[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
REVIVING COMPETITION, PART 1:
PROPOSALS TO ADDRESS GATEKEEPER POWER
AND LOWER BARRIERS TO ENTRY ONLINE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ANTITRUST, COMMERCIAL, AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
THURSDAY, FEBRUARY 25, 2021
__________
Serial No. 117-8
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: http://judiciary.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
47-295 WASHINGTON : 2022
-----------------------------------------------------------------------------------
COMMITTEE ON THE JUDICIARY
JERROLD NADLER, New York, Chair
MADELEINE DEAN, Pennsylvania, Vice-Chair
ZOE LOFGREN, California JIM JORDAN, Ohio, Ranking Member
SHEILA JACKSON LEE, Texas STEVE CHABOT, Ohio
STEVE COHEN, Tennessee LOUIE GOHMERT, Texas
HENRY C. ``HANK'' JOHNSON, Jr, DARREL ISSA, California
Georgia KEN BUCK, Colorado
THEODORE E. DEUTCH, Florida MATT GAETZ, Florida
KAREN BASS, California MIKE JOHNSON, Louisiana
HAKEEM S. JEFFRIES, New York ANDY BIGGS, Arizona
DAVID N. CICILLINE, Rhode Island TOM McCLINTOCK, California
ERIC SWALWELL, California W. GREGORY STEUBE, Florida
TED LIEU, California TOM TIFFANY, Wisconsin
JAMIE RASKIN, Maryland THOMAS MASSIE, Kentucky
PRAMILA JAYAPAL, Washington CHIP ROY, Texas
VAL BUTLER DEMINGS, Florida DAN BISHOP, North Carolina
J. LUIS CORREA, California MICHELLE FISCHBACH, Minnesota
MARY GAY SCANLON, Pennsylvania, VICTORIA SPARTZ, Indiana
SYLVIA R. GARCIA, Texas SCOTT FITZGERALD, Wisconsin
JOE NEGUSE, Colorado CLIFF BENTZ, Oregon
LUCY McBATH, Georgia BURGESS OWENS, Utah
GREG STANTON, Arizona
VERONICA ESCOBAR, Texas
MONDAIRE JONES, New York
DEBORAH ROSS, North Carolina
CORI BUSH, Missouri
PERRY APELBAUM, Majority Staff Director & Chief Counsel
CHRISTOPHER HIXON, Minority Staff Director
------
SUBCOMMITTEE ON ANTITRUST, COMMERCIAL,
AND ADMINISTRATIVE LAW
DAVID N. CICILLINE, Rhode Island, Chair
PRAMILIA JAYAPAL, Washington, Vice-Chair
JOE NEGUSE, Colorado KEN BUCK, Colorado, Ranking Member
ERIC SWALWELL, California DARREL ISSA, California
MONDAIRE JONES, New York MATT GAETZ, Florida
THEODORE E. DEUTCH, Florida MIKE JOHNSON, Louisiana
HAKEEM S. JEFFRIES, New York W. GREGORY STEUBE, Florida
JAMIE RASKIN, Maryland MICHELLE FISCHBACH, Minnesota
VAL BUTLER DEMINGS, Florida VICTORIA SPARTZ, Indiana
MARY GAY SCANLON, Pennsylvania SCOTT FITZGERALD, Wisconsin
LUCY McBATH, Georgia CLIFF BENTZ, Oregon
MADELINE DEAN, Pennsylvania BURGESS OWENS, Utah
HENRY C. ``HANK'' JOHNSON, Jr.,
Georgia
SLADE BOND, Chief Counsel
DOUG GEHO, Minority Counsel
C O N T E N T S
----------
Thursday, February 25, 2021
Page
OPENING STATEMENTS
The Honorable David Cicilline, Chair of the Subcommittee on
Antitrust, Commercial, and Administrative Law from the State of
Rhode Island................................................... 2
The Honorable Ken Buck, Ranking Member of the Subcommittee on
Antitrust, Commercial, and Administrative Law from the State of
Colorado....................................................... 4
The Honorable Jerrold Nadler, Chair of the Committee on the
Judiciary from the State of New York........................... 6
The Honorable Jim Jordan, Ranking Member of the Committee on the
Judiciary from the State of Ohio............................... 8
WITNESSES
Charlotte Slaiman, Competition Policy Director, Public Knowledge
Oral Testimony................................................. 10
Prepared Testimony............................................. 12
Hal Singer, Managing Director, Econ One
Oral Testimony................................................. 22
Prepared Testimony............................................. 24
Eric Gunderson, Chief Executive Officer, Mapbox
Oral Testimony................................................. 36
Prepared Testimony............................................. 38
Tad Lipsky, Director of the Competition Advocacy Program at the
Global Antitrust Institute, Antonin Scalia Law School, George
Mason University
Oral Testimony................................................. 42
Prepared Testimony............................................. 44
John Thorne, Partner, Kellogg, Hansen, Todd, Figel & Fredrick
Oral Testimony................................................. 55
Prepared Testimony............................................. 57
Morgan Harper, Senior Advisor, American Economic Liberties
Project
Oral Testimony................................................. 72
Prepared Testimony............................................. 74
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Receipts and invoices from Amazon, Google, and Qualcomm,
submitted by the Honorable Mondaire Jones, a Member of the
Subcommittee on Antitrust, Commercial, and Administrative Law
from the State of New York for the record...................... 96
Items submitted by the Honorable Mary Gay Scanlon, a Member of
the Subcommittee on Antitrust, Commercial, and Administrative
Law from the State of Pennsylvania for the record
An article entitled, ``Do Facebook, Twitter and YouTube censor
conservatives? Claims `not supported by the facts,' new
research says,'' Jessica Guynn, USA Today.................... 132
A report entitled, ``False Accusation: The Unfounded Claim that
Social Media Companies Censor Conservatives,'' Paul M.
Barrett and J. Grant Sims, NYU Stern Center for Business and
Human Rights................................................. 136
Items submitted by the Honorable David N. Cicilline, Chair of the
Subcommittee on Antitrust, Commercial, and Administrative Law
from the State of Rhode Island for the record
Statement from George P. Slover, Senior Policy Counsel,
Consumer Reports, and Sumit Sharma, Senior Researcher,
Technology Competition, Consumer Reports..................... 172
Statement from Cliff Pemble, President and CEO, Garmin
International, Inc........................................... 175
Statement from New America's Open Technology Institute......... 180
A report entitled, ``Promoting Platform Interoperability,'' New
America's Open Technology Institute.......................... 182
Statement from Blake Adami, Vice-President--Government Relations,
National Association of Wholesaler-Distributors, submitted by
the Honorable Dan Bishop, a Member of the Subcommittee on
Antitrust, Commercial, and Administrative Law from the State of
North Carolina for the record.................................. 214
REVIVING COMPETITION, PART 1:
PROPOSALS TO ADDRESS GATEKEEPER
POWER AND LOWER BARRIERS TO
ENTRY ONLINE
----------
Thursday, February 25, 2021
House of Representatives
Subcommittee on Antitrust, Commercial, and
Administrative Law
Committee on the Judiciary
Washington, DC
The Committee met, pursuant to call, at 10:02 a.m., in Room
2141, Rayburn House Office Building, Hon. David N. Cicilline
[Chair of the Subcommittee] presiding.
Members present: Representatives Cicilline, Nadler, Neguse,
Swalwell, Jones, Deutch, Jeffries, Raskin, Jayapal, Demings,
Scanlon, McBath, Johnson of Georgia, Buck, Jordan, Issa,
Johnson of Louisiana, Steube, Bishop, Fischbach, Spartz,
Fitzgerald, Bentz, and Owens.
Staff present: Arya Hariharan, Deputy Chief Oversight
Counsel; David Greengrass, Senior Counsel; Madeline Strasser,
Chief Clerk; Jordan Dashow, Professional Staff Member; Cierra
Fontenot, Staff Assistant; John Williams, Parliamentarian;
Amanda Lewis, Counsel, ACAL Subcommittee; Joseph Van Wye,
Professional Staff Member, ACAL Subcommittee; Slade Bond, Chief
Counsel, ACAL Subcommittee; Phillip Berenbroick, Counsel, ACAL
Subcommittee; Tyler Grimm, Minority Chief Counsel for Policy
and Strategy; 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
recesses of the Committee at any time.
Good morning and welcome to today's hearing.
Before we begin, I would like to remind the Members that we
have established an email address and distribution list
dedicated to circulating exhibits, motions, or other written
materials that the 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 our offices and we will circulate the materials
to the Members and staff as quickly as we can.
I would also like to remind all the 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 the Members on both
sides of the aisle to wear a mask for the duration of today's
hearing.
I now recognize myself for an opening statement.
Today's hearing is the first in a series that the
Subcommittee will hold to develop legislation to promote
competition online and to modernize the antitrust laws. These
hearings follow a 16-month bipartisan investigation led by this
Subcommittee last Congress which produced significant evidence
of the rise and abuse of gatekeeper power online. In testimony,
submissions, and numerous interviews with Subcommittee staff,
businesses of all types and sizes described how dominant
platforms exploit their gatekeeper power to charge exorbitant
fees, advantage their own products and services, impose
oppressive contract terms, and extract valuable data from the
people and businesses that rely on them.
Over and over again, words like ``fear'' and ``hardship''
permeated the concerns of businesses across the economic
spectrum--app developers, innovators, and local young companies
alike. According to these businesses, their dependence on
platform gatekeepers to access users and markets are simply the
cost of doing business because they have few, if any other,
options. In one example, David Heinemeier Hansson, the
cofounder of Basecamp, testified last Congress that Apple's
power over app developers was, quote, ``complete tyranny and
insufferable,'' adding that ``Developers live in constant fear
we may have violated these vague rules and the next update to
our applications will be blocked by Apple.''
This power is also critical for the platforms to maintain
their grip on the market. By having control over the
infrastructure of the digital age, these firms can conduct
surveillance over other businesses to identify potential rivals
and, ultimately, buy or bury any competitive threats.
For example, during the investigation, the Subcommittee
uncovered emails from Mark Zuckerberg to Facebook's chief
financial officer describing the purchase of Instagram as
``neutralizing a competitive threat.'' Before it was acquired,
the cofounder of Instagram told an investigator that he was
worried Mr. Zuckerberg would go into, quote, ``destroy mode,''
if he refused to sell the company. Facebook later acquired the
surveillance company Onavo to identify other competitive
threats, and then neutralize them through acquisition, cloning
their features or blocking them from Facebook's platform.
In advance of today's hearing, we have also received
written testimony from Cliff Pemble, the CEO of Garmin, about
this topic. He notes that, as gatekeepers of the app ecosystem
for virtually all app developers, Apple and Google, and I
quote, ``have the ability and incentive to harm competition,
and that these super-dominant companies should not be allowed
to use their ability to control key inputs and distribution as
a sword to eliminate or impede competition.''
Due to higher barriers to entry in these markets, such as
strong network effects and high switching costs, new entrants
are unable to enter the market with better products or services
to contest the dominance of these firms. In other words,
businesses and consumers are stuck with few or no alternatives.
I want to be very clear about two things. First, this
problem is not just about a market failure. At its core, this
issue is fundamentally about whether we will have an economy
where businesses fighting for economic survival can actually
succeed. It is about whether our economic future is going to be
defined by the success of the best businesses with the best
ideas or simply the biggest companies with the biggest lobbying
budgets.
Second, this problem goes far beyond the exchange of
dollars and data online. It is also at the heart of our
nation's reckoning with domestic terrorism and hate speech. In
a letter to Facebook requesting documents and information
related to the spread of disinformation on its platform earlier
this week, my colleagues on the Energy and Commerce Committee
wrote, and I quote, ``From conspiracy theorists peddling false
information to extremist voices urging and organizing violence,
Facebook has become a breeding ground for polarization and
discord.''
As Chair Pallone and Subcommittee Chairs Schakowsky, Doyle,
and DeGette explain, phrases like ``kill them all'' and ``lock
and load'' appeared thousands of times on Facebook pages in the
days and months leading up to the violent mob's attack on the
Capitol on January 6th. Rather than bringing the world closer
together, Facebook functioned as an organizing tool for
extremists to plot violence against our democracy and plan to
kidnap public officials.
Last year, dozens of civil rights leaders from the Anti-
Defamation League, the NAACP, Color of Change, and other groups
organized a boycott by more than 500 advertisers following
Facebook's refusal to tackle hate speech on its platform. In
response, Mark Zuckerberg reportedly said that Facebook is,
quote, ``not going to change our policies or approach on
anything because of a threat to a small percent of our revenue
or to any percent of our revenue.''
That is because, in the absence of competition or
accountability, Facebook and other dominant platforms have no
incentive to change. This problem is a cancer that is
metastasizing across our economy and our country. It is
spreading through our body politic and taking over our ability
to function as a democracy. Americans have had enough.
According to multiple surveys over the past year,
Republicans and Democrats agree on an overwhelming basis that
these companies have too much power and that Congress must curb
this dominance. Today's hearing begins the process of doing
just that. Mark my words, change is coming; laws are coming.
Everyday policymakers around the world are undertaking a
similar process. In Europe, the European Commission has
developed a Digital Markets Act, a comprehensive set of rules
for platform gatekeepers that will now be considered by the
European Parliament.
In the United Kingdom, the government has announced that
its competition and markets authority will create a digital
markets unit to enforce a competition regime for tech giants to
give the consumers more choice and control over their data and
ensure businesses are treated fairly.
In Australia, the Parliament is finalizing a law produced
by the Australian Competition and Consumer Commission to give
news publishers greater bargaining power with online platforms.
Several other countries have announced similar proposals.
As Margrethe Vestager, the Executive Vice President of the
European Commission has said, ``We have a choice: A set of
clear, strong requirements or a completely fragmented legal
system.''
I would also add that virtually every other sector of the
economy is subject to rules and safeguards. The digital
marketplace should be no different. In communication markets,
there are decades of laws and regulations to complement the
breakup of AT&T. In pharmaceutical markets, Congress enacted
the Hatch-Waxman Act of 1984 to lower prescription drug costs
to the benefit of generic competition, and we have added to
this with recent laws like the CREATES Act to foster
competition and lower prescription drug cost by billions of
dollars.
By comparison, the market capitalization of Amazon alone is
larger than that of AT&T, Verizon, Comcast, Pfizer, and Johnson
& Johnson combined. While we need more competition in every
market across the economy, unlike the firms in these other
sectors, Amazon and other dominant platforms are virtually
unbound by law or regulation. That time is coming to an end; it
must end.
Today's hearing is the beginning. We will hear from a panel
of experts on several of these topics, which will build on the
testimony and information we received as part of our
investigation last Congress. In the coming weeks, we will hold
several additional hearings to consider reforms for antitrust
laws and paths forward for ensuring the survival of trustworthy
sources of news. We also will hold additional hearings as
necessary to develop a comprehensive record in support of
legislative reforms.
We will work on a serious bipartisan basis to advance these
reforms together. In the words of my colleague and friend,
Ranking Member Buck, quote, ``We have an opportunity to offer
bipartisan solutions that will promote competition and build a
better technology marketplace for the future.'' I agree.
With that, it is my pleasure now to recognize the gentleman
from Colorado, the Ranking Member of the Antitrust
Subcommittee, Mr. Buck, for purposes of making an opening
statement.
Mr. Buck. Thank you, Mr. Chair, and thank you for holding
this hearing.
I also want to thank you for your bipartisan and thorough
nature in which you conducted the antitrust investigation into
Apple, Amazon, Facebook, and Google in the last Congress.
During the hearings last year, we heard numerous examples
of exclusionary and predatory conduct that Apple, Amazon,
Facebook, and Google have engaged in. For example, Google and
Facebook colluded to control the ad marketplace. Amazon
demanded proprietary information from small businesses who are
forced to use their platform, and then, used the small
businesses' data to make their own products and relegated the
competitors lower in their search results. Apple, exacting a 30
percent tax from its competitors like Spotify, because these
companies have no way for their customers to download their app
other than going through Apple's App Store or Google's Play
Store.
Additionally, we have seen all four the tech giants take
unprecedented actions to silence political speech they disagree
with, which almost always exclusively means shutting down
conservative speech. Just since early October 2020, we have
seen Google's YouTube platform delete numerous conservative
channels, Facebook deplatformed the President of the United
States, Amazon kick Parler off its web hosting service, and
Google and Apple blocked Parler from their app stores.
Whether their conduct is directed at potential competitors
or politicians and citizens they don't agree with, these
companies are able to Act with complete impunity because of
their status as monopolies. The status quo is not working, and
we must act. The key is to make sure that we do not take
chainsaw to the whole economy, but, rather, we should implement
a scalpel-like approach for big tech.
I believe there are several areas where we can work
together on this: Increasing funding for antitrust enforcement
agencies enacting data portability and interoperability
requirements, and reforming the burden of proof in merger
cases, among others. I would like to discuss some of these in
detail.
As we have discussed previously, I believe that consumer-
oriented data portability and interoperability policies will
further facilitate competition in the marketplace. Perhaps one
of the most popular and procompetitive actions Congress ever
took was mandating mobile phone number portability in the
Telecommunications Act of 1996. Consumers were empowered to
shop between carriers without having to worry about changing
phone numbers. The result was a competitive and proconsumer
marketplace. This is the model regarding data portability as it
applies to online platforms.
In the mobile phone space, companies fought to get your
phone number and your business. In the digital world, companies
want your data and the ability to monetize that data. The core
question before Congress in this area is, what data is
portable? For example, should a search term entered into Google
by a consumer be portable data? What about data that is
collected passively by Google like location data?
I think a Supreme Court case from 2018 gives an interesting
bit of context here. In the Carpenter case, the Court noted
that it is basically a necessity of modern life that we have
mobile phones and carry them around with us. The Court found
that just carrying your phone around cannot constitute consent
for law enforcement to track your movements via cell tower
pings without getting a warrant. The type of location tracking
that Google is doing is far more sophisticated and precise than
cell tower pings. How is it possible that the type of
microtargeting and tracking Google engages in is permitted with
essentially no benefit to the consumer?
This type of data is incredibly valuable to companies, and
consumers should be able to control who has access to the data
that results from literally every aspect of their lives being
tracked. They should also be able to reap benefits from their
data besides a better ad experience. Maybe it is just me, but I
would rather get access to publications behind a paywall or
airline miles or hotel points rather than a better ad
experience when I hand over my data. By making data portable,
you put power back in the hands of consumers and leave it up to
them who gets access to it and under what conditions.
Similar to data portability, which is about the platform-
to-consumer relationship, interoperability can also help
competition in digital marketplaces. Interoperability is a
time-honored practice in the tech industry that allows
competing technologies to speak to one another, so that
consumers can make a choice without being locked into any one
technology. In the same way that data portability helps markets
function better, so can interoperability. Interoperability does
not work in uncompetitive digital markets where dominant
platforms have locked consumers into their technology.
On this issue, I agree with the Chair that there is room to
explore. As with data portability, the devil will be in the
details, and we will want to ensure that any interoperability
mandates do not create spillover effects or result in heavy-
handed regulation.
Lastly, I think we may be able to find common ground in
keeping big tech from getting bigger. In the Third Way report,
I outlined that I did not agree with pursuing a Glass-Steagall
for the internet approach. I continue to believe that approach
is one fraught with potential problems. I think much more
robust enforcement by our law enforcement agencies with regards
to mergers and acquisitions would accomplish essentially the
same goal.
It is a big problem for consumers and market competition
that these tech titans' buying spree has continued unabated for
essentially the past 20 years. Estimates vary, but the number
of deals involving digital platforms stands at approximately
750 over the past two decades. This M&A activity appears to
have significantly strengthened the platforms' market power.
Yet, the vast majority of the deals were cleared by our
antitrust agencies without scrutiny. In addition to much more
scrutiny of mergers and acquisitions, I think we should
consider shifting the burden to the digital platforms to
demonstrate that the proposed acquisition or merger is
procompetitive and proconsumer.
In closing, we have to do something. Throwing partisan mud
at one another is not going to work. These are people and
businesses whose lives are actually being destroyed by these
tech giants. Complacency is not an option.
I look forward to working with you in these areas, Mr.
Chair, and others, in a bipartisan fashion to make the digital
marketplace more competitive and more consumer-focused.
Mr. Chair, thank you for your collegiality, and I yield
back.
Mr. Cicilline. Thank you to the Ranking Member for his
opening statement.
The Chair now recognizes the Chair of the Full Committee,
the gentleman from New York, Mr. Nadler, for his opening
statement.
Chair Nadler. Thank you, Mr. Chair, for holding today's
important hearing on gatekeeper power.
It has been over a century since Congress enacted the first
of several major Federal antitrust statutes. Beginning with the
Sherman Act in 1890, these laws were passed to preserve and
promote competition. Earlier this week, Attorney General
Nominee Merrick Garland quoted Supreme Court Justice Hugo Black
for the principle that antitrust law is ``the charter of
American economic liberty.''
Today, however, this charter is in a state of disrepair.
Across many industries, economic power is concentrated among a
few powerful firms with outsized influence over our democracy,
our jobs, and our social institutions.
The Committee's bipartisan investigation into digital
markets uncovered abundant evidence of both anticompetitive
conduct and harmful consolidation. The lack of competition
online and across our entire economy demonstrate an urgent need
for action.
As we all know, a lack of competition and anticompetitive
conduct is not just limited to social networks or online
commerce. These problems show up in other critical markets. For
example, it is well-documented that the lack of competition in
healthcare markets has been one of the primary causes of the
skyrocketing price of prescription drugs and other healthcare
costs.
Over the past several decades, labor markets across America
have also become highly concentrated. Just as consolidation in
product markets tends to have harmful effects for consumers,
the growing concentration of labor markets has saddled workers
with depressed wages and fewer opportunities--something often
called monopsony.
As our country begins to recover from the pandemic and the
resulting economic crisis, noncompete and no-poach clauses
impede the ability of workers to reenter the workforce or find
better jobs. This is unacceptable.
It is clear that lax enforcement by regulators, combined
with the courts' undue narrowing of the law, has played a large
role in creating the poor State of American economic liberty
and the present monopoly crisis.
With today's hearing, we take an important step in the
process of restoring competition online. The rise and abuse of
gatekeeper power by a few dominant firms has undermined the
goals of the open internet. Instead of having an open,
competitive ecosystem, online gatekeepers can and do put a
thumb on the scale in favor of their own businesses and against
innovators, entrepreneurs, and startups. Simply put, this
allows them to pick winners and losers rather than compete on
the merits.
Moreover, there is growing evidence that insufficient
competition online has reduced the incentive for powerful
companies to implement privacy protections or to address the
rise and spread of hateful rhetoric and misinformation on their
platforms. Despite public pressure, including from civil rights
community leaders, the lack of a competitive marketplace
results in many firms becoming simply ``too big to care.''
It is abundantly clear that competition online is not
simply a click away. High barriers to entry, such as network
effects and switching costs, protect the incumbents' market
power and make it nearly impossible for new entrants to get a
foothold.
Over the last two years, this Subcommittee, under the
leadership of Chair Cicilline, has conducted the most
significant congressional antitrust investigation in more than
a generation. Having identified and studied the problem last
Congress, we must now legislate and exercise our oversight
mandate in support of a solution.
I look forward to hearing from our distinguished panel of
Witnesses on these important topics.
I thank Chair Cicilline and Ranking Member Buck for their
work last Congress and for holding today's hearing.
I yield back the balance of my time.
Mr. Cicilline. The Chair thanks the gentleman for yielding
back.
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. Chair.
The Chair in his opening remarks seemed to suggest that
platforms should censor more. I want them to stop censoring
conservatives. I want them to stop censoring speech. I want
them to embrace the First Amendment.
Frankly, if platforms are to continue to undermine the
First amendment and other liberties that Americans enjoy,
section 230 protection should go away. It is really that basic.
I hope that is what this Subcommittee will focus on in this
Congress, is addressing the real concerns we see happening to
the very First amendment to the Bill of Rights where free
speech rights have been attacked time and time again.
Typically, it is conservatives who have been attacked.
Frankly, every other potential remedy should be on the
table as well. It is that important. This is the Judiciary
Committee, and we are talking about the First Amendment.
So, I hope that is the focus, as we move forward with this
important hearing and other hearings that are coming in this
Committee.
With that, Mr. Chair, I would yield back.
Mr. Cicilline. It is now my pleasure to introduce today's
Witnesses.
Our first Witness is Charlotte Slaiman, Competition Policy
Director of Public Knowledge. Before joining Public Knowledge,
Ms. Slaiman worked at the Anticompetitive Practices Division of
the Federal Trade Commission investigating and litigating
antitrust conduct violations. Additionally, she worked as a
legislative aide to former Senator Al Franken, handling
elements of his Judiciary Committee portfolio, including
competition, media, and consumer privacy. Ms. Slaiman received
her bachelor's from the University of Virginia and her J.D.
from the New York University School of Law.
Our second Witness is Hal Singer, Managing Director of Econ
One, and Adjunct Professor at Georgetown's McDonough School of
Business. He is an expert on antitrust and regulation and has
extensive experience providing policy advice to regulatory
agencies in the United States and Canada. Before becoming the
Managing Director at Econ One, Dr. Singer served as the
Principal at Economist, Inc., and as a Managing Director at
Navigant Economics. In 2018, the American Antitrust Institute
honored Dr. Singer with an Antitrust Enforcement Award for his
work on the Lidoderm antitrust legislation. Dr. Singer received
his bachelor's degree at Tulane University and received both
his master's and Ph.D. in Economics from Johns Hopkins
University.
Our third Witness is Eric Gundersen, Chief Executive
Officer of Mapbox, a mapping and location cloud platform for
developers. Mapbox has helped companies like Facebook, CNN, The
Weather Channel, and The New York Times create dynamic maps to
enhance their products and content. Mr. Gundersen knows
firsthand how difficult it can be to compete in an online
marketplace when firms like Google have such dominant
positions. Prior to joining Mapbox, Mr. Gundersen worked with
Mapping Technology, an open data space at Development Seed, a
firm that creates open-source tools for international
development agencies. Mr. Gundersen received both his
bachelor's and master's degree from American University.
Our fourth Witness, Tad Lipsky, is the Assistant Professor
and Director of the Competition Advocacy Program at the Global
Antitrust Institute at the Antonin Scalia Law School. Prior to
joining the Global Antitrust Institute, Professor Lipsky served
as an Acting Director of the FTC's Bureau of Competition from
February 2017--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's section of Antitrust Law, and as the
Co-Chair of the International Competition Policy Working Group
of the United States Chamber of Commerce. Professor Lipsky
received his master's and J.D. from Stanford University.
Our fifth Witness, John Thorne, is a partner at Kellogg,
Hansen, Todd, Figel & Fredrick. He has had a long career as an
antitrust attorney and has been recognized multiple times by
the Global Council Awards as one of the best corporate
competition lawyers in the world. Currently, he represents
media companies, publishers, financial service providers, app
developers, and consumer products companies in commercial
litigation in Federal and State courts, as well as before law
enforcement agencies. Before joining Kellogg Hansen, Mr. Thorne
served as Verizon's Senior Vice President and Deputy General
Counsel in charge of competition, intellectual property, and
privacy. Mr. Thorne received his bachelor's degree from Kenyon
College and his J.D. from Northwestern University's School of
Law.
Today's last Witness, Morgan Harper, is currently Senior
Advisor at the American Economic Liberties Project. Ms. Harper
is an expert in consumer protection and education issues and
has spent her career working to strengthen local businesses and
reduce monopoly power. Prior to joining AELP, Ms. Harper served
as Vice President of Knowledge Management and Strategy at the
Local Initiative Support Corporation, the nation's largest
community development and financial institution. She has also
spent time working as Special Advisor to the Director of the
Consumer Financial Protection Bureau. Ms. Harper received her
bachelor's degree from Tufts University, her master's from
Princeton University, and her J.D. from Stanford Law School.
We welcome all our distinguished Witnesses and we thank
them for their participation.
I will begin by swearing in our Witnesses, and I ask our
Witnesses who are here to testify in person to rise. I ask the
Witnesses testifying remotely to turn on their audio and make
sure that I can see your face and your raised right hand while
I administer the oath.
Do you swear or affirm under penalty of perjury that the
testimony you are about to give is true and accurate to the
best of your knowledge, information, and belief, so help you
God?
Let the record show that the Witnesses answered in the
affirmative.
Thank you. You may be seated.
I would just remind the Witnesses that your written
statements will be entered into the record in their entirety.
Accordingly, I ask that you summarize your testimony in 5
minutes. To help you stay within that timeframe, there is a
timing light in Webex and, also, on your tables. When the light
switches from green to yellow, you have about a minute to
conclude your testimony. When the light turns red, it signals
that your 5 minutes has expired.
I now recognize Ms. Slaiman for 5 minutes.
STATEMENT OF CHARLOTTE SLAIMAN
Ms. Slaiman. Chair Cicilline, Ranking Member Buck, Chair
Nadler, and Ranking Member Jordan, it's an honor to have this
opportunity to testify before you today on behalf of Public
Knowledge.
I'm Charlotte Slaiman, Competition Policy Director at
Public Knowledge, a nonprofit that has represented the public
interest for 20 years. We value an open internet, free
expression, and access to affordable communications tools and
creative works for everyone.
I'm an antitrust lawyer and a former antitrust enforcement
attorney at the Federal Trade Commission in the Anticompetitive
Practices Division.
Competition is often the best way to make companies pay
attention to what the people want. When companies face few
competitors and are protected by high barriers to entry, they
find they can ignore the interests of everyone else. That's
where you come in.
This Subcommittee has undertaken a year-long investigation,
an in-depth staff report, a series of hearings on the problems
with competition and dominant digital platforms, and now this
series of hearings to address those problems. This Subcommittee
is digging in and doing the work, building a record for new
laws and rules that can actually promote competition on and
against the most powerful digital platforms.
Important antitrust cases have already been filed by
enforcers of both parties against Google and Facebook, but it
is still vitally important that Congress take up these concerns
in a more proactive and comprehensive manner than antitrust
alone can achieve. This hearing rightly zeroes in on the
concept of gatekeeper power, the special power that platforms
have over businesses and consumers that rely on them to reach
each other. This power is the root of the problem.
Gatekeepers can impose contract terms, like high prices or
unfair data access requirements. Gatekeepers can also use their
power to protect themselves from potential competitive threats.
By discriminating and by withholding interoperability,
gatekeepers can pick themselves as winners in a market while
ensuring rivals and potential rivals remain losers. These
gatekeepers exploit incumbency advantages or barriers to entry,
features of the market that make it especially difficult for
anyone to challenge the gatekeeper.
Network effects, especially prevalent among these digital
platforms, occur when a platform becomes exponentially better
and more useful as more and more users join the service. This
creates a chicken-and-egg problem for a new entrant. You need
users to get users. Sheer size can keep customers locked in,
even when there are superior options available.
When the problem is network effects, the solution is
interoperability. Both the Subcommittee's Majority Report and
the Ranking Member's Third Way report highlighted
interoperability as a potential remedy. Public Knowledge
believes there can be bipartisan consensus on interoperability,
and we are excited to work with you to make that happen.
Just as our phone networks are already interoperable--you
don't have to worry whether the person you are calling is on
Verizon's or AT&T's network--Facebook should be required to
offer interoperability with its network to competitors and
potential competitors. For a new social network, this would
help address that chicken-and-egg problem. Innovative
competitors could compete on a level playing field with
dominant platforms.
Interoperability requirements like this are absolutely
necessary to reinvigorate competition on and against digital
gatekeepers. Interoperability creates lasting change to the
structure of platform markets. For markets where a gatekeeper
controls access to key components, it will be incredibly
difficult to sustain multiple competitors without
interoperability, leaving us again with the gatekeeper problem.
Interoperability requirements should be carefully tailored
to maximize competition and innovation. They will need to
change as technology changes. Finding and choosing the most
efficient option requires a level of technical detail and
frequent updating best suited for an agency regulator. Congress
should give clear rulemaking authority to an agency to require
interoperability from gatekeeper platforms for competitors or
potential competitors that meet baseline privacy and safety
requirements.
In conclusion, the world we live in today, where a single
company can dominate search, shopping, or social networking, is
not inevitable. It is, instead, the result of our policy
choices. We have a market structure that tends towards monopoly
because policymakers have chosen not to intervene, but it is
not too late to make a different choice. Congress, led by this
Subcommittee's sterling work, can and, indeed, must pass new
laws like interoperability and nondiscrimination requirements.
Thank you.
[The statement of Ms. Slaiman follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Cicilline. Thank you.
I now recognize Dr. Singer for 5 minutes.
Just be sure your microphone is on, Dr. Singer.
STATEMENT OF HAL SINGER
Mr. Singer. Thank you. Thank you, Mr. Chair, and thank you,
Mr. Ranking Member, and the rest of the Committee, for inviting
me here today. It is an honor to testify.
Big tech's two-part strategy of cloning edge content,
followed by steering users to their clones, or self-
preferencing, presents the greatest threat to edge innovation
and is, arguably, the most vexing monopoly problem in our
lifetimes. Starting an e-commerce business or developing a
killer app or designing a website is a new and critical pathway
to the middle class. The platform's two-part exclusionary
strategy of cloning and self-preferencing the clones threaten
this pathway for many entrepreneurs, and thus, threatens the
American dream.
In light of the findings of the Majority Report, there is
no need to revisit the question of whether the digital
platforms are dominant in their dealings with certain input
providers. They are. Amazon and Apple have buying power with
respect to merchants and app developers on their respective
platforms, as evidenced by increasing or excessive take rates.
Google is dominant with respect to certain websites, as
evidenced by its power to disappear disfavored sites in search.
The question now is what to do about this dominance. Unlike
the Europeans, there is no protection against abuse of
dominance here. Antitrust law cannot assist harmed trading
partners unless the offender's dominance is supported by a
restraint of trade. All too often, it must be a restraint that
crosses the firm's boundaries and results in higher consumer
prices.
While Amazon's requirement to purchase fulfillment services
can and should be challenged under antitrust law, Amazon's
residual market power over merchants cannot. Similarly, while
Apple's exclusionary provisions in app developer contracts can
be challenged under antitrust law, Apple's residual market
power over app developers cannot. Given this gap in protection,
there is an urgent need to supplement antitrust enforcement
with regulatory protections. There are two policy options.
The first is structural separation or a line-of-business
restriction. You can be the platform, but you can't also own
the content riding over the platform. Because structural
separation only covers control through ownership, this approach
must be bolstered with rules against control via contracting,
such as bans on exclusive dealing.
The second option is a nondiscrimination regime, which
would allow platforms to have a toe in the content space, but
would prevent them from leveraging their platform power into
that content. Nondiscrimination would be modeled after section
616 of the Cable Act, which passed on a bipartisan basis. The
program carriage rules of the Act prevent cable operators from
disfavoring independent networks that compete against the cable
operator's network. As with program carriage, nondiscrimination
here would be enforced with a private right of action for
victims of discrimination.
Now, no proposal is a panacea. Line-of-business
restrictions would solve the problem of cloning and self-
preferencing, but, to the extent that platforms have anything
of value to add in the content space, that value would be
eliminated.
A nondiscrimination regime would permit cloning, but would
prevent the platform from monetizing the clone via self-
preferencing. Yet, the nondiscrimination regime would have to
be policed by a tribunal, which would entail monitoring costs
and could be gamed by platforms with superior information.
There's a hybrid approach that I'd like the Committee to
consider. Congress could empower a tribunal with the authority
to offer three types of relief as it polices acts of
discrimination: (1) Injunctive relief; (2) damages to the
victims of discrimination; and (3) structural separation. In
cases involving a recidivist discriminator who shows no respect
for the nondiscrimination regime or where injunctive relief
proves unworkable, the tribunal could require the platform to
sell off its content arm or cease operations in the content
space.
My embrace of nondiscrimination rules today doesn't mean
it's the only portion of the majority report's recommendations
I support. I also embrace the report's call to nullify bad
legal precedent that created unnecessary impediments for
antitrust plaintiffs, beginning with the American Express
decision.
I'll close by raising one final point in remedy design. The
nondiscrimination regime, or any regime requiring the
platform's cooperation and respect for the Rule of law, is
vulnerable to the extent that the platform believes it is above
the law. Recent developments imply that certain platforms have
accumulated so much economic and political power that they may
not be governable, which militates in favor of cutting them
down in size.
Amazon preemptively sued Attorney General Letitia James of
New York for considering new worker safety protections. Google
threatened to shutter its search engine in Australia in
retaliation for a new law that compels Google to share a
portion of the advertising revenues it earns off the backs of
newspapers. Facebook blocked links to news stories from
Australian news publishers and users, and even launched its own
supreme court.
Accordingly, this Committee should draft two bills, one
that imposes structural separation with the aforementioned
safeguards right out of the gate, and a second that imposes a
nondiscrimination regime with structural separation
incorporated as a remedy.
I look forward to your questions and thank you again for
having me.
[The statement of Mr. Singer follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Cicilline. Thank you very much, Dr. Singer.
I now recognize Mr. Gundersen for 5 minutes.
STATEMENT OF ERIC GUNDERSEN
Mr. Gundersen. Chair Cicilline, Ranking Member Buck Nadler,
and the Members of the Committee, thank you for inviting me
here today.
My name's Eric Gundersen. I'm cofounder and CEO of Mapbox,
a mapping and location company. We make maps. We don't have an
app that you can download. Our customers are developers. We
provide the technology--APIs and SDKs--that let them add maps
to their apps or websites for weather maps or delivery apps,
major news sites, social messaging, and automotive. Maps is
critical to future industries, from drones to delivery,
electric vehicles, autonomous driving, and augmented reality
navigation.
This work, it all started in 2009. I was in Afghanistan
supporting the State Department digitizing old Soviet maps
ahead of the country's first democratic presidential election.
We needed better mapping tools to do our job. So, we built
those tools. In fact, we did it all from DC, not far from where
you're sitting. We, then, opened our tools up to other
businesses, launching Mapbox as a platform for everyone.
Today, we're the largest independent mapping company, and
our main competitor is Google Maps. That said, it's all
relative when you're competing against giants. Analysts
estimate that Google Maps, if it was a standalone company,
would be valued at more than $60 billion. That was a couple of
years ago. So, I'm sure it's gone higher.
This Committee is holding a hearing to better understand
how gatekeeping works. So, let me be clear: The gatekeeping is
brazen and happening right in front of us, posted on Google's
website in their own terms of service. There's a lot that can
be said about how we got to this point, but I want to focus on
what needs to be done today.
I need your help now. My customers need your help now. I
need Google Maps to stop bullying and intimidating customers
who want to pay both for Google Search and use Mapbox maps. The
problem is Google uses its dominance in search to suppress
competition in maps.
Look, all of us have searched for something on Google. All
of us have looked at a Google map. All of us can see that
search and maps, they're different products. Google's terms of
service State that, if you are a developer using Google's
Search on a map, that the map has to be a Google map instead of
any other company's map, like Mapbox. So, to use Google Search
with a map, developers are forced to use Google Maps and only
Google Maps. There's no technical reason to restrict this
interoperability.
Customers, developers, they should be able to buy whatever
maps they think are the best solution for their needs without
anticompetitive interference from Google. This problem is
getting worse. More and more of our customers have been
targeted by these exclusionary practices over the years, which
forces them to stop using us, and not because Google Maps is a
better product, but because of Google's restrictive terms of
service.
Tying together Google's search with Google Maps is not just
anticompetitive for Mapbox; it impacts a huge number of
developers and customers because it prevents developers from
building the best product possible. We've watched customers
spend months dismantling what they had built because of threats
from Google.
This problem will get more complicated in the future with
subscription bundling of services and bulk pricing that creates
ecosystem lock-in. I mean, just look at the deal last week with
Google Maps and Ford. That's a six-year, several billion-dollar
deal that not only locks Ford into Google Maps and Google
Automotive Services, but also obligates Ford to use Google
Cloud rather than staying with Microsoft Azure.
So, gatekeeping today not only drives short-term dollars to
Google; it's blocking competition long term. It's blocking
product development and innovation because, look, maps get
better the more people that use them. By blocking customers
from using Mapbox today, Google deprives us of the data and
scale we need to grow and make better products, which makes it
harder for us to build more competitive maps and compete
against Google in the future. All of this is hurting our
customers and developers and the products they're building.
Mapbox has been fortunate, thanks to the talented team that
has built some amazing technology and the developer community
who believes in us. We're an exception. I mean, I remember
starting it and how many people told us that we were crazy to
take on Google. Well, how many folks had great ideas and didn't
make it this far?
We're losing out on innovation because of this chilling
effect. We want to be able to compete on a level playing field,
be able to sell our products to customers who want them.
Thank you, Chair Cicilline, Ranking Member Buck, and other
Members of the Committee, for the great reports that you're
already putting out and the attention you're paying to this
issue. The Committee has already done important work describing
the problem. Now, we need rules of the road that aren't only
clear, but actually enforced.
It's an honor of a lifetime to be called upon by you today
to discuss how we help our country build a stronger economy and
continue improving America's competitiveness and innovation.
Thank you all for this opportunity.
[The statement of Mr. Gundersen follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Cicilline. Thank you, Mr. Gundersen.
Professor Lipsky is now recognized for 5 minutes.
STATEMENT OF TAD LIPSKY
Mr. Lipsky. Thank you, Chair Cicilline, Ranking Member
Buck, and the Members of the Subcommittee. I'm very grateful
for the opportunity to address you today at this hearing.
The U.S. has been the world's leading economic powerhouse
for decades, and it is the unquestioned innovation leader not
only in digital technology, but in most other fields of
advanced technology as well. Although many laws and policies
create the framework that shaped this extraordinary record of
success, our antitrust enforcement system must be given
substantial credit, as it is our main system of government
control for business conduct applicable throughout our
competitive private enterprise economy.
There is no evident basis for declaring any systemic
failure of our antitrust laws or its enforcement institutions,
and there's no evident basis for declaring a crisis or
attempting to impose foundational or drastic changes of those
laws and institutions. Of course, we should always be willing
to examine the details of the system and propose adjustments
after thorough vetting of potential consequences, both intended
and unintended. Of course, the broad picture of profound
success of our economy and antitrust enforcement system should
not immunize or excuse any specific anticompetitive conduct.
The success of our antitrust system can be attributed to
four elements.
First, the key substantive provisions of the antitrust laws
have always focused on prohibiting anticompetitive conduct:
Restraints of trade, monopolization, and anticompetitive
structural transactions.
Second, from the very start in 1890, our antitrust
enforcement laws were backed up by very powerful tools, both
civil and criminal enforcement by the Department of Justice,
private treble damage actions by anybody injured by an
antitrust violation. From 1914, the FTC provided administrative
enforcement, and additional enforcement options are available
to State attorneys general, including by parens patriae
actions.
Moreover, each of these enforcement tools has been
dramatically enhanced by later amendment, including escalation
of criminal violations from misdemeanors to felonies, enormous
increases in maximum criminal sentences and fines, the creation
of very powerful civil class action procedures, passage of the
Clayton Act and the Celler-Kefauver amendments to the Clayton
Act, and the Hart-Scott-Rodino Act, among many others.
Third, interpretation of the key statutes has been
entrusted to our article III Federal courts to work out via the
common law process the particular rules that apply to the
myriad forms of anticompetitive conduct that have been
encountered over the 130 years since passage of the Sherman
Act. Our article III courts have proven to be a uniquely
powerful and effective mechanism for shaping the very brief and
general prohibitions in the antitrust statutes into a workable
and effective system of controlling an enormous variety of
competitive conduct encountered throughout our massive,
complex, and dynamic economy in so many different circumstances
and under so many distinct competitive and technological
conditions.
Fourth, after a long period of consideration and a certain
degree of trial and error, the antitrust enforcement
community--the Supreme Court, the antitrust agencies, antitrust
law and economic scholars, practitioners, and other Members of
the community--have coalesced around a consensus that firms
accused of antitrust violations should be entitled to defend
themselves, and that the antitrust laws should be construed to
safeguard vigorous, dynamic competition rather than specific
competitors or other specific economic stakeholders.
We should not alter these fundamental characteristics on
which the strength and success of our antitrust enforcement
system is based. This is especially when, as now, each of the
leading technology companies is under specific challenge in
particular antitrust cases brought by the FTC, the Antitrust
Division, private parties, and dozens of State attorneys
general. To consider major shifts in substantive antitrust
standards or enforcement mechanisms prior to resolution of this
litigation suggests fundamental distress of the judiciary,
which has played such a key role in the effective
implementation of our antitrust statutes over time.
That being said, some of the proposals contained in the
Majority Staff Report and recommendations are worthy of
consideration. Since my time is short, I want to mention just a
couple that seem to me to deserve particular consideration.
Those are the proposals for interoperability and proposals for
portability of data. I think there is a family resemblance to
mobile number portability, denied boarding compensation, the Do
Not Call Registry, and other ready-to-hand consumer aids that
lower barriers to entry and assist the process of competition,
which I think is our best safeguard of a competitive digital
technology sector.
Thank you very much for your attention.
[The statement of Mr. Lipsky follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Cicilline. Thank you, Professor Lipsky.
I now recognize Mr. Thorne for 5 minutes.
STATEMENT OF JOHN THORNE
Mr. Thorne. Chair Cicilline, Ranking Member Buck, the
Members of the Subcommittee, Chair Nadler, Ranking Member
Jordan, I'm honored to appear before the Subcommittee. The
views I express are just mine; nobody else's.
I represent both antitrust plaintiffs and defendants.
Working on both sides of the ``V,'' I have both positive and
some cautionary suggestions to offer, as you consider
legislation to energize antitrust enforcement and address
gateway power.
There is an urgent need for energetic, aggressive law
enforcement. To quote a friend, and noted price theorist,
Archbishop Desmond Tutu, ``The price of freedom is eternal
vigilance. Economic freedom does not sustain itself. It must be
actively advanced and defended.''
I have four specific recommendations to offer.
First, resources and expedition. Antitrust cases are hugely
expensive. We need more enforcement. That requires more funding
for DOJ and FTC.
Closely related to resources is how long it takes to get an
antitrust case to trial. If it takes years to investigate, and
then, years to get to trial, that's a lot of years the public
is denied competition waiting for law enforcement. I know these
cases can move faster because I've seen it done. Moving faster
will conserve resources, boost agency staff morale--they don't
sign up for this at below market wages for decades--and if you
get a case to trial faster, you get the results for the public
faster. The Subcommittee should take immediate actions to
increase funding for enforcement and to expedite antitrust
cases in the courts.
Second, you should consider stopping bad conduct before it
happens. In a significant merger review, DOJ or the FTC is
given a period of time to investigate before the merger is
allowed to close. There is what's called a waiting period while
DOJ or FTC investigate the merger. The ability to intervene and
stop bad conduct before it happens, without the huge burden in
the courts of obtaining a preliminary injunction, should be
extended to monopoly conduct.
I have a current example that I describe at length in the
written testimony. Apple is about to introduce a new change to
its apps store that threatens free apps that millions of iPhone
and iPad consumers currently are using. Apple will require--
this is just a few weeks away--free apps to require user
consent before passing valuable advertising data to
advertisers, while Apple on its apps will be able to pass that
information by default, unless the users opt out.
Apple will enforce the new opt-in Rule by forcing free apps
to display a scary, misleading pop-up about what free apps do
with the data from a user's device. Apple will cut ad revenue
to free apps while Apple protects itself.
Free apps are either going to have to charge fees--they go
from free to being paid for--or they are going to exit the
market. Apple wins either way because it takes a big cut, 15 or
30 percent of all subscription fees, and it also offers its own
free apps like Apple News that it wants to shield from
competition with free rivals. Consumers will be the losers.
They will get fewer, more expensive apps on the app store.
Third suggestion, you should take advantage--and you have
heard other opening remarks on this--of the experience with
other monopoly remedies.
I represented pieces of the broken-up Bell system, and I
worked on issues coming out of the Bell breakup remedy. Parts
of that remedy were very effective, other parts less so. In
particular, as Ranking Member Buck mentioned in his opening,
requiring portability of telephone numbers and interconnection
between rival networks reduced entry barriers.
By contrast, the line of business restrictions that are
akin to a Glass-Steagall Act turned out to create a lot of
administrative burdens and were more pure regulation, not
resembling antitrust enforcement.
Fourth suggestion, that is that enforcement is most needed
where monopolists are affirmatively disrupting rivals'
independent efforts to compete. As I mentioned, there is an
example brewing with Apple. The cases that have been filed by
the Department of Justice against Google in the District of
Columbia and by a 10-state group in Texas fit that paradigm.
That is where Google is interfering with independent efforts by
rivals to compete.
Both of those cases are good under current law. You don't
need to change the antitrust laws for those cases to go
forward. We do need to do the work of enforcing the law and to
do it quickly.
I look forward to your questions.
[The statement of Mr. Thorne follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Cicilline. Thank you, Mr. Thorne.
I now recognize Ms. Harper for 5 minutes.
STATEMENT OF MORGAN HARPER
Ms. Harper. Thank you. Chair Cicilline, Ranking Member
Buck, and the Members of the Subcommittee and the Full
Committee, thank you for the opportunity to give this
testimony.
I appear before you today as someone who has devoted her
career to figuring out how to broaden economic opportunity in
this country. That pursuit has led me many places--the Federal
Trade Commission, a corporate law firm, and the Consumer
Financial Protection Bureau. I currently serve as the Senior
Advisor at the American Economic Liberties Project, an
antitrust advocacy organization which does not accept any money
from corporations.
What these experiences have shown is that until we address
corporate power at its core the rest of us are just playing for
economic scraps, and currently there is no greater power that
threatens our livelihoods and civil liberties than the big tech
platforms, namely Facebook, Google, Amazon, and Apple.
That fact is best put by none other than Facebook CEO Mark
Zuckerberg, quote, ``In a lot of ways, Facebook is more like a
government than a traditional company. We have this large
community of people, and more than other technology companies
we are really setting policies.''
As the Subcommittee's extraordinary 16-month investigation
and report revealed last year, big tech corporations have and
abuse their extreme market power. It is impossible to include
an exhaustive list of the harms this dominance causes because
they are so large and so intertwined with much of our economic
activity.
Collectively, these firms control the financial lives of
many American small business owners and workers. They enable
the rampant spread of misinformation, which has compromised our
elections and the safety of our schools, communities, and even
Members of Congress. They have almost entirely destroyed a core
American institution, a free and vibrant press in the form of
local newspapers.
Unlike what they would have us believe, the dominant tech
firms did not achieve this market power through only superior
business acumen. Rather, they exploited gaps in public policy,
including the weakening of merger law and decades of lax
monopolization enforcement to build dominance by aggressively
acquiring other businesses and employing anticompetitive
tactics to squash competitors.
This unquestionable dominance of the Subcommittee to launch
the most thorough investigation into monopoly power in 50
years, ultimately resulting in recommendations that make clear
a traditional, regulated competition approach, including
structural separations, is necessary to rein in these
corporations and restore freedom in the digital markets.
The United States has a tradition dating back to the 1800s
with the railroads of using a regulated competition approach to
limit corporate power. Over the course of the 20th century,
policymakers used laws, regulations, and antitrust suits to
break up banks, television networks, and electric utilities.
The result was the most robust economy in global history with
high wages, high technology, and high business formation.
As the research of many economists has shown, there are
several reasons to apply such an approach to the dominant big
tech platforms. First, structural problems demand structural
solutions. Conflicts of interest are baked into the platforms'
business models. The only way to address these conflicts is to
limit their operation in certain markets.
Second, regulatory tools alone cannot address the problem
of entrenched market power and can sometimes make it worse. The
dominant tech platforms know they offer critical infrastructure
and can effectively ignore regulation, and we have seen this in
the past.
Finally, structural separations are also easier to
administer. The platforms and their business practices change
rapidly. Structural remedies offer an ex-ante way to address
the root cause of a platform's dominance without costly and
ultimately ineffective supervisory efforts.
Some claim that breakups are unduly burdensome, but the
evidence doesn't support that. In fact, there is reason to
believe that breakups might be easier to accomplish with a tech
platform than some other commodity-based industries. Let's keep
in mind that corporations commonly initiate self-imposed
breakups, otherwise known as restructurings, as all the time.
Digital platforms, similarly, will adjust with changed
business models after structural separations. That alone will
not entirely tame the problem of dominance. Regulation will be
needed. Dominant firms should have to give market players equal
access to their platforms, and we must make changes to
antitrust law to restore mid-20th century monopolization and
anti-merger statutes. Breaking up firms is relatively useless
if they can simply recombine.
Facebook has taken out full-page ads in The New York Times
inviting regulation because its executives know that the true
threat to their business model is a breakup. When the
Australian government moved forward with a regulation forcing
them to compensate news outlets for their content, far from
welcoming the measure with open arms, Facebook announced it
would ban all news.
They are retaliating to scare Australia and other
governmental bodies like this Congress from imposing even more
aggressive remedies. Only structural separation can limit their
power to enable effective regulation.
I encourage the Subcommittee to continue reasserting your
congressional authority and swiftly implement the report's
recommendations. Under your leadership, Congress can restore
the government's own legacy of standing up to corporate power
that threatens our American way of life. It is time to break
them up.
Thank you.
[The statement of Ms. Harper follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Cicilline. Thank you, Ms. Harper.
Thank you to all the Witnesses for your opening statements,
and we will now proceed under the 5-minute Rule with questions.
I will begin by recognizing the Chair of the Full Committee,
Mr. Nadler, for 5 minutes.
Chair Nadler. Thank you, Mr. Chair. Some have suggested
that current law is enough to police anti-competitive practices
in the digital economy and beyond. While I agree that the plain
language and legislative history of the antitrust laws are an
unambiguous prescription in favor of competition and against
monopoly--and, frankly, should be flexible enough for the
modern economy--it is abundantly clear that they are not.
That is because for decades courts have strayed far from
the intent and plain meaning of these laws, and enforcers under
both Republican and Democratic Administrations have not done
nearly enough to curb the rise in abuse of online market power.
Ms. Slaiman, do you agree that it is the constitutional
responsibility of Congress, not the courts, agencies, or
private corporations, to enact laws that reverse these trends?
Ms. Slaiman. Yes, absolutely. I think it is urgent that we
do so as quickly as possible, because the longer that we are
waiting, the more competition we are losing. Thank you for that
great question, Mr. Chair.
Chair Nadler. Thank you.
Ms. Harper, isn't it true that the policies that are under
discussion today--nondiscrimination, interoperability, and
structural separation--are the same tools that Congress has
employed for nearly a century to create competition in highly
concentrated markets and to complement effective antitrust
enforcement?
Ms. Harper. Thank you for your question, Chair. That is
absolutely right, and actually the structural separation,
regulated competition approach is in line with our American
tradition of addressing corporate power when it has gone too
far.
So, in combination with regulations once we have broken up
these companies they are able to actually regulate, we will be
able to bring competition back to the market and have room for
small businesses, entrepreneurs, and ultimately workers to
benefit as well.
Chair Nadler. Ms. Slaiman and Mr. Singer, what is your
response to some of the arguments we have heard that the
proposals you support would somehow harm smaller competitors,
reinforce the market power of dominant firms, or harm
consumers' privacy? Mr. Singer first.
Mr. Singer. I can take that one first. Well, it doesn't
make sense, at least with respect to the nondiscrimination
regime. You couldn't be a respondent. No one could haul you in
front of the tribunal unless you were determined to be a
dominant platform. So, the notion that the nondiscrimination
regime, as I have contemplated it, would expose small merchants
to liability is just a farce.
Chair Nadler. Ms. Slaiman?
Ms. Slaiman. Thank you. So, interoperability as a
regulatory tool is really targeted at helping those smaller
competitors to be able to get a foothold in the market. It is
important that we are targeting the interoperability
requirements. We don't need every single feature to be
interoperable. We want to have some differentiation of
products.
So, I think that is one of the reasons why it is so
important to have an agency regulator that is making a lot of
these detailed decisions about what type of interoperability is
appropriate for different markets. The whole goal is to support
those small businesses and help them to thrive.
Chair Nadler. Now, in a written statement for today's
hearing, Consumer Reports argues legislation to prohibit the
abuse of gatekeeper power and lower barriers to entry online is
essential to creating a marketplace that empowers consumers
with choice and, quote, ``the ability to go elsewhere for a
better deal, which means businesses have to be responsive to
consumers' interests.''
Ms. Slaiman, can you explain why creating competition in
this area is so important to creating a better internet, a
stronger economy, and a healthier democracy?
Ms. Slaiman. Yes. Thank you, Mr. Chair. So, right now, we
have a market structure with dominant digital platforms that
tends towards monopoly. There are important incumbency
advantages or barriers to entry that we think are protecting
these gatekeepers in that important gatekeeper role.
So, that is what we are trying to address here with these
new tools that could break open the gates, so that there can
really be competition in these incredibly important features of
our lives.
The way that we are finding information on the internet--
information discovery--ought to be a place where there is a lot
of innovation and competition. The way that we communicate with
our friends--even businesses and municipalities are now using
social networking to reach people--that needs to be a
competitive place where consumers can have choice.
So, it is vitally important that we are adopting these new
tools, so that we can promote competition against these
gatekeepers and really have some choice for people.
Chair Nadler. Thank you, Mr. Chair. I yield back.
Mr. Cicilline. Thank you. The Chair yields back.
I now recognize the gentleman from Colorado, Mr. Buck, for
5 minutes.
Mr. Buck. Mr. Chair, I would ask that you recognize Mr.
Owens, and I will then go towards the end, if that is okay.
Mr. Cicilline. The Chair recognizes Mr. Owens for 5
minutes.
Mr. Owens. Thank you, Mr. Chair and Ranking Member and the
Witnesses. First, I really do appreciate this bipartisan
process you guys are going through here. This is just
remarkable, exciting to me, and we are looking at probably the
greatest threat we have to our freedoms in so many different
ways.
Anyway, I want to bring a little different context. I was
for 10 years in the telecommunications field as a Nextel
corporate account executive, Sprint corporate account
executive, and my last one was Motorola national account
executive. So, I had a chance to see firsthand how portability
and interoperability work.
It was a time when going from Nextel to AT&T--the benefits
of maybe a better price, better customer service, even a better
experience--was just not good enough if you had to lose your
number and your contacts at the same time. When I look at
interoperability, it is something we see very, very easy today.
Seamless communication, we see it every single day; we text
from an Apple to an Android. We know the difference because if
it is the same platform, it is blue. If it is not, it is green.
Sometimes we might get a little irritated when our text
pictures will not go through, but that is progress, because at
least now we take for granted you should do that.
Imagine a day in which Google data, Facebook data--ours,
not the corporation's--seamless and interoperable and able to
be able to be seamless across the different platforms. Imagine
a day where innovation, an innovative startup, can actually
compete and offer to pay for your data.
I want to ask Mr. Thorne, the experience with Verizon over
the years, in your experience, do you believe that data,
portability, and interoperability requirements work? Can they
promote competition? Would it be easy to administer?
Mr. Thorne. Yes, yes, and no. As someone remarked earlier,
the details matter a lot. It is like the question, do you
believe in infant baptism? Yeah, I have seen it. I have seen it
happen. It does work.
In the telephone network of the past, we were able to open
competition by defining relatively stable interfaces, and those
were places where you had to connect to others, and small
telephone networks were able to build up.
The way the Bell system was first monopolizing way back 100
years-ish ago was AT&T would go into local competitive markets
and say, ``This is the telephone company I will connect with.''
Your name can be Bell. You can be Illinois Bell. Chicago
Telephone Company is where I grew up. Chicago Telephone
Company, competing telephone company, we are not going to
connect to you.
So, you want long distance access? Illinois Bell wins.
Chicago Telephone Company is still engraved in a piece of stone
over a bar on LaSalle Street.
So, they were picking and choosing by denying or granting
interconnection, who would win or lose. Conversely, it turns
out to be a terrific remedy, but the details matter a lot. As
you know, there can be a charge for interconnection. Telephone
companies had this idea that, okay, if you are going to
terminate a call, you have got to pay for termination. Then
entities--
Mr. Owens. Can you get a little closer to your microphone?
Mr. Thorne. I am sorry. Thank you. There was all sort of
additional details that mattered in making interconnection
effective. It probably does require an agency to continue that
enforcement. I am not sure you need an agency to fix these
problems, but that kind of remedy does work.
Mr. Owens. Okay. What type of guardrails will we be looking
for this data portability and interoperability? How do you--
Mr. Thorne. I, frankly, do not know enough about the
details of what kinds of portability or interconnection would
solve these particular problems. I just don't have enough
information. That is going to be a hard engineering question
for you to address.
Mr. Owens. Mr. Singer, would you like to add anything to
those comments?
Mr. Singer. Just that I am also a supporter of portability
and interoperability mandates in this area. I have seen it work
in mobile number portability, as you mentioned, and I have
faith that it would also work here.
Mr. Owens. Thank you. I yield back my time.
Mr. Cicilline. I thank the gentleman.
I now recognize myself for 5 minutes, and I really want to
say thank you to the Witnesses for the really excellent
testimony.
Dr. Singer, I would like to begin with you. I think there
is consensus, both in the majority report and in the report
prepared by my Republican colleagues, that self-preferencing is
a problem with the dominant platforms. In my opening question
in the hearing to Google's CEO I asked specifically about
scraping content, and discriminating against rivals and
steering consumers to their own goods and services.
Really I would like you to drill down a little bit more
about how self-preferencing undermines competition, and then
what a nondiscrimination regime would look like in practice,
like how that would work.
Mr. Singer. The way that it undermines competition, I refer
to it as the towel drops. So, an entrepreneur watches her idea
get stolen and then watches the platform steer users to her
idea, and basically gives up, throws in the towel, and that is
the harm that we are worried about. It is an innovation harm.
There have been studies that have documented what happens
when affected sellers on Amazon's platform get their ideas
stolen. They end up selling fewer items on Amazon as a result.
There are studies that show what happened to app developers on
Google's app site, app store, when they have their ideas
stolen. So, it is well documented, the nature of the harm.
How it would work is, I am not doing anything very novel. I
have litigated several cases in front of the FCC, Federal
Communications Commission's administrative law judge under
section 616 of the program carriage regime. I think it works,
and I think that the same sort of structure could be set up. We
just need an ALJ and a conference room and a standard, and a
victim of discrimination would come forward and have to prove
that they are three things.
First, They are similarly situated to the app or
merchandise of the platforms. Second, that they have received
disparate treatment or disfavored treatment as a result of
their lack of affiliation, as opposed to some other legitimate
business justification. Third, as a result of one and two, they
have suffered material injury.
If you can show those things, you win under the FCC's
tribunal, and you can get relief. The relief that you get is
damages, lost profits, and you get injunction relief as well.
I would add a third component here, which is structural
separation, as I mentioned in my opening remarks.
Mr. Cicilline. Great. Thank you very much.
Ms. Slaiman, one of the issues that I have been very
concerned about is how ineffective enforcement policies can
actually harm competition and consumers. I first said this in
the context of the FTC settlement with Facebook following the
Cambridge Analytica scandal, and I think there have been a
number of examples in which very significant fines have really
done very little to change the behavior of companies and their
kind of monopoly power.
So, my question to you is, is it clear from this sort of
history that these big fines are--these monetary penalties,
even if they are in the hundreds of millions or billions of
dollars, are really insufficient to stop these companies from
engaging in the kind of conduct that harms competition,
consumers, and workers? If so, what should we be thinking
about?
How does this inform how we should be developing new
legislative enforcement mechanisms, sort of in light of this
history and the size of these platforms and what seems to be
sort of no financial penalty large enough to actually make a
difference?
Ms. Slaiman. Yes, Mr. Chair, that is absolutely right. I
was disappointed to see that the focus of the results from the
Cambridge Analytica investigation on Facebook was monetary. We
really needed to see big changes to how Facebook was treating
user data, and I didn't think we saw enough of that.
So, I think that is something to keep in mind going
forward. You are absolutely right that monetary damages will
usually be insufficient with these platforms, and we really
need to be making changes to how they are operating the
business, and really changes to the structure of these markets
is I think what interoperability can do.
If I may, Mr. Chair, I would like to add something to Mr.
Singer's point in response to the last question about
nondiscrimination. I think there is an additional harm to the
harm that he mentioned about competition on the platform.
Platforms that are gatekeepers can actually also use
discrimination as a tool to protect their gatekeeper power. It
is not just about competition on the platform but competition
against the platform.
One of the very few ways that smaller companies might try
to compete against a gatekeeper platform is to start out
selling a product on the platform or providing a service
through the platform, and to expand or to intermediate building
a direct relationship with consumers, so that they no longer
rely on that platform.
If the platform has the power to intervene and discriminate
against that potential competitor so early on in the process,
they can prevent anyone from being able to compete against them
at that gatekeeper platform level as well. So, I think that is
another important harm we should keep in mind with a
nondiscrimination rule.
Thank you.
Mr. Cicilline. Thank you, Ms. Slaiman.
I see that my time has expired. I now recognize the
gentleman from California, Mr. Issa, for 5 minutes.
Mr. Issa. Thank you, Chair.
Professor Lipsky, I have the benefit of being able to look
up at the pictures on the wall and recognize all but two of
them as people that I have known and served with. During that
time, the last 20-plus years, 20 years, what I have noticed is
that corporations come to us regularly asking us to pick
winners and losers.
Some 20 years ago, Sun Microsystems sat at the chairs that
others are sitting at today and told us about Microsoft as a
monopoly with barriers to entry, particularly in Internet
Explorer, a product that is very hard to find in use today, but
at that time it was dominant.
So, I am more reticent to automatically say that a company
that has earned recently market power, great market power, is
inherently going to be able to retain it, even if they use many
of the techniques that have been talked about here today.
I do have a couple of areas I would like to dwell on today
that I think are tangential to this problem and could go a long
way toward the United States leading the world in free,
fairness, and opportunity for competition.
One of them is back to that question of who owns the data
and what we own. The European Union, famously of course, has
this right to be forgotten, meaning a right to put your
information out there and then later have it stripped back. The
United States has resisted that. As many have talked about
owning a phone number, would it be helpful if Congress, either
directly or through an administrative process, began
extensively defining that data which inherently does belong and
can be made portable by the consumer?
Mr. Lipsky. Thank you for the question, Representative
Issa. I think this is an area worth exploring. I am the first
to confess that I don't know enough of the details about the
significance of particular pieces of data, the privacy laws as
they now exist, and what kind of administrative solutions are
available.
I think, in principle, there are a number of solutions like
the cell number portability, and I also mention, just because
it is part of my experience, things like denied boarding
compensation or other sort of convenient rules that work to
assist the consumer or the user in taking advantage of such
competitive options as exist.
So, I would hesitate to endorse any particular approach or
to get into the details, but I think among the recommendations
made by the majority staff report and recommendations, this is
one that probably deserves to be explored, not necessarily as a
legislative or compulsory government exercise, but perhaps this
is someplace where something like a standard-setting, standards
development organization should be thought of. Give the private
sector a chance to establish the basic principles, and then
Congress can step in to the extent that the result is not
satisfactory.
Mr. Issa. Thank you. Professor Throne, carrying on with
that, I am going to use the example currently of Android
products and Parler. When Apple threw Parler off of its site,
even while it was the number one selling item on its site, it
denied it access because it is a closed system, while in the
case of an Android product, Parler was free to have a device or
an app that they could put on their own site, once they got a
site back up, that gave them an opportunity to go into the
product.
Should we, in products such as Apple and non-Apple phones,
be looking at the real question of whether or not the consumer
owns the right to put products onto theirs? In other words, can
Apple continue to have a system that eliminates the ability of
anyone to add something to their software? Which, of course, if
our PCs were delivered with no ability to add another software
package of any sort, unless it came from the vendor, we would
certainly call that an unlawful tie-in.
So, how would you feel about us having a role in that? I am
using Apple as the example versus the Androids?
Mr. Thorne. Apple and Android are both good examples of
places where you have got a lot of market power. The defense,
for example, you would hear Apple say is, well, if a consumer
doesn't like that I have disabled the apps that they were
using, they will just switch to the other platform.
My phone costs about $1,000. I haven't paid it off yet. I
am not going to switch to another phone just because of an app
choice. That is a kind of power similar to what the Supreme
Court said is an antitrust case in the Eastman Kodak against
Image Technical Services case.
My view only maybe, I think under existing law there is an
antitrust case that could remedy some of that stuff right now,
for example, what I described as eligible.
One other point to follow up on is your comparison to
Europe. I think what Europe has done with privacy is a
benchmark for what does or doesn't work. Under the GDPR privacy
protections, the opt-in regime for apps produces about 95
percent of consumers opting in.
What Apple is about to do to free apps, people expect it
may be 20 percent. That is a signal that they are doing
something different and bad.
Mr. Cicilline. Thank you. The time of the gentleman has
expired.
Mr. Issa. Thank you.
Mr. Cicilline. I now recognize the gentleman from Colorado,
Mr. Neguse, for 5 minutes.
Mr. Neguse. Thank you, Mr. Chair. Thank you to Chair Nadler
for holding this important hearing as we move to the next phase
of the Subcommittee's work examining the rise of market power
online.
I want to say thank you to Chair Cicilline, in particular,
for the comprehensive investigation that he helped this
Committee lead last Congress. As we learned from that
investigation, our existing antitrust laws, competition
policies, and current enforcement efforts are not adequate to
address the growing market power and anticompetitive business
practices of companies in the digital marketplace.
This hearing really offers an opportunity to reflect on the
work that the Subcommittee did during the last Congress, as
well as reflect on the work left to do to ensure that our
digital marketplace is fair for users, consumers,
entrepreneurs, and small businesses.
So, I want to thank the Witnesses for being here and for
their testimony. I have a question around innovation. Before I
get to that, I guess I just want to make sure that I am
understanding the testimony of the Witnesses. My understanding
on interoperability is that, generally speaking, each of the
Witnesses supports us--Congress--exploring the potential ways
in which we could perhaps ensure that interoperability is
applied in the context of the digital marketplace in social
media companies.
I will just go through each Witness to just make sure that
I have correctly stated your views. Ms. Slaiman, is that
correct?
Ms. Slaiman. Yes, absolutely.
Mr. Neguse. Mr. Singer?
Mr. Singer. Yes.
Mr. Neguse. All right. Mr. Gundersen?
Mr. Gundersen. Yes. The interoperability is not technically
the hard part we should be discussing. What I am sharing today
is the problem with the collusion.
Mr. Neguse. Agreed.
Mr. Gundersen. Yeah.
Mr. Neguse. Yes, sir.
Professor Lipsky?
Mr. Lipsky. Yes.
Mr. Neguse. Mr. Thorne?
Mr. Thorne. I have seen it work, and subject to the
details, I think it will work in new places.
Mr. Neguse. Ms. Harper?
Ms. Harper. Yes. Also, structural separations and other
considerations. Yes.
Mr. Neguse. Thank you. So, and the reason I ask that is
because this is a very complex topic. Obviously, I am
supportive of any number of other reforms that we are
exploring, both as part of this hearing and will be exploring
in the coming weeks and months.
It strikes me that, given your testimony, the breadth of
experience and, shall we say, political ideological views of
the Witnesses that are gathered before our Committee, all
agreeing that we need to do something about interoperability to
me suggests that this is an area ripe for the Committee to
immediately move on in a bipartisan fashion.
So, I would just--I appreciate all of your candor with
respect to answering that particular question, and I hope that
we can in short order move on this particular issue.
Now, innovation, over the course of the Subcommittee's
investigation, we heard the same story from sellers,
developers, entrepreneurs, about big tech's impact on
innovation. An individual comes up with a new idea, a product,
does all the market research, starts selling the product on the
platform, which opens it up--the data collection from the
platform--becomes a best seller, and then gets their idea taken
from them by the platform and is driven out of business,
creating what some people--venture capitalists and others--have
called an innovation kill zone at the platform's edges.
Mr. Singer, in one of your publications in Pro Market, you
say--and I have a quote, ``If left unchecked, the resulting
competitive landscape could become so inhospitable that
independents might throw in the towel.''
I represent Boulder and Fort Collins, Colorado. They are
two of the fastest-growing, most innovative tech hubs in the
country, so, as you can imagine, very concerned about these
types of tactics. I guess I would like to see if you might
expound on what changes to Federal antitrust law, or to our
regulatory regime, Congress should consider to deal with this
particular threat to innovation.
Mr. Singer. Thank you. I think the change that I point out
is that we need to create a venue in which a victim of
discrimination, which typically falls on the heels of
appropriation, can bring his or her complaint. Right now, the
only venue for such a victim would be an antitrust court, which
is inhospitable for the reasons I lay out in my piece. In
short, it takes too long and I don't think the standard is
right.
So, I think that if you want to stop this process, if you
want to restore this pathway for entrepreneurship in America,
we want to create a venue, and we want it to be fast, and we
want the standard to be achievable by complainants who bring
cases against dominant platforms there. We want to give them
relief and relief quickly.
So, I think that is the best advice that I could give.
Mr. Neguse. Thank you, Professor.
With that, I will yield back the balance of my time.
Mr. Cicilline. I thank the gentleman for yielding back.
I now recognize--I don't believe the gentleman from Florida
is present, correct? No?
Okay. I now recognize the gentleman from Louisiana, the
distinguished Mr. Johnson.
Mr. Johnson of Louisiana. I thank the distinguished Chair.
I appreciate that very much. Thanks to all our Witnesses for
sharing your time and expertise with us today. As you have
seen, this really is a bipartisan concern and something we are
all working on together, which is rare these days and we are
grateful.
Real quick, Mr. Singer, I was just asked by our Ranking
Member to follow up with you and ask, are you suggesting a CFPB
kind of measure or creation of something like that?
Mr. Singer. No. I don't think a new agency is needed. I
think that all we would need is--I call it a tribunal, but
really an Administrative Law Judge, just how the FCC has its
own administrative law judge, the FTC has an Administrative Law
Judge.
I think that this could just sit inside of an existing
agency. I am also sensitive to the notion of bureaucracy and
agency and paper pushers, and the like. I don't think that is
needed. Whenever I argued a case in front of the FCC's tribunal
it was one ALJ and his legal assistant. That was it. So, I
think this could be done in a fairly streamlined fashion.
Mr. Johnson of Louisiana. That is music to our ears.
Mr. Thorne, like most Members of this Committee, I have
deep concerns about this seemingly ever-expanding nature of big
tech--we all do--and the residual effects of its expansion on
other sectors of the economy and the workforce. Like you, I
have litigated extensively in our courts, and I wanted to drill
down on a few points you made in your written testimony
pertaining to under-enforcement.
You specifically note the difficulty and high cost of
expert Witnesses and litigation and comparatively low financial
resources of enforcement bodies. Through the lens of your
experience as a practitioner, could you expand upon how you see
that lack of necessary resources as an issue that prohibits
scrutiny of firms with potentially monopolistic features.
Mr. Thorne. Thank you for that question in particular. The
cases right now against Google are the hardest cases ever
litigated in our courts. The people that are carrying the water
on that are great lawyers. The staff lawyers at DOJ, the staff
lawyers at the Texas Attorney General's office, and the other
states that are in that case, are paid below market, but they
are working above market.
They do not have the same resources that their opponent
has, and these are really--as I said, these are--I just found
it amusing the Texas Attorney General went to his legislative
and said, ``May I please have $43 million, not for lawyers,
just for the expert Witnesses. I am in an expert Witness
bidding war against Google. I need $43 million.''
The answer from the finance chair of the Texas Senate was,
``I don't think that is going to be enough money for you. I
don't think you can actually win this with that side.'' These
are very difficult things. If you want to do more than the one
or two going on right now, if you think more enforcement
actions--I think there are more enforcement actions that can be
brought--if you want to do more than that, the agencies need
funding now.
So, I would recommend the Committee--you have got a lot of
interesting and hard things to work on and study, and maybe in
this Congress you will move something, but fund the agencies
now. There is no reason to wait for that.
Mr. Johnson of Louisiana. I appreciate that, and it is a
very practical concern and something we have to consider as we
go forward in all this. I worked for a nonprofit litigation
firm doing religious liberty work for 20 years, and we had the
same disparity sometimes in what we were doing.
It ultimately has a great effect on the economy and
consumers and all of that. I guess we would have to quantify
exactly how much would be needed. The resources seem hard to
calculate sometimes, what is needed.
Another question. You consistently touched on the
importance of a faster, more responsive enforcement process to
promote competition and economic liberty. You talk about two
specific reforms you have mentioned in the first recommendation
and your justifications for them. If you just want to take--we
have got a minute or so left, if you want to elaborate a little
bit more on what specifically you are suggesting in that arena.
Mr. Thorne. So let me start with consumers. That is your
constituency. Why are they waiting so long for good law
enforcement to happen? There is a long period of investigation.
I am not proposing that you interfere with the pace of
investigation. They need to be thorough, and you have got to
bring good cases. Once a case is brought, it does not have to
take 5 years.
Tad Lipsky, one of my friends, worked on the IBM case at
the Justice Department when he was a baby lawyer, and that was
about 13 years, and DOJ just dropped it. I mean, if the
defendant can drag these things out long enough, the market
will have moved past. It won't matter anymore. That is a long
time for consumers.
Then the other end of the spectrum, the individuals that
sign up to do this stuff at the agencies--speaking for them for
a second--it is like you want to join the Army, the Marines,
what the tour of duty is going to be. I have got a 8-year
contract, but I am going to be in for 2-4 years.
Mr. Jordan. Will the gentleman yield?
Mr. Thorne. They really do not sign up for an unending
length of under market pay.
Mr. Johnson of Louisiana. Thank you. Let me yield to Mr.
Jordan.
Mr. Jordan. I appreciate the 9 seconds. I thank you--so we
are talking about bureaucracy. We are talking about dealing
with these in a quicker fashion. So, Senator Lee has introduced
the legislation, one agency to deal with this. So, we have got
the FTC and Justice Department. Do you support that concept,
Mr. Thorne? Or how should this--
Mr. Thorne. I have not seen his legislation. I apologize
for that.
Mr. Jordan. Okay. Well, all right.
Mr. Jones. [Presiding] The gentleman's time has expired.
Mr. Johnson of Louisiana. I yield back. Thank you.
Mr. Jordan. I thank the gentleman.
Mr. Jones. The Chair now recognizes Mr. Swalwell, the
gentleman from California.
Mr. Swalwell. Thank you, and I want to thank Chair
Cicilline for elevating this issue. I represent a constituency
in the San Francisco Bay area with entrepreneurs who want to
know that as they seek to have innovative solutions that they
are going to have a fair playing field, and I think this
addresses that.
My first question is for Ms. Slaiman, and I want to know
how you would apply traditional antitrust law, what exists
today, the goal of which is to protect consumers from high
prices to the subject of today's hearing, which is the power of
gatekeepers online.
Ms. Slaiman, do you think that there is room in existing
law for courts to use existing antitrust law to protect
consumers, or do we need changes to the law?
Ms. Slaiman. Thank you so much, Congressman. We absolutely
do need changes to the law. I have very much appreciated the
antitrust cases that have been brought already by the
Department of Justice, the Federal Trade Commission, and State
enforcers against Google and Facebook. I think that those cases
are doing a great job in the direction of trying to address
this problem, but really the problem is much broader than any
particular antitrust violations that may have occurred.
So, even if those cases are very successful and we get
really strong remedies out of them, I think we would still be
left with this fundamental gatekeeper problem and the structure
of the market that tends towards monopoly. So, that is why it
is so important to add on top these regulatory tools like
interoperability and nondiscrimination.
Mr. Swalwell. Even if current antitrust laws could address
the monopolistic conduct of gatekeepers--and it sounds like
your opinion is that it cannot--are they sufficiently fast
enough and clear enough to deter that conduct in any meaningful
way?
Ms. Slaiman. The length of time that it takes to do
antitrust enforcement is also, a real limitation, and that is
something that other Witnesses have talked about as well. We
can work on trying to speed that up, but I do think that having
ex ante rules set in advance can save so much time and provide
more certainly for businesses, as they are deciding how to
operate in the market, for them to know interoperability is
going to be required or discrimination is not going to be
allowed. That can really save a lot of litigation time and help
those businesses.
Mr. Swalwell. Ms. Slaiman, I listened to your opening
statement where you argue that we need new sector-specific
laws. Since the beginning of antitrust policy, though, we have
had broadly applicable laws which apply to every industry
equally. So, why does technology require its own laws? If we do
it that way, wouldn't every industry come up with its own
complaints and want its own laws?
Ms. Slaiman. Well, many industries are already subject to
procompetition regulation. A lot of these ideas are inspired by
the communications industry where we have procompetition
regulation. I am also thinking of the Cable Act where we have
procompetition regulation.
So, although this is new, we want to learn the lessons from
those other industries, but many industries are regulated for
competition, and I think that is fully justified, to do that
here.
Mr. Swalwell. Great. Thank you, and I yield back.
Mr. Cicilline. [Presiding] The gentleman yields back.
I now recognize the gentleman from Florida, Mr. Steube, for
5 minutes.
Mr. Steube. Thank you, Mr. Chair. Big tech, Google,
Facebook, Twitter, and others have been able to grow, to
dominate the marketplace, because they are protected from
liability under section 230. If we don't aggressively address
their liability protection, it will continue to grow and
continue to dominate and push out competition.
Even if you break them up and separate them like the
majority contends using antitrust provisions, and they still
have liability protection under section 230, the same thing is
going to happen because they are barred from being sued. If
Twitter and Facebook can editorialize, censor, and edit
content, then why should they be treated different than news
networks and newspapers that do the same thing?
I have a bill that very narrowly goes in and reforms
section 230. It doesn't do away with it. It is called the CASE-
IT Act. It is H.R. 285. It provides a private right of cause of
action for anybody that feels or business that feels that their
rights under the First amendment have been violated and gives
that private right of cause of action.
I encourage any Members of this Committee that want to work
on this issue, I would be happy to work with any Members on
either side of the aisle.
My first question is for Mr. Thorne. Big tech has
discriminated against conservatives in a variety of ways,
including deplatforming them, suspending accounts, like they
did to the former president, and other similar actions. What
are practical ways to stop big tech censorship without creating
obstacles for small startup companies?
Mr. Thorne. So I am, at a personal level, concerned about
that, and I didn't prepare to talk about that at this hearing.
I do think if we address the underlying problem of--I will pick
on Google, for example--if it is the gatekeeper to where you
get the information, you get to the status of becoming a verb.
If there was competition against Google, that would be a
much less serious problem. I think it is a serious problem.
Mr. Steube. You have spoken about the financial obstacles
in the antitrust cases. In your written testimony you mentioned
how the State of Texas was afraid that it couldn't match a tech
giant in a long, drawn-out litigation. Beyond better financing
for DOJ or State legal efforts, what can be done consistent
with free market principles to create a fair playing field in
such a situation and actually combat antitrust when it occurs?
Mr. Thorne. I actually think if we win these cases, we will
have done an awful lot of good as a starting point. There are
more cases and I am concerned about what Apple is about to do
to free apps on its platform. There are more cases to be
brought.
These things take resources. I am as creative as I can be,
but I think at the level of if you believe this is important,
you believe the Constitution is important, I believe a market
economy is important, there should be real enforcement here,
and that takes resources. It is not something that self-
polices. It requires vigilance, as my friend would say.
Mr. Steube. Well, can you talk further about the potential
downsides of creating a new Federal agency to address these
issues?
Mr. Thorne. Oh. So, Bill Barr's favorite former attorney
general is Robert H. Jackson. Last week at Judge Merrick
Garland's confirmation hearing, he brought up Robert H. Jackson
as a model for enforcement. Robert H. Jackson convinced his
President at the time to hold off on regulation. Let's not run
the price in terms of how people operate. Let's try antitrust
first. I would recommend that.
With the tools that Congress has, you should consider all
of the different things that make sense. If antitrust works,
you don't need to set up an agency that stays there forever.
Mr. Steube. I yield back.
Mr. Cicilline. The gentleman yields back.
I now recognize the gentleman from New York, Mr. Jones, for
5 minutes.
Mr. Jones. Thank you, Mr. Chair. I would like to thank all
of my colleagues and all of our Witnesses. I thoroughly enjoy
the bipartisan nature of this hearing. I am excited to join
this Subcommittee at a time when it renews its effort to ensure
that our economy and our democracy work for everyone.
Mr. Lipsky, thank you for being here. I greatly appreciate
your time, and I have a few questions for you, sir. You are the
Director of the Competition Advocacy Program at the Global
Antitrust Institute of the Antonin Scalia Law School, correct?
Mr. Lipsky. Yes. Although I am appearing only in personal
capacity, as I state in my testimony.
Mr. Jones. Sure. In the fiscal year ending in June 2019,
your institute's budget was $2.1 million, correct?
Mr. Lipsky. As an adjunct professor, I am very minimally
involved in anything administrative, and Lord protect me from
having to deal with the budget.
Mr. Jones. Reclaiming my time.
Mr. Lipsky. I will have to--
Mr. Jones. It is publicly available information. I
appreciate your response, sir.
Let me tell you why I asked.
Mr. Lipsky. Okay.
Mr. Jones. When I read that you were going to testify that
we should do, from my perspective, relatively little to check
the power of big tech companies, I was surprised. I wanted to
understand where you were coming from, so I followed the money
and I got the receipts.
I have here copies of the invoices, checks, emails, and
even thank-you notes that reveal who funded your institute in
the fiscal year ending in June 2019. Amazon gave your institute
at least $175,000. Google gave at least $200,000. Qualcomm gave
$964,600. In total, over 60 percent of your institute's budget
came from these three big tech companies alone.
With all due respect, sir, if we had wanted to hear the
views of Amazon, Google, or Qualcomm, we would have invited
them. When a CEO comes before this Committee, I understand that
they are going to advocate for their own interests. When you
come before us today, sir, when your institute is funded by
secret donations from big tech companies, you today come as a
wolf in sheep's clothing.
I would submit that the American people deserve to know the
truth. The truth is that secret corporate funding like yours
has distorted our discourse for far too long. For decades
institutes like yours have masked corporate money to protect
monopoly power. Institutes like yours have worked to teach
judges and regulators to let their guard down as corporate
funds like yours came to dominate our economy.
The American people, of course, are paying the price. The
corporations who wrote your paychecks are now not only the
gatekeepers for our economy, but they are also the gatekeepers
for our democracy.
Let me give you a few examples, one of which has been
mentioned earlier today. When Tish James, the attorney general
from my home State of New York, stood up to protect New York
workers from COVID-19, Amazon sued her to silence her
investigation. When Barry Lynn, a scholar at the New America
Foundation, had the courage to praise antitrust action against
Google, Google's Chair got him fired.
When Facebook's own employees concluded that far-right
conspiracy theorists like Alex Jones were violating Facebook's
own rules against hateful and dangerous conduct, Facebook CEO
Mark Zuckerberg, who I confess grew up in my district,
personally intervened to keep Jones on the platform. We cannot
let corporations dictate the terms of our democracy any longer.
Mr. Chair, I ask that these documents be entered into the
record with unanimous consent.
Mr. Cicilline. Without objection.
[The information follows:]
MR. JONES FOR THE RECORD
=======================================================================
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Jones. I yield the balance of my time.
Mr. Cicilline. The gentleman yields back.
I now recognize Mr. Bishop from North Carolina for 5
Minutes.
Mr. Bishop. Thank you, Mr. Chair. I pulled mask malfunction
right as I was trying to get my glasses off.
This is maybe the most interesting hearing I have
participated in. I am a new Member of Congress, commercial
litigator for 29 years, never have gained any particular depth
in antitrust law. So, there is intimidating. I have got some
prepared questions here I can probably get into.
One thing I think I would like to do first, Professor
Lipsky, I believe it was, I would like to give you about a
minute if you care to respond to what was just--and the way in
which you were impugned. I just think that would be fair.
Mr. Lipsky. I guess not being knowledgeable of the matters
that were discussed, I think it will be amply demonstrated by
any review of my professional history that these views are
fully consistent with what I have been articulating in terms of
antitrust policy and antitrust enforcement since well before
any of these digital technology companies even existed.
In particular, I will take advantage of Mr. Thorne's
reference to the fact I worked on the IBM case, United States
v. IBM, which was the massive monopolization case filed by the
Antitrust Division in 1969, which was dismissed 13 years later
in 1982, without prejudice, because the purpose of the case was
essentially moot, given the profound changes in the computer
industry that occurred during that time.
My point is simply that I was not one of the litigators on
that case. I was the deputy assistant attorney general assigned
to review, that to help and organize a review of that case,
because it had bogged down, it had become incoherent, it had
begun to pursue very anticonsumer purposes, and--
Mr. Bishop. Professor Lipsky, I am sorry, I want to reclaim
my time. I wanted to give you a moment to address that, but I
need to save some time for some other things.
Let me ask quickly--
Mr. Lipsky. I am sorry.
Mr. Bishop. Ms. Slaiman, Public Knowledge, you are, I
guess, a Democrat Witness here today. Has your organization
received money from Google?
Ms. Slaiman. Yes, we have.
Mr. Bishop. All right. Thank you.
Let me ask this. The other thing that really impressed me,
Mr. Thorne, at the very beginning of your paper where you said
in 1997, you are talking about a rocket docket antitrust case.
You spent $24 million preparing it. The same case today would
cost $54 million. You have talked about resources. In my
commercial litigation career, I spent all my time litigating
against bigger, more well-resourced opponents, and had a good
bit of success.
Is it possible that there is change to the process or
change to the law that could result not only in solving some of
the market problems that have been talked about by majority and
minority, but also could make bringing the litigation more
efficient? Or is it just the necessity of procuring the
knowledge of the expert and devising perhaps, you know, a
course of action to take? What is it that causes that to cost
$54 million of--
Mr. Thorne. I think it is a resounding yes that things can
go faster. Tad Lipsky just said he spent, or the department
just spent 13 years litigating against IBM. The Cravath firm,
the Cravath, Swaine and Moore, a fantastic law firm, was the
defendant firm there, and they fought hard and well and 13
years later the government dropped the case.
I had that same law firm on the other side of this case,
the rocket docket, and we got it to trial in 13 months. It is
possible, if you focus on expedition.
I had a couple of small ideas in my testimony. I am sure
there are better ones, but a place I was recently in that is
faster is the United States International Trade Commission.
They have got a mission to stop the import of infringing
products, and you get there, you don't spend weeks talking
about a protective order. Here is the protective order. We are
going. Your discovery is due in 2 months. I mean, it is boom,
boom, boom, and you have a trial, and it is--
Mr. Bishop. So, obviously, I understand as a matter of, as
a litigator, that the longer you take in litigation, the more
the costs go up. Is that the predominant source of the cost is
that it gets stretched out over time? Is it the need to develop
some sort of high-tech expertise to figure out what is going to
be done, what are the problems, how does interoperability work,
or whatever the--
Mr. Thorne. Antitrust case, like any other piece of
litigation, you have got to eventually simplify it, so that the
trier of fact can understand it and make a decision.
Mr. Bishop. Right.
Mr. Thorne. You have to hire experts in the area. You
don't--lawyers don't know much about any particular subject
when they start. Hiring experts, getting discovery done,
getting to trial, that can be done in a compressed period. It
does not take a decade.
Mr. Bishop. Thank you, sir. My time has expired.
Mr. Cicilline. The gentleman yields back.
I now recognize the gentleman from Maryland, Mr. Raskin,
for 5 minutes.
Mr. Raskin. Mr. Chair, thank you very much.
I wanted to go to Ms. Slaiman, if I could. Tell us in
practice what would be required of the big companies like
Amazon and Google and Facebook to make their dominant products
and services interoperable. In other words, to deal with the
anticompetitive effects of their being both a gatekeeper and a
participant in the particular market traffic that they cover.
Ms. Slaiman. Thank you, Congressman. So, I think the
simplest example is Facebook, so I will start there. We are
asking that they provide interoperability to competitors to the
network. So, that could be through an application programming
interface, an API. Basically, they need to change some code in
their system to make it available to competitors.
When they make updates to important features, they need to
give some notice of those changes, so that the competitors have
a chance to make sure that their products will continue to
interoperate even after the changes.
So, it is a lot simpler than historically the types of
interoperability that we needed with a telephone network where
they had to invent new jacks and deal with physical networks.
So, this is a software problem, and they need to change that
software and make it available to competitors.
Mr. Raskin. Okay. So, you are telling us that relatively
simple technical fixes at Facebook, Google, and Amazon, could
actually dramatically promote new commercial dynamics that
would allow smaller businesses to be in the field and to
prevent these anticompetitive effects; is that right?
Ms. Slaiman. Yes, that is right. It will also be important
to have strong law enforcement capabilities on the side of the
government to make sure that the interoperability is actually
functioning properly. Yes, that is what we need from the
company.
Mr. Raskin. Okay. None of this would destroy Facebook,
Amazon, or Google, the big companies, right?
Ms. Slaiman. No. It would certainly not destroy the
companies. I do think it would have a really strong competitive
impact. They would suddenly face competitive threats from
places they haven't before, and I hope that would change the
way that they are operating their businesses. Certainly, it
would not destroy the companies. That is not our goal.
Mr. Raskin. Go back to the analogy that you guys were using
about telephones. ``Interoperability'' means that somebody who
has got AT&T as their provider can call somebody who has got
Sprint. Was that is a result of public regulation?
Ms. Slaiman. Yes, that is right.
Mr. Raskin. Okay. So, and that didn't cost very much to
guarantee interoperability, and we all now take it for granted
as part of using the telephone. So, you are saying we can
institute features like that to promote entrepreneurship and
real commercial entry for businesses right now that are
suffering because some of their competitors are also the
gatekeepers to their ability to compete effectively. Is that
right?
Ms. Slaiman. That is absolutely right.
Mr. Raskin. Well, what is keeping us from doing this?
Ms. Slaiman. That is a good question, Congressman. There
are important details that I think need to be worked out, and
that is where I think an agency regulator comes in. I want to
defend the paper pushers who were criticized earlier. I think
there is a really important role for regulators here to figure
out, especially in such a technical space, exactly which
features need to be interoperable.
There are already great written works about this. Some of
the data that we know is really important to be interoperable
is the friends list or the social graph, tools like cross-
posting. So, there is a lot that is already known and that we
can know now, but agency regulators can really make those
decisions most efficiently.
Mr. Raskin. Mr. Singer, you proposed a hybrid approach for
us to consider empowering agency or tribunal to provide relief
against structural discrimination on a case-by-case basis. I
wanted to just take one example relating to Amazon to see how
this might work.
A study by Upstream Commerce found that 857 apparel items
were first offered for sale by marketplace. Within 12 weeks,
Amazon began directly selling 25 percent of these top-selling
items itself. In other words, it had sort of captured the ideas
from these sellers and in a quarter of the cases was selling
basically the exact same item or mirror of the item.
Given the fact that Amazon has been able to pressure
companies like Nike with contract provisions, it is unlikely
that small independent sellers could rock the boat to bring
claims on their own behalf. So, how would the kind of tribunal
you are talking about help small sellers in this kind of
situation?
Mr. Cicilline. The time of the gentleman has expired, but
the Witness may of course answer the question.
Mr. Singer. Thank you. Yes, to make it clear, I get phone
calls. A recent phone call came from a merchant on Amazon who
said that he had been buried in search because Amazon was not
showing his product on a standalone basis, but instead was
bundled with a bunch of periphery, peripherals that caused the
price of his product to appear high, and, therefore, low in
search.
He said, ``Hal, you know, what can I do about this?''
I said, ``I am going to go to Congress and tell them to
create a venue for you, so that you can bring a discrimination
case.'' Because right now, the only other alternative is to go
to an antitrust court, and I don't have the heart to tell him
such a thing because I know what that would entail. That would
entail years of his life, and he doesn't have that. He needs an
intervention soon.
Mr. Cicilline. Thank you. The gentleman yields back.
I now recognize the gentlelady from Minnesota, Ms.
Fischbach, for 5 minutes.
Ms. Fischbach. Thank you, Mr. Chair.
Mr. Thorne, you submitted quite extensive written
testimony, and I am just--regarding competition and increasing
enforcement. I just wanted to provide you an opportunity to
provide more information or recommendations based on that
testimony, if there is something that you feel would be
helpful.
Mr. Thorne. Well, thank you, and I am sorry the testimony
is so long. If I had known about the hearing earlier, it would
have been shorter and clearer.
The long-ish piece at the end focuses on a simple idea of,
what do we want the antitrust laws to do? Now, regulators can
do new things. The FCC, for example, in the telephone world can
require sharing of stuff that goes beyond what the antitrust
laws require. The question at the end is, do you want to focus
on interference with independent activity arrivals? I think
that is what the antitrust laws are focused on.
Do you want to just say monopolies are wrong; we are going
to make them illegal? Do you get over 50 percent market share
or something--you can't have that anymore. You have to now
compete differently.
Our law has not said that monopolies should stop trying
hard to win customers. If I am successful because I built a
good product, and I want to give you a price cut, more people
benefit by definition, because a monopoly has got more
customers and there is less discipline.
I would welcome a monopoly that gave you a price cut. I
would welcome a monopoly that kept up its facilities better and
kept investing in stuff. So, but there is a fundamental
question, and it is--but on the other hand--and I will point to
my friend, now--Justice Gorsuch, is a decision when he was a
judge in the 10th Circuit called Novell. People point to that
as strict, but it has a catalog of ways you can interfere with
rivals, independent competition, and be condemned to the
antitrust laws and suffer the severest of consequences.
One of the cases he cites is a case called Conwood,
involving shelf space in physical retail stores. I think it is
a pretty good analog for a way that the antitrust laws can be
enforced on the internet where the shelf space is virtual, not
in a retail store.
Ms. Fischbach. Thank you. I just thought with my last
couple of minutes here, if Mr. Lipsky has anything else he
would like to add, I know he has been cut off a couple of
times, and so if there is anything to add, I would yield my
time to Mr. Lipsky.
Mr. Lipsky. I am very grateful for that. I guess I would
just take advantage to say that a lot of regulatory solutions
don't work out for a wide variety of reasons and ask that as
the Committee explores these suggestions that it make itself
acutely aware of the history of sectoral regulation in, for
example, the railroad and other surface transportation sectors
or in air transportation, and so on and so forth.
We had for over 100 years the Interstate Commerce
Commission, which was really judged--despite very good
intentions when it was created in 1887--ended up being a very
anticonsumer and innovation-suppressing entity, and Congress
wisely abolished the ICC in 1995. Same thing with the Civil
Aeronautics Board in 1985.
So, we can't compare imperfect antitrust to perfect
regulation because perfect regulation simply doesn't exist.
Thank you very much.
Mr. Buck. Would the gentlelady yield, please?
Ms. Fischbach. Yes, Mr. Chair. Yes.
Mr. Cicilline. Mr. Buck is recognized.
Mr. Buck. I thank the gentlelady for yielding.
Mr. Lipsky, I want to ask you a few quick questions if I
may. There was an accusation made earlier that your testimony
in some way may be altered by some of the donors to a
foundation that you are associated with. Were you involved in
the solicitation of those donations in any way?
Mr. Lipsky. No.
Mr. Buck. Did you have conversations with anyone at any
point in time that would influence your testimony today?
Mr. Lipsky. No. Although I--
Mr. Buck. When I say ``anyone,'' I mean specifically any
representative from those companies.
Mr. Lipsky. Yes. I should say, just for absolute clarity
and full disclosure, that I have attended a technical briefing
about how the Google--some of the Google functions work. That
would be the entirety of my response to--
Mr. Buck. Is your testimony today consistent with your
views and writings form the past?
Mr. Lipsky. Absolutely.
Mr. Buck. Is there in any way an influence from donations
that you did not know about on your testimony today?
Mr. Lipsky. No.
Mr. Buck. I thank the gentlelady for yielding, and I yield
back.
Mr. Cicilline. The gentleman yields back.
I now recognize the distinguished gentleman from New York,
Mr. Jeffries, for 5 minutes.
Mr. Jeffries. I thank my good friend and colleague, the
distinguished Chair of the Antitrust Subcommittee, for yielding
and for your leadership, as well as all the Witnesses for the
testimony that you have provided today.
Mr. Singer, during the inaugural days of the internet, is
it fair to say that Congress took the position that a hands-off
approach would allow this new platform to grow and flourish and
innovation to be unleashed on that particular platform?
Mr. Singer. Yes, that is fair.
Mr. Jeffries. In the early days, do you think that that
decision has allowed for and facilitated sort of what we have
seen in the decades that have followed in terms of the
innovation economy?
Mr. Singer. Yes. I think that the dominant platforms today
have been able to exploit certain gaps in protection that came
about for different reasons, including the fact that when they
were a nascent industry 20-30 years ago, there was no need for
such regulation.
Mr. Jeffries. Is it fair to say that in the view of some,
this sort of this Wild West approach, that it may have had some
rational justification in the early days of this new platform
without concentrated market power, but adversely impacts
consumers decades later?
Mr. Singer. Yes. There has been a change in circumstances
that would warrant a change in the regulatory treatment.
Mr. Jeffries. Part of that change in circumstance that
would warrant the change in regulatory treatment is the growth
in concentration of market power amongst a relatively small
handful of internet companies. Is that correct?
Mr. Singer. Yes. Just a handful of companies have embarked
on a series of hundreds of acquisitions that have eliminated
what could have been threats to their platform power.
Mr. Jeffries. How would your nondiscrimination proposal
that, as I understand it, would restrict self-preferencing and
economic discrimination benefit the consumer in this new
environment?
Mr. Singer. Well, the way that it would benefit consumers
is to the extent that this appropriation of ideas and self-
preferencing goes unpoliced, as it is today, we will see fewer
and fewer innovations that occur that are proconsumer in the
edge of the network. So, while you might not be able to see a
price effect in the short run from such discrimination, my
opinion is that there are consumer harms that flow from this
withdrawal of entrepreneurs in the edge who believe that the
playing field is so stacked against them that it is not worth
the effort and investments to try to take on one of these
behemoths.
Mr. Jeffries. Now, the Committee's report found that Amazon
uses access to sensitive third-party seller data to then clone
products and undermine those sellers who are on Amazon's e-
commerce site. Is that correct?
Mr. Singer. Yes.
Mr. Jeffries. How would a nondiscrimination proposal
addresses that type of conduct?
Mr. Singer. The nondiscrimination proposal doesn't stop the
cloning per se. In other words, it would allow the platform to
continue to have a toe in the water. The only way that it would
stop it is indirectly by preventing the platform from
monetizing the clone.
In other words, if all Amazon did was make its own tripod,
for example, but it didn't then use the platform power to steer
users to the cloned tripod, right, it is the steering that
comes on the heels of the cloning that creates the
monetization, the profitability, of the anticompetitive
strategy.
So, what the nondiscrimination regime would do--I am just
repeating myself--is it would stop that second part. It would
allow the platform to have a toe in the water, but it wouldn't
allow the platform to leverage its power in such a way as to
give its content affiliate an unfair advantage.
Mr. Jeffries. Thank you.
Mr. Gundersen, you are the cofounder and CEO of a mapping
and location company called Mapbox. Is that correct?
Mr. Gundersen. Correct.
Mr. Jeffries. In your testimony, I think you referenced a
provision in Google's terms of service that require a developer
to use Google search on a map, rather than a map from another
company. Is that right?
Mr. Gundersen. Correct.
Mr. Jeffries. How does a restriction like this impact your
business?
Mr. Gundersen. Congressman, that is a great question. Point
being the technical interoperability is already there. Where
our customers are being restricted is if you want to use Google
search on top of Google map, that is the only thing that is
allowed. If you want to use Google search along with a Mapbox
map, it is not allowed. So, you have to stop using our
services, and developers must switch back, and Google is
actively targeting enforcing them.
Mr. Jeffries. Well, thank you for your presence here today,
and I thank--
Ms. Slaiman. Congressman, could I also--
Ms. Jayapal. [Presiding] The time of the gentleman has
expired. Thank you.
Ms. Slaiman. Okay.
Ms. Jayapal. I now recognize the Ranking Member of the Full
Committee, Mr. Jordan, for 5 minutes.
Mr. Jordan. Thank you, Madam Chair.
Mr. Thorne, does big tech discriminate against
conservatives?
Mr. Thorne. I have not studied that issue, but as a
conservative myself, I have seen evidence for that.
Mr. Jordan. Yeah. When they let the ayatollah Tweets get to
stay on the platforms, even when he is talking about striking a
blow against America, but they deplatform, get rid of, ban the
former President of the United States. I think that is
discrimination. Would you agree?
Mr. Thorne. I think that is a form of editorial choice that
in a competitive world would be disciplined by the consumers,
and that is what I would be working on here.
Mr. Jordan. Okay. Are big tech companies too big?
Mr. Thorne. I don't know how to define ``too big,'' but I
do know when somebody is interfering with independent business
conduct, and that should be stopped.
Mr. Jordan. Ninty-two percent of search is--Google has 92
percent of search. Is that too big?
Mr. Thorne. They have monopoly power in search.
Mr. Jordan. Yeah. Because they have monopoly power, should
they be broken up?
Mr. Thorne. Probably not the right time to talk about
remedies.
Mr. Jordan. What do you mean? That is what this whole
Committee is about is--
Mr. Thorne. As I read the United States case against--
Mr. Jordan. You heard the Chair's opening statement. He is
talking about censoring more speech. He is talking about all
kinds of things. You don't think it is the right time to talk
about it?
Mr. Thorne. I think if the United States wins its case in
the District of Columbia, based on the search monopoly, a
proper remedy would be to break up Google. I would not feel
squeamish about that, and I don't think DOJ would feel
squeamish about it.
Mr. Jordan. So, you are waiting for the case.
Mr. Thorne. ``Waiting'' is a problematic term, because I am
impatient.
Mr. Jordan. Yeah. I think we all are. I think the American
people are.
If they should be broken up--we are waiting for the case, I
get that. If they should be broken up, is current law
sufficient?
Mr. Thorne. Current law is--
Mr. Jordan. Notwithstanding the timeframe that we all have
concerns about, Mr. Singer, is--
Mr. Thorne. Current law is wonderfully plastic in the hands
of a district court that has heard a violation of the antitrust
laws and is charged with restoring competition. What does that
take? In Standard Oil, it required breaking up the company,
creating competitors--Standard Oil of Indiana, Illinois, Ohio,
and California. They immediately went to other territories and
they competed against each other.
The baby Bells for the right kinds of committed services,
like wireless, immediately competed against each other.
Mr. Jordan. Yes. So, you have given two examples, Standard
Oil and the Bell, the baby Bells as you indicate. Is that where
you think this ultimately should end?
Mr. Thorne. I think that would--
Mr. Jordan. Is that what you are saying?
Mr. Thorne. You asked would this be working remedies, and,
again, my answer is I have seen it done.
Mr. Jordan. Yeah. Okay. If, in fact--
Ms. Jayapal. Would everybody please mute yourselves? Thank
you.
Go ahead, Mr. Jordan.
Mr. Jordan. Thank you, Madam Chair.
If, in fact, they are broken up, it seems to me we would
still need the overhaul of 230, because there is nothing to
prohibit platforms from engaging in the same kind of behavior
we see now with discriminatory action against conservatives.
Mr. Thorne. This is on my part speculative, but if you
broke up, say, a Google, and now you have got competing search
engines--
Mr. Jordan. Got three or four Google--you have got three or
four Googles now.
Mr. Thorne. I am going to use the one that gives me search
results that are useful to me. If they are discriminating in
the search results against people that I want to see their
information, I am not going to use that, and consumers are
going to discipline that.
Mr. Jordan. No, I agree. That is the marketplace. That is
what we want. What I have Witnessed here in the last several
months is every big platform working at the same time to ban
people from their platform, specifically the former President
of the United States. So, they all colluded and banded together
to keep the President off. Will we have that same dynamic? If
we do, why not have 230, which says, if you are going to
moderate content, you don't get liability protection? Why not
put that in place? Frankly, why not put it in place now?
Mr. Thorne. Again, I am not well enough to be heard on
section 230. I have read Justice Thomas's--was it a decision in
a sur-petition that wasn't granted, where he would read section
230 in a very different way than it is being applied by the
courts now. The earliest 230 decision seemed to have taken a
different view than they might today.
Mr. Jordan. Yeah. Okay.
Thank you, Madam Chair. I yield back.
Ms. Jayapal. The gentleman yields back.
I now recognize myself for the purpose of questioning for 5
minutes.
I want to take this discussion in a slightly different
direction, and that is to explore the nexus between inequality
and antitrust law. There may be some out there who are watching
this who aren't as expert as our expert Witnesses today who
aren't sure that consolidation of corporate power actually
affects them, but in fact it does in multiple ways.
You are not able to access the same independent news
sources anymore because of Google's dominance over ad revenue.
You are paying far more for your milk because of corporate
consolidation. All the things that you buy online reel you into
that platform called Amazon where its gatekeeper power controls
everything that you see and buy.
The reality is that inequality is skyrocketing, and the
COVID-19 pandemic has made it worse. According to a recent
report by Americans for Tax Fairness and the Institute for
Policy Studies, the collective wealth of America's 651
billionaires has jumped by over $1 trillion since roughly the
beginning of the COVID-19 pandemic, even as 1 million new
unemployment claims are being filed every week.
Meanwhile, big tech firms like Facebook, Amazon, Google,
and Apple have made a killing during this pandemic, enjoying
expanded and concentrated control over vast swaths of our
economy, and often engaging in exclusionary conduct that erodes
the bargaining power of workers and suppliers.
So, Mr. Singer, do you think that big tech and other large
corporations help exacerbate inequality in our society? If so,
why? What is the relationship there?
Mr. Singer. So, yes, I do think they exacerbate inequality.
The way they do it is because they have buying power over two
important groups. One is their workers, so their workers are
not getting paid their marginal revenue product. It is a fancy
word for saying what their contribution is at the margin to the
firm in terms of revenues.
Similarly, the input providers, the merchants for example,
who are supplying Amazon with inputs are being exposed to
excessive take rates; that is, the tax that Amazon imposes on
these merchants is too high. The effect of those two sorts of
strategies is to skew income unfairly in the direction of the
platform owner.
So, I have written a piece recently I think in the American
Prospect where I explain that if you go back to the original
mission of antitrust, which would be about dispersing
concentrations of power, we could use antitrust in a way to
attack inequities, including racial inequities.
Ms. Jayapal. Thank you, Mr. Singer.
Ms. Harper, what role should antitrust law play in
addressing the harms posed by increasing corporate
consolidation and decreased bargaining power for workers and
small businesses?
Ms. Harper. Thank you for the question, Congresswoman.
There is a very large role to play for a few different types of
interventions to address this concentration issue and I want us
to focus on the real problem here. The problem is their power.
It is the gatekeeping power that allows them to manipulate
their users, manipulate users, profit off data, and squash
competition.
The only way that we will be able to stop that is not
through individual regulations like interoperability or
nondiscrimination or individual enforcement actions. It is
through breaking up these companies, addressing the inherent
conflicts of interest in their business model that create these
incentives. When we do that we can begin to eliminate some of
the very urgent harms that you are pointing to that are
happening right now, exacerbating inequality, lower wages for
workers, pretty much nonexistent bargaining rights when you are
up against a giant in trying to negotiate.
So, that is why we really, really encourage the
Subcommittee to move quite expeditiously to implement the
solutions that are going to address the structural issues with
these companies so that we can restore competition to the
market and give workers, small businesses, entrepreneurs a
chance to earn a livelihood free of fear.
Ms. Jayapal. Thank you, Ms. Harper. Very powerful. You
paint a stark picture, in which the economic power of these Big
Tech firms has turned into political power that allows them to
rewrite the rules of our society. I think even just looking at
what happened recently with Facebook in Australia shows the
incredible power that these tech companies have.
Antitrust laws and regulations should not just tinker
around the edges of corporate abuse, they have to get to the
heart, this is what you were getting at, the heart of
unaccountable concentrations of power and fundamentally
safeguard the public trust. With that, I yield back.
I now recognize the gentlelady from Indiana, Ms. Spartz.
Ms. Spartz. Thank you, Madam Chair. Great conversation, and
I appreciate that we have conversation and agree on some issues
in this Committee on both sides of the aisle. So, I appreciate
it.
I work at some monopoly problems becoming bigger and bigger
problem in a variety of industries. I work on healthcare reform
in the State of Indiana and there is a huge monopoly/oligopoly
problem. I am struggling a little bit because, I am a huge
believer as a free-enterprise Republican in the freedoms of
contracts and I am a huge believer that we don't want to go too
much and try to regulate markets. Looking at a lot of contracts
in healthcare, I have noticed enormous distortion of power of
larger companies where some of these contracts or terms of
service would have never been agreed by other side, but you
have no choice.
So, what I would like to get, and maybe I can start with
Mr. Thorne, give me an example because I spend a lot of time
reading contracts in healthcare when working the reform, but I
would like to get your examples of some that are real egregious
contract terms for consumer or business to business and some of
these contracts that really create enormous amount of
distortion that we really should maybe take a deeper dive at.
Mr. Thorne. So, I have not taken discovery of any of the
platforms that are being discussed here and you often see stuff
in their documents that are revealing, but I have seen the
public documents involving Google's conduct, and I will give
you an example. They require in their standard contract that if
you have a dispute with Google it has got to be heard in
California, so all the early lawsuits against Google are filed
in California. It is their forum selection clause.
California has great courts, great judges. They are
overworked, they have too many cases, and it is one of the
slowest dockets in the country. Google has arranged things so
that when the State of Texas and a group of other states join
together to file a case in Texas, which is a fast court--it is
a rocket docket--Google says, ``No, no. We have all these other
cases in California, come on over. Our contracts require it,''
and moving State enforcement from a fast forum to a slow forum.
That is an example of one of their contracts.
The kinds of contracts that are problematic in antitrust
cases are ones that create time or exclusive dealing or
interfere when somebody is trying to sell a competing product.
Ms. Spartz. Maybe, Mr. Singer, you can add a little bit and
is there anything in the current law that could be improved?
There is a better, even when they go, there is a better
recourse for someone, whether it is individual consumer or the
business, to be able if you go in the civil court of law and
actually be able to make your case that it makes it easier,
that the level of discovery and expenditures can be so
significant that you would not be able then to deal with that.
Is there something in the current law that need to be
improve, if you have some examples?
Mr. Singer. Right. So, let me try to identify, I know one
contract provision that needs to go right now and that is
Amazon imposes in its merchant contracts provisions by which
the merchant has to waive its legal rights to say, for example,
to join a class action. The reason why this is so destructive
is that as Mr. Thorne noted to bring an antitrust case against
Amazon by yourself you would have to hire a fancy antitrust
lawyer and you would have to hire a fancy antitrust economist,
and just the scale doesn't make sense to bring these claims
individually. So, the system is rigged, effectively, to
immunize Amazon from antitrust scrutiny at least by private
complainants, so.
Ms. Spartz. Does it have some due process or it doesn't
allow any due process?
Mr. Singer. Yes, mandatory--oh, I am sorry.
Ms. Spartz. It is different. Yes, so what does it require?
Mr. Singer. Yes, it is not due process, it is mandatory
arbitration. So, they basically say that you can't bring a
claim collectively as a class action, say, of other merchants
who are similarly situated, but instead you have to come, you
have to submit to our arbitration process. This kind of binding
arbitration, mandatory arbitration provision should be
scrutinized, and I would submitp should be nullified by an Act
of Congress so as to restore their legal rights.
Ms. Spartz. Well, arbitration, but it depends how it is
structured. It could be useful process for consumer too and
more cost effective. It depends. I didn't, but any other
things?
Or maybe, I don't know if, Mr. Lipsky, you have some
suggestions, sir, on this panel, any particular clauses that
really give you a headache when you look at that? Because we
want to have a freedom of contract, but there are just some
clauses I have read in some of the contracts when I have dealt
with healthcare that were really outrageous.
Anyone on the panel would like to add anything to that?
Ms. Harper. Congresswoman, I am happy to add something
there, if I may.
Ms. Spartz. Yes.
Ms. Harper. Yes, so what I would emphasize is, you are
exactly right. What you are observing and your confusion in the
healthcare space is that it is not fair, right, so you are not
out of bounds there. Imagine what concentration issues and
power issues we are seeing in that space and put it in
overdrive in what we are seeing in the context of Big Tech.
So, that is why we really need to be realistic about what
is possible now to even contract for, right. If you are a small
business, a medium-sized business, an entrepreneur that is
trying to play in these same markets, it is not possible. We
have to structurally separate and change these companies and
then begin to think about some of the additional regulations
and changes to enforcement that procedure.
Ms. Demings. [Presiding] The gentlewoman's time has
expired. Thank you very much. I now recognize myself for
questioning for five minutes.
Let me first say, thank you to all our Witnesses for being
with us today. This has been a very important discussion. We
have heard a quote this morning from Bishop Desmond Tutu. Mr.
Thorne, I believe you quoted him. When I think about him and
what he stood for, I think we would probably all do a better
job if we chose to live by the principles of Desmond Tutu.
He also said this. He said if you are neutral in situations
of injustice, you have chosen the side of the oppressor. He
went on to say if an elephant--this should make it plain for
all of us--has its foot on the tail of a mouse and you say you
are neutral, the mouse will not appreciate your neutrality.
So, think about that, but also think about what if you
helped the elephant in that situation. I would believe that we
are all here today to create a more fair and equitable society
regardless of the business that we are in. For me, I was a
former law enforcement officer, so to me it is very simple. We
have good actors, and we have bad actors.
I am convinced that Congress has a direct responsibility to
take action to right the wrongs, as we have heard this morning,
to broaden economic opportunity in this land of opportunity and
promote innovation. Promote innovation, not destroy it. So, if
we just think along those lines, I think we could all be on the
same sheet of music at least that we have some major issues in
this area and we need to solve them.
Ms. Harper, you said that Facebook and other platforms are
not just corporations. That they seek to censor and destroy.
Ms. Harper, could you just tell me a little bit, what do you
mean by they are not just corporations?
Ms. Harper. Well, at this point and taking the example--and
thank you for the question, Congresswoman, and your remarks. At
this point, we are looking at an entity that is not just doing
one thing, right, it has dominance in the social network space.
It is also in a duopoly in the ad business, right, and so
it is able to drive users in a certain way and create this
addictive business model that just makes them a lot of money
but is actually causing our society a lot of harms. So, that is
what we mean. Just to give an example of how that power can
play out, and it is something that has come up before and I
have mentioned in my remarks, but look at Australia, for
example, right?
When Australia, a sovereign state, attempts to regulate and
pose regulations to support the existence of news in their
country, Facebook's reaction is not to, oh, let's just sit down
and talk about that, it is to pull news, right. So that is an
example where--and Australia has no recourse. So, they can't
just go to some of these other platforms that maybe are focused
on social media exclusively, like Clubhouse, for example, or
TikTok. There are no substitutes.
Facebook is dominant. It has too much power. It knows it,
and that is why it engages in these retaliatory acts.
Ms. Demings. Ms. Harper, thank you so very much.
Mr. Singer, you talked about us trying to find solutions,
and you said we don't need to create another department but
perhaps appointing an administrative law judge would create
that much needed venue. Could you talk just a little bit more
about how we make that happen and kind of what are the pros and
cons of that as opposed to.
Mr. Singer. Sure.
I think the natural place to house this tribunal, or as I
affectionately refer to it as the net tribunal, would be in the
Federal Trade Commission but with one caveat. I wouldn't want
decisions made by the ALJ there to be subject to review by the
five FTC commissioners.
If I could point out one flaw in the design of the tribunal
that works to adjudicate discrimination complaints at the FCC,
Federal Communications Commission, is that the decisions there
by the ALJ are appealable to the full FCC, and in every
instance, you had partisanship dictating votes. In other words,
Republicans voted to overturn every finding of discrimination
that has ever come up through this tribunal.
What hurts about that is you have a very pristine process
that is based on the merits of the case and a neutral
arbitrator, and it should end there. Now, I am open to the idea
of appeals, but I want to immunize this process from any
politicization. So, I would submit that if you do house this in
the FTC that the appeals would go straight to, say, the D.C.
Circuit and would skip over the FTC commissioners.
Ms. Demings. Thank you so much, Mr. Singer, and again thank
you to our Witnesses. The Chair now recognizes the gentleman
from Wisconsin.
Mr. Fitzgerald. Thank you, Madam Chair. In the mid '70s I
had a record player and then years after that it became a
cassette player, and then I had 8-tracks, my mom and dad had 8-
tracks. Then eventually I have like 2,500 CDs right now at
home. I don't know what I am going to do with them.
My point is that, government doesn't move at the same speed
as technology. Technology moves much quicker than all of us,
and all those recordings are right here on iTunes right now.
So, my point would be 230 has to be changed because it is the
only overarching remedy compared to us even when you look at
maybe breaking these up.
Mr. Thorne, before, you talked a little bit about, and
again I am old enough to remember the breakup of Ma Bell, and
there was some criticism later on because what you saw is some
of those players started to grow even larger and at a more
rapid pace, like AT&T, so my question would be, how do we make
that decision?
I know this has come up earlier, how do we make that
decision that this is too big and this entity is not and as
technology advances, that is going to be a moving target and I
am frustrated by that, so.
Mr. Thorne. Your description is so correct. The Bell
System, the example of it, in the middle of the breakup there
was this thing called wireless service, and I think it was the
CEO on AT&T on some stage talking with investors about is this
going to work and it is a question, where is the wireless
business going to go? He turns to a lawyer and says, ``Well,
where does the wireless business go? It looks like a local''--
the lawyer says, ``Local service, it goes to the baby Bells.''
You think of the biggest, most valuable part of the
business and without being a prophet, they didn't realize how
important that was going to be. It is very hard for anybody to
make good decisions about technology futures. I should have
more confidence in the article III judiciary and in quick
processes than I do setting up a permanent regulator, but one
advantage is a regulator has is they can readjust things so if
you make a mistake, the regulator can notice it.
Again, I am not praising anybody in particular, but
regulators have the ability to revisit things in ways that
maybe courts don't, so for some purposes those may be a better
forum. By the way, appointments clause. Don't enact something
that makes unreviewable action, a small thing.
Mr. Fitzgerald. Thank you, Madam Chair. I would yield back
to Mr. Bishop the balance of my time.
Ms. Demings. The Chair recognizes the Ranking Member.
Mr. Bishop. Well, thank you, Madam Chair, and I appreciate
that.
Mr. Singer, I was listening with interest. If I get the
drift, and I have already said my knowledge of this is pretty
superficial, but it seems that I get the drift today it is that
you propose and maybe on the left they propose breaking things
up, nondiscrimination regimes, whereas, if I understood the
thoughts from Mr. Thorne and some others and maybe Mr. Buck,
the notion is, well, let's try interoperability and
portability.
I share some concern that others have about whether you may
be throwing out the baby with the bath water or whether there
could be undesirable collateral damage reducing competition,
reducing benefit to consumers by going too far. Wouldn't it be
the logical thing to do to start with the remedies that there
is consensus about and then see if they are sufficient and if
not go further?
Mr. Singer. Sure. I feel like we have heard a clear
consensus on the interoperability today, but I also think that
we have consensus around nondiscrimination too. I think I heard
that from Public Knowledge's Witness and, well, we could ask
Mr. Thorne how he feels about nondiscrimination. So, I feel
that it makes sense to start where there is consensus, yes.
Now, of course, I do recall I do build in structural
separation as a remedy in the nondiscrimination regime as
contemplated, right? If you have a recidivist discriminator who
just flouting the law and keeps getting hauled over and over
again in front of this tribunal, I think that at that point,
the tribunal should have the power to impose structural
separation as a remedy.
Mr. Bishop. All right. Mr. Thorne, two things. Maybe a
little comment on that same question. Do I have the drift
right, because I heard in your testimony in response to Mr.
Jordan's questions you said, with respect to Google, a
monopolist, maybe the remedy would be to split them up? So, you
haven't really ruled that out, either. What about that? What do
you think about the alternative forum idea in the FTC that Mr.
Singer spoke about?
Mr. Thorne. The details matter so very much that it could
be a good idea, and I don't want to nay-say yet, but just
adding more people under a nebulous standard we want to stop
discrimination, that's not specific enough. Discrimination is
really, really important in a handful of antitrust cases
imposing liability on monopolists.
It was never the end of the inquiry. It was always, it was
a signal that something is wrong, and it turns out to be an
easier remedy for any enforcement court to say stop
discriminating than to set new terms of dealing like some judge
setting price in terms of dealing.
It was never under the inquiry. There was always a chance
for the monopolist to say, no, I had a reason for that. Hear it
out, and if it is a real reason, they get away.
Mr. Fitzgerald. Thank you, sir.
Mr. Cicilline. [Presiding] Thank you. The time of the
gentleman has expired. I now recognize the gentlelady from
Pennsylvania, Ms. Scanlon, for five minutes.
Ms. Scanlon. Thank you, Chair Cicilline.
Well, as this Committee's investigation has revealed, Big
Tech has relied on creating barriers to entry as a means of
building up and maintaining monopolies whether it is Apple
making arbitrary rules for direct competitors to use their App
Store, or Amazon using a vendor's own sales information to
undercut their business, it appears that the time has come when
Congress has to take action.
So, I am particularly concerned about the impact of
gatekeeper techniques on user privacy and so are my
constituents. So, I would like to focus my questions on the
network effects of Facebook and Google because those platforms
are so dominant that is where so many of my constituents really
encounter privacy concerns.
The self-reinforcing nature of those companies makes it
difficult for users to leave when they have been harmed and it
makes it hard for merging companies to draw new users on to
their platforms. What we have seen is that Facebook and Google
exploit their relationship by continuously lowering privacy
standards while profiting hand over fist from their growing
cache of user data.
So, I am hearing that there are some solutions to this
issue particularly around fostering real competition in the
digital marketplace, raising privacy standards for user data
usage and empowering consumers. So, Ms. Slaiman, can you talk
to me about the connection between user privacy, data
portability, or interoperability?
Ms. Slaiman. Yes. Thank you, Congresswoman. So, first, I
want to be clear. I don't think that competition will be
sufficient to fully address the consumer privacy concerns that
Public Knowledge has on that I am sure your constituents have,
so we still will need Federal privacy legislation to protect
users. However, I do think users are already frustrated by not
having their privacy protected on these platforms and they
might like to leave but they feel locked in because of those
network effects that you have described.
If I am a frustrated Facebook user, and I am, I would like
to leave the platform and I can't because I have around a
thousand Facebook friends who are not switching to an
alternative platform with me. That makes it much harder for a
startup to convince investors that they are going to be
successful.
Investors know that this lock-in effect is impacting users,
so it is a really difficult problem for users, for
entrepreneurs to try to provide a more privacy-protective
service or to switch to a more privacy protective service, so
interoperability would address that concern. I could switch to
the new network and still communicate back with my friends who
have not decided yet to make the switch. I could benefit from
those privacy protections on the new network and not be
isolated from people who are on the incumbent network.
Ms. Scanlon. That is interesting. I mean one of the
difficulties in dealing with the issues that we are digging
into on this Committee is it can get pretty wonky in trying to
translate it for people who are not so deep in the weeds is a
problem.
So, as I try to translate that connection, do I have it
correct that if, for example, a new social networking service
wanted to offer stronger privacy protections, that some of the
things we are talking about here today could help someone
switch over to the new service and enjoy the new privacy
protections without losing their homeroom moms' group or their
class reunion Facebook group or something like that?
Ms. Slaiman. Yes, I think that is right. So, the question
about groups is a fairly specific one that we would want to
make sure, I think, that is something that the regulator could
work on to see whether groups can be shared across networks.
Certainly, it is important to be able to communicate back with
friends' network connections that you have made on the
incumbent social network, in this case Facebook.
Ms. Scanlon. Okay. I would like to seek unanimous consent
to enter two articles into the record. The first is an article
from USA Today dated February 1, 2021, and it is entitled, ``Do
Facebook, Twitter and YouTube censor conservatives? Claims `not
supported by the facts,' new research says.'' The second is a
new research report from New York University dated February
2021, entitled, ``False Accusation: The Unfounded Claim that
Social Media Companies Censor Conservatives.'' With that, I
will yield back.
Mr. Cicilline. Without objection.
[The information follows:]
MS. SCANLON FOR THE RECORD
=======================================================================
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Cicilline. The gentlelady yields back.
Now, I will recognize the gentlelady from Georgia, Ms.
McBath, for five minutes.
Ms. McBath. Thank you so much, Mr. Chair, appreciate it,
and thank you to each of the Witnesses for being here today. I
am going to just jump right into this.
Mr. Gundersen, I want to jump right into questions and
start with you. Your mapping company competes with Google Maps,
am I correct?
Mr. Gundersen. Correct.
Ms. McBath. You are not a Web search company, correct?
Mr. Gundersen. Correct.
Ms. McBath. Your business is not cloud storage or cloud
computing, is that right?
Mr. Gundersen. That is correct.
Ms. McBath. Great. So, you are a business that competes
with one aspect of Google and basically that is Google Maps,
but you don't compete against Google in these other areas.
So, let's say I am an app developer and I want to start a
new business from scratch and build a brand-new app, maybe an
app to help local businesses maybe deliver goods or services to
their customers and I really like using your mapping tools. I
also want to integrate some aspects of Google Maps search
capabilities to help customers find businesses and then I have
another company that is going to give me a really good deal on
cloud mapping services. Can I do that? Why or why not?
Mr. Gundersen. Technically, you can, absolutely.
Congresswoman, it is a great question. Technically, you can,
absolutely, select the specific services you want to build the
app the exact way. So, you can pick search from Google, you can
technically pick maps from Mapbox, and you can go to AWS for
cloud, for example. You as a developer need to have that level
decision making to make sure you are picking the right things.
Today, the terms of service contractually prohibit you as a
developer from using any of Google search APIs on top of any
map that is not Google and even though they are different
products, different API end points, and actually monetize
differently.
Ms. McBath. So, as the CEO of a mapping company then, is it
fair to say that you feel like you are competing with Google
Maps just based on who has a better product? Is that fair to
say?
Mr. Gundersen. No. Unfortunately, I am not able to compete
on the product merits. I have customers who, you know, you
think about what does it mean when a customer wants you, you
are paid, right? When a customer has to stop paying you and go
use a different product only because of the terms of service,
that is depriving not just the developers who are customers of
choice, but it has all these downstream implications on
consumers to have the right kind of app experience.
Ms. McBath. So, then for the developers that you work with,
the businesses that are your customers, these terms like they
say affect them and the products and the choices and the
offers, that has a lot of impact on those choices, correct?
Mr. Gundersen. Correct.
Ms. McBath. Okay. So, what does this ultimately mean then
for the choices that are out there for consumers?
Mr. Gundersen. It radically limits the consumers'
experiences because it is an upstream issue for the developer,
right. If a developer is required to use all things Google just
because terms of service, then by definition all things Google
will flow down to the consumer.
This gets to some of the other points coming up on data
collection. What does that then start having implications on
innovation, right, because the data that you are collecting
today needs to start it creates a self-learning flywheel and
then, next thing you know, it just farther expands all products
within the Google ecosystem.
Ms. McBath. So, during our investigation, Google said the
reason for this limitation in their terms is to prevent
negative user experiences and then they changed the policy
itself to specify that the restriction was to, and I quote,
``avoid quality issues and/or brand confusion,'' end quote.
What do they, what do you make of that explanation? What do you
make of that?
Mr. Gundersen. I would love to ask any developers if they
ever, or any consumers if they have any brand confusion here.
Like these are, you are in a different app already, right, the
map is going to be showing up in a different app. It is going
to be customized a whole bunch of different ways.
Like it is meritless. There is not, you don't need to tie
all services to one single giant entity to protect from brand
confusion. I think it is, I mean it is a recent change. It is a
change that came up after we started asking Google for years to
change their actual terms.
Ms. McBath. Well, thank you.
Turning to you, Mr. Singer, are issues like this unique to
Google or are there similar situations where contract terms
from dominant companies are reducing competition? What are the
conditions that allow for this kind of situation?
Mr. Cicilline. The time of the gentlelady has expired, but
Dr. Singer may answer the question.
Ms. McBath. I yield back.
Mr. Singer. Sure, so I will point to one, if I understand
correctly, what are other examples of contract terms that are
used by dominant platforms to stymie competition, and I would
point to Amazon's, effectively a tying arrangement, a tying
requirement that is imposed on merchants. If I understand
correctly, if the merchant decides to break the bundle and not
comply with the requirement but instead sources its fulfillment
from an independent that the merchant will be penalized in
Amazon's search results.
So, that would be a clear example of a contract provision
that is undermining competition and should be challenged under
the antitrust laws.
Mr. Cicilline. Thank you. The gentlelady yields back.
I now recognize the distinguished Chair of the Intellectual
Property Subcommittee, Mr. Johnson of Georgia, for five
minutes.
Mr. Johnson? Mr. Johnson of Georgia. Maybe his volume is
down.
Okay, I think Mr. Johnson is recognized for five minutes.
No. Mr. Johnson, can you hear us?
Mr. Johnson of Georgia. Yes, I can. Am I up?
Mr. Cicilline. I recognize you as the distinguished Chair
of the Intellectual Property Subcommittee and you are now
recognized for five minutes.
Mr. Johnson of Georgia. Thank you, Chair Cicilline, for
holding this very important hearing and thank you to the
esteemed Witnesses for appearing before us today.
Throughout the 15-month investigation that preceded these
solutions focused hearing, I kept seeing the same thing over
and over again, a bigger guy taking advantage of the smaller
guy. Sometimes through intimidation, other times by putting
themselves first and sucking up all the air in the room.
The rich get richer, and the poor get poorer in Big Tech
today, and we are looking for solutions because it is clear
that without intervention nothing is going to rebalance the
scales. The free markets will not rebalance the scales. So, we
know that there is a problem. We knew it before the series
began, but because of the series, we now know how broad the
problems are.
Ms. Harper, during my questioning of Big Tech CEOs, I asked
Mr. Cook from Apple about the practices of the App Store. I
observed that some of the companies, large app owners or even
corporate app owners were given sweetheart deals, but small app
owners were forced to pay 30 percent of their revenues. Others,
other small app developers can't make it past the vetting stage
because Apple has decided to introduce their competing app.
After understanding what the app developer was proposing to
put on their platform, they decided to preempt and put their
own app in. That is, they stole the app owner's idea in other
words. So, these are common practices and have an
anticompetitive effect. At its heart, treating similar
companies differently seems unfair. Why has Apple been allowed
to engage in this anticompetitive practice, Ms. Harper?
Ms. Harper. Thank you for the question, Congressman. You
raise a lot of really important issues. Essentially what has
happened is a failure of public policy, right. I mean we have a
tool kit as I referenced earlier in some of the prior
questions, we have a tool kit and a historic precedent of how
to address these types of extreme market power, which you point
out can be predatory, and this kill, copy, acquire approach to
running a large company that doesn't leave any room for anyone
else to play.
So, what I really think we need to consider is, you know,
taking on that main issue that we are seeing on with other
companies as well that have been mentioned here the dynamic you
describe with Apple is similar to Amazon having a marketplace
and also running its own private label business. The way to get
at that is through structural separation.
I will just add because I think something that has come up
in some of the prior questions is this either/or between the
regulation or the structural separation, but really the
historic precedent we have, the American way for dealing with
this problem is a combination of all those things together and
that is what the Subcommittee should move forward.
Mr. Johnson of Georgia. Thank you, Ms. Harper.
Mr. Singer, in your written testimony you discuss the use
of nondiscrimination requirements as a remedy. Do you believe a
nondiscrimination requirement could be implemented to prevent
the behavior that I just described?
Mr. Singer. Absolutely. I think that you would create a
venue in which this victim of discrimination by Apple would be
able to put forward a complaint and have his or her day in
court and seek relief, and the relief at a minimum would be
injunctive and any lost profits that was caused by
discriminatory conduct.
Mr. Johnson of Georgia. Well, your remedy seems to be not
in keeping with the Grover Norquist strategy of downsizing the
Federal government to the degree that you can drown it in a
bathtub. Is that philosophy one of the reasons why we have the
rise in four behemoth platforms that no one can compete with?
Mr. Singer. I think that that philosophy did catch on. It
might be on its way out. I think even in Republican circles,
the kind of pure laissez-faire approach to government may be on
its way out, thankfully, but that did take hold for, certainly,
the last several decades.
I point back to in 1992 when government used to respond to
problems, including gaps in antitrust law, they passed the
Cable Act. The Cable Act was meant to fill a void that the
antitrust laws could not address, which was Comcast, I don't
mean to pick on them, but other large incumbent cable operators
decided to pick off the best ideas of the edge among
independent networks, create a clone, and then give preference
to their clone on the cable dial by putting their network on
the basic tier and moving the independent either completely off
or putting them on expensive tier, like the sports tier. Does
that sound familiar?
So, the question is, why hasn't Congress acted to fill
these voids over the last 20 years?
Mr. Cicilline. Thank you.
Mr. Johnson of Georgia. Well, I--
Mr. Cicilline. I am sorry. The gentleman's time has expired
but, Mr. Johnson, did you have something final you wanted to
say?
Mr. Johnson of Georgia. Well, I was just going to say that
most of my friends on the other side of the aisle have signed
the Grover Norquist no new tax pledge as they have steadily
supported cutting revenues to the Federal Government by cutting
taxes. So, this is a problem that needs to be addressed mostly
by my friends on the other side of the aisle, who are they
responsible to, Grover Norquist or the people and the consumers
and small businesses of America. With that I yield back. Thank
you, Mr. Chair.
Mr. Cicilline. The gentleman yields back.
To be sure that we have a complete record of this hearing
and have some additional questions for a couple of the
Witnesses, Mr. Bishop and I are going to do one kind of wrap
up, just a couple of additional questions. I will now yield to
Mr. Bishop for five minutes.
Mr. Bishop. Yes, thank you, Mr. Chair.
I think that last point Mr. Johnson was making, it has
always been my view that when tax rates are set low enough for
the economy to be robust, more revenues always come to the
Federal government and government at all levels.
Mr. Thorne, but to pick up on Mr. Johnson's point just a
little bit and to be a little parochial, here is a self-
preference phenomenon example. Apple charges $9.99 a month for
a subscription to Apple Music, but $12.99 for a subscription to
Spotify. It is obvious what they are doing. Epic Games, a video
game company headquartered in my State attempted to give users
playing Fortnite a chance to save money through direct
payments. Apple began blocking updates and declined to host
Epic Games on its operating system. At the same time, Apple's
banning Epic Games from launching a gaming distribution service
while promoting its own. So, it appears to be a good example of
self-preference.
I know, Mr. Singer, there has been talk about the
nondiscrimination regime, and you said, Mr. Thorne, the devil
is in the details. Can you fill that in a bit or, and you can
just step away from that if you would like, if there were any
other major point you would like to wrap up with, we are, here,
at the end of the hearing, I would appreciate you doing so. I
will reserve a little time for Professor Lipsky to do the same.
Mr. Thorne. So, I would start by saying, Congressman, I do
not think that is a parochial concern, I think that is a
national concern. There is a business for $10 or $15 a month
subscriptions and there is a business for free apps where you
get ads and that is how you support it.
Apple is about to cut that off. I am very concerned about
the timing as Congress takes up remedies as we are between
leadership at the Justice Department. Apple was going to do
this last year right before the elections and at the beginning
of the holiday selling season where all the different campaigns
would have been disrupted by what they were about to do, and we
were able to hold them off a little bit. I think this is a bad
time for them to be taking new actions to make that problem
worse.
On Republican enforcement though, just a word. I am so
delighted, first, to be here and to see the strong bipartisan
support for focusing on what is, as Congresswoman Deming says,
the moral issue. The biggest case right now is the United
States' case against Google in the D.C. District Court. That
was brought under Attorney General William Barr. The biggest
case in the State AGs addressing Google is out in Texas with
ten Republican State AGs. I am really hoping that Democrat AGs
will join that case and support it. It is in a fast forum. It
is teed up in front of a judge that knows how to be a good
administrator. I do not see a lack of Republican enforcement in
any way.
I just again, I am very grateful for the chance to be here
and I think the problems you are addressing are very important.
Mr. Bishop. Thank you, Mr. Thorne. I think your point, your
comments emphasize the point that contrary to Mr. Johnson's
suggestion, I don't think anybody is proposing a laissez-faire.
I heard you talking about additional enforcement resources and
the likes, so I don't think that is really on the table. To
compliment the Chair, I think a bipartisan advance seems to be
particularly possible here and I appreciate the approach that
you have taken of that, Mr. Chair.
So, finally, Professor Lipsky, you have sort of taken it on
the chin a couple times today and I wanted to give you an
opportunity to highlight anything you would like to say at the
end.
Mr. Lipsky. I would just like to briefly echo the
discussion that you were just engaging in. I think the
antitrust community, by which I mean the courts and the
enforcers and the scholars and the lawyers, take great pride in
the fact that for many, many years antitrust has essentially
been a nonpartisan effort. You can find dozens of examples of
very serious and well-considered antitrust cases that were
started under a Democratic Administration and carried forward
by Republican Administrations and then maybe finished up in a
Republican or a Democratic Administration.
We take pride in the fact that this is a very fundamental,
national economic policy that has produced wonderful results.
It has made our country the economic powerhouse of the world
and part of the basis for that is that we make decisions on the
laws and the facts and sound economics and not on partisanship.
Finally, I would just like to say that you must recognize
that this spectacular success of the technology companies, and
this does not exempt them or in any way forgive any
anticompetitive conduct that they might have engaged in, but
that spectacular success is in many respects a product of this
wonderful combination of the antitrust laws focused on
prohibiting anticompetitive conduct and the article III courts'
independence and judicious ability to exercise independent
judgment and make sound decisions based on economics and the
facts and the law. We don't want to undermine those elements of
the system that produced this wonderful innovation and success.
Mr. Bishop. Thank you. Thank you, Mr. Chair.
Mr. Cicilline. I now recognize myself for five minutes. I
just want to follow up on a couple of things and, of course,
the spectacular success that Professor Lipsky speaks about has
brought different consequences for innovators, consumers, and
workers, and that is the very reason we are having this hearing
and we conducted this investigation.
There has been a lot of discussion with respect to the
issues of structural--I am sorry--portability and
interoperability where I think there is a lot of consensuses in
the Committee. One of the issues or one of the solutions or
remedies that is most exciting to me, and to other Members of
the Committee is the structural separation remedy.
Ms. Harper, you in your written testimony note, and I am
quoting you, ``Amazon runs the infrastructure for modern
commerce and engages in a host of anticompetitive practices
such as predatory pricing, leveraging its dominance from one
market into another, self-preferencing its own products, tying
its services to extract more money from those who use its
services, and weaponizing counterfeit products.''
Would you speak to how structural separation or line of
business restrictions, what I like to refer to as the Glass-
Steagall of the internet, can address this anticompetitive
conduct and whether really it is, in your view, the only remedy
that will comprehensively address the practices that you have
just described in your testimony?
Ms. Harper. Thank you for the question, Chair. Again, thank
you for the opportunity to be at the hearing.
Yes, it is my view that this is the only way to take on the
level of gatekeeping power and dominance that I described in
the written testimony and that you just alluded to in terms of
the different lines of business that they are operating in
because they are, they have near-perfect market intelligence.
It allows them to squash other businesses that are coming even
close to threatening them on even specific product lines, and
it is not possible through regulation alone.
Just to make a couple of more points there, we need to also
look back, and I know something was referenced about being
logical and careful and all of that. Well, we should be careful
and look at what has worked and what hasn't worked before,
right. Like if you look at policy, regulations, singular
regulations in Europe, for example, that did not actually
address the problem. It only made the Facebook and Google
dominance more entrenched.
So, that is why we really recommend the structural
separation piece because it also is ultimately easier to
administer with just something that has also has come up, it
recognizes the humility of regulation, right. We can only do so
much through individual agencies, but if we take the root cause
of the issue, address these conflicts of interest and the
incentives, then we will be able to restore competition to the
marketplace.
Mr. Cicilline. That was similar testimony that was provided
in the last Congress by Sally Hubbard from Open Markets
Institute who testified that Congress should structurally
eliminate the platforms' conflict of interest and remove their
incentives and ability to self-preference and should separate
platforms from commerce into best business lines.
So, I guess my final question for you is, how would that
work? I mean can you just sort of speak to how Congress would
actually make that happen, how it would be operationalized?
Ms. Harper. Well, yes. I mean it would involve passing
statutes that address this specific market. Again as I have
alluded to, that is very much in line with prior historic
moments where we faced this type of dominant power--railroads
and the telecom industry. This body, this institution,
Congress, recognized that it wasn't sustainable to let this
type of power continue and acted accordingly through enacting
statutes and then, ultimately, making changes to the law that
enabled more competition.
Mr. Cicilline. Great.
Ms. Harper. So, similarly, just like is covered in the
Subcommittee Report, we would recommend moving forward with
those types of recommendations.
Mr. Cicilline. Thank you so much.
My final question, Mr. Gundersen, is for you. In your
written testimony you explain the problem of Google's
anticompetitive tying of Google Search with Google Maps and you
say it will get more complicated in the future and you point to
this deal between Google Maps and Ford as an example of how
Google's subscription bundling of services is creating a full
ecosystem lock-in.
Could you speak a little bit about what you mean by that
and how the expansion into this sort of auto technology will
reinforce the monopoly power of Google in search and a dominant
position in numerous other markets like advertising and cloud
computing and what it might mean in terms of the privacy
concerns it might raise in terms of the data that they will
have the ability to collect?
Mr. Gundersen. Mr. Chair, thank you. It is the data piece
that is just so critical here. Monopoly power is at the root
cause of this. What is going on right now is not just price
positioning, you are getting access to all the data and the
sensor data in the cars. It is not just about the user app
data, but the map and the operating system, all the way down to
the data coming off the vehicle back to the cloud.
My gosh, this is how all AI learns. It is all about data.
The decisions this Committee makes now are going to have major
ramifications on the future of search and the future of
artificial intelligence and further consolidation. It's the
data.
Mr. Cicilline. Thank you very much, Mr. Gundersen.
I now seek unanimous consent to add a number of letters and
statements to the record regarding the proposals discussed
today to limit gatekeeper power and increase competition
online. Without objection, Mr. Bishop is recognized for
unanimous consent request.
[The information follows:]
MR. CICILLINE FOR THE RECORD
=======================================================================
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Bishop. Thank you, Mr. Chair. It is to seek, and I
think, I don't know if it is among the letters you are
referring to, but a letter to you and Mr. Buck from the
National Association of Wholesaler Distributors.
Mr. Cicilline. Without objection.
MR. BISHOP FOR THE RECORD
=======================================================================
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Bishop. Thank you, sir.
Mr. Cicilline. This concludes today's hearing and I again
want to thank our distinguished Witnesses for their testimony
which is really going to provide enormous assistance as the
Committee shapes the legislative remedies that the
investigation calls for. I thank all the Witnesses for their
time.
Without objection, all Members will have five legislative
days to submit additional written questions for the Witnesses
or additional materials for the record. Our next hearing which
will happen just in a couple weeks will address the news
crisis, the crisis of local journalism and the impact of the
large technology platforms in facilitating that crisis, and
some proposed responses.
Again, with gratitude, this hearing is adjourned.
[Whereupon, at 1:01 p.m., the Subcommittee was adjourned.]
[all]