that is often unattainable. That chills enforcement, 
limits our ability to challenge conduct or acquisitions of 
potential rivals, especially in the tech sector where firms 
benefiting from network effects can acquire enduring market 
power.
    So what do I think we should do about it? I think we need 
to modify current law to direct the courts and the antitrust 
enforcers to be more assertive in challenging conduct and 
consolidation that risks creating or enhancing market power. 
Modest changes will suffice by incorporating presumptions that 
certain behaviors are likely to reduce competition, making it 
clear that showing a risk of reduction of competition is 
sufficient; emphasizing that anti-competitive effects include 
price and quality and innovation competition; and legislating 
to overrule recent problematic court decisions.
    Congress could make a meaningful difference. And we need to 
consider forward-looking rules and legislation that will 
enhance competition. We have precedent for that. The 2004 FCC 
rule allowing consumers to port their phone numbers to 
competing carriers gave consumers the economic power to reward 
those with lower prices and better service. It forced incumbent 
carriers to compete like never before. Those sorts of tools--
portability and interoperability--can help restore markets to a 
competitive equilibrium. Congress also needs to fund antitrust 
enforcement. Today we spend about 18 percent less than we did 
10 years ago, despite increasing concentration, a growing 
number of dominant firms, and a much, much larger economy. We 
need funding both to bring enforcement actions and to allow for 
after-action studies of what happened in markets where the 
agency decided not to bring enforcement actions, or where the 
courts rejected an antitrust challenge.
    We can do more and we can do better, and thank you again 
for the opportunity to be here today.
    [The statement of Mr. Baer follows:]
    
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    Mr. Cicilline. Thank you, Mr. Baer. I now recognize 
Professor Teachout for 5 minutes. Could you please turn on your 
microphone?

                  TESTIMONY OF ZEPHYR TEACHOUT

    Ms. Teachout. Chairman Cicilline, Ranking Member 
Sensenbrenner, and members of the subcommittee, thank you for 
the opportunity to testify at this historic hearing. My 
expertise is in the law of democracy, so I will speak to the 
essential nature of what you are doing to protect our 
democracy.
    Antitrust laws, and strong antitrust laws, are essential 
for freedom and for a thriving economy. The highly-concentrated 
Big Tech marketplaces and the existing abuses of Big Tech, 
enabled by their dominant positions, poses a major democratic 
threat. It is quintessentially a congressional job to respond 
to this threat. For nearly 40 years, the Supreme Court, not 
Congress, has been the primary institution rewriting American 
antitrust laws. The Court is detached from the realities of 
business and power, unaccountable to the public, and Congress 
has essentially allowed them to take the reins, gutting popular 
laws with their own judge-made theories, and allowing this 
massive growth of concentrated power. This has to change. 
Congress, not the Supreme Court, must be the body responsible 
for defining the scope of those laws. The Sherman Act, the 
Clayton Act, and our other antitrust laws are not 
constitutional provisions over which Congress must defer 
interpretations to the Court. They are Federal laws passed by 
this body, and when they're misinterpreted by courts, Congress 
must act.
    There are several particular cases that I and others 
highlight in my written submission that are ripe for direct 
congressional overturning, but it is not sufficient to pick a 
handful of cases. This body must recognize its central role in 
making economic policy and play an ongoing role in the kind of 
investigations that it has just conducted, overseeing agencies 
and continually re-examining antitrust laws. Senator Phil Hart 
went to his death bed working on antitrust legislation. Up 
until the 1980s, this body understood that economic policy and 
anti-corruption policy required ongoing anti-monopoly 
vigilance.
    Second, it will not be sufficient to overturn those laws. 
Significant new legislation is required, as your investigation 
revealed. Key parts of Big Tech companies have become a kind of 
essential public infrastructure. The economy and public life 
would come crashing to a halt if they were suddenly removed. No 
merchant, politician, political activist, or journalist can 
thrive without them, and no individual can. They play a grossly 
outsized role in the basic functions of our society and have 
become unelected, unaccountable, and self-serving heads of 
planned economies planned by them. This is a deeply problematic 
infrastructure because they are riven with conflicts of 
interest. They own platforms and compete on the platforms, so 
Congress should pass a law--people often talk about this in 
terms of structural separation--delineating single-line-of-
business rules for the very biggest tech companies. This 
single-line-of-business rule kind of law exists throughout our 
Nation's history, and it would lead to things like Amazon, for 
instance, being prohibited from being involved in fulfillment 
or shipping, a distinct line of business. Facebook could not 
also be engaged in Facebook Messenger. Google should not be 
owning YouTube.
    Finally, I want to applaud this subcommittee for a riveting 
and critically-important investigation, and argue that Congress 
must continue with this kind of investigation, and not just 
this committee. This should be the beginning of the golden age 
of congressional investigations where committees use their 
investigative power to reveal abuses and address them. As Big 
Tech companies become more powerful, they are building direct 
political power. Big Tech, as you know, is the biggest lobbyist 
in D.C., and Congress must stand up to these new robber barons 
to protect our public institutions, to restore democratic and 
economic freedoms, and build a thriving, fair, and free 
country. Thank you.
    [The statement of Ms. Teachout follows:]
    
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    Mr. Cicilline. Thank you, Professor Teachout. I now 
recognize Mr. Kades for 5 minutes.

                   TESTIMONY OF MICHAEL KADES

    Mr. Kades. Thank you, Chairman Cicilline, Ranking Member 
Sensenbrenner, Full Committee Chairman Nadler, Full Committee 
Ranking Member Jordan, and the members of the subcommittee for 
the opportunity to testify to you on this important issue. And 
I would like to share the commendations that my colleague, Bill 
Baer, who also gave me my first promotion--probably his biggest 
mistake--that this committee really needs to be commended for 
taking on this topic, proceeding despite the politics, in a 
bipartisan way. And it is really a testament to the strength of 
this Nation and democracy.
    The challenges we face are not limited to one or two 
companies. The filing of one or two cases will not solve 
problems in digital marketplaces. This committee has an ongoing 
important role in promoting competition in digital markets, and 
so there are three issues I urge you to consider as the 
committee moves forward. First, we need legislative reform, not 
just enforcement actions. Over the past 40 years, showing an 
almost neurotic fear of over enforcement, the courts have 
increased the burdens on plaintiffs and narrowed the scope of 
the antitrust laws. Both economic research and empirical 
results a result discredit that approach.
    As the letter I, along with 11 other economists and 
lawyers, submitted to this committee concludes, the antitrust 
laws, as interpreted and enforced today, unnecessarily limit 
the ability to address the anti-competitive conduct in digital 
marketplaces that this committee has investigated. So, for 
example, under current case law, it is arguable that the 
government could not have successfully pursued its claim that 
led to the breakup of the AT&T phone monopoly in the 80s, 
perhaps the most significant monopolization case in the history 
of the U.S. and maybe the world. Something is simply wrong when 
judicial decisions implicitly undermine basic competition 
principles. Just yesterday, the Third Circuit Court of Appeals 
found that the Federal Trade Commission is powerless to punish 
monopolists, despite agreeing that a defendant in the case, a 
branded pharmaceutical manufacturer, had violated the FTC Act 
and delayed lower-cost generic competition. The court blithely 
concluded that the FTC could not obtain an injunction to stop 
the conduct in the future, nor could it recover the nearly half 
a billion dollars that the company earned by violating the law. 
Again, something is wrong when the courts decide there are no 
repercussions for violating the antitrust laws.
    We know how the courts are interpreting the antitrust laws, 
but, as Professor Teachout just mentioned, it is up to Congress 
to decide whether that is correct. But unless Congress acts, it 
is accepting the judicial view that the antitrust laws have 
little power to stop or deter anti-competitive conduct, whether 
it be in the pharmaceutical industry, digital markets, or 
anywhere else in the economy. Two bills introduced by Senator 
Amy Klobuchar, the Anti-Competitive Exclusionary Conduct 
Prevention Act and the Consolidation, Prevention and 
Competition Promotion Act, embody reforms that would allow 
Congress to restore the strength of the antitrust laws. None of 
this is to suggest that the government should just get a pass 
from prosecuting antitrust violations against digital 
platforms. To the contrary, antitrust enforcers have a duty to 
attack monopoly power where they find it, despite these 
challenges.
    This leads me to my second point. A key remedy in an 
antitrust case involving digital platforms needs to be that 
once a violation has occurred, the remedy needs to eliminate 
the network effects that create entry barriers, and I talk 
about this more fully in my statement. But that means when we 
think about remedy, prohibiting conduct, penalizing the 
companies, even breaking them up, all may not be sufficient to 
restore competition, so that is the challenge the enforcers 
will have going forward. Finally, I want to commend also the 
committee for thinking broadly about solving competition. This 
is not just about competition, antitrust enforcement, or 
regulation. We need both tools, as my colleague, Sally Hubbard, 
reminds me often. So this committee is correct to be 
considering both regulatory tools as part of that solution. 
Protecting competition in digital marketplaces requires that 
the laws efficiently distinguish between pro- and anti-
competitive conduct, remedies that deal with the underlying 
structural problems causing the anti-competitive activity, and 
a combination of antitrust enforcement of regulations so that 
markets deliver the results that benefit us all.
    And I have 9 seconds. I just want to say to Ranking Member 
Sensenbrenner, one of my favorite things was, as I would drive 
to clerk for Judge Reynolds back in the early 90s through your 
district, and I would complain about the traffic, he would 
always explain to me, we don't complain about that traffic 
because we like James Sensenbrenner even when we don't agree 
with him. So I thought this was an appropriate time to share 
that story with you.
    [The statement of Mr. Kades follows:]
    
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    Mr. Cicilline. Thank you, Mr. Kades. I now recognize 
Professor Rahman for 5 minutes.

                   TESTIMONY OF SABEEL RAHMAN

    Mr. Rahman. Thank you Chairman Cicilline, Ranking Member 
Sensenbrenner, members of the subcommittee and the full 
committee. I'm grateful for this opportunity to participate in 
this hearing with you all on this critical issue of 
reinvigorating our competition policy in the online economy. As 
president of Demos, we're focused very much on this idea of how 
we build an inclusive and equitable democracy and economy, and 
the work of this subcommittee is critical to that vision.
    Tech platforms are our modern infrastructure like roads, 
bridges, telecom, and it poses unique regulatory and policy 
challenges that this committee in its recommendations will have 
to consider. In short, as some of our colleagues have already 
mentioned, we will have to engage both break ups as well as 
regulatory tools, and I'll talk about that in these next few 
minutes.
    So if we think about the physical infrastructure of our 
ordinary life--roads, telecom, bridges, electric utilities--
there are some basic rules of the road that we need for that to 
actually serve the goals of economic innovation, serving 
consumers and communities, and ensuring that all of us are able 
to benefit in the growth of our economy. We need to make sure 
that these infrastructures don't discriminate on the basis of 
price, on basis of race. We need to ensure that they don't 
self-deal. The kinds of interests that Professor Teachout 
mentioned are a big problem. We also need to make sure that our 
basic infrastructure isn't toxic, right? We wouldn't want 
people who drive on the roads to then get sick from driving on 
those roads. And we want to make sure that they don't entrench 
themselves, that the fact that one highway exists doesn't mean 
that we can't build another faster highway that shortens time 
on the route. These are the kinds of challenges that we 
actually face in the digital environment.
    So let me give two quick examples highlighted by the work 
of this subcommittee. If we take Amazon, for example, we've 
seen in the hearings of this subcommittee over these last few 
months how Amazon has leveraged its dominance over online 
retail transactions to undercut its competitors, to engage in 
predatory pricing, and to stifle innovation. This impact is not 
just on the economy and on growth, it also has a particularly 
hard-felt impact on black, brown indigenous communities when 
you think about the impacts on small businesses, for example. 
That market dominance has then, in turn, also enabled Amazon to 
pressure State and local governments for more favorable 
regulatory treatment and subsidies and to avoid the kinds of 
liabilities for its workplace safety, particularly at a time 
where we see black and brown essential workers facing 
astronomically high injury rates double the industry average, 
and where Amazon warehouses have themselves become hot spots 
for COVID transmission.
    Facebook offers another example. With the election rapidly 
approaching, we've seen the dangers of an ad-based, data-
mining-based business model where an online information 
platform like Facebook uses algorithms that maximize user 
attention in order to sell targeted ads. That essentially means 
that our information infrastructure of Facebook is actually 
incentivized to allow the rapid spread of toxic misinformation, 
disinformation, hate speech, attacks on black and brown 
speakers, in particular. Here, too we see the burden is felt 
disproportionately on black and brown communities.
    The policy response to this type of problem has to grapple 
with the fact that, in some ways, we want infrastructure to 
enable communication, to enable new innovation. That 
infrastructure has to serve all of us for the economy as a 
whole rather than being a basis for the kind of entrenchment 
that Professor Teachout mentioned. So I want to suggest in this 
last minute and a half briefly some of the policy strategies 
that this committee should consider.
    First, we need to include structural separations and 
breakups as part of the policy toolkit. Congress can legislate 
standards to this effect. It can also reinvigorate the 
enforcement powers of agencies, like the FTC, to pursue the 
kinds of functional separations, line-of-business separations, 
that will be important. Second, we need to complement breakups 
and structural separations with regulatory standards and public 
standards that enforce those basic rules of the road for our 
digital infrastructure. That means standards for non-
discrimination and for portability, labor and consumer 
protection standards, basic rules of the road that we see in 
all other parts of the economy that we need to bring to the 
digital space. Third, there might be instances where we might 
want public provision, as has been mentioned already, in order 
to ensure fair and equal access and to provide the kind of 
competitive pressure that is sometimes lacking in these 
markets. These are all familiar and doable policies. They are, 
in fact, common in our history and our tradition going back a 
century ago and over the years. And, in fact, the use of these 
tools has enabled the kinds of innovation and dynamism that has 
brought the gains of many of these last few decades of economic 
growth.
    As my time is winding down, I'll just note that these 
policies, these strategies are central to rebuilding our 
economy in this moment of crisis. These policies will be 
essential as we move forward out of the current crisis that 
we're in. Thank you very much, and I yield back.
    [The statement of Mr. Rahman follows:]
    
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    Mr. Cicilline. Thank you, Professor Rahman, and I now 
recognize Professor Yoo for 5 minutes.

                  TESTIMONY OF CHRISTOPHER YOO

    Mr. Yoo. Thank you, Mr. Chairman, Ranking Subcommittee 
Member Sensenbrenner, Chairman Nadler, Ranking Member Jordan, 
and the members of the subcommittee. I applaud the subcommittee 
for its review of how antitrust laws should apply to digital 
markets.
    In sifting through the various reform proposals before you, 
I would encourage the subcommittee to keep in mind three key 
principles. The first is the importance of maintaining 
antitrust's longstanding commitment to protecting consumers 
over competitors. The second is the key role played by 
innovation and the importance of flexibility in promoting 
innovation. And the third is that many remedies work far worse 
in practice than they sound in theory. I'll explore these three 
themes by examining two of the proposed reforms that have 
already come up today by restricting companies to a single line 
of business and mandating portability and interoperability.
    Beginning first with line-of-business restrictions, there 
is strong evidence that proposals to prevent companies from 
entering complementary lines of business would likely harm 
consumers. The reality is that all companies do more than one 
thing, and consumers typically benefit. To cite one specific 
example, my colleague, Herbert Hovenkamp, has noted that 
allowing Amazon to sell private label products has provided 
enormous consumer benefits by allowing them to pay lower 
prices. In addition, we've seen Amazon expand from just an e-
commerce platform into cloud computing and other aspects that 
have been tremendously beneficial.
    If you look at the surveys of the literature on vertical 
integration conducted by antitrust enforcement officials from 
both parties, those surveys confirm that, although the 
theoretical studies hypothesize ways that vertical integration 
could harm consumers, the real-world data indicate that it is 
much more likely to benefit consumers. These results underscore 
the importance of assessing consumer welfare based on 
systematic real-world evidence and not abstract theoretical 
possibilities or anecdotes.
    Restricting companies to a single line of business can also 
harm innovation. For example, in 2005, U.S. mobile operating 
systems were a sleepy market dominated by Palm, Blackberry, 
Symbian, and Microsoft. Apple iOS appeared in 2007, and then 
Android followed in 2008. These new entrants employed 
innovative new business models based on vertical integration 
and third-party payments that reduced direct costs by consumers 
that went beyond the original lines of business of just simply 
mobile operating systems. In so doing, these new entrants 
unleashed the smartphone revolution that has provided 
tremendous benefits for consumers. This history provides useful 
examples of how consumers benefit when companies have the 
breathing room to experiment with different approaches. 
Contrary rulings would risk ruling particular business models 
out of balance. If so, the case-by-case approach of traditional 
antitrust is better suited to promoting innovation than would 
ex ante prohibitions. This is particularly important in dynamic 
industries where technological change frequently renders 
particular vertical formulations of ex ante rules obsolete.
    Now, regarding data portability and interoperability, an 
interesting problem is that large platforms, such as Google and 
Facebook, already provide for data portability, and yet 
consumers almost never avail themselves of this feature. 
Understanding why requires a deeper appreciation of what 
mandating data portability and interoperability actually 
requires. For data portability and interoperability to be 
meaningful, the data must be in a standardized format. To do 
otherwise would be like be trying to fit the proverbial square 
peg into the round hole. The reality is that different 
companies structure their data in radically different ways, and 
reconfiguring data is prohibitively expensive. Therefore, data 
portability and interoperability imposes standardization costs 
and have the unfortunate effect of picking winners and losers. 
As Ranking Member Sensenbrenner noted, the result would be to 
force data into a one-size-fits-all approach.
    In addition, interoperability can be only imposed under 
certain circumstances. We've learned over time that it works 
when interfaces are relatively simple, they're easy to monitor, 
and require a little information. The type of data interfaces 
we're talking about in this series of proceedings seem to 
represent a complex interface that has not historically been 
amenable to mandated interoperability.
    And, importantly, data formats are tied directly to 
innovation. The structure of data determines what types of uses 
are and are not possible. Forcing data into a particular format 
would inevitably preclude certain types of important 
innovation. Together, these considerations suggest that 
seemingly simple remedies are likely to prove hard to implement 
and create hidden consumer harms in terms of cost and loss of 
innovation and that the traditional case-by-case approach is 
fact intensive and specific, which would be more beneficial.
    In closing, I would like to emphasize that it is tempting 
to ask antitrust to serve a wide range of goals beyond its 
traditional role in protecting competition. While there are 
many important roles, asking any one law to do too much risks 
causing it to be ineffective and doing nothing. I believe U.S. 
citizens would be best served if antitrust continues to retain 
its traditional focus on promoting consumer welfare and 
competition in markets. Thank you very much.
    [The statement of Mr. Yoo follows:]
    
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    Mr. Cicilline. Thank you, Mr. Yoo. I now recognize Ms. 
Bovard for 5 minutes.

                   TESTIMONY OF RACHEL BOVARD

    Ms. Bovard. Chairman Cicilline, Ranking Member 
Sensenbrenner, Chairman Nadler, and Ranking Member Jordan, 
thank you for inviting me to testify today.
    A growing bipartisan consensus is emerging against the 
power of the Big Tech companies. This consensus is based on the 
recognition that corporate hegemony--that is, concentrated 
power exercised at scale--can be a threat to individual 
liberty, the free market, and independent thought in a free 
society. To that end, I started the Internet Accountability 
Project in 2019 to give a voice to conservatives concerned 
about the growing concentrated power of Big Tech as it is 
exercised and weaponized at unprecedented levels. IAP has 
focused its efforts on three areas of policy and remedy: 
antitrust enforcement, data privacy and ownership, and reform 
of Section 230 which one pro-tech law professor has identified 
as Big Tech's implicit financial subsidy.
    That Big Tech systematically engages in viewpoint and 
information bias is increasingly obvious. Here are a few recent 
examples. Dr. Scott Atlas, a neuroradiologist and professor at 
Stanford Medical School, has been accused of spreading medical 
misinformation by Google's YouTube, but only after he joined 
the White House's coronavirus Task Force. A deep investigation 
into Google by the Wall Street Journal found that the company 
``made algorithmic changes to its search results that favor big 
businesses over small ones.'' The investigation also found that 
Google modified its search results around topics like abortion 
and immigration. In June, Google colluded with NBC News to flex 
its muscles against the conservative news site, The Federalist, 
for minor violations of its ad policies in their comments 
section. In July, the search engine inexplicably stopped 
presenting search results for several leading conservative 
websites.
    Conservatives are routinely told that bias is a myth, but 
that assertion is unprovable because these tech companies are 
not at all transparent about their algorithmic and content 
moderation practices, but they should be. These decisions have 
profound impact on the nature of free thought and expression 
when done at a scale at which these companies exist. A single 
algorithmic decision made by individuals in a private 
corporation, accountable to no one, changes what kind of 
viewpoints and information are available to billions of people 
around the world. Antitrust enforcement, the subject of this 
committee's remit, is equipped to tackle corporate hegemony. It 
is the view of myself and the Internet Accountability Project 
that our antitrust laws do not need to be updated, that the 
laws on the books are sufficient for tackling per se violations 
of antitrust as they exist in the tech sector.
    Antitrust enforcement is not regulation, it is law 
enforcement. As conservatives, we do not support legal amnesty 
for those who violate our Nation's laws, and this should be 
extended to corporations who violate competition laws in the 
market. Though antitrust application to so-called speech 
concerns may not be direct, proper enforcement of the law 
against violations where they exist could certainly have 
positive downstream effects. Antitrust enforcement does not 
occur in a vacuum. Enforcing against the monolithic dominance 
of these companies in one sector, if warranted, could free up 
the market in such a way that concerns over viewpoint bias 
could be competed away in ways Big Tech's market dominance now 
makes impossible. Conservatives who rightly champion the 
innovation generated by a free market should be equally 
vigilant about maintaining the integrity of that marketplace. 
To borrow the old adage from Ronald Reagan, ``Trust, but 
verify.''
    Conservatism properly understood follows a tradition of 
skepticism when it comes to concentrations of power. As Barry 
Goldwater wrote in Conscience of a Conservative, ``Let us 
henceforth make war on all monopolies, whether corporate or 
union. The enemy of freedom is unrestrained power, and the 
champions of freedom will fight against the concentration of 
power wherever they find it.'' Thank you.
    [The statement of Ms. Bovard follows:]
    
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    Mr. Cicilline. Thank you, Ms. Bovard. Professor Lipsky is 
now recognized for 5 minutes.

                    TESTIMONY OF TAD LIPSKY

    Mr. Lipsky. Thank you, Chairman Cicilline, and thank you 
also to Ranking Member Sensenbrenner as well as Chairman Nadler 
and Ranking Member Jordan. Good to see you. You have my 
statements for the record, and given the length of the witness 
list, I'm going to try and summarize very briefly.
    A hundred and thirty years ago, a gigantic network industry 
arose as one of the greatest economic manifestations of the 
second Industrial Revolution in the United States, and that was 
the railroads. And Congress addressed many grievances and 
problems with the performance of the railroads in two 
fundamentally different ways. In 1887, it passed the first 
major Federal sectoral regulation creating the Interstate 
Commerce Commission to enforce the Interstate Commerce Act, 
which was a method of directly regulating competitive outcomes 
in the railroad industry. And in 1890, it enacted the Sherman 
Act, which very simply prohibited restraints of competition, 
conspiracy, and monopolization. It's 130 years later. The 
Interstate Commerce Commission and the Interstate Commerce Act 
are gone, but antitrust thrives, and competition thrives, and 
the success of the American economy thrives.
    In the very early stages of Sherman Act interpretation, the 
Supreme Court, taking a common law approach as Congress 
intended, very quickly determined that cartel activity was to 
be condemned per se. But then in 1898, in the Addyston Pipe & 
Steel case, it confirmed that restraint could be reasonable if 
it had a sensible relationship to a transaction with a lawful 
purpose. And except for the 1911 imposition of the per se rule 
against retail price fixing, a long period of time happened in 
which the courts were trying to feel their way through the 
complex issues that naturally arise when the antitrust laws are 
applied to particular industries, and there are nice judgments 
that are required to be made to determine what is anti-
competitive and what is pro-competitive.
    Then in the late New Deal in the second FDR term, under the 
leadership of Assistant Attorney General Jackson and his 
successor, Thurman Arnold, something changed in antitrust 
enforcement. With the encouragement of the antitrust agencies, 
the courts became far more willing to deprive companies of any 
right to defend their conduct, either using economic arguments 
or trying to show on the basis of facts and circumstances that 
what they were doing was justifiable, pro-competitive, that 
they lacked market power to present any other defense. This was 
the start of the so-called per se rule era which occurred 
around 1945 with the Associated Press decision. A number of 
patent licensing practices were condemned per se, and on and on 
until when you reach United States v. Topco, almost any type of 
conduct challenged by a plaintiff or by the government was 
condemned per se, or very strong presumption against business 
conduct. The legality of business conduct was adopted by the 
courts.
    But simultaneously, at the end of that era, America's 
economic fortunes started to go south. We had severe 
competition from companies arising in Europe and Asia, and many 
of our leading industries began to see negative results, and 
our economy entered a period of stagflation. Scholars and 
academics in law and economics pointed this out in the 60s and 
70s, and they weren't all from Chicago. As a matter of fact, 
you could say that in the study of economics and its 
application of the antitrust law, probably the most notably 
introduced antitrust enforcement was by Lyndon Johnson's first 
assistant attorney general for antitrust, Don Turner, who had 
both a Harvard Ph.D. in economics and a Yale law degree, and 
who advocated very strongly that economic analysis be used as 
the touchstone for antitrust.
    And fortunately, in the mid-70s, the Supreme Court began to 
take that up. And ever since, there has been a very powerful 
consensus in the courts, the Bar, the agencies, antitrust 
practitioners, and businesses that have to deal with very 
severe antitrust remedies and comply with the law, that the 
focus on competition rather than competitors, and the ability 
to defend oneself based on facts and circumstances, and the 
willingness of the courts at least listen to economic 
arguments, those are critical to successful application of the 
antitrust laws to the economy, not to destroy the economy, but 
to help it grow.
    And the Supreme Court and other courts have shown very 
great flexibility in understanding and absorbing new economic 
learning and applying it to even high technology industries, as 
in the two Microsoft cases that were litigated in the 1990s and 
the latter one resolved in 2001, and, most recently, for 
example, in the Ohio v. American Express case. It's not a 
right/left, Republican/Democrat, liberal/conservative issue. 
Successful implementation of the mandate for competition in the 
antitrust laws encourages innovation, which is the main driver 
of economic growth and ensures that our economy continues to 
grow and prosper.
    And so I want to associate myself with Representative 
Sensenbrenner's remarks. I think things are very well 
positioned, and I would caution aggressively against any 
extensive intervention in our common law system of interpreting 
the mandate of our basic antitrust laws.
    [The statement of Mr. Lipsky follows:]
    
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    Mr. Cicilline. Thank you, Mr. Lipsky. You have gone over 
time significantly. The gentleman yields back. I now recognize 
Sally Hubbard for 5 minutes.

                   TESTIMONY OF SALLY HUBBARD

    Ms. Hubbard. Chairman Cicilline, Ranking Member 
Sensenbrenner, and members of the subcommittee, thank you for 
inviting me to speak with you today and for conducting this 
critically important investigation.
    Facebook, Amazon, Apple, and Google started on their paths 
to dominance with innovation, but you've uncovered major 
evidence that the platforms have used anti-competitive conduct 
and acquisitions to grow and maintain their monopoly power. 
They've violated the antitrust laws as they now stand. You've 
opened up Americans' eyes to the widespread harms that flow 
from the illegal monopolization of digital markets. It is one 
thing that most Americans still can't see, what our lives, 
economy, and country could look like if these markets were open 
and competitive.
    We've been under monopoly rule for so long, but we're 
suffering from a crisis of imagination, so let's take a moment 
and envision the possibilities of what America could be. I see 
an America where anyone can pursue an innovative business idea, 
get it funded, and build a company that doesn't get crushed by 
giants protecting their turf. Diverse ideas and founders 
flourish. Small and big companies can decline platforms' 
extractive terms of dealing, stop paying them taxes and tolls, 
reap the rewards of their ingenuity, and pay their employees 
more. Strong antitrust enforcement creates new waves of 
innovation like when the government broke up AT&T, and when 
U.S. v. Microsoft paved the way for Google to exist by stopping 
Microsoft from taking over every market that touched its 
monopoly.
    I see an America where creators of all types, from 
musicians to journalists, enjoy the fruits of their labor no 
longer siphoned off by Big Tech. I see an America where no 
company has concentrated control over speech, public discourse 
flows freely, not subject to business models that boost 
divisive and incendiary content, where, when we all see the 
same speech, we can respond to it with counter speech as the 
First Amendment requires. This vision of America can be ours if 
we defeat the robber barons of today, just like we've done 
before, using the antitrust laws.
    Some say antitrust isn't the right solution and some other 
fix is the answer, but we are in a crisis. This isn't an 
either/or situation. It's a both/and situation. We must attack 
monopoly rule from every angle. For example, we also need 
privacy laws, but regulation doesn't work when monopolists are 
too powerful to comply or when monopolists shape the laws 
themselves. Others say antitrust is being weaponized for 
improper purposes, but Senator Sherman always intended to save 
America from kings of commerce, and if we open up markets by 
ending platforms' anti-competitive tactics and deals, a wide 
range of benefits will follow.
    Enforcing the antitrust laws won't magically solve all of 
our problems, but we won't be able to cure America's ills if we 
don't first disperse monopolies' concentrated power by 
unlocking competition. Of course the tech giants each provide 
useful services, but providing some benefits does not give them 
a free pass to break the antitrust laws. Unfortunately, our 
laws have been attacked by the courts for decades, making 
enforcement expensive and hard. Even so, enforcers need to 
bring more cases and be more willing to risk losing in court.
    Ultimately, we are depending on you, Congress, to fix this. 
Congress should use bright-line rules and presumptions to 
remove complexity and make antitrust cases easier, faster, and 
cheaper. Congress should overrule legal precedent that imposes 
obstacles for monopolization and merger cases. Congress should 
also structurally eliminate the platforms' conflicts of 
interests and remove their incentive and ability to sell 
preference. It should separate platforms from commerce and 
divest business lines. The U.S. has used structural separation 
as a standard regulatory tool and antitrust remedy in network 
industries. Congress should require platforms to offer equal 
access on equal terms to all, protecting citizens as sellers of 
goods and services, consumers, and as speakers. Lawmakers 
should open up competition through interoperability, and 
immediately, in order to preserve our elections, Congress 
should ban the surveillance-based hyper-targeting of content. 
Advertising should be done based on context, not identity.
    This is a turning point for our Nation. Our democracy is 
hanging in the balance. The time to act is now, decisively and 
with courage. Speaking to my fellow Americans, in order for 
your elected representatives to stand up to monopoly power, 
they need you behind them. The tech giants have endless 
lobbying funds, but we, the people, can once again rise up and 
prevail against monopolists. Thank you very much.
    [The statement of Ms. Hubbard follows:]
    
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    Mr. Cicilline. Thank you, Ms. Hubbard. Thank you all for 
your opening statements. And now we will begin questioning 
under the 5-minute rule, and I will begin with the chairman of 
the full committee. Mr. Nadler, you are recognized for 5 
minutes.
    Chairman Nadler. Thank you, Mr. Chairman. As I said in my 
opening statement, I strongly believe that we must modernize 
our antitrust laws to meet the challenges of the modern 
economy. We must update the antitrust laws to reiterate, as 
Justice Thurgood Marshall said, that ``Antitrust laws are the 
Magna Carta of free enterprise. They are as important to the 
preservation of economic freedom and our free enterprise system 
as the Bill of Rights is to the protection of our fundamental 
personal freedoms.'' What do each of you think is the most 
important thing we can do from a legislative standpoint to 
address the deficiencies of current antitrust law? We will 
start with Mr.----
    Mr. Baer. Baer.
    Chairman Nadler [continuing]. Baer.
    Mr. Baer. Thank you, Mr. Chairman. Just briefly, I think we 
need to modify the standard by which we judge mergers. The 
current law says mergers that may tend to substantially reduce 
competition are problematic, but the way the courts have 
interpreted that, they have read the word ``tend'' out of the 
law. I think if we move to a materially reduce competition 
standard, that will help us attack more anticompetitive 
mergers. The second thing I think is to deal with Section 2 of 
the Sherman Act, and basically where a company gets of a 
certain size and engages in conduct that appears to have a 
significant effect on limiting opportunities for rivals, that 
that needs to be a potential cause of action where the courts 
will evaluate whether the pro-competitive benefits of whatever 
that behavior is are vastly outweighed by the potential harm to 
consumers and to competition. That is where I would focus, on 
those two areas.
    Ms. Teachout. I think there are three primary areas of 
focus. The first, especially since we are talking about Big 
Tech, is structural separation. I think that is quite urgent. 
And, again, your investigation has shown the incredible abuses 
of platforms that are also allowed to own companies that 
compete on those platforms. That is major legislation that I 
think this body should push. Second, these series of cases, 
some of which were just mentioned, the predatory pricing trio 
of cases, I think, are really important. This is Brooke Group, 
Warehouse, and other cases that made it incredibly hard to 
prove that companies are engaged in predation. That is 
important to overturn, along with Trinko, Twombly, these series 
of cases which I and others have outlined. And I would approach 
those as a set, which comes to my third point, which is that I 
would be very clear that the purpose of antitrust law includes 
the protection of liberty and the support of a decentralized 
economy, and move past the consumer welfare standard which has 
not been successful over the last 40 years.
    I said three, but the fourth thing that I think we need to 
do in this arena is something that Ms. Hubbard and Mr. Rahman 
mentioned, which is in the communications infrastructure, in 
particular, ban targeted advertising. It is truly toxic. It is 
undermining our democracy.
    Chairman Nadler. Thank you. Mr. Baer, as you previously 
testified in 2016, there has been an upswing in extremely 
large, complex, and blatantly anti-competitive transactions 
that never should have made it out of the boardroom. Why is it 
that this trend has continued and possibly even worsened, and 
what can Congress or the agencies do to deter companies from 
brazenly proposing transactions that are so clearly anti-
competitive?
    Mr. Baer. As I said earlier, Mr. Chairman, I think the 
standard as interpreted by the courts, the current standard of 
the Clayton Act, our merger statute, the courts have sort of 
applied a one-way ratchet that makes it tougher and tougher for 
the government to successfully challenge mergers. It is nearly 
impossible to challenge today an acquisition by a dominant firm 
of a nascent competitor, something that isn't a large rival 
today, but could well be tomorrow. Legislative changes that 
basically make it clear that once a firm achieves a certain 
dominance, that the burden shifts to justify its acquisition of 
small potential rival. We think of Facebook, right, Instagram 
and WhatsApp. They need to justify why this isn't a problematic 
merger, why it doesn't eliminate somebody who, either on its 
own or together with merging with somebody else, might well 
become an alternative platform to a dominant platform today.
    Chairman Nadler. Thank you. I yield back.
    Mr. Cicilline. The gentlemen yields back. I now recognize 
the gentleman from Wisconsin, Mr. Sensenbrenner, for 5 minutes.
    Mr. Sensenbrenner. Thank you, Mr. Chairman. Professor 
Lipsky, what shortcomings in the antitrust laws, if any, 
prevented the Obama-Biden era regulations from examining or 
blocking some of the transactions that have been scrutinized by 
this investigation? For instance, when Facebook acquired 
Instagram, it was greenlit by the FTC. I am not asking you to 
second guess that decision, but rather to discuss whether the 
existing antitrust laws were insufficient to allow for a proper 
review.
    Mr. Lipsky. Thank you, Ranking Member Sensenbrenner. My 
view is that there are no deficiencies in the antitrust laws. 
In fact, over the years, the legal apparatus built up for the 
prevention of anti-competitive mergers has become truly 
formidable. There was some initial question that the Sherman 
Act, as passed, applied to corporate transactions, but any 
doubt about that was eliminated with passage of the Clayton Act 
in 1914, and then again, the Clayton Act was brought and then 
the standards were clarified by the Celler-Kefauver amendments 
to the Clayton Act in 1950. And then in 1976, you had Hart-
Scott-Rodino, which essentially made it impossible for any 
significant transaction to be consummated until the Federal 
authorities had been notified of the nature of the transaction, 
the competitive activities of the parties, and given very ample 
tremendous discovery powers to investigate and to go to court 
prior to consummation of the transaction.
    Mr. Sensenbrenner. So you are saying that the existing 
statutes at the time of the Facebook-Instagram buyout were 
sufficient to do a proper review.
    Mr. Lipsky. I do say that.
    Mr. Sensenbrenner. Okay. Now, Mr. Baer, this was before 
your time as chief honcho in the Antitrust Division, but I 
think you were around at the time. Would you care to respond to 
that?
    Mr. Baer. As I indicated, Mr. Sensenbrenner, my law school 
classmate and friend, Tad Lipsky, and I have a bit of a 
disagreement on this. I do think if you look at Instagram or 
WhatsApp, and you look at some of the documents that were 
revealed in this subcommittee's most recent hearing, these were 
companies that potentially, either on their own or in 
combination with other companies, had potential to be rivals. 
It wasn't clear they were going to be, but Facebook, I think, 
according to the documents your investigation has uncovered, 
recognized these firms as potential rivals. Current law does 
not allow the FTC or my old place, the Antitrust Division, to 
challenge those transactions. You need to be a significant, 
actual, potential competitor in the marketplace in order for 
antitrust laws to apply. I am sorry. Go ahead.
    Mr. Sensenbrenner. You are essentially saying that the law 
that was in effect at the time, which I don't think has been 
significantly changed then, prevented the enforcement during 
the Obama years.
    Mr. Baer. That is correct, and I think modest changes to 
the current statute would allow us to go after those kind of 
acquisitions by dominant firms.
    Mr. Sensenbrenner. Do you know if DOJ requested an 
amendment to those laws so that they could be more active in 
enforcing them?
    Mr. Baer. I think while I was there that debate was just 
beginning, and as I have watched what has happened to the 
antitrust laws since then, the way the courts have, as I 
indicated, this one-way ratchet, imposing more and more 
conditions on the government to meet its burden of proof, that 
we are at a place where some tweaks to the antitrust laws would 
help the courts understand better what the congressional intent 
was at the time and is today. I am sorry to filibuster.
    Mr. Sensenbrenner. Okay, Senator. [Laughter.]
    You know, I guess, you know, my observation, you know, on 
this is that, you know, we hear from DOJ and FTC all the time 
when they think laws are inadequate, and then they come and 
crack the whip on us to say let's get it fixed, let's get it 
fixed right away, not tomorrow, but yesterday. And there wasn't 
any real move by the Department of Justice or the FTC to get 
those laws fixed if this merger prevented an enforcement of the 
laws. You know, the final point I would like to make is, you 
know, I think that antitrust law has to continue to be focused 
on consumer welfare rather than deviating into other problem 
areas. If we go back to the basics and enforce those basics, a 
lot of the complaints that we heard during the previous hearing 
when the CEOs were here never would have existed. And I yield 
back. Thank you.
    Mr. Cicilline. The gentleman yields back. I now recognize 
the distinguished gentleman from Georgia, Mr. Johnson, for 5 
minutes.
    Mr. Johnson of Georgia. I thank the gentleman for hosting 
this hearing. It has been a very important hearing, and it has 
been a very important topic. And it is time for Congress to 
act, and I am happy to be a part of this monumental effort. Mr. 
Rahman, in July, I asked Apple CEO, Tim Cook, about Apple's 
power and control over the App Store. I am still troubled that 
in order to sell in the App Store, Apple forces app developers 
to comply with rules it makes up as it goes along. It develops 
and sells apps that compete with the app developers who need to 
be in the App Store in order to gain access to the 100 million 
Americans who use iPhones, and it also forces those app 
developers to pay 30 percent. It holds them over a barrel and 
makes them pay 30 percent of whatever they get out of the App 
Store for selling their products. So it is like the fox owning 
the henhouse, and pimping the chickens and then eating the 
chickens. [Laughter.]
    Mr. Rahman, in your written statement, you addressed the 
concept of gateway power as a type of infrastructure power that 
the antitrust laws should address. Can you elucidate a little 
more on gateway power and how the App Store exploits its 
gateway power?
    Mr. Rahman. Yeah, thank you very much, Congressman. It is 
such an important question because I think all of the platforms 
that we are talking about in these hearings have this type of 
gateway power, and I love the metaphor you used, the fox owning 
the henhouse. The way this works is if you build the kind of 
infrastructure that everybody needs to access basic goods and 
services, in this case the App Store, it is the same argument 
you can make about Facebook or Google, because we all need to 
get entry into that marketplace. If I am an app developer, that 
means that the owner of the App Store, the person who controls 
the gates, has a lot of control, a lot of power, and can make 
unreasonable demands, right, on anyone who needs to get access 
to that marketplace, to that ecosystem.
    And so they may not always use that power benevolently, 
they may not always use it in an extractive way, but they have 
that power nonetheless because they have something that any 
entrepreneur or business developer needs, which is access to 
the marketplace. So this is why I think it is so important that 
any remedy include some basic rules of the road, that if you 
build that kind of infrastructure and you control the gateway, 
the access point, it is incumbent upon you, as the firm who 
controls that gateway, to observe basic standards of fair 
treatment and non-discrimination and so forth. And that would 
provide regulators with the tools, if Congress provided them, 
tools to enforce against those types of practices.
    Mr. Johnson of Georgia. Thank you. Ms. Teachout, Amazon has 
much the same relationship with vendors on its platform. Can 
you tell us your thoughts about how this works and how 
consumers are harmed, how small businesses are harmed, and what 
Congress should do in order to alleviate this imbalance in our 
commerce?
    Ms. Teachout. Thank you. There are, I believe, about 2 
million small business owners that depend upon Amazon to get 
their goods to market, and your investigation, along with the 
research of the Institute for Local Self-Reliance, has shown 
that Amazon charges as much as 30 percent of every sale. Amazon 
takes as much as 30 percent of every sale when those sellers 
sell on Amazon on average. This is essentially a form of 
private tax, and when you talk to Amazon sellers, as you have, 
you hear about the incredible fear that Amazon sellers have and 
a kind of rational paranoia about how the algorithms are 
treating them, and their own beliefs that they need to purchase 
ancillary Amazon services, something that your investigation 
revealed as a legitimate belief, as Bezos admitted, that the 
use of Fulfillment has an impact on the algorithm for the 
sellers. And that is really dangerous for democracy, but it 
also leads to inequality because that is essentially Amazon 
standing at the narrowest point in the pathway, the choke point 
moment, and demanding 30 percent of every sale.
    Mr. Johnson of Georgia. Thank you. Ms. Hubbard, do you 
believe Section 2 of the Sherman Act is sufficient to address 
the conduct that we are discussing?
    Mr. Cicilline. The time of the gentleman has expired, but 
the witness may answer the question.
    Ms. Hubbard. Thank you, Congressman. I do not believe 
Section 2 is sufficient because the soft preferencing and soft 
prioritization is so rampant, that it is basically a game of 
whack-a-mole. There are just a myriad of ways that these owners 
of the platforms can privilege their own products and services, 
and it is nearly impossible to police them all, not to mention 
because often it is being done through algorithms that are not 
transparent and are completely opaque. So that is why I 
advocate for the structural separation as a way to remove the 
incentive and ability of these platforms to prioritize their 
own products and services.
    Mr. Johnson of Georgia. Thank you. I yield back.
    Mr. Cicilline. Thank you. The gentleman yields back. I 
recognize the distinguished gentleman from Colorado, Mr. Buck, 
for 5 minutes.
    Mr. Buck. Thank you, Mr. Chairman. Thank you for holding 
this hearing. I appreciate the bipartisan and thorough nature 
in which you have conducted this investigation. I want to start 
by reiterating one of the Nation's most important founding 
principles. As Professor Teachout noted, Congress writes our 
laws and the courts interpret those laws. In the words of my 
fellow Coloradan, Justice Gorsuch, ``Judges wear robes, not 
capes.'' The American people elect their Representatives every 
2 years. Our constituents hold us accountable for our votes in 
a way that judges are not. It is worth remembering this as we 
examine Big Tech's anti-competitive actions and our Nation's 
antitrust regime more broadly.
    It is clear that our antitrust enforcement agencies have 
hobbled themselves by observing traditional interpretations 
instead of adhering to the letter of the law, which hampers 
enforcement agencies' ability to bring cases against industries 
that do not have a defined price structure or offer free 
services, like big tech. Congress did not intend for regulators 
to only bring antitrust cases based on price differential. In 
fact, lawmakers intentionally wrote the Sherman and Clayton 
Acts with an open-ended consumer welfare framework to enable 
antitrust enforcement agencies to bring cases also related to 
quality, output, consumer choice, or potential innovation in 
the marketplace. Following this original standard would allow 
regulators to review big tech mergers that offer free services, 
while relying on selling user data or making acquisitions based 
on potential competition.
    Data presented by McKinsey & Company further shows how 
dangerous relying solely on price change doctrine can harm the 
economy. McKinsey's data shows that return on capital in many 
industries, including restaurants, auto parts stores, 
department stores, and oil and gas companies, has remained 
nearly steady over the past 50 years. However, two industries 
show rapid growth: big pharma and big tech. There is a 
breakdown occurring in the digital economy. A small number of 
tech titans are using anti-competitive means to grow their 
marketplace dominance and control the channels of distribution.
    Our nation's law enforcement agencies can't keep pace. For 
example, Facebook's acquisition of Instagram was allowed to 
proceed primarily because there was no defined price change to 
the consumer. This review didn't take into account Facebook 
CEO, Mark Zuckerberg, stating his desire to purchase Instagram 
centered on buying an up-and-coming competitor before they 
could overtake Facebook's market dominant position. This case 
shows exactly why the current price-focused model of antitrust 
enforcement misses the mark and fails to account for potential 
innovation and consumer choice.
    Congress should lead the way with a meaningful solution to 
ensure our enforcement agencies are adhering to the original 
intent of the law, not judicial interpretations. If we don't 
provide constructive action to address these issues, the 
progressive left will undoubtedly push for an oppressive 
regulatory regime. A new Dodd-Frank, along with a CFPB-like 
agency overseeing the internet, will only benefit big tech 
firms and harm future innovation.
    This shouldn't be the only action Congress takes, though. 
This committee should work together to ensure our antitrust 
regulators have the tools and resources necessary to conduct 
meaningful oversight and successfully bring enforcement cases 
against bad actors. Currently, the FTC and DOJ Antitrust 
Division's combined enforcement budget stands at approximately 
$510 million. Conducting effective oversight and launching 
antitrust reviews is difficult when your budget is only a minor 
fraction of big tech's approximately $2 trillion market share 
with unfailingly deep pockets to combat litigation, comply with 
regulatory requirements, and pay expert witnesses.
    Our law enforcement agencies can't keep up with this 
onslaught. Congress should consider allocating more funds to 
the FTC and DOJ to ensure that they have the proper resources 
to conduct serious investigations and enforce antitrust laws. 
We should also work to ensure these agencies can recruit and 
retain the best possible talent to achieve the mission. We also 
need to seriously consider increasing scrutiny on big tech 
companies, including shifting the burden of proof required for 
a market-dominant company to prove that a merger is not anti-
competitive. These changes may stop market-dominant companies 
from further consolidating the tech center in an anti-
competitive manner.
    As a conservative, I want to see Congress reassert its 
Article I duties to write our Nation's law. As a former 
prosecutor, I understand how important it is for our nation's 
law enforcement agencies to have the tools necessary to fight 
and win these cases. It is clear that the ball is in Congress' 
court. Companies like Google, Amazon, Apple, Facebook, and 
Twitter have acted anti-competitively. We need to rise to the 
occasion to offer the American people a solution that promotes 
free and fair competition. Ms. Bovard, could you please offer 
your thoughts on these proposals?
    Ms. Bovard. Thank you, Congressman. I think you make a 
couple of really lucid points that are worth emphasizing. We do 
expect our enforcement agencies to parry with billion-dollar 
companies, the biggest the world has ever seen, and we give 
them miniscule budgets to do it. The $2 trillion that you 
mentioned is about 10 percent of U.S. GDP, and that is the tech 
sector. We need to give our enforcement agencies, I think, the 
resources and commitment from Congress to pursue their full 
mandate in this space. And I would also add that I think a 
little bit of humility from our enforcement agencies is 
necessary, that they may not have always gotten it right. If 
you look at the last 20 years, there have been about 750 
acquisitions that have taken place with relatively little 
scrutiny. And Bill Kovacic, who is a George W. Bush appointee 
to the FTC, who voted actually to approve the Google 
acquisition of DoubleClick in 2008, recently told the New York 
Times, and I want to make sure I quote him correctly, ``If I 
knew in 2007 what I know now, I would've voted to challenge the 
DoubleClick acquisition.''
    And this tells me that everything that you said is pretty 
on point. We need to make sure these agencies have the 
resources to do it, and also that they are not hamstringing 
themselves by raising the bar on themselves with the laws that 
currently exist. Section 7 of the Clayton Act, which I think, 
you know, you referenced, is actually a fairly generous 
standard when it comes to mergers and acquisitions. You know, 
to quote it, ``The effect of the acquisition may substantially 
lessen competition or tend to create a monopoly.'' It doesn't 
specify price competition alone, and it doesn't raise the 
evidentiary bar on potential completion versus actual 
competition. So I would like to align myself with your 
statement, and thank you for the question.
    Mr. Buck. Thank you. I yield back.
    Mr. Cicilline. The gentleman yields back. I now recognize 
the gentlelady from Washington, Ms. Jayapal, for 5 minutes.
    Ms. Jayapal. Thank you, Mr. Chairman, and thank you all for 
being here for what is such an important hearing. I think 
technology offers us the promise of freedom, and yet over and 
over again in these hearings, we have heard about people and 
businesses that are trapped, small businesses that can never 
quite get a fair shake, news sites that lose ad revenue, or 
other websites that lose viewers because of unregulated 
practices or conflicts of interest, and the many roles of these 
platforms that disadvantage innovation and competition. And 
would-be innovators and developers have to make products that 
cater to major tech companies or face the real threat of being 
copied and crushed. No one likes to feel trapped, but right now 
I think many people do, and our democracy is trapped, too.
    Ms. Teachout, let me start with you. In other sectors of 
the economy, like in healthcare markets, Congress has developed 
legislation that makes certain conduct presumptively illegal, 
and there has been quite a bit of discussion about this through 
these questions. Do you think a law that would make certain 
types of mergers presumptively illegal, shifting the burden to 
the merging parties to prove the transaction would not be 
harmful to competition, could be an effective remedy?
    Ms. Teachout. Thank you, Congresswoman, yes. You know, in 
the field where I come from, democracy law and anti-corruption 
law, prophylactic rules are absolutely essential. If you had to 
investigate every time there was a $10,000 direct campaign 
contribution, whether there was something problematic, you 
would never actually be able to protect against corruption in 
the campaign finance sphere. So I think it is really important 
to think about these kinds of prophylactic rules, including the 
one you talked about, to really shift the burdens. Thank you.
    Ms. Jayapal. Mr. Baer, I saw you nodding. Did you want to 
add anything to that?
    Mr. Baer. Just that I think as antitrust lawyers, we tend 
to think of antitrust law enforcement as often the only 
solution to a problem, and there may well be prospective 
rulemaking that makes sense. In my testimony, I talked about 
the 2004 FCC rule basically saying our phone numbers actually 
were our phone numbers, and we could port them elsewhere. That 
was a prospective rule. It was not a law enforcement action. 
Basically, there are ways to promote portability and 
interoperability in a fashion that may channel competition in 
constructive ways.
    Ms. Jayapal. Thank you. Mr. Rahman, I don't believe that 
many people make the necessary connections that they should 
between antitrust law, and racial equity, and economic equity. 
How would making changes to the antitrust laws help us to 
empower black and brown communities in particular that have 
been burdened throughout our history with structural 
inequities?
    Mr. Rahman. Thank you, Congresswoman, for that question. It 
is such an important link to be made. The antitrust laws we are 
talking about here really are one of those foundational rules 
of the road that, if we don't change them, we actually leave in 
place many of the structural inequities along the lines of race 
that you talked about. So three very quick ways that I would 
name that are connected around economic opportunity, around 
labor, the treatment of workers, and around racist forms of 
algorithmic bias.
    So the first piece. This whole point about accessing the 
marketplace, the new digital infrastructure that we talked 
about, monopoly power is especially hard on small and medium 
businesses and, in particular, on black and brown businesses. 
If you look at the challenges of business formation, of staying 
alive and afloat, especially in this kind of an economy, it is 
the same kind of challenges that we are seeing hitting black 
and brown businesses in response to, say, the COVID economy 
collapse. Solving this in an antitrust policy approach would 
actually help jump start small business formation. That is 
number one.
    Number two, in terms of workers, we haven't talked about it 
much yet today, but monopoly power is actually one of the key 
drivers of the suppression of wages and also the perpetuation 
of low labor standards, workplace safety standards in 
particular. And when we look at the plight of essential 
workers, black and brown workers, in this moment, whether they 
are Amazon workers or workers of other dominant firms, breaking 
up monopoly power actually is critical to empowering black and 
brown workers. And finally, the kind of toxic spread of white 
nationalism or extremism online and information platforms on 
Facebook is fundamentally tied to the ad-based business model 
that Facebook has. And if we are trying to build a racially-
inclusive public sphere, we have to tackle the monopoly power 
Facebook has. Thank you, Congresswoman.
    Ms. Jayapal. Thank you so much. Ms. Hubbard, you argue in 
your testimony for aggressive antitrust enforcement against 
platform monopolists. Can you talk a little bit about 
structural separation and how it would help small businesses, 
new tech startups, and consumers if we were to implement that?
    Mr. Cicilline. The time of the gentlelady has expired, but 
the witness may answer the question.
    Ms. Jayapal. I think you may be on mute.
    Mr. Cicilline. You are on mute maybe, Ms. Hubbard.
    Ms. Hubbard. Thank you, Congresswoman. As we have heard 
today, small businesses, entrepreneurs, and citizens are all 
beholden to these tech companies and are forced to play by 
their rules, often paying them which is the equivalent of 
taxes. You know, the 30 percent tax that Zephyr Teachout 
mentioned, the amount that every small business has to pay just 
to appear in Google search results under their own name, is a 
huge tax on small business. So what we have are small 
businesses paying taxes to these huge companies, and those 
companies don't in turn pay their own fair share of taxes. So 
structurally separating the platforms from the commerce will 
give everyone a fair shot at innovating, reaping the rewards of 
their hard work, and it will be good for consumers because 
consumers are human beings, and they benefit from the choice, 
innovation, and quality that robust competition brings. And 
they are also citizens that benefit from the free flow of 
speech, and there are workers and employees of companies that 
benefit when the platform extraction ceases. So we can't think 
of consumers only in one role because it doesn't make any sense 
to care about whether I pay low prices, but not care about 
whether I am getting paid less. Thank you very much.
    Mr. Cicilline. Thank you, Ms. Hubbard.
    Ms. Jayapal. Thank you. I yield back.
    Mr. Cicilline. The gentlelady yields back. I recognize the 
gentleman from North Dakota, Mr. Armstrong, for 5 minutes.
    Mr. Armstrong. Thank you, Mr. Chairman. I think just 
through the course of this investigation, that it is obvious 
that there is bipartisan agreement that there are serious 
competition concerns in digital marketplaces. We may differ on 
whether ex ante antitrust remedies are sufficient for some of 
these, like Mr. Baer talking about tweaks versus large-scale 
change. But, I mean, at the very least, I would like to know 
whether our current antitrust enforcement is capable of 
addressing at least some of these concerns, and I am glad you 
did the DoubleClick quote, other than you stole it from me and 
I am going to probably do it again. But I think over the past 2 
decades there has been, I mean, a lack of antitrust enforcement 
in digital markets.
    And to illustrate, when we were talking about Google's 
acquisition of DoubleClick in 2007, it was permitted by the 
FTC. The acquisition allowed Google to leap forward in third-
party digital display advertising where it previously only 
enjoyed considerable market share in search advertising. There 
is an argument to be made that nobody could foresee the future 
competition concerns at the time, that the third-party ad 
markets were relatively competitive. However, the FTC majority 
opinion in that case acknowledged that with DoubleClick, Google 
could engage in a number of potential anti-competitive 
strategies to further enhance its positions in various markets, 
because the Commission dismissed the concern that Google would 
bundle or tie part of its growth ad tech stack. And that 
concern was hypothetical in 2007, but now we know that it was a 
very real consequence of Google's acquisition.
    I said during our last hearing that the major part of this 
investigation is dealing exactly with those things. And when we 
talk about, like, Instagram, or WhatsApp, or Messenger, it is 
easy to see those things, but a lot of these acquisitions were 
very small companies at the time, and it only gets to be a 
problem when it is in the aggregate. I mean, with Google on the 
ad tech stack, it was both on the buy and sell side, which 
means they just simply have too much control over advertising. 
And in that case, though, the Commission also dismissed an 
additional concern that consolidation of ad tech stack would 
create a network effect whereby Google's position would make it 
more attractive to advertisers, which, in turn, would make it 
more attractive to publishers and so on and so on and so on.
    Google's ad tech is informed by a vast majority of user 
data, and they got it from their first-party services in Google 
Maps and Chrome. Meanwhile, Google has consolidated its market 
share by cutting off third parties and cookies. And I will say 
this every time I bring up the word ``cookie.'' I do not want 
to be the Congressman responsible for bringing them back, but 
there is no doubt that it consolidated their market share. And 
I am not even saying that FTC was right or wrong in that 
decision, but I am pointing out the FTC was aware of the 
concerns, which turned out to be proven correct, did not do any 
enforcement in the subsequent years, even though the majority 
FTC opinion concluded by promising to watch the online 
advertising market closely in the future. And that was, I 
think, towards William Kovacic's quote: if he had known then 
what he knew in 2007, he would have voted to challenge that. 
And since 2007, Google has spent billions of dollars to acquire 
a lot of other key ad tech firms, some big, some small.
    This is one anecdote. However, there are similar stories 
and concerns throughout the digital marketplace. The DOJ right 
now, though, and FTC are conducting investigations, and suits 
are reportedly imminent. That seems to me to be at least the 
most aggressive antitrust enforcement we have seen in decades. 
And I concur with my friend, Ken Buck, from Colorado. This is 
one area where, I mean, I do think we need more money, more 
resources, more enforcement.
    Mr. Baer, your testimony discusses additional resources for 
after-action studies, which obviously this would be easier on 
the front end, but sometimes that is not always realistic in 
studies of what have happened in markets where agencies did not 
bring enforcement actions. Can you elaborate how an after-
action review of an instance like the DoubleClick merger would 
result in better antitrust enforcement?
    Mr. Baer. Absolutely, sir, and the best example is hospital 
consolidation. We saw the courts hostile to the creation of 
monopolies or near monopolies in local markets as hospital 
chains combined over the course of the 80's and 90's. Tim 
Muris, a prior Republican chairman of the FTC, commissioned 
after-action studies of what those markets looked like after 
consolidation occurred and the courts had rejected the FTC's 
merger challenge. They found dramatic price increases in those 
markets. It established the FTC was right. In subsequent 
hospital merger challenges, the FTC was able to go to court, 
use those economic studies and demonstrate, hey, this risk is 
real, and the courts responded.
    Mr. Armstrong. Thank you. It wasn't just DoubleClick, 
though. It was AdMob in 2009, AdMeld in 2011, AdMetri in 2014. 
And so when you were talking about tweaking on mergers and 
changing the standard, I am interested in having that 
conversation possibly offline because I am not sure any one of 
these meet it initially. But when you look back, I mean, I 
think in some instances, we are going to have to figure out a 
way to deal with that, and I know that is not ideal. You see it 
right now with Instagram and Messenger trying to combine their 
data. Well, I mean, just practically, it makes it harder to 
intertwine. But do you think after-action reports considering 
how these companies work are a key part to enforcement moving 
looking forward?
    Mr. Baer. It is a key tool, but, in addition, statutory 
changes, which would require a dominant firm to offer an 
affirmative justification for its acquisition of smaller 
nascent competitors, would actually empower the antitrust 
agencies to address that potential accumulation over time of 
significant enhanced market power.
    Mr. Armstrong. My only concern with that is that a lot of 
these companies build themselves solely for the purpose of 
getting bought out. I mean, eventually we get into capitalized. 
We saw that with the Sprint-T Mobile merger. It was never a 
question between 4 and 3. It was going to be a question between 
4 and 2. But I have used too much time. Thank you, sir.
    Mr. Cicilline. I thank the gentleman. The gentleman yields 
back. I now recognize the distinguished gentlelady from 
Florida, Mrs. Demings, for 5 minutes.
    Mrs. Demings. Thank you so much, Mr. Chairman, and thank 
you so much to our witnesses for being with us today. Mr. Baer, 
you know, it is always so important. You know, we would have 
never thought, of course, 20 years ago, really 30, 40 years ago 
when we really began, that we would have companies that have 
grown or mergers that would grow so huge until they really 
affected everybody else in an adverse way around them. You 
talked about that sometimes the fear of getting it wrong really 
kind of stifles our ability to do what we need to do in this 
space. Could you please expound on that a little bit, and also 
talk a bit about the path forward, the fear of getting it 
wrong.
    Mr. Baer. Well, thank you, and thank you for reminding me I 
have been at this business over 40 years. [Laughter.]
    The fear of getting it wrong is sort of an outgrowth of an 
overreach by the Chicago School of Economics. It is basically 
the notion that unless we are 100 percent certain that there is 
an antitrust problem, we should stay back, and that has been 
infused into the thinking of the courts. I don't blame the 
courts for that thinking. It is just this one-way ratchet which 
has gotten tougher and tougher for the government or a 
plaintiff to prove up an antitrust case.
    That is why I conclude that one of the key solutions has to 
be Congress stepping forward and instructing the courts that, 
no, we meant if there is a tendency to substantially reduce 
competition, you should act. The courts need to intervene. So 
it is that hesitation about getting it wrong, avoidance of what 
they call Type I errors, errors of over enforcement, that I 
think it shifted the pendulum way to the wrong side.
    Mrs. Demings. You also talked about additional resources or 
the need for additional resources. Why should Congress give 
additional resources when many of the companies that we are 
talking about have not appropriately used the resources that 
they have effectively for enforcement efforts?
    Mr. Baer. Look, one could always criticize the Federal 
Trade Commission where I once worked, the Antitrust Division 
where I once worked, for not doing it exactly right. But I 
think they have used the resources Congress has appropriated 
them, in most cases, quite appropriately. The problem is those 
resources are so small in comparison to the size of the 
economy, to the number of acquisitions going on, behaviors this 
subcommittee is properly investigating and properly concerned 
about. So you look at the ratio. The ratio suggests we need to 
strike the balance a little differently.
    Mrs. Demings. Thank you. Mr. Kades, you talked about the 
need for reform and not just enforcement. And thinking about 
legislation to revitalize our country's antitrust law, what do 
you think are the most important principles right now that 
Congress should consider?
    Mr. Kades. I should remember that. Thank you, 
Congresswoman. I think you want to think about this in the big 
picture as you have a court that continually doesn't want to 
enforce the law, I think, the way that this bipartisan 
committee thinks it should be enforced. So the first thing you 
have to do is you need laws that will strip back decisions that 
limit antitrust enforcement. Professor Teachout talked about 
Trinko. There is a whole list. The second thing you want to do 
is something along the lines of what Bill Baer suggested is, 
you want to tweak the statute because at least that sends the 
signal you are doing it wrong. And then the third thing I think 
you want to do where you can, and this may sound small, but is 
very powerful, is you create presumptions where you are more 
concerned about the harm from the conduct than the potential 
cost of over enforcement.
    And so, in that sense, you know, the way you deal with what 
Congressman Armstrong said was, is you want the FTC to be more 
aggressive when they see something like a DoubleClick that 
looks new. You give them the tools that they don't have to go 
in and disprove every potential benefit. The company has to 
come forward and say, yeah, we understand there is a problem. 
We have to show you it is a good thing. So I think it is those 
three things.
    Mrs. Demings. Could you also finally talk a little bit 
about how you believe interoperability could help?
    Mr. Kades. Right. So I think that the interesting thing 
about interoperability is not as a solution itself, you know.
    Mrs. Demings. Mm-hmm.
    Mr. Kades. And it is one of these things, and I know, 
Professor, you talked about how hard it is. But, you know, it 
is amazing the way companies can find interoperability when it 
suits their purposes. So I can call you on the telephone. I can 
text you. We don't have to be on the same system, but if you 
are not on Facebook, you know, I can't put up a post on 
Facebook that goes to you if I want to friend you. Like, that 
is apparently technologically impossible. But if I could, it 
means if you don't like Facebook, or, as Congressman Jordan 
talks about, not liking the way they engage in censorship, you 
can walk away from Facebook and you don't lose contact with all 
your friends, right? And so that allows competition to occur, 
and that has the benefit of reducing the incentives and the 
ability to exclude competition.
    Mrs. Demings. Great. Thank you so much. I yield back.
    Mr. Cicilline. The gentlelady yields back. I now recognize 
the gentleman from Florida, Mr. Steube, for 5 minutes.
    Mr. Steube. Thank you, Mr. Chair. My questions are for Ms. 
Bovard. In May of this year, President Trump issued an 
executive order to prevent online censorship. The executive 
order discusses Section 230 of the Communications Decency Act. 
Ms. Bovard, have Big Tech companies abused Section 230 to their 
advantage?
    Ms. Bovard. Well, thank you for the question, Congressman, 
and the short answer, I believe, is yes. When conservatives 
think about Section 230, I think it is important to point out 
that the statute, kind of reflecting the conversation we are 
having here, has become so judicially distorted from what 
Congress initially passed, that what we rely on for its 
application today is very bloated, and a bulletproof immunity 
exists where a porous, narrow one was originally passed. So it 
is my view that, yes, the companies have abused this practice 
to the extent that it is now referred to as an implicit 
financial subsidy to these companies.
    Mr. Steube. Well, see, you kind of touched on it there. Can 
you explain other ways that Section 230 has been misused and 
wrongly applied?
    Ms. Bovard. Well, I think, as I outlined in my written 
statement, Section 230, originally passed as the Good Samaritan 
standard, has actually allowed a lot of bad Samaritans a lot of 
cover. There has been well-documented evidence of the fact 
that, you know, sex trafficking, all kinds of human 
trafficking, terrorism, revenge pornography, all flourish on 
these platforms, and the companies are immune from any 
liability for it. In 2018, Congress passed FOSTA SESTA to make 
them liable for knowingly participating in the facilitation of 
sex trafficking, but there is a whole lot of other criminal and 
lewd and harassing content that occurs. And these companies, as 
opposed to being the Good Samaritan that could, you know, walk 
by and help the guy out of the ditch, they can walk right by 
and there is no consequence.
    Mr. Steube. How does the President's executive order seek 
to promote free speech and rectify this online censorship issue 
that has been discussed?
    Ms. Bovard. So the President's executive order does two 
things that I think are very important. The first is that NTIA 
petitioned the FCC to bring Section 230's application back to 
its original intent, which, as we discussed, is a very narrow 
immunity focused on the original title of the amendment itself, 
which is the Family Online Empowerment Act, allowing, 
basically, you to clean up the internet. And the second thing 
it does that I think is really important is it enforces a 
measure of transparency on to these companies. A lot of the 
censorship and bias they get away with happens because they 
don't have to tell us what they are doing. They have never 
popped the hood and let us look in, and they could. They could 
put allegations of bias to bed if they let us look under the 
hood of what they are doing, but they don't. So I think that 
transparency is also very important.
    Mr. Steube. Do you believe that Section 230 reform is an 
avenue for addressing some of these online censorship issues?
    Ms. Bovard. I do because it enforces accountability and 
transparency on companies who right now have none of it, and I 
think companies that can upset half of their user base without 
consequence because they know they have nowhere else to go 
deserve a little bit of accountability and transparency 
requirements for a substantial benefit, a government-mandated 
privilege that they receive.
    Mr. Steube. What specific reforms should Congress consider 
when examining ways to address the pitfalls with Section 230?
    Ms. Bovard. So I think the proposal that Ranking Member 
Jordan mentioned in his opening statement, I think, sounds like 
a very good place to start. It deals with the otherwise 
objectionable part of Section 230, which, again, has become 
this sort of massive catch-all for the companies to enforce 
against viewpoints they don't like without any consequence. I 
think addressing that particular part of the law, I think, will 
be very useful. And, again, I think the transparency, when you 
have to show what you are doing, when you have to show your 
work, it is a lot harder just to say ``trust me'' to no 
consequence. You actually have to show conservatives that you 
are listening to them.
    Mr. Steube. Thank you for your time. Thank you for being 
here today. I would yield any of my remaining time to Ranking 
Member Jordan.
    Mr. Cicilline. You yield back. I now recognize the 
gentleman from Colorado, Mr. Neguse. I am sorry. I am sorry. I 
recognize the gentleman from Maryland, Mr. Raskin, for 5 
minutes.
    Mr. Raskin. Mr. Chairman, thank you very much. I want to 
come to Ms. Teachout. Welcome, Professor Teachout. In your 
testimony, you advocate what you call structural separation, a 
Glass-Steagall approach to antitrust in this field. Why did 
Congress approach concentrated markets, like financial services 
or telecom, this way in the past, and what is its resonance 
with American constitutional principles of structural 
separation of powers?
    Ms. Teachout. Thank you for your question. What we have 
seen in the past, you mentioned Glass-Steagall, which I also 
mention in my written testimony. You also see laws like the 
Public Utility Holding Act, which prohibits companies who are 
subject to the Act, who play the sort of central public utility 
role, from engaging in acquisitions unless there is SEC 
approval. And the key theory here is that you don't want 
conflicts of interest at the heart of your economy with 
essential infrastructures. You don't want your pipelines to 
have a conflict with what is going through those pipelines. And 
decentralizing that power instead of having platforms that 
enable competition on those platforms instead of using those to 
kill, acquire, or copy, as you have shown in your 
investigation, is really important both for allowing the 
thriving of small businesses, but also stopping these platforms 
from becoming a form of private government. And this is 
something that Justice Douglas spoke about, the inevitable 
tendency of all private power to form a government in and of 
itself. Structural separation is one of the key tools to 
prohibit these private powers from becoming private governments 
that coexist with our democratic government.
    Mr. Raskin. Well, would that undermine innovation? Would it 
undermine competition? Would it harm consumers?
    Ms. Teachout. Well, in general, I would say that the more 
feudalist a system is, the less innovation you are going to 
see. And what we are talking about, you know, when you talk 
about the democratic threat, it is essentially, a feudal 
threat, you see Amazon playing a feudal role, Facebook playing 
a really dangerous feudal role of deciding which newspapers get 
prioritization in your news feed, YouTube playing this role. 
And the more you see a feudal system, actually the more you see 
a closed and fearful system and a less innovative system, so 
yes.
    Mr. Raskin. Tell us about what you think the role of 
Congress is today and historically in the development of 
antitrust principles. If Congress doesn't do it, what happens 
if we are not updating and modernizing the antitrust laws?
    Ms. Teachout. Yeah, I mean, Congress from the 1880s onward 
has played this really central role, recognizing that 
protecting fairness in a thriving economy is the quintessential 
congressional role, and also protecting our democracy and 
protecting the corruption of the takeover of these forms of 
private government is a quintessential congressional role. And 
then starting in the 80s, you saw Congress really step back 
from this role. You saw this deep de-politicization. Instead, 
when these cases came down, cases we have been talking about 
today, whether the cases were involving predatory pricing or 
changes to merger law, you didn't see a congressional hearing. 
There was a kind of tacit acceptance that the Supreme Court was 
the right institution to be making decisions about the shape of 
our economy. It is a terrible institution to be making 
decisions about the shape of our economy.
    That said, I do want to address something that has not been 
addressed enough I think. I think Congress' other role is to 
light a fire under enforcement agencies. I would not allow 
enforcement agencies to get away with saying that, you know, 
although the court has made these laws harder to enforce, the 
FTC can engage in much more aggressive rulemaking, much more 
aggressive enforcement. In fact, I would say that your 
investigation has shown some really deep failures in the 
aggressiveness of the FTC, so I think there is a double role. 
One is ongoing investigations and ongoing responsibility taking 
for the structures of power and the structures of the economy 
here in Congress, and second is ongoing oversight and lighting 
a fire under the agencies in an ongoing way.
    Mr. Raskin. Well, are there benefits to a regime where you 
have multiple levers of enforcement in the federal bureaucratic 
context, state attorneys general, private plaintiffs? Do you 
want to try to multiply the different sources of enforcement?
    Mr. Cicilline. The time of the gentleman has expired, but 
the witness may answer the question.
    Ms. Teachout. It is absolutely essential to multiply levers 
of enforcement. In fact, in the first Congress of this country, 
about half the laws had qui tam provisions because there was 
concern about capture or corruption of possible enforcement 
agencies. So you need to have a dynamic interaction with broad 
private rights of action, State attorneys general, agencies, 
and Congress all constantly engaging instead of passively 
accepting the Supreme Court and big companies taking over this 
area.
    Mr. Raskin. I yield back. Thank you, Mr. Chairman.
    Mr. Cicilline. The gentleman yields back. I now recognize 
the gentleman from Ohio for 5 minutes.
    Mr. Jordan. Thank you, Mr. Chairman. Ms. Bovard, is cancel 
culture real?
    Ms. Bovard. It certainly is, sir.
    Mr. Jordan. A recent survey, 62 percent of the American 
people said they are afraid to freely express their thoughts 
and opinions. I think most Americans agree that it is darn 
real. It is scary. I think Professor Teachout, I think the 
quote she just said, ``a closed and fearful system'' that we 
find ourselves in. If 62 percent of the American people are 
afraid to express themselves, do we have a functioning First 
Amendment?
    Ms. Bovard. You don't. It would seem that would violate the 
very intent of the First Amendment, which is to provide robust 
protection for speech of all kinds.
    Mr. Jordan. Yeah, silence is not the First Amendment, and 
that is exactly what the cancel culture mob is wanting. They 
are wanting us to be silent. In fact, I think it is even worse. 
They want us to agree with them. Do you have free speech if 
only one side is allowed to talk?
    Ms. Bovard. You do not. You have one source of information 
only. That is not free speech or free thought, I would add.
    Mr. Jordan. Yeah. So if you don't have free thought, you 
don't have free speech, you have a closed and fearful system. 
You have a system where 62 percent of the American people are 
afraid and reluctant to express their thoughts, their opinions, 
then that is a dangerous place to be. Is Big Tech a part of 
this phenomena we now find ourselves in?
    Ms. Bovard. I would say absolutely. I think that the bias 
that we have discussed is a symptom actually of its market 
power. Google filters information for 92 percent of the world, 
87 percent of America. So whatever they choose to amplify or 
suppress is what billions of people around the world see. That 
is a problem.
    Mr. Jordan. It strikes me as twofold. One, they can censor 
themselves. We know about that. We know what Google tried to do 
to The Federalist. We know what Twitter will do to the 
President of the United States, but yet then turn around and 
let the Ayatollah of Iran spew the things that he wants to 
spew. So they can engage in it themselves, but then they also 
provide a platform for other people to attack and try to cancel 
opinions they disagree with. Now, I don't know how we deal with 
that. We just got to fight back and be able to use the platform 
and fight back with that. But that second part, Bari Weiss, the 
individual, had to resign or did resign. I don't know if she 
had to. She resigned from The New York Times. She called that 
second phenomena the digital thunderdome, a term that just 
struck me as exactly what happens when the mob starts attacking 
positions they don't like. So it seems to me we come to the 
critical question, what is the answer? How do we address it?
    Ms. Bovard. Well, I think I would actually go back to 
something that Ms. Hubbard actually referenced in her opening 
statement, which is that the answer, the antidote to bad speech 
and suppression of speech is more speech. And I think----
    Mr. Jordan. Always has been in this country. Always has 
been.
    Ms. Bovard [continuing]. They already are involved with 
these tech companies with Section 230, with sort of this 
antitrust immunity that they have given these tech companies. 
Whatever incentives that Congress can give these companies to 
abide by what we, in Section 230, designed for, right, which is 
robust political debate, a diversity of views, I think it is 
incumbent upon Congress to do that.
    Mr. Jordan. I agree with that, and I want you to take a 
good look at the legislation I briefly referenced in my opening 
comments, legislation that we have introduced today. It seems 
to me that would be something we could all agree on because 
there is definitely some disagreement. We heard what Ranking 
Member Sensenbrenner said. We have heard what folks on the 
Democrat side said about is existing antitrust law good enough. 
The truth is I don't know. It may be. It may not be. Do we have 
to change it? Well, we will look at that. Is it more robust 
action, as some of the Democrat witnesses have said, from the 
agencies? Probably all that is important, but it seems to me we 
should be able to agree on Section 230 and what needs to be 
changed there to foster more speech and not allow these Big 
Tech companies to particularly, I think, censor conservatives. 
Would you agree with that?
    Ms. Bovard. I would. I think there are a lot of proposals 
to reform Section 230, which I think reflects the sentiment 
that you just suggested, which is that they all have one goal, 
which is to force more accountability on these platforms for 
speech, for the criminal acts that flourish there, and I think 
it is a very important area to address. To your point, I do 
think this is a multi-pronged problem that is going to probably 
require multi-pronged approaches----
    Mr. Jordan. Right.
    Ms. Bovard [continuing]. Across different sectors of 
policymaking. Section 230 is one of them.
    Mr. Jordan. And you know what else I think is important? I 
think you have to call it out every single time you see it. 
Every time Big Tech censors somebody, it should be called out, 
particularly now. I mean, particularly now, 4-and-a-half weeks 
before a major election, I mean, maybe the biggest election. 
And we know what happened in 2016. We know what Google tried to 
do to help the Clinton Campaign, so you have to call it out 
every single time. And then hopefully we can get some 
bipartisan support for the Section 230 changes that I think 
everyone, if we all just sit down and work, we all agree need 
to happen. I will give you the last word for the last 15 
seconds.
    Ms. Bovard. I would agree with that because I would like to 
get to a point where these Big Tech giants don't have nearly 
the power they have over speech, over election, over 
independent behavior. I do not think we can function as a free 
society when we are ruled by tyrannical corporations.
    Mr. Jordan. Thank you. I yield back, Mr. Chair.
    Mr. Cicilline. The gentleman yields back. I now recognize 
the gentlelady from Pennsylvania, Ms. Scanlon, for 5 minutes.
    Ms. Scanlon. Thank you, Chairman. I want to start by 
commending the members and the staff of this committee for the 
incredible work they have done over the course of this hearing 
series. It is an historic investigation. The report coming 
forward is shedding light on the crushing power of big tech, 
and it has really brought before the American people a 
desperately-needed conversation on what we need to do to reform 
our antitrust laws. So I am proud to have been a part of this 
process, very grateful to the chairman for having initiated it 
and walked us all through this.
    You know, over the course of the last year, we have laid 
out how Amazon, Apple, Facebook, Google, and others have used 
monopolistic tactics to exert undue market power. In doing 
this, these companies stifle innovation, kill competition, and 
harm the American public. We certainly hear about it every day 
from our constituents. I have little reason to believe that, 
without regulatory intervention, these companies will continue 
to act in their self-interests rather than in the interest of 
free and fair competition or privacy.
    Over the course of the investigation, it became clear 
conversation on rethinking traditional antitrust law is needed. 
Companies competing in the digital marketplace on the scale we 
see today could not have been conceived of when the Sherman 
Antitrust Act and our other anti-monopoly laws were created. 
And decades of court rulings have obviously made it harder and 
harder to use traditional antitrust laws to bring enforcement 
measures against these companies. So, in addition to looking at 
how we can use traditional antitrust law to bring companies to 
heel, we also have to identify the areas where we can make 
reforms to better regulate and police digital marketplaces. So 
I am looking forward to how we develop a modern antitrust code 
that can respond to the major competition issues of this time, 
and I am hopeful that our report and the expert testimony of 
our witnesses today will serve as a launching point for 
enforcement and reform legislation.
    Now, using the predatory pricing models to drive out 
competition is a classic monopolistic tactic, and in our 
hearing in July, I raised concerns with Amazon's scheme to 
artificially lower the prices of diapers in order to drive down 
competitors' profits until they could acquire that competitor. 
And this had a real impact on parents who saw, after the 
acquisition, saw the cost of Amazon diaper products rise as a 
result. So, Ms. Teachout, do you see this predatory pricing 
scheme as a symptom of a company that has grown so large, they 
no longer care about what is best for consumers?
    Ms. Teachout. As a mother of an almost 2-year-old, I feel 
the diapers problem on a regular basis, so thank you for 
raising it. Look, the diapers acquisition, and thank you for 
your line of questioning, which was very powerful. It was an 
example of one of the moments where great research and great 
preparation really revealed something powerful. I believe you 
uncovered just how much Amazon was willing to lose in order to 
govern that market.
    And I think one of the things it showed is the really 
deeply problematic nature of court-driven antitrust policy, 
because what we saw in Brooke Group, and Warehouse, and the 
series of Supreme Court antitrust cases is a statement that 
predatory pricing of exactly this kind was really unlikely to 
happen. It was a statement based in economic theory, but not in 
the economic realities. And it is just an example of how 
incredibly important it is for this body to act to make clear 
that that kind of predatory pricing cannot happen going 
forward. Right now, we do not know the full scope and range 
of--I will be quick--of predatory behaviors going on, but we 
have reason to suspect it is far broader than anything we know. 
And the opacity of these companies makes it very easy to cross-
subsidize in ways that really crush competition.
    Ms. Scanlon. And do you have suggestions about how we can 
use reform to combat this?
    Ms. Teachout. Well, sure. Overturn the trio of cases that 
changed the predatory pricing laws. I mean, this is something 
Congress does in other areas. When President Obama became 
President, his first bill, the Lilly Ledbetter Act, was 
overturning bad Supreme Court interpretation of congressional 
statutes. So here again, it is your responsibility to take this 
moment and overturn bad Supreme Court interpretation of 
congressional statutes.
    Ms. Scanlon. Okay. Thank you. I appreciate that. And I do 
have to say, I am struck by the fact that when they passed the 
Sherman antitrust law, they probably were not thinking about 
diaper pricing and did not have witnesses like yourself or 
representatives like myself. Thank you to all of our witnesses. 
We really appreciate your insights today, and I yield back.
    Mr. Cicilline. The gentlelady yields back. I now recognize 
the gentleman from Colorado, Mr. Neguse, for 5 minutes, and the 
vice chair of----
    Mr. Neguse. Thank you, Mr. Chairman, and I want to thank 
each of the witnesses for their testimony today and very 
thoughtful presentations with respect to the legislative 
recommendations that this committee is poised to potentially 
make to the full Congress. I would be remiss if I didn't say 
first and foremost just how much I have appreciated serving as 
the vice chair of this subcommittee, particularly given the 
investigation that we have undertaken, and I want to give my 
gratitude to the chairman, to Chairman Cicilline, for his 
thoughtful leadership. I think the way that he has approached 
this investigation and leading, of course, our counsel and the 
staff of the committee, and, on a bipartisan basis, working to 
try to get to the bottom of these very serious, vexing issues 
that impact every consumer in our country, in my view, has just 
been a tremendous example of how Congress can work well when we 
are working at our best. And so I want to say thank you again, 
Chairman Cicilline, and the ranking member of the subcommittee 
as well. We appreciate his leadership and, of course, wish him 
well in his retirement.
    I want to, I guess, perhaps end the hearing in a similar 
way in which we started it. The ranking member asked a series 
of questions around Facebook, in particular. And I think that 
Facebook provides perhaps one of the best examples for this 
committee and for the country really to consider in terms of 
acquisitions of competitive and nascent threats, you know, 
undeniably helping a company amass and maintain market 
dominance. And I think that was exposed during the course of 
the hearing, of course, that we held in July with the CEO, and 
the documentary evidence that this committee was able to 
compile during the course of our investigation.
    Ms. Hubbard, in your prepared testimony, I believe you 
argue, and I think I am putting this accurately, that enforcers 
should unwind illegal mergers that they didn't catch. And you 
cite Facebook's acquisition of WhatsApp and Instagram as 
examples of what you believe could be illegal mergers. I wonder 
if you could expound a bit on why, in your view, antitrust 
enforcers didn't catch these anti-competitive acquisitions in 
real time, because I think it is fairly clear from the 
documentary evidence that we have compiled that it was, in 
fact, an anti-competitive acquisition, and it was consistent 
with Facebook's, you know, modus operandi, if you will, which 
Professor Teachout articulates really well in terms of, you 
know, copying competitors, acquiring competitors, or 
eliminating them.
    Ms. Hubbard. Thank you for the question. I think in this 
hearing, we have let the enforcers off the hook a little too 
lightly. To hear the conversations we have had about the 
Google-DoubleClick merger, for example, we said how could we 
have foreseen that. All you need to do is read the dissenting 
statement of Pamela Jones Harbour. She foresaw everything. So 
who is in the majority matters, okay? If we had three Chopras 
or Slaughters running the FTC right now, we would be having 
vastly different enforcement. So people matter. If Pamela Burns 
Harbour had been in charge, that deal may have not gone 
through. She was urging for greater scrutiny.
    So, you know, why did they miss these mergers? I think they 
were trained in the Chicago School ideology, which has been a 
failure at enforcing the antitrust laws in a way that protects 
anybody. It is the consumer welfare standard, but it hasn't 
protected consumers at all, and that ideology is incredibly 
narrow. And they look at, oh, Facebook is this kind of a 
product and Instagram is a photo-sharing app, and they don't do 
any kind of a real thoughtful analysis that, hey, is this a 
competitor that they are acquiring. I didn't see any of the, 
you know, discussion of, wow, this is a really hard case to 
win, and so, you know, even though we think it is a problem, we 
are not going to do it. What I saw is they didn't do a thorough 
enough investigation. They didn't get the documents, the 
documents that your investigation has shown.
    If any antitrust enforcer was presented with those 
documents, you need to try to bring that case. Even if you 
think you might lose, you need to bring that case, so it is a 
failure. But the good thing is that it is not too late because 
there is no rule that you can't unwind an illegal acquisition 
later in the future, so that should still happen. It is very 
critically important for our democracy, for elections, for all 
kinds of problems that we are seeing that result from Facebook 
not having any competitive threat because it acquired its top 
competitors.
    Mr. Neguse. Well, thank you. You know, I couldn't agree 
with you more, and obviously there has been public reporting. 
As you know, the FTC is certainly investigating whether 
Facebook illegally maintained its dominance in the social media 
market through those acquisitions of, you know, 80-some-odd 
companies in the course of 15 years. So, in any event, I 
certainly share your sentiments. And as somebody who previously 
served in a gubernatorial administration in Colorado prior to 
coming to Congress, running the State's regulatory department 
back there, I certainly can attest that personnel is policy in 
every sense of that phrase, and so your point is salient one.
    And I guess I am running out of time here, but the last 
question I would have for you, Ms. Hubbard, and to the extent 
Professor Teachout wishes to opine on this as well. I certainly 
read her report with Mr. Stoller in depth, and think their 
recommendations are very thoughtful of just what statutory 
changes, in addition to potentially overturning, of course, the 
precedents that were referenced by Professor Teachout, to 
federal antitrust law should Congress pursue to ease 
challenging dominant firms, rather ease the dominant firms' 
acquisitions of nascent competitors.
    Mr. Cicilline. The time of the gentleman has expired, but 
the witness may answer the question.
    Ms. Hubbard. Thank you, yes. So I think when it comes to 
acquisitions of nascent competitors, we definitely need to 
reform the standards that are completely broken, but the 
easiest way would be to go through a bright-line rules process 
for mergers. We can look at the 1968 merger guidelines as a 
model for how to do that where it just says, if you have a 
certain amount of market power, you are not allowed to acquire 
any further companies. And if you want to grow your market 
power, you need to do it by investing in products and your 
workers, and you need to grow organically. You are not allowed 
to do any kind of a merger once you are a certain size.
    And these clear thresholds would get rid of the burdens on 
enforcers that make it too hard and too expensive to win 
mergers. It would also create very clear rules for the 
marketplace so that everyone knows what is acceptable. You 
know, we need to go further than just little tweaks here and 
there. We need actually bright-line rules.
    Mr. Cicilline. Thank you. The gentleman yields back. I now 
recognize the gentlelady from Georgia, Mrs. McBath, for 5 
minutes.
    Mrs. McBath. Thank you, Mr. Chairman. Thank you so much for 
continuing to bring these important measures before the body 
today, and thank you so much to each of you. We are really glad 
to be hearing from you today as we continue to examine the 
antitrust and also the anti-competitive nature of big tech.
    When I had the opportunity to ask questions of the CEOs of 
big tech companies, I focused on the harms that were faced by 
small businesses. I asked Mr. Bezos about Amazon's treatment of 
third-party sellers, small businesses who want to sell on 
Amazon. I asked Mr. Cook about developers who want to make 
their apps available in the App Store and the users who were 
disappointed when their favorite apps just suddenly 
disappeared. In both cases, Amazon and Apple exercised immense 
control over whose products, whether physical or digital, are 
available in their marketplaces. And this leaves small 
businesses beholden to their whims as they try to maintain a 
business, create jobs, and provide for their own families. 
After our last hearing, even more Amazon sellers reached out to 
this committee and to my office with the same or similar 
concerns. Sellers have told us over and over again that they 
feel that they are dispensable.
    So, Ms. Teachout, you made recommendations in your 
testimony about reforms that we could make. Do you have 
anything to add on those reforms that can help third-party 
sellers or app developers?
    Ms. Teachout. Thank you, and thank you for your very 
powerful questioning. As you saw in response to your questions, 
the CEOs will always have some reason for kicking off their 
competitors because it is better for consumers, but it looks 
from the outside like they are using their platform power to 
really squeeze and really hurt small businesses. And I just 
want to add one thing. We are in the middle of a global 
pandemic where small businesses are facing a true catastrophe, 
and it is more important than ever that we support those small 
businesses in this moment during a time when margins are tight, 
if they are there at all. So the most important thing to 
protect small businesses is structural separation. The most 
important thing for those Amazon sellers is that they are able 
to go to Amazon as a place where they sell their wares, but not 
feel like they are then obliged to go to the feudal lord of 
Amazon and say, to get prioritization, I will use your 
advertising, to get prioritization, I will use your Fulfillment 
services. And those sellers are legitimately fearful that their 
brilliant, creative ideas will be ripped off and then used by 
Amazon to compete against them. So structural separation to me 
is the simplest and most powerful tool for supporting small 
businesses at this moment.
    Mrs. McBath. Thank you so much for that answer. Mr. Kades, 
do the reforms that you are supporting, actually do they have a 
risk of unintended consequences, and if they do, why or why 
not?
    Mr. Kades. Okay. So I think I actually forgot to turn it 
off last time, so I am 0 for 3 today. Thank you for that 
question. I think it is foolish for anyone to say I have an 
idea for reform, and it is totally costless, and there never 
will be unintended consequences, so that is true. But what I 
think is also true is when we look at the situation of where 
the law is, the cost of doing nothing is tremendous. In some 
sense, when we address the question of whether the antitrust 
laws are in the right position, this Committee, in a bipartisan 
way, already answered yes. Earlier in this Congress, you passed 
bills directly trying to address the failure of the courts to 
condemn clearly anti-competitive activity in the healthcare 
field, both the Pay for Delay and the CREATES Act. Those were 
much simpler issues than the types of issues that are flowing 
around with tech. Those were cases involving price, and still 
the courts are getting them wrong.
    So I think if we do nothing, what we are saying is that 
government is no longer concerned about regulating dominant 
companies and it is just free rein. Can the reforms have 
negative consequences? As I said, yes, but I think that is the 
decision Congress always makes.
    Mrs. McBath. Thank you very much. And one last question for 
Ms. Hubbard. Of the reforms that you are recommending, which 
ones do you think will do the most to address the harms that 
have been faced by these small businesses? As you know, as one 
who has been working in gun safety, I know that there is not 
one solution to the expansive culture of gun violence. But what 
do you believe is a reform that will do the most effective, 
efficient, expedient change?
    Ms. Hubbard. Yeah, I have to agree with Professor Teachout, 
her comment earlier about structural separation. It is just the 
most administrable. It is, you know, a preventive solution that 
just eliminates the conflicts of interest and creates a playing 
field that is level. It just doesn't work to have dominant 
corporations, you know, playing the game and controlling it, 
too, right? They have to do one or the other. And you just 
can't police every little incident because there are so many 
opportunities for them to favor their own products and 
services, and so many opportunities for them to put the thumb 
on the scale that we just can't even see. It is just not 
possible to get at all of those through individual enforcement 
actions, and that is why I think the structural separation, 
which has been done in American history many times in many 
industries, is the best solution.
    Mrs. McBath. Thank you, and I yield back.
    Mr. Cicilline. I thank the gentlelady for yielding back. I 
now recognize myself for 5 minutes.
    Professor Teachout, I would like you to respond to an 
argument that we have heard during the course of this 
investigation, that Congress suddenly becoming active in this 
antitrust space risks rendering antitrust laws dangerously 
political, and that somehow our efforts to sort of get the 
policy around antitrust modernized and updated creates some 
perception that we are politicizing antitrust. I wonder if you 
would respond to that argument.
    Ms. Teachout. Economic policy and anti-corruption policy 
are arguably the core jobs of Congress protecting the people of 
this country from tyrants and allowing for a thriving economy. 
There is recent research that Mr. Rahman alluded to showing 
that corporate concentration is leading to a transfer of as 
much as $14,000 per year from workers to investors. This is a 
major driver of inequality. Nobody doubts that labor law is 
your job, that tax law is your job, that campaign finance law 
is your job. And when it comes to antitrust, antitrust and 
anti-monopoly law is about the country sharing its vision of 
what a moral, fair, and thriving economy looks like. There is 
nothing more congressional than antitrust law.
    Mr. Cicilline. I couldn't agree with you more. Thank you. 
You said it much more articulately than I could have. Ms. 
Hubbard, I would like to now ask you, there obviously is 
significant reporting that, and we are all aware that the State 
attorneys general, the FTC, and the DOJ are all pursuing 
antitrust investigations into the major dominant technology 
platforms, and some are reporting that lawsuits may be brought 
very soon. Some have also suggested that, you know, Congress 
should just wait to see how these cases turn out before 
pursuing legislative reform. I, of course, have suggested that 
there are two very different proceedings. One is an enforcement 
proceeding, which we are not prosecuting, and enforcement 
action. As Professor Teachout just mentioned, ours is public 
policy development, and the urgency of doing our work cannot be 
overstated, and so, of course, we shouldn't await those. I just 
want to be sure that I am not off course with that thinking.
    Ms. Hubbard. Right, and as you know, I was at the New York 
AG's office, and they are part of these investigations, so I 
still don't think you should wait for them. And the reason is, 
there is so much anti-competitive conduct to go after, that the 
agencies are just trying to bite off little tiny pieces that 
they can work on, that are just a tiny fraction of the anti-
competitive conduct that is going on. So they are not, you 
know, getting the whole landscape of all the different ways 
that these companies are abusing their monopoly power to 
exclude competition.
    The other thing is that antitrust cases take years. So we 
have very pressing issues here about small business, about 
citizens, about democracy, about speech. We need urgent action 
right now in the middle of this global pandemic. We can't wait 
5, 10 years for an antitrust case to finish up.
    Mr. Cicilline. Thank you.
    Ms. Hubbard. And the last thing is we have seen some strong 
antitrust cases lately that the judges just completely screw 
up. I mean, the New York State AG is soon to block the Sprint-T 
Mobile merger. That was a classic antitrust case of three to 
two major competitors. It should have been blocked. The 
evidence was overwhelming that it would lead to a price 
increase under the Chicago School theory of consumer welfare, 
and they still didn't win. So we just can't put this in the 
hands of the courts. It is too important and too urgent. I do 
urge those enforcers to carry on and do their job, but we need 
you as well.
    Mr. Cicilline. Thank you. And, Professor Rahman, in your 
written statement, you note that tech platforms like Facebook, 
Google, Amazon, and Apple represent essential infrastructure, 
just like the railroads, bridges, and telegraph lines of a 
century ago, and you write about the dangers of unchecked 
private control over social, economic, and political 
infrastructure. And I wonder if you could just speak a little 
more about what that kind of infrastructure and the power that 
accompanies it means, and why our responsibility in terms of 
developing good public policy in this context is so important.
    Mr. Rahman. Thank you very much, Chairman. I think like a 
lot of the other speakers today have alluded, you know, we are 
in such a crisis moment right now in our country. And a central 
piece of this is that if Congress doesn't act, what that means 
is that we are actually living under the private government, as 
Professor Teachout said, the private government of these 
private firms and the misapplication of law that we are seeing 
from the courts, right? And so essential infrastructure is 
exactly that, it is essential. If we don't update the rules of 
the road to make sure everybody can actually access that 
infrastructure, build the businesses, and engage in the social 
activities that it enables, then we are not creating the kind 
of economy that we need to be equitable and inclusive and to 
create new types of innovation in the future.
    Mr. Cicilline. And so if I could just ask for all the 
witnesses. As I kind of review both the testimony at this 
hearing today, which has been incredibly useful, and your 
written testimony, it seems as if the reforms that you have all 
recommended, or some part of these, are kind of in five 
different areas, and I want to be sure I haven't missed one. 
The first is a change of some presumptions in statutes to shift 
burdens to parties that both may be engaging in misconduct, but 
also have easier access to the information; two, this whole 
notion of separation of lines of business, that sort of 
structural change so we eliminate what Professor Teachout has 
described as this extraordinary conflict of interest, which is 
bad for our economy, bad for innovation, bad for a whole range 
of other things; three, more rigorous enforcement, which, of 
course, we recognize means more resources, staff, and 
leadership that enthusiastically and creatively promote 
competition policy, and believe in this stuff, and will work 
aggressively. The fourth area is a reversal of a number of 
court decisions that have either kind of misinterpreted or, 
frankly, just changed the intention of Congress as it relates 
to important competition policy; and then, fifth, a set of 
provisions that may just explicitly prohibit discriminatory 
behavior. And, you know, those obviously have some 
permutations, but are there other general areas that we ought 
to be looking at in this final part of our investigation in 
terms of recommendations? Yes, Mr. Baer.
    Mr. Baer. I agree. I think that appropriately summarizes 
the points. I do think in looking at prohibitions, we also 
ought to be thinking of forward-looking rules, you know, of 
interoperability, portability. And it may well be we need to 
vest, whether it is the Federal Trade Commission or a new 
agency, with the authority to do targeted rules that actually 
will promote competition. So that is kind of an addendum to 
point 5.
    Mr. Cicilline. Great. Thank you. We will make that point 6. 
It deserves its own.
    Anyone else? Yes, sir. Mr. Kades.
    Mr. Kades. Yeah, I just want to echo what Bill Baer just 
said. I mean, I do think it is really important to think about 
part of----
    Mr. Baer. That is why I promoted you back then. [Laughter.]
    Mr. Kades. I know, right. Too often, we see when people say 
the word ``regulation,'' right, they have this theory of 
burdening commerce, where, in fact, regulation is just a kind 
of jargon way to say these are the rules of the marketplace.
    Mr. Cicilline. Right.
    Mr. Kades. And so, the FCC, right, the reason, right, they 
decided at some point that long-distance monopoly didn't mean 
you got to have a monopoly on phones, they said, no, now you 
got to have interconnection. And I think a lot of the problems 
we are dealing with, whether it be with any of these companies, 
is, better regulatory rules really will unleash competition and 
unleash it along the lines we want to see.
    Mr. Cicilline. And just with the indulgence of my 
colleagues, I am just going to ask Professor Rahman. I think he 
had his hand up also.
    Mr. Rahman. Yeah, thank you, Chairman. Very quickly, I just 
had one piece, which is it is important to clarify the 
rulemaking authority that the FTC will also need in order to be 
an effective enforcer going forward of the kinds of issues that 
we have talked about today. That is a dispute right now, and 
Congress could help improve that.
    Mr. Cicilline. Well, thank you. I have gone way over my 
time, so I appreciate the indulgence. Before closing today's 
hearing, though, I would like to first just thank the chairman 
of the full committee, Chairman Nadler, who has been an 
extraordinary supporter of this investigation and an active 
participant, and it would not have been permitted to proceed in 
the kind of robust nature that it did without his support. So I 
want to thank Mr. Nadler for that.
    Chairman Nadler. Let me thank Mr. Cicilline for his role in 
this. Without your efforts, this would not have occurred.
    Mr. Cicilline. Thank you, Mr. Chairman. I also want to take 
a moment as a point of personal privilege to thank the members 
of the subcommittee on both sides of the aisle who have taken 
this work seriously, invested extraordinary amounts of time to 
conduct a really thorough investigation. I am really grateful 
for that. And I also want to take a particular moment of 
privilege to extend my thanks to our extraordinary staff of the 
subcommittee for the work that they have done and will continue 
to do. I have said this many times before. This is a mighty 
staff of 5 or 6 that has done the work of 30 or more, and that 
is Slade Bond, Lina Khan, Amanda Lewis, Phil Berenbroick, Anna 
Lenhart, and Joe Van Wye. And they have just been 
extraordinary, and I know all my colleagues will join me in 
thanking them.
    [Applause.]
    Mr. Cicilline. And I think, you know, they have obviously 
been a really important and indispensable part of this process, 
and every member on this dais is grateful on both sides of the 
aisle for all the work that has been put into it. I also want 
to just take a moment to thank my chief of staff, Peter 
Karafotas, and my communications director, Richard Luchette, 
for their diligence and commitment during this investigation.
    And finally, to our witnesses, thank you again. You have 
all informed this work throughout and given us a lot to think 
about today, and we are grateful for that. And I will end by 
just reminding everyone the reason that this investigation is 
so important to the future of our country is because our 
country has a history of this battle between concentrated 
economic power, monopolies, and democracy. We are seeing that 
play out in the most extraordinary way and, frankly, in a 
dangerous way, and it is incumbent on the Congress of the 
United States to fulfill our responsibility to make sure our 
economy works and we safeguard our democracy. And this 
investigation is a critical part of that, so thank you all.
    And with that, the hearing is adjourned.
    I am sorry. Members have 5 legislative days to enter into 
the record materials and extended remarks.
    [Whereupon, at 3:45 p.m., the subcommittee was adjourned.]
      

                                APPENDIX

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