[Senate Hearing 117-840]
[From the U.S. Government Publishing Office]
S. Hrg. 117-840
BIG DATA, BIG QUESTIONS: IMPLICATIONS
FOR COMPETITION AND CONSUMERS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON COMPETITION POLICY,
ANTITRUST AND CONSUMER RIGHTS
OF THE
COMMITTEE ON THE JUDICIARY
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 21, 2021
__________
Serial No. J-117-35
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
www.judiciary.senate.gov
www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
54-862 WASHINGTON : 2024
COMMITTEE ON THE JUDICIARY
RICHARD J. DURBIN, Illinois, Chair
PATRICK J. LEAHY, Vermont CHARLES E. GRASSLEY, Iowa, Ranking
DIANNE FEINSTEIN, California Member
SHELDON WHITEHOUSE, Rhode Island LINDSEY O. GRAHAM, South Carolina
AMY KLOBUCHAR, Minnesota JOHN CORNYN, Texas
CHRISTOPHER A. COONS, Delaware MICHAEL S. LEE, Utah
RICHARD BLUMENTHAL, Connecticut TED CRUZ, Texas
MAZIE K. HIRONO, Hawaii BEN SASSE, Nebraska
CORY A. BOOKER, New Jersey JOSH HAWLEY, Missouri
ALEX PADILLA, California TOM COTTON, Arkansas
JON OSSOFF, Georgia JOHN KENNEDY, Louisiana
THOM TILLIS, North Carolina
MARSHA BLACKBURN, Tennessee
Joseph Zogby, Chief Counsel and Staff Director
Kolan L. Davis, Republican Chief Counsel and Staff Director
SUBCOMMITTEE ON COMPETITION POLICY, ANTITRUST
AND CONSUMER RIGHTS
AMY KLOBUCHAR, Minnesota, Chair
PATRICK J. LEAHY, Vermont MICHAEL S. LEE, Utah, Ranking
RICHARD BLUMENTHAL, Connecticut Member
CORY A. BOOKER, New Jersey JOSH HAWLEY, Missouri
JON OSSOFF, Georgia TOM COTTON, Arkansas
THOM TILLIS, North Carolina
MARSHA BLACKBURN, Tennessee
Keagan Buchanan, Majority Staff Director
Wendy Baig, Minority Staff Director
C O N T E N T S
----------
SEPTEMBER 21, 2021, 2:51 P.M.
STATEMENTS OF COMMITTEE MEMBERS
Page
Klobuchar, Hon. Amy, a U.S. Senator from the State of Minnesota.. 1
Durbin, Hon. Richard J, a U.S. Senator from the State of Illinois 1
Lee, Hon. Michael S., a U.S. Senator from the State of Utah...... 5
WITNESSES
Witness List..................................................... 48
Colclasure, Sheila, global chief digital responsibility and
public policy officer, IPG Kinesso, Little Rock, Arkansas...... 10
prepared statement........................................... 49
Erickson, Markham, vice president of government affairs and
public policy, Google, Washington, DC.......................... 9
prepared statement........................................... 58
Robb, John, author, The Global Guerrillas Report, Acton,
Massachusetts.................................................. 12
prepared statement........................................... 67
Satterfield, Steve, vice president of privacy and public policy,
Facebook, Menlo Park, California............................... 7
prepared statement........................................... 71
Slaiman, Charlotte, competition policy director, Public
Knowledge, Washington, DC...................................... 13
prepared statement........................................... 76
QUESTIONS
Questions submitted to Sheila Colclasure by:
Ranking Member Grassley...................................... 88
Senator Ossoff............................................... 89
Senator Tillis............................................... 91
Senator Blackburn............................................ 87
Questions submitted to Markham Erickson by:
Ranking Member Grassley...................................... 92
Senator Hawley............................................... 93
Senator Tillis............................................... 94
Questions submitted to John Robb by:
Ranking Member Grassley...................................... 97
Senator Tillis............................................... 98
Senator Blackburn............................................ 96
Questions submitted to Steve Satterfield by:
Ranking Member Grassley...................................... 100
Senator Hawley............................................... 101
Senator Tillis............................................... 103
Senator Blackburn............................................ 99
Questions submitted to Charlotte Slaiman by:
Ranking Member Grassley...................................... 105
Senator Tillis............................................... 106
ANSWERS
Responses of Sheila Colclasure to questions submitted by:
Ranking Member Grassley...................................... 107
Senator Ossoff............................................... 109
Senator Tillis............................................... 115
Senator Blackburn............................................ 118
Responses of Markham Erickson to questions submitted by:
Ranking Member Grassley...................................... 121
Senator Hawley............................................... 123
Senator Tillis............................................... 126
Responses of John Robb to questions submitted by:
Ranking Member Grassley...................................... 137
Senator Tillis............................................... 133
Senator Blackburn............................................ 136
Responses of Steve Satterfield to questions submitted by:
Ranking Member Grassley...................................... 143
Senator Hawley............................................... 144
Senator Tillis............................................... 149
Senator Blackburn............................................ 139
Responses of Charlotte Slaiman to questions submitted by:
Ranking Member Grassley...................................... 154
Senator Tillis............................................... 155
BIG DATA, BIG QUESTIONS: IMPLICATIONS
FOR COMPETITION AND CONSUMERS
----------
TUESDAY, SEPTEMBER 21, 2021
United States Senate
Subcommittee on Competition, Policy, Antitrust, and
Consumer Rights,
Committee on the Judiciary
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:51 p.m., in
Room 226, Dirksen Senate Office Building, Hon. Amy Klobuchar,
Chair of the Subcommittee, presiding.
Present: Senators Klobuchar [presiding], Blumenthal, Lee,
Hawley and Blackburn.
Also Present: Chair Durbin, Senators Padilla and Cruz.
OPENING STATEMENT OF HON. AMY KLOBUCHAR,
A U.S. SENATOR FROM THE STATE OF MINNESOTA
Chair Klobuchar. Okay. We've been joined by my friend and
colleague, Senator Lee, so we're ready to begin the hearing. I
call to order the hearing of the Subcommittee on Competition,
Policy, Antitrust, and Consumer Rights on Big Data, Big
Questions: Implications for Competition and Consumers.
Good afternoon, and before we begin, the Chair of the
Committee can only be here for the first few minutes. It was
very important to have him here and as we would give Senator
Grassley the same due, we will--I asked Senator Durbin if he
could say a few words before I begin.
OPENING STATEMENT OF HON. RICHARD J. DURBIN,
A U.S. SENATOR FROM THE STATE OF ILLINOIS
Chair Durbin. Thank you very much, Senator Klobuchar, and
to our witnesses and my colleague Senator Lee for giving me
this opportunity to say a few opening words about the scope and
unrestricted nature of big data collection.
In 2018, we had an extraordinary hearing with the head of
Facebook, Mr. Zuckerberg. He faced 42 Senators who had
questions for him because of overlapping jurisdiction of the
Committees. It was an ordeal that went on for some period of
time. I was somewhere in the middle of the pack. The question I
asked him was very basic. ``Would you mind sharing with us the
name of the hotel you stayed in last night?'' After a kind of
embarrassed and awkward pause, he said, ``No.'' I said, ``Well,
would you mind sharing with us the emails that you've sent out
in the last 24 hours and who you sent them to?'' He said,
``No.'' I said, ``Really isn't that the issue we're getting
down to, privacy? Am I right to say there's a line I'm going to
draw, and you can't cross it legally to invade my space and
invade my privacy?''
In today's world, information is economic power. Companies
are using it to make more money. I share the concerns of my
colleagues that have enabled the collection of too much
information by selected few giant companies. There could be
benefits and efficiencies to big data, but there are cost and
impact. These cost and impact affect everyone, including our
children.
I introduced the Clean Slate for Kids Online Act because I
was concerned with the amount of data collected and stored on
our children and grandchildren. Every click a child makes on
the internet leaves a trail of personal data that can last a
lifetime.
Companies that market online products and apps geared
toward children are accumulating massive amounts of personal
data, and the kids never had the chance to even consider giving
informed consent.
My bill would give every American enforceable legal right
to demand that internet companies delete all personal
information collected about a person when she was--he or she
was under the age of 13. Kids deserve the right to request a
clean slate once they've grown up and are old enough to
appreciate the consequences of data collection. This bill gives
them a basic privacy protection. It's one aspect of data
collection that can be manipulated and impacted on consumers
and competition.
Today's hearing is an important part of that effort to
shine light on big data collectors.
I thank Senator Klobuchar and Senator Lee.
Chair Klobuchar. Thank you very much, Chairman Durbin. I
wanted to make clear that this hearing is one of a series of
hearings that Senator Lee and I are conducting, our bipartisan
review of America's competition issues. I thank my staff, as
well as Senator Lee and his staff, for helping to plan the
hearing.
Today we're going to be talking about how competition is
affected and threatened by the use of big data. Big data is at
the core of our modern economy, as Senator Durbin so well
pointed out, powering targeted advertising and driving
artificial intelligence to select what products and services we
are shown online and increasingly offline as well.
In this hearing, we'll explore the companies that control
the data, the state of competition and barriers to entry, and
the effects of big data on consumers, their choices, and their
privacy.
I'd like to be clear about what we mean when we say big
data. Technology companies such as Google, Facebook, and Amazon
collect an enormous amount of information, as Senator Durbin
pointed out, about our daily activities in real time. They know
what we buy, who our friends are, where we live, work and
travel, and more.
In fact, their very business models, their very business
models were set up around getting that information and then
using it to profit. Through services such as Google's Gmail and
Facebook's Instagram, though those services are offered to us
for free, these companies and advertisers use the data they
collect about us to sell to other companies. In the end, you
can't get around the fact. We are the product. We are the
product that makes the companies money.
Big tech companies are not the only ones keeping tabs on
all of us. Data brokers including Kinesso and its sister
company, Acxiom, also buy, process, and sell massive amounts of
personal information about consumers, and they've actually been
doing it since before we even knew what the internet was. They
collect information from the Department of Motor Vehicles, from
public records, from our grocery store loyalty cards, and even
from other data brokers.
Today they also buy our browsing histories, and guess how
much money we make, and what religion we practice. This data
has immense competitive value and the way that it is collected
and used has important impacts on consumers.
I'll give you an example. The simple act of a consumer
visiting a utility company's website to pay a monthly gas bill
allowed dozens of companies to profit off of her, for the most
part, without her knowledge.
Facebook and Google are likely to know about that consumer
paying her bill even though they had nothing to do with the
transaction. If the gas company runs advertisements on Facebook
as many do, Facebook would have trackers embedded on the gas
company's website. If the consumer, if she uses the world's
most popular web browser, Chrome, Google would know what
websites she visited.
Both companies collect and analyze this kind of
information, building a detailed profile of the consumer and
giving advertisers access to our online, for a price of course,
but not something she gets paid.
At the same time, data brokers like Acxiom are buying and
selling data from utility providers, so they also potentially
know that she paid her gas bill, and they pair that information
with her other purchasing habits, location data, financial
information, family details, and their guesses about her race
and gender. They sell this kind of information to governments,
advertisers, healthcare companies, and others.
Just a few years ago, Acxiom had a partnership with
Facebook to combine their data for advertisers and share the
profits. At that time, Facebook would have supplied the
consumer's online activities and Acxiom would have provided her
offline activities, and advertisers could use them both to show
her ads. Facebook ended that program in 2018, raising questions
about whether massive technology companies now have so much
data that they don't need to buy from data brokers.
In today's hearing, we will discuss how this kind of
control over enormous data affects competition. While data-
driven targeting can filter out things we don't want, show us
products that might be of interest, and help some small
businesses reach new customers, it also functions as a
gatekeeper to important services and opportunities.
We talk a lot in this space, as Senator Durbin did, about
the privacy concerns, and obviously, there's big concerns about
that. I've been a longtime advocate for privacy legislation,
Federal privacy legislation. I think its time has long come,
and I know we are looking at focusing some resources into these
privacy issues in the bill that's currently being debated in
the Senate.
We also have to look at another piece of this, and that is
that there are real threats to fair competition from these
massive data sets and the artificial intelligence inferences
that these companies make based on them.
For example, after years of complaints and a Federal
lawsuit, Facebook is reportedly still disproportionately
showing job ads for mechanics to men and for pre-school nurses
to women. That distorts labor markets, and it doesn't help us
get to where we need to be to be able to recruit people for
these jobs.
We also see the control that big data has serious
implications for healthy competitive marketplaces. Data can be
a barrier to entry. Unless you have a lot of it, you may not be
able to reach consumers successfully. The big data allows you
to target ads, to create algorithms that others who might want
to be entering the market can't do if they don't also have the
data. It can be another way that powerful internet gatekeepers
maintain control of how small businesses reach customers and
earn outsized profits from that control.
The impact of big data should also play an important role
in merger analysis. As dominant digital platforms try to
acquire other companies with massive troves of consumer data,
the antitrust agencies must place greater emphasis on
determining the competitive impact of obtaining even more data
through mergers.
This is why I talk about that our laws have to be as
sophisticated as the markets that we today operate in. We all
want opportunities for new and innovative companies to emerge
and for new markets to develop.
When big data inhibits competition by allowing those who
have it to block access to markets for those who do not, we
need to step in and fix it. This means enforcing our existing
antitrust laws to their fullest extent to protect competition.
It means updating our antitrust laws for the modern economy,
just as we've done centuries past.
It's like every 50 years or so, we do a major update. The
time has long passed for today's tech world.
My bill, Competition and Antitrust Law Enforcement and
Reform Act, would do so by updating the legal standard to
prohibit harmful mergers and anticompetitive conduct, shifting
the burden to dominant companies to prove that their
acquisitions and, most significantly here, their exclusionary
conduct doesn't threaten competition.
We also have to make sure that our antitrust enforcers have
the resources to do their jobs. They can't take on the biggest
companies and some of the most complex conduct the world has
ever seen with duct tape and band-aids.
Senator Grassley and I, with the support of this Committee,
got our bill through to update the merger fees which will bring
in over $100 million for both agencies. It has passed the
Senate. We are waiting action in the House. We have every
reason to believe we'll get it done.
There's more we can do not only in the reconciliation bill
before us, but in the year-end budget to make sure these
agencies have what they need.
We also need competition reform specifically targeted at
tech. These are things like issues of interoperability. We've
been talking about app stores recently. There's a major bill on
that, bipartisan, that's been introduced, as well as bills
targeting discriminatory conduct with tech companies.
As we explore paths forward, we see that the dynamics of
data mining are already changing. In recent months, Apple
rolled out an update that lets iPhone and iPad users decide
whether they want to be tracked online by Facebook and other
apps. That was a major good change. What happened? What do we
know so far? Early reports indicate consumers have
overwhelmingly opted out of being tracked. More than 75
percent, Senator Lee, decided not to be tracked on apps or
their Apple devices when they were posed that simple
straightforward question.
As we push for increased consumer privacy, we must make
sure that monopolists don't fool us into handing over all
control of our data to them at the expense of fair competition.
We must both fight monopolies and protect consumer data. Guess
what? We can do both things at once.
I don't want us to not realize this brave new world we are
in, where having the data at all completely advantages certain
companies who are the gatekeepers and makes it much more
difficult to have a competitive market.
I will now turn it over to Ranking Member Lee. Thank you.
OPENING STATEMENT OF HON. MICHAEL S. LEE,
A U.S. SENATOR FROM THE STATE OF UTAH
Senator Lee. Thank you, Chairwoman Klobuchar. I like the
band-aids and duct tape analogy. I knew a guy named Fred Trent
who used to say, ``If you have a spool of baling wire, a roll
of duct tape, and a pair of vice grips, you can fix anything.''
Chair Klobuchar. Okay.
Senator Lee. I'm sure he wasn't talking about antitrust
laws. Yes.
Chair Klobuchar. Maybe not this. Yes. Thank you.
Senator Lee. I think the title of today's hearing is an apt
one, as big data does itself by its very nature present big
questions, although the answers might not always be what we
expect.
On the one hand, data is increasingly valuable and it's
often essential to developing and improving technologies
that'll power our economy through the rest of the 21st century.
These technologies obviously have a bearing on consumer markets
and retail markets, but they also make enormous contributions
to national security and national defense and likely influence
global strategic thinking in countless ways.
At the same time, as more and more data about us is
collected, the risks of unauthorized disclosure increase
considerably. The more valuable and the more useful our data
becomes the more companies will do to obtain it, and the more
we can start to expect more intrusions into our privacy.
Privacy, too, can be weaponized to entrench market
incumbents and provide them with the convenient pretext for
excluding competition and, in some cases, evading it
altogether.
I see several key considerations going forward. The first
is the value of our data. Viewing user data as a form of
payment for online services is no longer just a theory. It's
how the companies themselves, and how many antitrust enforcers,
view the market. It's time for lawmakers and for the public to
catch up, and we need to reframe our understanding and our
expectations of supposedly free online services. To realize
that they're not, in fact, free at all, but they come at the
cost. A cost that's often opaque, unstable, and significantly
greater than we may realize.
The second consideration, which flows naturally from the
first, is the need to reinforce our ownership and our control
over our data. When we recognize the value of the data that we
provide for companies like Google and Facebook in exchange for
their services and realize the massive imbalance in bargaining
power the consumers have had--had up until this point, it
should compel us to take greater care that our data is truly
ours, that we have the ability to meaningfully consent to its
use and to revoke that consent.
Each of these will help to promote competition in markets
that rely heavily on data by forcing companies to compete for
the quality of services offered in exchange for our data and
for the right to continue using our data.
Speaking of data and product quality, it's often claimed
that better data will mean better services. That depends
entirely on how the data are put to use. Intrusions on our
privacy are an obvious threat to quality, but so too are the
more insidious threats like those uncovered recently by the
Wall Street Journal about Facebook. It may be that the most
pressing question when it comes to data access in aggregation
is not whether it's entrenching monopolies, but whether it's
leading big tech firms to act with flagrant disregard for the
effects of their businesses on society at large.
Finally, we should be reticent to immediately embrace
concerns that focus merely on the bigness of data access or
aggregation. Data is not a finite resource. It's constantly
being generated by innumerable sources, and no one company
could likely ever control all data necessary to its or a
competitor's business.
Moreover, punishing companies for obtaining the data sets
necessary to achieve economies of scale and scope smacks of
penalizing success, and it's not something we should be doing.
In the name of tearing down all barriers to entry, will we
next demand that market incumbents share their trade secrets,
their expertise, and their intellectual property with
competitors?
All these questions and more should make for a deeply
interesting and informative discussion, both at today's hearing
and in the years to come. I look forward to it. Thank you,
Madam Chairwoman.
Chair Klobuchar. Thank you very much, Senator Lee. I'm
going to introduce our witnesses now. Some are remote, some are
here with us.
Steve Satterfield. Mr. Satterfield is a vice president on
the Public Policy Team at Facebook. He leads a team responsible
for developing and advocating for the company's positions on
privacy and data related regulations. Prior to joining
Facebook, he worked at Covington & Burling as a privacy lawyer.
Markham Erickson. Mr. Erickson leads Google's Centers of
Excellence, a global team of subject matter experts focused on
the application of law and policy with respect to technology
and the internet. Prior to joining Google, Mr. Erickson was a
partner at Steptoe & Johnson.
Sheila Colclasure. Ms. Colclasure is the global chief
digital responsibility and public policy officer at IPG
Kinesso. She is responsible for leading the global data policy
and digital responsibility strategies at the company. She
previously worked at the sister company, the data broker Acxiom
as its global chief data ethics officer in public policy
executive. She also served as staff assistant here in the
United States Senate. I always like to add that when they do.
John Robb. Mr. Robb is an author and podcaster with The
Global Guerrillas Report. He is alumnus of the United States
Air Force Academy and Yale University. He previously served in
uniform as a pilot and with the Special Forces. He is also the
author of the book, ``Brave New War.''
Charlotte Slaiman has been with us in the past. Ms. Slaiman
is the competition policy director at Public Knowledge, a
nonprofit dedicated to promoting freedom of expression and open
internet, and access to affordable communications. Prior to
joining Public Knowledge, she served as an attorney with the
FDC, and here in the Senate as a legislative aide.
We thank you, and if the witnesses could please stand and
raise your right hand, including our remote witnesses.
[Witnesses are sworn in.]
Chair Klobuchar. I will now recognize the witnesses for
five minutes of testimony each, and why don't we begin with
you, Mr. Satterfield. Thank you.
STATEMENT OF STEVE SATTERFIELD, VICE
PRESIDENT OF PRIVACY AND PUBLIC POLICY,
FACEBOOK, MENLO PARK, CALIFORNIA
Mr. Satterfield. Thank you. Chairwoman Klobuchar, Ranking
Member Lee, and Members of the Subcommittee, good afternoon,
and thank you for the opportunity to be here today. My name is
Steve Satterfield, and I'm vice president of privacy and public
policy at Facebook, where I focus on developing and sharing the
company's perspectives on data regulation globally.
I appreciate the Subcommittee's interest in the topics of
today's hearing and the work that you all do to ensure the
competitiveness of American markets and to shape data policy. I
believe Facebook has an important perspective here given the
substantial contributions we've made to the technology sector
in the nearly 20 years since our founding.
We believe that many of the concerns expressed by Congress
and other stakeholders with respect to privacy and content
moderation can be addressed by appropriate legislation, and we
stand ready to be a productive partner in those efforts.
As you know, our company is currently facing multiple
lawsuits, including those brought by the Federal Trade
Commission and a number of State Attorneys General, and that
will limit what I'm able to address today. I assure you we want
to be helpful where we can, and I look forward to our
discussion.
Like many services, Facebook helps people share, connect,
communicate, or simply find entertaining content. Each day,
millions of Americans use Facebook to connect with people and
businesses, to share and view a wide range of content, to join
communities of interest, and to set up fundraisers for good
causes, among many other things.
All of these activities support our mission to give people
the power to build community and bring the world closer
together. The data helps make all of this possible.
At Facebook, we use and analyze data responsibly to provide
personalized user experiences. We also use data to improve our
products, to provide measurement, analytics, and other business
services; to promote safety, integrity, and security; to
communicate with people who use our services; and to research
and innovate for social good, including by connecting and
lifting up marginalized communities and addressing humanitarian
crises.
Data also helps us show people better and more relevant
ads, which keep Facebook free. It lets advertisers reach the
right people, which benefits more than ten million businesses
and non-profits. For the data people trust us with, we
recognize that we have an important responsibility to protect
it, and we work around the clock to help protect people's
accounts, and we build security into every Facebook product.
We offer a number of tools that provide people transparency
and control over the data we receive, and we've steadily made
improvements to the privacy protections and controls we offer.
We also have a variety of tools to help users understand the
data Facebook has about them. We're always working to develop
technologies that enhance the way people connect and
communicate, and data is key to that work. We know that if we
don't keep innovating and improving, we'll fall behind.
When Facebook started, we faced established competitors,
including AOL and MySpace, with lots of user data that didn't
protect them from competition. Success comes from creating
products users value and enjoy, not from how much data you
have.
As our CEO, Mark Zuckerberg has explained, we believe that
strong and consistent competition is vital because it ensures
the playing field is level for all. Facebook competes hard
because we're up against other smart and innovative companies.
We know that our future success is not guaranteed, especially
in the global tech industry defined by rapid innovation and
change.
Technological innovation has created an ever more
competitive environment, and we invest heavily in our products
and services to stay relevant, competitive, committing more
than $18 billion to research and development last year. We're
proud of our record and will continue to focus on building and
updating our products to give people the best experiences
possible.
Thank you and I look forward to your questions.
[The prepared statement of Mr. Satterfield appears as a
submission for the record.]
Chair Klobuchar. Thank you very much, Mr. Satterfield. Next
up, Markham Erickson of Google.
STATEMENT OF MARKHAM ERICKSON, VICE
PRESIDENT OF GOVERNMENT AFFAIRS AND
PUBLIC POLICY, GOOGLE, WASHINGTON, DC
Mr. Erickson. Chairwoman Klobuchar, Ranking Member Lee, and
distinguished Members of the Subcommittee, thank you for the
opportunity to appear before you today.
My name is Markham Erickson, and I'm a vice president of
government affairs and public policy at Google, where I oversee
a global team of subject matter experts focused on the
application of law and policy to technology and the internet.
Data should be used to make consumer's lives better by
improving the quality and diversity of products and services
available, while protecting user's privacy and giving them
control.
In my testimony, I will describe how Google uses and
protects data, the safe data mobility empowers consumers and
boosts competition, that data alone does not guarantee better
products for consumers.
Data plays an important role in making Google products and
services people use every day functional and helpful, and we
are committed to treating that data responsibly and protecting
privacy with strict protocols and innovative technologies.
Google combines industry-leading technology with insights from
data to develop products that help people find directions,
build businesses, and search for information.
On an individual level, what data is collected and how it
is used depends on how each person uses our services and how
they manage their privacy controls. Data is one element of our
ads business where it helps us connect people with relevant
advertisements. Advertising is Google's main source of revenue,
and it enables us to make many of our flagship--flagship
products available for free to billions of people around the
world.
The ads shown are often informed by a search query or page
content, but they can also be based on a user's interest or
their personal data, if their privacy settings permit. We do
not sell our users' personal information to advertisers or to
anyone. Our business relies on ensuring our user's trust,
specifically in how we use and protect their data. We work to
maintain that trust by offering industry-leading controls to
manage privacy. Three billion users visit Google accounts every
year, where they can review and change their privacy settings
and delete data stored with their account.
We constantly innovate to improve privacy across our
products and on our platforms. For example, Privacy Sandbox is
a collaborative initiative that aims to build a more private
and secure web, because many publishers and advertisers rely on
online advertising to fund their websites and connect with
consumers. We will continue to partner with the industry, civil
society, and governments to get this balance right.
In addition to our work to advance privacy-preserving
technology, we contribute data and expertise to the broader
ecosystem. Data portability empowers consumers to choose
services or online platforms based on quality and individual
preference, not because they're locked in.
Since 2011, Google Takeout has enabled users to easily move
their content to competing services with more than one billion
gigabytes exported from Google products. Additionally, through
our leadership in the data transfer project, Google makes it
easier for other companies to provide tools that let users
seamlessly move data between online services.
We are also proud of our contributions to the open-source
community. Many of the larger successes in the machine learning
ecosystem have come from data that is openly available on the
web.
Senators, data by itself does not guarantee better and more
and more successful products. Rather, it is the investment,
innovation, and methods that matter, not just the amount of
data that a company may have. Cutting edge technology or new
ideas allow companies, new companies, to succeed, sometimes
without any data at all. New entrants such as Zoom, Snapchat,
Spotify, Pinterest, and many others, they've all become
successful because they provide an innovative product, not
because they have access to data from established companies.
Our focus is continually improving our products, and our
greatest source of innovation comes from extensive research and
development. Last year alone, we spent over $27.6 billion on
research and development, which is nearly ten times what we
spent in 2009.
At Google, we are committed to protecting data through
privacy, security, and user control, and improving our products
in a way that ensures more consumer choice and competition. We
will continue to engage with policymakers and regulators, as
well as other stakeholders, to support thoughtful regulation
that encourages innovation and protects consumers. For example,
we have long supported Federal privacy legislation in the
United States, and we encourage to Congress to enact such
legislation.
Thank you for the opportunity to discuss our work with you
today, and I welcome your questions.
[The prepared statement of Mr. Erickson appears as a
submission for the record.]
Chair Klobuchar. Thank you very much Mr. Erickson. Next up,
Ms. Colclasure.
STATEMENT OF SHEILA COLCLASURE, GLOBAL
CHIEF DIGITAL RESPONSIBILITY AND PUBLIC
POLICY OFFICER, IPG KINESSO, LITTLE ROCK, ARKANSAS
Ms. Colclasure. Chairwoman Klobuchar, Ranking Member Lee,
Members of the Committee, good afternoon. Thank you for the
opportunity to speak today.
I'd like to make several key points about the importance of
fair and open data use, the intersection of data privacy laws
and Federal competition practices, and their potential impact
on today's connected marketplace.
First, responsible companies are ready for a comprehensive
Federal data privacy law that is good for citizens and good for
America. I work for Kinesso, a subsidiary of the Interpublic
Group of companies or IPG, one of the largest and most data-
driven advertising agency holding companies in the world. We
strongly support a national privacy law.
IPG's business is built on four pillars of consumer trust:
accountability, fairness, safety, and transparency. We work
hard with our industry partners to instill these values
throughout data-driven advertising.
Second, in today's economy, any privacy law, functionally,
will be a competition law, whether a legislature intends it to
be or not. America needs a future-fit national privacy law and
appropriately applied antitrust policy.
In our connected marketplace, both of these have data
availability, use, and control at their core. A Federal privacy
law should be people-centered and ensure data is used to serve
people. Limiting who can collect, control, and use data won't
work. A privacy law that restricts who can collect data would
give data control and, thus, market control to a few companies
and unavoidably weaken competition. As we have seen in other
jurisdictions, market power belongs to whoever controls the
data.
A Federal privacy law should preserve data sharing for
beneficial and innovative purposes, while making companies
responsible and accountable for harmful uses. Similarly,
competition policy should ensure that companies with better
technology, better ideas, and innovation, but which may not
have adequate data of their own, are not foreclosed from the
marketplace. A company shouldn't have to create a first-party
platform to compete.
Today's connected marketplace increasingly is dominated by
companies who thrived thanks to ready access to consumer data.
National laws that in effect limit data to just a few dominant
players risks putting more power in those few players' hands.
In our data-intense economy, overly restrictive data use and
sharing laws preclude robust competition, vibrant innovation,
and the possibility of the small company finding and
competitively serving its audience.
We emphasize how essential data availability, open data
flow, and fair uses of data are to innovation, competition, and
a vibrant market of connected participants.
Federal privacy law and competition law should provide for
responsible and accountable data sharing so that everyone can
compete. We urge you to consider the effect of mergers on who
controls the consumer data value change and, thus, on
competition. An analysis of the growth of the major online
platforms shows the role that acquisitions have played in the
development of dominant data positions. To protect people, the
fair use of their data, and support a robust, trustworthy, and
competitive connected marketplace, Federal law should promote
fundamental privacy rights for citizens and enable responsible
accountable use and sharing of consumer data by commercial
enterprise. This allows the market to continue to provide a
wide array of benefits to people, including things like safer
online payments, ready access to business and consumer credit,
access to free content and platforms, and cost-effective and
efficient advertising for all, especially small business and
new market entrants.
We at IPG have built accountability and responsible data
practices into everything we do. We believe that corporate
America is ready to responsibly collect and share consumer data
and be accountable for its actions in doing so. We encourage
the Committee to protect the fair and open use of data as
fundamental to competition. We urge the Committee to help
develop a Federal privacy law that is future-fit for the
digital age and protects consumers and enables a connected
marketplace in which all participants can compete fairly, so
long as they engage in safe and accountable data use and
sharing.
I thank the Committee for its attention and look forward to
your questions.
[The prepared statement of Ms. Colclasure appears as a
submission for the record.]
Chair Klobuchar. Thank you very much. Next up, John Robb.
STATEMENT OF JOHN ROBB, AUTHOR, THE
GLOBAL GUERRILLAS REPORT, ACTON, MASSACHUSETTS
Mr. Robb. Thank you so much for the invitation. I'm a bit
of an outlier here; I'm not a lawyer. Big data and the AI's
that are articulated are clearly already valuable. They'll
become more valuable over time as they're integrated into all
of the products and services that will be sold in the next 20
or 30 years.
Unfortunately, there isn't a clear approach to how to deal
with this big data in the marketplace. Currently, there is
three major methods of actually dealing with data. We have it
in China, where they have incorporated this big data into their
national security and implemented a national security
totalitarian state. You have in Europe, who's suppressing the
aggregation of big data through privacy laws, basically turning
it into something to be destroyed rather than embracing it.
That'll affect their economic capabilities long term, reducing
the capabilities to even produce high-quality products in the
future, but, you know, it does award them better social
stability. And then we have the U.S., which is still, you know,
up in the air. We're still trying to decide what to do with it.
If you use a framework on the economic model for the United
States, the way we're treating data right now is very feudal.
It's basically a feudal system where you have the corporations
are acting as, you know, the lords and owners of the data, and
they farm people for their data as they traverse their
platforms. That's clearly not sustainable over the long term.
You know, it will create, you know, wealth inequalities as big
data and its AIs move toward the center of the economy. That,
you know, that will also create the social instability.
The solution to that is the same solution we used to
eradicate feudalism in the past, is that data ownership--is to
give people ownership over their data so they can exercise
ownership privileges associated with it and reap the benefits
for having that ownership. That means taking data off the big
platforms and putting it into a central repository, you know,
that's controlled by the owner of the data, where it can be
pooled with others and then resold or lent to organizations
that will make use of it, build AIs that are useful in a
variety of different ways.
It doesn't always have to be commercial. It could be open
source efforts, it could be non-commercial university
development, but putting the consumer, putting the individual
in the driver's seat changes the whole equation. It could also
be a source of royalties and revenues for that individual,
driving their personal prosperity forward. It's a different way
to approach it. It does destroy the data directly through
privacy, but it allows them to benefit from data as it moves
forward.
There's also a strong tie between big data and these AIs to
the national security component that's going to come into all
of this tangentially. I don't think people would fully
appreciate how much things have shifted over the last 20 years.
All of the technologies that are needed to implement a national
security data-driven surveillance state have leapt forward
substantially, and that most of the shift has occurred within
the context of the corporate development. We've seen a shift
from what governments used to be only able to do to now
corporations are only able to do it.
China has embraced that, and they're using those
corporations to gather the data, create the tools, and control
their society.
The problem here in the United States is that there aren't
any natural limiting factors to prevent that from happening
here. We don't have any protections against the overreach in
the corporate realm. We don't have any--like we do against
Government overreach. We don't have any free speech rights. We
don't have any rights of access. We don't have the ability to
resolve disconnection, because disconnection in the modern
environment can radically reduce your ability to operate in the
world.
We need a set of digital rights that we can exercise over--
to protect us against any kind of overreach at the corporate
side.
Thanks.
[The prepared statement of Mr. Robb appears as a submission
for the record.]
Chair Klobuchar. Okay, very good. Thank you. Next up,
Charlotte Slaiman, with Public Knowledge.
STATEMENT OF CHARLOTTE SLAIMAN,
COMPETITION POLICY DIRECTOR, PUBLIC
KNOWLEDGE, WASHINGTON, DC
Ms. Slaiman. Chairwoman Klobuchar, Ranking Member Lee,
thank you so much for the opportunity to testify today on
behalf of Public Knowledge, a nonprofit working in the public
interest for over 20 years.
I'm Charlotte Slaiman, competition policy director at
Public Knowledge. Gatekeeper power is at the root of big tech's
competition problems. Experts, policymakers, and advocates the
world over have identified gatekeeper power, sometimes
bottleneck power, sometimes strategic market status, as the
power that dominant digital platforms have over other
businesses' ability to reach their customers.
Right now, big tech has the power, over us and our data,
and we need to protect both users and a competitive market with
new laws and rules to promote fair competition against them.
Until we have a real choice to leave these platforms if we're
not happy with them, they won't have the incentive to win us
over, and we'll continue to miss out on disruptive innovations
that challenge the status quo.
I want to take this opportunity to highlight important
legislation that I think can help to address the underlying
power dynamics that have led us here. Interoperability, data
portability, and delegatability are the privacy-protective ways
to neutralize the power that big data confers upon dominant
digital platforms.
Right now, if I'm frustrated with how Facebook treats my
data, I don't really have the option to leave, because my
friends and family, the businesses, groups, and even schools I
need to communicate with are on Facebook. Interoperability
would allow competition to flourish by letting users
communicate across platforms.
Look to the Access Act for a model of implementing
interoperability to maximize competition and protect privacy.
These platforms can abuse their gatekeeper power to freeze out
would-be competitors from the market. One of the tools for that
anticompetitive discrimination is big data. Gatekeeper
platforms can put their own products first on the page, give
them the best attention-grabbing design, and point users away
from companies that pose a competitive threat. While this
offends our basic notions of fairness, this behavior would be
difficult to stop using our existing antitrust laws.
We need a nondiscrimination law to reliably stop it. I'm so
glad to see news reports that Chairwoman Klobuchar is working
on just such a bill here in the Senate. There's a strong model
in the American Choice and Innovation Online Act from Chairman
David Cicilline in the House.
Strict limitations on mergers by dominant digital platforms
and giving our Federal antitrust enforcers the ability to sue
to break up vertically integrated dominant digital platforms
are also important parts of how we can address gatekeeper
power. The Platform Competition and Opportunity Act and the
Ending Platform Monopolies Act are strong examples of how these
tools could work. These four bills were recently endorsed by a
bipartisan group of 32 State attorneys general.
App stores and operating systems preference their own
products when it comes to communication with the user and to
data. The Open Apps Market Act zeros in on the gatekeeper role
that app stores play.
Purposeful narrowing of our antitrust laws by the courts
have left big business with a license to engage in a host of
anticompetitive conduct. A myopic focus on price and other
easily quantifiable effects leaves out important innovation and
consumer choice harms that antitrust is supposed to address.
Chairwoman Klobuchar's Competition and Antitrust Law
Enforcement Reform Act would help reign in the power of big
data by updating the legal standards for blocking mergers and
stopping exclusionary conduct. Competition is not a panacea for
the challenges of big data. We also urgently need new privacy
laws to protect users and a digital regulator to
comprehensively address the policy questions surrounding
digital platforms.
A comprehensive Federal privacy law can be procompetitive
by creating a level playing field for dominant incumbents and
new entrants alike.
For decades, Washington has taken the perspective that we
need to let digital businesses run wild to see what great
innovations they might come up with, but today, unscrupulous
data practices and consolidated power have led us to a place
that isn't anyone's dream of what the internet was supposed to
be.
These largely unregulated platforms have been allowed to
amass powerful gatekeeper roles where they need not fear
competition or Government intervention. For users to really
have control, we need to have a real choice to leave these
platforms. We need real competitors, and we need switching to
be easy. To get those things, we need new laws and rules to
promote fair competition on and against gatekeeper platforms
like Google and Facebook.
Congress has already done the laudable work of introducing
a series of bills to combat these harms. The best time to pass
them was 10 years ago, but the second-best time is now.
Thank you.
[The prepared statement of Ms. Slaiman appears as a
submission for the record.]
Chair Klobuchar. Okay, very good. All right. Why don't we
start out, Mr. Satterfield, Mr. Erickson, Facebook, and Google
both collect data about consumers to enable targeted
advertising, which is the principal way I believe your
companies make money. How important is consumer data to each of
your companies? You can start Mr. Satterfield.
Mr. Satterfield. Thank you, Chairwoman Klobuchar. The way
that we look at it is success comes from building great
products and not from how much data you have.
Chair Klobuchar. Okay. Is--just if you could just
straightforward answer the question, how important is consumer
data to your company and your profit model?
Mr. Satterfield. Data's important, you know, to connect
people to relevant experiences. That includes showing them
relevant ads, but again I'd say that you know, the success that
we've had has come through building great experiences and not
from the amount of data that we collect.
Chair Klobuchar. Mr. Erickson, how do you answer that for
Google?
Mr. Erickson. Thank you, Senator, for the question. At
Google, we provide a means for people to find relevant
information and helpful information on the internet, and to do
that we have to understand what they're looking for. Anyone can
use our products for free without providing or storing any
personally identifiable information with us. We provide
transparent mechanisms for users to understand how their data
is being collected and how their data is being used, and
meaningful tools to give consumers the ability to see the data
that is stored in their account and to make choices like delete
the data, or use one of our auto-delete tools to set up regular
cadences where information, such as their search history or
viewing history or location history if they've opted in to
location history, can be regularly deleted.
We've also, as I mentioned in my testimony, since 2011,
have created tools to give consumers the ability to take the
data that they provided to us and move it to a competitor's
site. We don't want users to work to engage with Google because
they feel locked in because their data is with us. We want them
to be able to go to the services and the technologies that suit
their needs based on a competitive dynamic rather than any
sense of lock-in.
Chair Klobuchar. Okay. Why don't we go to you, Ms. Slaiman.
I was just looking at some Twitter feed. Someone just reported
that they were talking with a few friends on one of the sites,
going back and forth online about being a female politician a
while back, including a TV make-up artist for some reason, and
this person said they referred to me as inimitable online, and
within an hour they got an online ad for Chanel Inimitable
mascara, linking the TV make-up artist comment with their
adjective. Is that possible? I don't know if this is true or
not, but I'm just saying this is what's happened to me, and how
important is the data to these companies? They've kind of gave
round around about answers here. What does it mean for other
platforms trying to compete if they don't have the data?
Ms. Slaiman. I think the data is very important. I
appreciate what the other witnesses have said, that there is
also a role played by their innovative engineers. I think
that's absolutely right, but the data is important, and that's
why we're concerned about whether it's being treated
competitively or not. You know, I think the relevant ads are
not always what is best for us. It's what's best for the
platform, and sometimes that lines up with what's best for us,
and sometimes it doesn't.
We need to make sure that we have protections for users and
for the competitive marketplace when we're looking at that
problem.
Chair Klobuchar. Mr. Satterfield, along the same lines,
last quarter Facebook publicly reported that its advertising
revenue per users in the U.S. and Canada was $51.58. I want to
ask you a few questions about that.
The comparable number for Europe was only $17.08. In Asia,
it's $4.13. The rest of the world, you reported advertising
revenue per user of about $3.00. Why is the value of a user in
the U.S. worth so much more than the rest of the world,
especially when we're comparing ourselves to comparable
countries in Europe?
Mr. Satterfield. Senator, I think there are a lot of
factors that go into those average revenue per user numbers.
Chair Klobuchar. Okay. I just--that's not really an answer
though, man. That's the beginning of an answer, so.
Mr. Satterfield. What we're doing is we're breaking down
revenue per region according to the number of folks that we
serve in those regions. That's what's reflected in the numbers
that you're describing.
Chair Klobuchar. Okay. Why don't we go to you, Mr. Robb? Do
you think Facebook should pay all of its U.S. users $51.58 for
Facebook's use of their data, which we now know, it's in their
recent fiscal report? Maybe the individual profit centers,
which is all of us, should actually get the money back?
Mr. Robb. If you own the data, you would at least be able
to compare offers and get paid for its usage. I don't think
you'd get the full amount, obviously, but then----
Chair Klobuchar. Right. Maybe there'd be a discount, but
you could get a good chunk of it just like you do when you, you
know, when you're a consumer and--they--you go and buy
something or you sell something, is probably the better
example.
Mr. Robb. That's correct.
Chair Klobuchar. Mr. Robb, when companies collect data
about us and either sell it or use it to target us with ads, we
aren't just the consumer or the user anymore. We really have to
start thinking about this because I think when we get on these
platforms, we, you know, can have fun, people do business, but
they don't realize every single second they're on there, they
are creating profits, but they are not reaping the benefit.
We are, in fact, our data is a commodity, but consumers as
I know it aren't getting enough in return, and I've discussed
the idea of somehow putting a tax on the data for these
companies to pay. You have written about paying people for
their data.
In your opinion, what is the strongest argument for
ensuring that the tech companies have to pay for the consumer
data that they collect and use, and if Facebook and Google had
to pay for using consumer data, how do you think their behavior
would change?
Mr. Robb. Okay. The most compelling argument is that it
would change the perspective people have on data if they were
in--if they had ownership rights over it. By unlocking it by,
you know, through ownership, you don't just limit the data to
what--that Facebook collects or Google collects to what they
can do with it. You then open it up to what all of these other
companies can actually do with it, and they can generate
revenue. You know, people in control of their data, people who
have ownership of their data, they will be more willing to give
more and if they can set permissions in terms of how it's used,
they'll feel comfortable with it. They'll feel like they're
participating in the economy rather than being observers or
being treated as resources. It's a complete face shift. It's
not even comparable to what we have now.
Chair Klobuchar. Okay. I thought it was just so
interesting. I'll go back to you, Mr. Erickson, Mr.
Satterfield, my last questions here. I just thought it was
interesting, when Apple unleashed the power of allowing people
to opt out, that 75 percent did that, because I think it's
probably because they did it in a pretty straightforward way.
Because I know I tried to do it sometimes, and then I'm on some
site and I don't know if I've opted out, and it's really
complicated for people, or they make me opt in to try to do
something, and I can't figure it out, and you're just trying to
order something online.
Mr. Erickson, you've spoken about putting consumers'
privacy preference first and giving them the ability to change
what is collected and used about them. I understand how you
think that protects user privacy, but from a competition policy
perspective, it seems like we look beyond what benefits an
individual user. Even if millions of consumers give you
permission to collect and use their data, shouldn't we be
concerned about the competitive impact of your exclusive access
to their data, which you use to compete with companies that
don't have that data? Do you want to answer that, Mr. Erickson,
first?
Mr. Erickson. Sure. Thank you, Senator, for the question.
At Google, we do want to make sure that consumers first
understand how their data is being collected and how their data
is being used, and we do want to give them meaningful choice
about their use of their data.
Unlike Facebook, the user can use Google services for free.
They do not need to establish an account or provide any
personally identifiable information to Google. We never sell
personally identifiable information about our users, even when
they do sign in. They can delete that information at any time.
Most users, when they're using online services, are
providing similar information, if not the same information, to
multiple online services, so in that regard, the data's
really--the data's really non-rivalist from a competition
standpoint. It's easily gotten by other companies that want to
purchase data from, for instance, data brokers, or other
entities, but I think the key here for us is to put users in a
position where they have meaningful choices and meaningful
control about the use of their particular data.
Chair Klobuchar. Okay. Do you want to take a crack at that
one, Mr. Satterfield, from Facebook's perspective?
Mr. Satterfield. Yes. Thank you. Just to be clear, Facebook
services are also free. To your question, Chairwoman Klobuchar,
you know, the statistics are so interesting right now. The
average user has something like 46 apps that they're using
every month. There's more than 100 apps on the average person's
phone. People are sharing more data in more places than they
ever have been before. We think that there's a lot of data out
there that's being used for innovative purposes, including to
show people ads.
Chair Klobuchar. Do you think they all know that they're
sharing their data on all those apps?
Mr. Satterfield. Senator, we hope so. We think transparency
and controls are core values of ours, though we think that they
should be core values of other companies as well.
Chair Klobuchar. No, I just--if you could answer though, do
you think that they know they're sharing that data? Do you
think that they all know that?
Mr. Satterfield. On Facebook, Madam Chairwoman, they do.
I'm confident of that. There's core values of ours. We invest a
lot in providing transparency and control. I think with respect
to other companies, this is an area where Congress could
intervene, make sure they do. Transparency and control could be
core components of a Federal privacy legislation.
Chair Klobuchar. Okay. I'm going to just ask just one
follow-up because I really want a turn for Ms. Slaiman. Do you
think that's true, that they all know this? Do you think we
need--and by the way, the companies are now coming to us saying
they want privacy legislation after opposing it, various
iterations of it, after all the States have started to get into
the act, which is kind of a pattern we've seen in other areas
here, but do you want to respond to this quickly? Then I should
let Senator Lee ask some questions.
Ms. Slaiman. Yes. I'm sure there are many users who do not
know that they are sharing the data. I also think even if they
know about the data that they're sharing, it's quite
complicated to understand what that data can be used for. That
data can be used to figure out additional information about
you, so a user may be making a decision to share some data, not
realizing what that data actually could tell a company about
who they are and their preferences.
I also think I want to respond to the point that Mr.
Erickson made about Google doesn't sell your data. I think it's
important to keep in mind that Google has within them the
capacity to fully exploit your data without ever selling it
because they have the advertising system. Within this one large
vertically integrated company, they can both collect the data
and fully exploit it to advertise to you, so the necessity for
selling isn't there, and it can still be exploiting it just as
effectively.
Chair Klobuchar. Okay. Thank you very much. Senator Lee.
Senator Lee. Thank you. Mr. Satterfield, I'd like to start
with you. I want to start by asking you about some recent
reports about Facebook. The first is from Geoffrey Fowler at
the Washington Post. He did a deep dive into Facebook's
collection of user data, including revealing that Facebook's
own financial modeling estimates that Facebook's estimates of
its user data is worth an average of $164 per user per year.
This would seem to confirm my own view and that of several
State attorneys general, including my home State attorney
general, Sean Reyes, in Utah, that Facebook isn't actually a
free service, as you suggested a moment ago, but rather it's
one that we pay for with our data. What's concerning is that
there's so little transparency in the transaction, and you've
sort of confirmed that now moments ago by saying that it is
completely free. I am never told what my data is worth. You're
not even acknowledging that it is worth anything or that
there's any kind of a transaction involved here. What I get in
return is always subject to change. You change systems by which
posts are reviewed, what's prioritized, what deprioritized.
It's basic antitrust law that you look for symptoms. You
look for signs. One pretty consistent sign of monopoly power
involves the ability to set prices and control output. What
could be a better example of that very thing than Facebook's
ability to demand data from its users, as it does, without
telling them its value or even acknowledging that it has a
value at all, while providing a service whose quality, whose
features, whose terms of service, in terms of use, are subject
to change at any moment and they do frequently change at any
moment?
Can you answer that question for me?
Mr. Satterfield. Thank you, Senator. You know,
respectfully, I think we see things differently. We don't see
data as something that people give us in exchange for providing
our services. We see data as something that we use to provide
the service to them, to provide value to them.
Senator Lee. Okay, so you disagree with the assumption that
when you're--when there's a service out there that purports to
be free, you are the product. You are sort of what's being
served. I mean, I get your point. Nobody's paying out of pocket
with money. They're not paying in literal coins or virtual
tokens to go on there, but you are in fact a for-profit
business enterprise. You are in fact profitable, and you do
that because there's something of value. I think we're
quibbling here over sort of nonsensical distinctions between
literal payment, which I didn't say, nor did I imply.
I guess I'd ask you to answer the question, accepting the
premise that I think all the rest of us in this room and pretty
much every other American would acknowledge exists, which is
the premise that your service is--well, it purports to be free.
It is in fact paid for in the sense that people contribute
their time, they give their time, and with their time you
acquire data. You're able to monetize that. With that
understanding, I'm asking you, it is a basic principle of
antitrust law that one sign of monopoly power is the ability to
set prices and control output. With that premise, what's your
response to that? About the fact--I'm asking what better
example could one find, once one accepts this premise, than
that of Facebook's ability to demand data from its users
without telling them the value of that data and without a
service--when dealing with a service, whose quality and whose
features and whose terms of service are subject to change at
any moment and often do.
Mr. Satterfield. Senator, you know, again, respectfully,
that's just not how we think about data and how we use data to
provide value to people.
Senator Lee. All right. All right, I get it. That's not how
you think about it. It's clear to me you don't want to answer
that, whatever. I was throwing you a bone there to try to allow
you to engage in a dialog.
We'll move on to the next question. The Wall Street Journal
released a series of bombshell reports last week on internal
Facebook documents that revealed shocking, absolutely stunning
lapses in Facebook's ability to protect Facebook's consumers,
its users, from being harmed by using its platforms. This too
looks like the behavior of a monopolist, a monopolist that's so
sure that its customers have nowhere else to go that it
displays a reckless disregard for quality assurance, for its
own brand image, and even just being honest with its users
about the obvious safety risks that it's subjecting its users
to, particularly its teenage users.
In light of these reports doesn't it look to you like
Facebook lacks competition?
Mr. Satterfield. Senator, thank you. The Journal series
that you're referencing raises, you know, really serious and
important questions. I think it misses the mark in terms of
what we're trying to do in the matters that it describes. These
are----
Senator Lee. How does it miss the mark? How does it miss
the mark any more than revelations years ago about tobacco
companies concealing the dangers of tobacco? How is that
missing the mark any more than the revelations about tobacco
and what tobacco companies knew about what they were doing to
their own users?
Mr. Satterfield. Senator, I think what's being discussed in
these articles are issues that we have identified ourselves and
that we're attempting to work through as a company. This is
research that we're doing ourselves in order to identify gaps
and issues and to address them to make our platforms safer.
I think these are self-identified issues, and these are
internal deliberations that are dedicated to one thing, which
is making the platform a safer place for the people who use it.
Senator Lee. Ms. Slaiman, I'd like to turn to you. In your
testimony, you advocate for updating the antitrust laws to
tackle problems like big data. It seems to me that we have to
first try to enforce the laws we have, which I think in most
circumstances are more than up to the task, if in fact we will
utilize them. If in fact, we will utilize the law and enforce
the law. The reason we haven't used antitrust law to address
many of the problems in big tech has everything to do with
things that could be accomplished with the law. In other words,
it's not just because the courts have said no. It's not because
enforcers have taken these things repeatedly to the courts and
the courts have smacked them down. That hasn't been the case.
It's rather been because our antitrust enforcers simply didn't
bring the cases to begin with.
Look at the Obama administration. President Obama's
antitrust enforcers let Google off the hook after a two-year
monopolization investigation, ignoring--ignoring rather
specific, rather conclusive staff recommendations to sue. They
failed to stop Facebook from buying Instagram and failed to
stop Facebook from buying WhatsApp, nascent competitors that
they acquired at the time, and they failed to stop Google from
buying its way to dominance of digital advertising.
Moreover, in the last year of the Trump administration
alone, just the last year of that administration, the Trump
administration, which finally filed cases against Google and
against Facebook that the Obama administration had turned down,
the FTC blocked 27 mergers. So far in 2021, the FTC, now
supposedly run by antitrust hawks eager to protect competition,
has filed just seven merger cases, one of which is the case
against Facebook and five of which were filed in fact by the
outgoing Trump administration.
Can't we agree that the problem with antitrust law isn't
just the law but lacks antitrust enforcement?
Ms. Slaiman. Thank you, Ranking Member Lee. We absolutely
need to improve antitrust enforcement. I believe it will be
very important to improve the antitrust laws as well, but there
have been lapses in enforcement.
I think there are some situations where the antitrust
enforcers have correctly identified that the law wasn't there
for them, but there absolutely are also cases that they missed
that I wish they had brought. Improving antitrust enforcement
is definitely an important part of this effort.
Senator Lee. Mr. Erickson and Mr. Satterfield, I want to
ask both of you this question. The Wall Street Journal and the
New York Times, they reported about a year ago that Google and
Facebook had entered into an agreement to partner together with
regard to digital advertising.
Setting aside the question of whether data can be a barrier
to entry, shouldn't we at least be concerned when two companies
with possibly the greatest access to user data secretly agree
not to compete with each other for the primary way in which
that data is to be used, which is digital advertising?
We'll start with you first, Mr. Erickson.
Mr. Erickson. Thank you, Ranking Member Lee. At the time of
that agreement, we publicly announced Facebook's participation
in our open bidding platform, as well as 25 other companies
that are participating in that platform. We thought it would be
useful to publishers and accretive to publishers where we'd
have multiple ad networks competing for the publisher's
inventory, and having large ad networks like Facebook benefits
consumers. There's no truth to the allegation that these--our
auction system is somehow rigged in Facebook's favor. If they
provide the highest, bid they'll win. If they don't, they'll
lose, but at the end of the day, those 25 companies which
Facebook is one of them, creates more competition and more
demand for the publisher's inventory.
Senator Lee. Okay. You're saying that just one of them,
you're just two of those companies. You are in fact the two
biggest, arguably the two biggest companies with access to this
much data. You don't see that there's any antitrust implication
associated with this?
When two companies with possibly the greatest access to
user data, agree not to compete with each other when it comes
to digital advertising, you see no antitrust implications for
that?
Mr. Erickson. Yes, Senator, respectfully, that's not the
agreement. There is no prohibition for Facebook to provide
their ad network and compete on other auction systems.
Competing on Google's auction system with other ad networks
creates actually more competition and more competitive
dynamics, which ends up benefiting the publishers who are
selling their inventory.
Senator Lee. Mr. Satterfield, my time's expired. Can you
respond to that same question?
Mr. Satterfield. Senator, I don't have anything to add to
what Mr. Erickson said. You know, we compete hard. We compete
fairly. We did so here as well.
Senator Lee. Oh, wow. I'm not surprised to hear that you
don't think there's anything unseemly. We'll get back to that
later. My time's expired. Thank you.
Chair Klobuchar. Very, very good, Senator Lee. I was off in
the other anteroom doing another hearing, and I can see you
used your time well.
With that, we turn it over to Senator Blumenthal, and we've
also been joined by Senator Hawley and Senator Cruz. Senator
Blumenthal.
Senator Blumenthal. Thanks, Madam Chair. I want to thank
both you and our Ranking Member for holding this hearing. I
hope it will be the beginning or maybe another step in an
effort to forge a bipartisan effort on privacy law. I've been
working with one of our colleagues, Senator Moran, on a draft
for quite some time. We have come very close, and I am very
hopeful that we'll continue to make progress because this issue
of privacy is one of the central ones of our time.
There's no question as you, Madam Chair, have pointed out
so well that data is the source of pay and power to these
companies. It is not only a source of vast revenue; it is also
the fulcrum of dominance and the ability to prevent others from
entering the market, and the companies have learned how to do
it very adroitly and have adapted to the challenges that have
been put to them by the kinds of answers that we've seen today.
I want to return to those issues that my colleagues have
raised so well. First, let me just ask a few questions about
the Wall Street Journal investigative report that was published
last week showing the heinously destructive impact of Instagram
on teens. The simple fact of the matter is that Facebook has
known for years that Instagram is directly involved in an
increase in eating disorders, mental health issues, and
suicidal thoughts, especially for teenage girls. Despite that
horrifying risk, Facebook is now dead set on pushing Instagram
to even younger children.
Far from being transparent about this danger, as Mr.
Satterfield just attempted to represent, Facebook in fact has
been blatantly deceptive and disingenuous about it.
Last month, on August 4th, Senator Blackburn and I wrote to
Mark Zuckerberg and asked him specifically about this issue. We
asked, and I am quoting, ``Has Facebook's research ever found
that its platforms and products can have a negative effect on
children's and teens' mental health or well-being, such as
increased suicidal thoughts, heightened anxiety, unhealthy
usage patterns, negative self-image, or other indications of
lower well-being?''
It wasn't a trick question. It preceded the published
reports in the Journal. We had no idea about the whistleblower
documents that were ultimately revealed. Facebook dodged the
question. Quote, ``We are not aware of a consensus among
studies or experts about how much screen time is too much'',
end quote. We are not aware. Well, we all know now that that
representation was simply untrue. Internal documents reported
on by the Wall Street Journal demonstrate that Facebook has
known for years that Instagram harms children and young people.
For years, Facebook studies have found clear links between
Instagram and mental health problems. It was common knowledge
in the company, so the response was a clear attempt to mislead
Congress and misinform parents. I ask that the Wall Street
Journal report of September 14, by Georgia Wells, Jeff Horwitz,
and Deepa Seetharaman be made a part of the record, Madam
Chair.
[The information appears as a submission for the record.]
Chair Klobuchar. It will be. Thank you.
Senator Blumenthal. Thank you. The comparison to big
tobacco made by Senator Lee is entirely apt. I know something
about big tobacco because I sued big tobacco and I remember the
revelation of the documents that showed big tobacco not only
knew but had done experiments proving that cigarettes cause
cancer. They had denied it for years. They had the knowledge
about the damage done to people who smoke.
My question to you, Mr. Satterfield, is, why did Facebook
misrepresent its research on mental health and teens when it
responded to me and Senator Blackburn?
Mr. Satterfield. Senator, thank you. Respectfully, I don't
agree with that characterization, but I do understand the
frustration and concern that we're hearing about these reports.
The safety and well-being of the teens on our platform is a top
priority for the company. We're going to continue to make it a
priority. This was important research. We're proud that we did
it, and we're going to continue to, you know, study these
really important issues.
Senator Blumenthal. Why did you conceal it?
Mr. Satterfield. Senator, we didn't make it public as we
don't with a lot of the research we do because we think that
that's an important way of encouraging free and frank
discussion within the company about hard issues.
Senator Blumenthal. Do you have more research that shows
the destructive effect of your platform on teens?
Mr. Satterfield. Senator, I'm not aware of any other
research on teens. I don't work on these issues. I work on
privacy and data.
Senator Blumenthal. Are you not aware in the same way that
the company responded that it was not aware when, in fact, it
knew about the research?
Mr. Satterfield. Senator, I apologize. I'm not familiar
with the context of that letter or what went into the response.
You know, what I can tell you is that we think it's important
to be having a dialog with Congress on these issues, and we're
prepared to work with you and your team going forward.
Senator Blumenthal. Will you work with me and my team by
appearing on September 30 at a hearing that we've invited you
to do?
Mr. Satterfield. Senator, I know our folks have been in
touch with your staff, you know, to discuss that. It's
something that I think we're discussing right now.
Senator Blumenthal. We are discussing it right now. I'm
asking you for a commitment that your company will send a high-
ranking, qualified, and knowledgeable representative to that
hearing on September 30. Senator Blackburn and I are,
respectively, the Ranking Member and Chairman, but it includes
Senator Klobuchar and Lee. They are Members, as well. We need
to hear from someone who's capable of answering these
questions, and it should be next week. Will you commit to have
someone at that hearing?
Mr. Satterfield. Senator, we're going to follow-up promptly
on this. We know these are incredibly important issues, and we
want to work with you and your staff going forward. We'll
follow-up promptly.
Senator Blumenthal. Mr. Satterfield, I just want to point
out to you that your company, contrary to what you've just told
this Committee, is continuing with this really unfortunate
charade. Vice President Nick Clegg doubled down on the
misleading statement, in fact, this weekend, when he said the
research is, quote, ``Still relatively nascent and evolving'',
end quote. According to one of these studies, Facebook found 13
percent of British users and six percent of American users
traced a desire to kill themselves to Instagram. How is it not
misleading to tell this Committee that the research is unclear
if, according to your own research, tens of thousands of teens
have suicidal thoughts directly because of Instagram? Don't you
think you owe us an explanation next week?
Mr. Satterfield. Senator, I appreciate the concerns. I do,
and I do think that Nick was accurate in his op-ed. What I can
tell you is that we can commit to working with you and your
staff going forward on these issues.
Senator Blumenthal. Has Facebook ever conducted research
that found Instagram was more toxic to teens than another--
other social media platform?
Mr. Satterfield. Senator, I'm not aware of that but these,
again, these aren't issues that I work on at the company. You
know, we're happy to follow-up with you and your staff.
Senator Blumenthal. Will you follow-up next--the September
30th by having someone at that hearing who can tell us the
answer? By the way, the answer is that you have found Instagram
is more toxic than Snap and TikTok. It's more of a Facebook
problem. Your own research has shown it. I'd like somebody to
come provide an answer, an explanation next September 30th.
Mr. Satterfield. We're going to get back to you promptly,
Senator. I can commit to that.
Senator Blumenthal. I want to ask about another area but
perhaps I should wait until I hope we'll have a second round?
Chair Klobuchar. Yes, we will. We will.
Senator Blumenthal. Thank you.
Chair Klobuchar. Thank you. Thank you so much, Senator
Blumenthal. Next up, Senator Hawley, then Senator Ossoff, and
then you, Senator Cruz, if it works. Thank you.
Senator Hawley. Thank you, Madam Chair, and thank you,
Senator Lee, also for holding this hearing. Thanks to the
witnesses for being here. This is such an important topic. Mr.
Satterfield, let me just pick up where Senator Blumenthal left
off. Can I just ask you a fundamental question? Are teenagers
safe on any of your platforms?
Mr. Satterfield. Senator, we're working really hard to make
that the case.
Senator Hawley. They're not now?
Mr. Satterfield. Senator, we are investing a lot in safety
and integrity across all of our platforms. We've invested
billions of dollars.
Senator Hawley. Are you concerned, though, that teenagers
are currently subject to all kinds of potential predators, the
social effects--I mean, you're saying you hope that they'll be
safe on the platforms? Are they not safe now?
Mr. Satterfield. Senator, I think it's our responsibility
to invest the resources that we need to make sure that these
things don't happen. You know, that's why we're investing
billions of dollars in protecting the integrity of our
platforms.
Senator Hawley. By ``these things'' do you think things
like this, let me read you a few quotes. ``Thirty-two percent
of teen girls said that when they felt bad about their bodies,
Instagram made them feel worse.'' Quote, ``We make body image
issues worse for one in three girls'', end quote.
New quote, ``Teens blame Instagram for increases in the
rate of anxiety and depression. This reaction was unprompted
and consistent across all groups.''
Or how about this? ``Teens who struggle with mental health
say that Instagram makes it worse.''
Or how about this? ``Social comparison is worse on
Instagram.''
Or about this? ``Aspects of Instagram exacerbate each other
to create a perfect storm when it comes to body issues,
identity, depression, anxiety.''
That doesn't sound like a very safe platform to me. Those,
of course, are all from your own internal research. What do you
have to say about that?
Mr. Satterfield. Senator, again these aren't issues that I
work on but I--we do have teams that are working across all of
those issues, body image, well-being, and so forth. We're
investing, you know, we're doing research like this so that we
can identify gaps and address them. We're going to continue to
do so.
Senator Hawley. Will you make the research public?
Mr. Satterfield. Senator, again, you know generally the way
that we approach research is that we keep it confidential to
encourage free and frank discussion about it internally. It's--
keeping it confidential actually enables us to----
Senator Hawley. Sounds like a no to me.
Mr. Satterfield [continuing]. Ask hard questions about
these really important issues.
Senator Hawley. I haven't been in the Senate that long, but
this sounds like that's a no. Let me try again. You've already
done the research. This research is completed. You've done it,
you know the results, you know the data. You've actively misled
Congress for years now. You've deliberately misled Senators as
recently as just a month ago. Senator Blumenthal was just
telling--putting on the record. You have the research. Will you
make it public? Yes or no?
Mr. Satterfield. Senator, I--respectfully, I'd strongly
reject, you know, those characterizations. The issue of greater
transparency around the research----
Senator Hawley. Let's try answering my question. Will you
release the research? Yes or no?
Mr. Satterfield. Senator, it's something we're looking
into, how to provide greater transparency with appropriate
context around the research----
Senator Hawley. Right. What would the appropriate context
be, exactly? What's the context for 32 percent of teen girls
saying that they feel worse when they use Instagram? Is there
context that I'm missing there? What is it that parents need to
know? What's the context, exactly? I'm intrigued by that
statement.
Mr. Satterfield. Senator, I mean, I think it's the broader
view of what the potential impact of services could be on
folks, and I think that the----
Senator Hawley. Oh, like maybe the things that Instagram
does is positive that outweighs all of the terrible effects
that it has on teen girls and others. Is that what you're
talking about, your benefits? Let me ask you this. How much
money does Instagram make for Facebook every year?
Mr. Satterfield. Senator, I don't know the answer to that.
Senator Hawley. How much money do you make from teens being
addicted to Instagram every year?
Mr. Satterfield. Senator, I wouldn't agree with that
characterization.
Senator Hawley. How much money do you make from your teen
users every year?
Mr. Satterfield. Senator, I don't know the answer to that
question.
Senator Hawley. I bet it's a lot. I'll give it to you for
the record. I think the--we all know what's really going on
here. You won't release the research because this is a cash cow
for you. You won't answer our questions because you make a gob
of money on this. I mean, it's the whole reason Mark Zuckerberg
wanted to get Instagram in the first place, right? I mean, back
in 2012, Mark Zuckerberg wrote to his own chief financial
officer that buying Instagram will give us time to integrate
their dynamics before anybody else can get close to their
scale. We know why Facebook bought Instagram. It was to get rid
of a competitor, to gobble up all the data. Now they've done
that. Now, it's making teenagers sick and destroying their
mental health, but, you know, hey, it's lucrative. It's
really--it's amazing. How about this?
Will you commit to suspending any efforts to develop the
Instagram Kids product that would target children under the age
of 13?
Mr. Satterfield. Senator, we know that tweens are online,
and, you know, we want them to have an experience that is a
good one, that is a healthy one like we have with----
Senator Hawley. Like the one that teenage girls are having
on Instagram right now, that kind of experience?
Mr. Satterfield. Senator, respectfully, these are issues
that we take incredibly seriously that we're investing in. You
know, there is no more important priority than the safety and
well-being of the people who use our products.
Senator Hawley. [Laughter] I really can't believe you're
saying that. I mean, really, I've listened--I've listened to
Facebook and these other big tech companies before these
Committees for years, and I guess it's two years, although it
feels like 20, and you always dissemble. You always mislead,
but I can't believe that, given the research that you have
conducted, that you can sit there and say that teens' health
and security and safety's your top priority.
Clearly, it's not. You won't share any of the data. You're
stonewalling every Member of this Committee. What about this?
Will you at least commit to keeping behavioral advertising out
of any product that a kid can access?
Mr. Satterfield. Senator, we think that, you know,
advertising is potentially very valuable. We have made changes
with respect to teens under 18, limitations around the ability
of advertisers to use our products to reach them.
Senator Hawley. Let's see. You won't reveal the research.
You won't restrict your advertising. You won't pull back on
plans to target children under the age of 13 with this
platform, which you know is toxic for so many teenagers,
especially female teenagers, and yet their health and well-
being is your top priority. Do I--have I got that right? Did I
miss any part?
Mr. Satterfield. Senator, I'm not sure I said any of that.
What I would say is, again, these are incredibly important
issues to the company. We're committed to having a constructive
dialog with Congress about them, and we're going to continue to
invest heavily in them at the company.
Senator Hawley. I'm sure you'll invest heavily in it. I
have absolutely no doubt about that. That I think is probably
the truest statement you've made today. I have no doubt you
will continue to pour money into Instagram as long as you can
extract money from it and from the teenagers whom you are,
quite frankly, exploiting.
Here's just a final question for you. Why should--why
should you be able to advertise to teenagers at all? I mean,
given all the dangers inherent in collecting their data, which
is what you're doing on Instagram, why should you be able to
advertise to teenagers? Why shouldn't we prohibit that?
Mr. Satterfield. Senator, as you know advertising supports
our service. We do think that additional protections for
teenagers are appropriate. We put those in place. We're going
to continue to look into ways to keep teenagers safe on our
services while being able to support them with advertising.
Senator Hawley. Mr. Satterfield, the truth is you and I
both know is that your product isn't safe. Your platforms
aren't safe. They're dangerous. You know it, we know it. You
stonewalled us. You've stonewalled the public. It's time for
some accountability, and all I can say is accountability is
coming.
Thank you, Madam Chair.
Chair Klobuchar. Thank you very much, Senator Hawley.
Before I turn it over to Senator Ossoff, I just want to--
something when I was asking my questions that could lend some
information to you here.
Facebook publicly reported that last quarter its revenue,
advertising revenue per user, which I presume includes teens in
the U.S. and Canada, was $51.58 per user. I guess just to
follow-up, Mr. Satterfield, do you have the breakdown for teens
versus the rest that we could get, maybe not today, but later?
Mr. Satterfield. Senator, the only breakdown I'm aware of
is the one you referenced, which is the average revenue per
user.
Chair Klobuchar. Does that include Instagram? Is it
company-wide?
Mr. Satterfield. Senator, I believe it's company-wide.
Chair Klobuchar. Okay. All right. Senator Hawley compared
it to some of the other countries which were a lot less than
our country, so we'll have to be looking into that. How much
revenue they make with that?
I'll turn it over to Senator Ossoff.
Senator Ossoff. Thank you so much, Madam Chair. The first
question please for you, Ms. Colclasure, does Acxiom or any
other IPG company provide services to entities outside of the
United States based upon or linked to data about U.S. persons?
Ms. Colclasure. Thank you, Senator, for your question. Of
course, I'm at Kinesso and formerly at Acxiom, and a part of
the IPG family. Acxiom data, we at Acxiom and at Kinesso both,
we do have clients that are multinationals, and we have clients
that operate in other markets around the world, and part of the
services we provide are data-enabled services, marketing, and
advertising services, so, yes.
Senator Ossoff. Thank you. Do Kinesso, Acxiom, or other IPG
companies provide data-connected services or services based on
or related to data about U.S. persons to Federal agencies,
State or local law enforcement, or any other public sector
actors in the United States?
Ms. Colclasure. Of course, again, I'm speaking about
Acxiom. Acxiom does have, and shortly to be retired, an
identity authentication product, which is made up of regulated
data and provided for regulated service and that is--we call
that our risk product suite, and it solves things like know-
your-customer obligations that financial services have--that
we're actually exiting that business shortly and concentrating
on marketing and advertising.
Senator Ossoff. Is that the only product or service that
you sell to any public sector entity in the United States?
Ms. Colclasure. We do other things like marketing and
advertising data-enabled services. Like we supported an Ad
Council advertising campaign to help get information out to
help with the pandemic. Another example I can think of is we
helped the American Red Cross when the Hurricane Katrina hit
New Orleans several years ago. We helped get data to them for
some marketing communications to go out and find audiences so
they could learn about help and services from the American Red
Cross.
We have a few other campaigns like that that I am aware of.
Does that help?
Senator Ossoff. Thank you, Ms. Colclasure. Do many IPG
entities provide any services or have any financial
relationships, direct or indirect, with any agencies or clients
at the Department of Defense, in the intelligence community, or
in Federal, State, or local law enforcement?
Ms. Colclasure. It is not an area of concentration, and I
don't know the answer right off. I feel like I would----
Senator Ossoff. Is that for the record?
Ms. Colclasure. Yes. I do not know the answer right off,
but I promise I will go and research it and get you an answer
so that I can be certain. Of course, there may be
confidentiality issues that I'll have to navigate if we do have
those sorts of contracts. I'm glad to go research and get you
an answer.
Senator Ossoff. Just to be clear, Ms. Colclasure, you are
not personally aware and have never heard of any financial
relationship between an IPG entity and the Department of
Defense, the U.S. Intelligence Community, or any Federal,
State, or local law enforcement entity?
Ms. Colclasure. I do know that Acxiom--of course, I'm not
at Acxiom now, and Acxiom historically has had some
relationships with some of that community, but I do not have
the knowledge to share at this--but I'll research it for you.
Senator Ossoff. What are you aware of? What do you recall?
Ms. Colclasure. We do have some--we did, again I'm not in
command of the knowledge because I'm not at Acxiom now, but
there are some Governmental agencies that we have worked with,
most of it, like the Veterans Administration, was advertising
and trying to do outreach to their veterans' community, so
rather than fish around, if you might allow me, Senator, I'll
go and research and get you an exactly right answer, if that
would be OK?
Senator Ossoff. Thank you. Do any IPG entities have direct
or indirect financial relationships or provide any services or
products to any foreign governmental entities?
Ms. Colclasure. Not to my knowledge.
Senator Ossoff. Will you please double-check, for the
record?
Ms. Colclasure. I certainly will. Certainly.
Senator Ossoff. Thank you. How does Acxiom or how do other
IPG entities engaged in their activities obtain device
identifiers, such as IMEI or IMSI numbers?
Ms. Colclasure. At Acxiom and at Kinesso, of course, we
operate in the digital advertising and marketing space, and we
run a unified ethical framework as the basis for our data
governance program. When we either source data, we undergo a
due diligence process. I always like to say not all data's the
same, and not all data uses are the same. Some of the data,
like device IDs, that is a connecting piece of data that we use
to enable and activate digital advertising campaigns on behalf
of our clients. It may be that it flows in from one of our
connected partner ecosystem providers, like an advertising
network or a publisher, and we sit in the middle as a
connector. That is typically how the data flows.
Does that help answer?
Senator Ossoff. Do you place any limitations? Does Acxiom
or any IPG entity place any limitations on the form, category,
type, of entities to whom you'll sell services?
Ms. Colclasure. Absolutely, Senator. Thank you for that
question. We do. As I mentioned, we use what's called a unified
ethical frame for our data governance program. We practice an
accountability-based, data-governance program.
Senator Ossoff. Which plans--forgive me, but my time is
limited. Which types of entity specifically will you not
license data to or provide services to?
Ms. Colclasure. We--they have to be a legitimate commercial
enterprise. We don't provide data to individuals or data-
enabled services to individuals. It is to commercial entities
for a legitimate ethical purpose. We judge the data use in
context via our privacy impact assessment process. We check it
off against legal requirements, regulatory requirements,
coregulatory requirements. We do a harm detection and
prevention test, and then very important to all of us, we do a
fairness test. I mentioned in my opening remarks that we're
people-centered, and that is we design from people outwards,
from the engineering layer outward.
Senator Ossoff. Ma'am, my time is limited. I appreciate the
elaboration of that policy. Let me ask you this question? Does
any IPG entity or has any IPG entity provided any service or
sold any product to private investigators?
Ms. Colclasure. No. A very long time ago there was one
business that Acxiom owned that we divested that did serve PIs,
but that might have been 10 or 15 years ago. The answer's no,
today.
Senator Ossoff. Which firm was that?
Ms. Colclasure. It was--it was Acxiom-owned. We had
acquired an entity. We operated it for a few years, and then we
sold it, and I apologize, I cannot recall the name right now.
Senator Ossoff. Thank you, ma'am. Madam Chair, I may return
for a second round if we have the opportunity. I yield.
Chair Klobuchar. Excellent. Senator Blackburn.
Senator Blackburn. Thank you, Madam Chairman. Ms. Slaiman,
let me come to you first. I know that you're aware that
Senators Blumenthal, Klobuchar, and I filed the Open Market App
Store Bill so that we could address Google and Apple and their
stranglehold on that app market. Very quickly, how do Apple and
Google's data practices factor into this app store and how they
limit the use there, and do they incentivize the app store
developers to continue the monopoly over--over this market that
they have?
How are they manipulating that marketplace, very quickly?
Ms. Slaiman. Thank you so much, Senator Blackburn. We were
so glad to see the introduction of the Open App Markets Act. I
think that's going to be really important, not just for big
data but for gatekeeper power writ large when it comes to app
stores.
In particular, with regard to big data, I think the app
stores and the operating systems have this privileged position
where they can treat users, decisions about their data,
differently, based on whether the app is owned by the app store
company or the operating system company, or whether it's a
competitor.
One thing that's really important is to make sure that
those are being treated the same so that we have a level
playing field for competition.
Senator Blackburn. I think that's important and that
privileged position that they exercise is important to note.
You've mentioned the gatekeeper property and how that would
apply to other applications, whether it is publishers and other
forms of content development. I think that this is an important
bill that we get passed in on the record.
Very quickly on filter bubbles, and I know you've mentioned
that--how do you address--how do you think we could address the
filter bubbles and the platforms' secret algorithms, if you
will, that really, kind of manipulate that consumer experience
online?
Ms. Slaiman. One of the ways that big data is used is to
decide what products to show the users. The platforms, again,
are in this gatekeeper role where they're making those
decisions. A lot of times that's based on an algorithm that is
fed by data that they're collecting from users.
Those decisions about which products to show to users,
which services to offer to users, those are decisions that the
platform gets to make, and that's limiting the options that a
user sees.
Senator Blackburn. Yes. I think that the Open Apps Market
Act gives us that footing, as I said, that gatekeeper role to
begin to address that so that the consumer, online consumer,
has a more private and a more genuine experience, and we're
looking forward to getting that bill passed. Thank you for
those comments on that, because I agree with you. I think the
implications we're going to see are writ large in the industry.
Mr. Satterfield, if I may come to you for just a moment. As
you're aware, Senator Blumenthal and I have kind of been doing
a deep dive on what you're doing with this data that you're
collecting on teenagers. From working with whistleblower and
from the data that we've seen, basically reams of data at this
point, we are concerned about this amount of data that you are
keeping on teens. Basically, what you're doing is building a
virtual presence, a virtual you, of these teenagers. Do you
think that is a violation of the Children's Online Privacy Act,
the fact that you're tracking and following and building these
files on these children?
Mr. Satterfield. Senator, no. We're complying with the law.
We do think it's really important to provide protections around
teens' experiences on our services. These are things that we've
been investing in. We've been consulting with third-party
experts so that we do this thoughtfully and----
Senator Blackburn. Okay. Who are the third-party experts
that you're consulting with? Because when we talk to teachers,
to parents, to pediatricians, to psychologists, and when we
look at the data that you have collected from teens and the
changes that they have recommended that you make to your
platform, it's like you're turning a blind eye to that because
you're chasing a dollar. Why don't you bring some clarity to
bear on that?
Mr. Satterfield. Senator, this isn't something that I work
on at the company. I'm happy to get back to you with more on
the experts, and I'd say that----
Senator Blackburn. You know, if you're the VP----
Senator Lee. Still going.
Senator Blackburn [continuing]. On privacy and public
policy, one would think that you probably were in meetings and
that you would have a stakeholder position in what your company
chooses to do on that issue. Are you not involved in these
discussions of privacy and how to protect this data, and
thereby how to protect the virtual you of these children and
teens that are using your platform?
Mr. Satterfield. Senator, yes, of course. I was talking
about, you know, safety experts, experts on well-being and
such. Yes, of course, I'm involved in privacy issues, including
privacy issues that affect the teens on our platform.
Senator Blackburn. Do you have any plans in the works to
use the data that you have collected, the data that teens gave
you, the information they gave you when they participated in
your mental health survey? Are you going to use that to put
protections in place for these teens on your site? Yes or no?
Mr. Satterfield. Senator, all of the research that we do,
you know, informs the decision-making in the company. It's
certainly something that we'll take into account as we're----
Senator Blackburn. The decision-making that you are
exercising shows that you're making decisions that allow you to
be more profitable, not that you're making decisions that are
based on the welfare of that child. Why do you collect so much
data on your users if you do not use it to improve the user
experience? You're not using it to protect children or to
improve the user experience, so for the record, why don't you
tell us what you're using this data for?
Mr. Satterfield. Senator, we are using the data that we
collect when people use our services to improve their
experience. That's our----
Senator Blackburn. Why would teens that took your mental
health survey say--why would older teens say, ``We're advising
our younger siblings not to use Instagram, not to be a part of
this online community''? Because they feel like you're not
following what they're asking you to do. What are you using the
data for? Are you using it for micro-targeting, to go in and
target advertising? Are you using it to feed them--to push them
further down paths if they click on one something then you keep
feeding them more of that? Why don't you, for the record, tell
us what you're using this data for? You've got reams of it.
Mr. Satterfield. Senator, when it comes to the data that we
collect when people use our services, you know, we do a couple
of things. We use that data to provide the service. We use it
to improve the service, to provide enhanced experiences, as you
were saying.
Senator Blackburn. Tell me what improvements you have made
that would keep teens healthier and safer. Give me three
examples of things you've done that would keep teens healthier
and safer as they use your platform.
Mr. Satterfield. Senator, with respect to Instagram, we
have made changes to the ways in which adults can contact
potentially younger users. We've made changes to the way in
which people can comment, and we've made changes that are
designed to address potential bullying and harassment. In
comments, we've made resources available on well-being and body
image issues. We've made a number of investments over the years
that address these kinds of issues.
Senator Blackburn. Do you nibble around the edges, or are
you aggressive? Are you going to stop allowing human
traffickers, sex traffickers, drug traffickers, to use your
platform, whether it's in the U.S. or other countries? Is that
the kind of improvement that you're making?
Mr. Satterfield. Senator, respectfully, absolutely not.
There's no place on Facebook for----
Senator Blackburn. It happens.
Mr. Satterfield [continuing]. Activities like that.
Senator Blackburn. It happens. There's a Mexican drug
cartel that's been on your platform. You didn't take them off.
Mr. Satterfield. Senator, that organization was designated
and banned on our platform, if what you're referring to is the
organization from the Wall Street Journal article.
Senator Blackburn. You know, I have to tell you--and I have
grandchildren, I have two grandsons and a granddaughter. My
grandsons are 12 and 13, and my granddaughter is a year old. I
tell my grandsons all the time that they cannot trust you all
with their information. I think what you have done to a lot of
these children is inexcusable. I think the fact that you
collect this data, you monetize that data, you benefit from
that data, and then knowing you have this data, don't you think
parents would have liked to have known that this was taking
place on your site? I do. I think it is unfortunate that you
all have hesitated to answer the questions that Senator
Blumenthal and I have. We do look forward to having a
representative from your company come next week and answer the
questions that we have in our hearing. Madam Chairman, we look
forward to hearing more from Google and Apple about the Open
Market Apps Bill. With that, I will yield back my time.
Chair Klobuchar. Thank you very much, Senator Blackburn.
Second round, Senator Blumenthal.
Senator Blumenthal. Let me just say, Mr. Satterfield, if
you fail to have someone here on September 30th, there can be
only one reason, that you're continuing the concealment. Let me
just be very blunt. You've been sent here to defend the
indefensible, but at some point, Mr. Zuckerberg should get the
message, ``Houston, we have a problem.'' Better to be here on
September 30, than continue to evade responsibility. I thank my
colleague Senator Blackburn for putting it so succinctly and so
eloquently.
I just want to point out that behind the numbers and the
perhaps seemingly abstract questions there are real human
beings, young women and men who are deeply hurt by these
images, the focus on body images, on self-worth that comes
along with those images. In one study of teens in the U.S. and
the UK, according to the Journal article, Facebook found that
more than 40 percent of Instagram users who reported feeling
unattractive, said the feeling began on the app, and about a
quarter of the teens who reported feeling not good enough said
the feeling started there, and many felt in quotes,
``addicted'' to the app and felt that they were deprived of
self-control.
Again, the analogy to big tobacco is undeniable. It's an
analogy, not an exact comparison, but the exploitation of that
kind of attraction, even addiction, I think is reprehensible. I
really do hope that you understand that there is a certainty
here, which is accountability is coming, as Senator Blackburn
has said and Senator Hawley put it exactly. Accountability is
coming, and it will be bipartisan.
I want to shift to the issue that Senator Blackburn also
raised, our bipartisan bill, the Open App Markets Act would set
robust rules to promote competition and strengthen consumer
protection. I am proud that this bill is bipartisan. I want to
thank my colleague Senator Klobuchar for her leading role in
this area and she is a co-sponsor of the bill. It's received
wide support, as was mentioned earlier, from consumer groups,
antitrust experts, and app developers. Ms. Slaiman, I
especially appreciate your reference to it, and the support
that Public Knowledge has provided for the bill.
Two companies, Google and Apple, have gatekeeper control of
the dominant app stores that allow them to dictate the terms
for everyone. Their duopoly allows them to set the terms and
they do. If app developers don't like the terms, there is
nowhere for them to go. That is what we call a broken market.
Not even Facebook is immune to Google and Apple's
gatekeeper control, big as Facebook is, powerful as it is, it's
not immune. Apple has blocked the Facebook Gaming app from the
app store at least five times, and it has prohibited other
cloud gaming services from becoming available on the app store.
Apple has also forced Facebook to remove a notice informing
consumers about the so-called Apple tax, that is the infamous
30 percent rent fee that they extract from digital goods and
services. The little guy is as much a victim as the big guys
like Facebook.
The Open Markets--Open App Markets Act would protect
developers' ability to offer competitive prices, tell consumers
about lower prices, and give consumers the right to make their
own decisions about the apps they install. That's what's called
competition, and a free market, or at least freer than it is
now, and it would mean that Facebook and others don't have to
pass the Apple tax on to consumers and small businesses.
It would mean that iPhone users could sideload Facebook
Gaming directly on to their phones if Apple continues to block
the app. These are basically pro-consumer and pro-competition
rules.
Mr. Satterfield, would Facebook support Congress setting
fair, clear, enforceable rules on app stores that would prevent
Apple and Google from using their gatekeeper power to extract
excessive rents and block competition like what happened to you
and your app, Facebook Gaming?
Mr. Satterfield. Senator, thank you. Our team is looking at
the bill, and we're providing feedback through the, you know,
the normal channels. You know, we're continuing to work with
you and the other co-sponsors and providing that feedback.
Senator Blumenthal. What are the normal channels?
Mr. Satterfield. We're communicating with your staff and
others.
Senator Blumenthal. Okay. Let me point out, in case it
isn't obvious, and I think it is, that Facebook really should
support these kinds of rules if it is in favor of competition
and open markets and not just for you, but for others.
Mr. Erickson, Apple has claimed that if we allow consumers
to make their own decisions, all sorts of really horrible or
terrible things are going to happen. Unlike Apple, Google has
allowed sideloading and better developing access on Android
from the very start. Given Apple's alarming claims, would you
characterize everyone's Apple phone as insecure or vulnerable
to cybersecurity risk, because that's what Apple says will
happen if we eliminate the Apple tax of 30 percent?
Mr. Erickson. Senator, thank you for your question. If I
may step back for a minute, we share the values that you and
Senator Blackburn have that consumers should be able to choose
the lawful applications, to download those, and that there
should be competition in this marketplace. We're taking a look
at your legislation as well, and we'll be happy to engage with
you going forward.
The Android ecosystem, no, we do believe we provide a very
safe and secure ecosystem for our app developers to reach a
global audience of billions of users in 190 countries, and
that's not undermined by allowing consumers to be able to
download applications outside of the app store or to sideload
those applications.
Senator Blumenthal. You do believe Android is secure?
Mr. Erickson. Senator, yes.
Senator Blumenthal. Let me just close this round of
questioning, because I know my colleagues may have other
questions. I cannot help but make this observation about the
action just over the last weekend by Google and Apple, at the
behest of Vladimir Putin, to censor their apps. In fact, censor
apps that were used to organize democratic protests in Russia.
Apple has taken down thousands of apps from its app store at
China's request. Almost a third of them relate to human rights,
and it includes Hong Kong protests and LGTBQ rights.
You know, in a tweet I analogized what's going on here to
Neville Chamberlain and the attempt to appease Germany. I view
it as very much the same kind of appeasement of Vladimir Putin
and the Communist Party in China. I think it was Winston
Churchill who said about Neville Chamberlain that he had to
choose between dishonor and war. He chose dishonor and he got
war. In fact, he got both.
At the end of the day, you're not going to appease these
totalitarian dictators. Not even Apple or Google or any of the
big tech companies are going to win by appeasement when it
comes to human rights. I think that it's pandering. It's craven
pandering, and it undermines our national interest, and I yield
the floor, Madam Chair.
Chair Klobuchar. Thank you very much, Senator Blumenthal.
Senator Lee is next.
Senator Lee. Thank you very much. My next question is for
Mr. Robb. Mr. Robb, what are the ramifications of our personal
data having become the method of payment for so many online
services?
Mr. Robb. It's a loss of control, loss of income, and, you
know, we're looking at the snapshot right now of the tech
industry, and we're looking at--we're focusing in on marketing
and the big players that exist today, but this is going to
evolve. You know, I've been in the tech industry for decades,
and I started on the internet 25 years ago, and that was well
before Facebook and Google even existed.
The same thing's going to happen in the next 20-30 years,
is that this data is going to persist, and we need to give
individuals control of that data so they can learn how to
exercise their control, set permissions on how it's used, and
make money on commercial apps that actually use it to build
products and services.
You know, changing the dynamic here----
Senator Lee. What if anything can we do to reassert our
ownership and our control over our own data?
Mr. Robb. I think the key way to do that is to get the data
off of the platforms that are aggregating it, and then putting
it into a central repository that's managed by the individual,
and if they do that, they're in control. They're the focal
point where actually combining that data and who's using it,
rather than having it sold by third parties to third parties
or--and combined in ways that they don't have any jurisdiction
over.
By putting the, you know, the individual at the center of
the equation, you know, it makes life more complicated, but
it's an essential thing for us to move forward and be able to
do this successfully long-term. Otherwise, we're going to be
caught in this, you know, privacy trap. I mean, privacy's fine,
but it really is just destruction of data and limitations on--
rather than actually solving the problem at root.
Senator Lee. Are third-party brokers like Acxiom an
obstacle or are they an aid to consumers trying to regain
control of their data?
Mr. Robb. The fact that they're combining data from
multiple sources, they're actually acting in opposition to what
individuals should--should be able to do. If you have the
individual at the center of the equation, you don't need an
Acxiom. We don't need a data broker. I mean, they can cut deals
directly with them. They might even be managing the data
repository. You know, it seems like--you know, we don't have a
data repository now, and it seems, you know, fanciful to even
think in terms of that, but I mean, we can build it. I mean, we
can set the standards for how that would operate. We can lay
out those standards and have companies actually compete to
deliver on those standards, just like we built the web, just
like we built so much of what we have in terms of web
architecture.
You know, data aggregators can do business with
individuals, but they can't be a substitute for them.
Senator Lee. Mr. Erickson, I'd like to turn to you next. In
the last year, Google announced that it would stop servicing
third-party cookers--cookies in the Chrome browser. Google's
announcement said that the purpose of this was to protect
consumers and to protect their data.
Left unsaid was how this could impact Google's ad tech
competitors, and also left unsaid was the amount of information
that Google collects from consumers--the browser data, location
data, app usage data, financial transaction data, et cetera.
Tell me, how is it that consumers are any more protected if
Google collects this data and your competitors can't? Can you
help me understand that?
Mr. Erickson. Senator, thank you for the question. Yes, I
can try. With the announcement that we made you rightfully
point out that we would stop supporting intrusive tracking
technologies like third-party cookies. We made the announcement
in an effort to chart a course for a more privacy-enhancing
web. We did not unilaterally withdraw our support for that but
rather wanted to engage in a thoughtful conversation with
advertisers, with publishers that rely on an ad-supported
ecosystem to be able to function their websites or to reach
consumers. We want to engage with regulators and governments
and other stakeholders to explore more privacy-protective
technologies, those are the intrusive technologies.
Senator Lee. Sir, I'm not sure you're grasping my question.
You're at least not answering it. I appreciate that you're
wanting to have a thoughtful conversation. I appreciate that
you include this was in your business interest, and it may well
have been. That's totally within your right. What I'm asking
you to explain is your apparent assertion that consumers are
any more protected if you collect that data and your
competitors can't.
Mr. Erickson. Senator, so----
Senator Lee. That is your assertion, right? I mean that is
the assertion that you made in that announcement. You said
you're not going to service the third-party cookies in the
Chrome browser, and----
Mr. Erickson. I'm sorry.
Senator Lee. Go ahead.
Mr. Erickson. Senator, we think the advertising ecosystem
can thrive without having privacy-intrusive technologies like
tracking devices or third-party cookies. The data that users--
we are transparent with the collection practices that we have
and the uses of our data, and we want to give consumers, and we
do give them meaningful choice over the uses of their data,
including to decide that they don't want to see targeted ads
and relevant ads. They can choose not to see those or to mute
ads that appear on third-party sites. There's many, many
advertisers in the ecosystem. The access to data from consumers
can be gotten from data brokers and other providers, so we
don't think--the data in that regard is not viable. The data
that consumers may provide with us are often provided to other
online actors as well, and some of these companies are some of
the biggest companies in the world. You implicitly raised a
very important point, which is as we see regulators around the
world push us and others, rightfully so, to have more privacy-
protective technologies and to chart a course through a more
privacy-centric web. There are competitors out there that are
urging competition authorities to have us make more personally
identifiable information released to the ecosystem.
We think that--we want to engage in these conversations. We
think we can have a privacy-centric web while ensuring consumer
choice and competition, and that publishers and advertisers
will continue to be able to have a business model that allow
them to provide their websites and services to consumers in the
way they do today.
Senator Lee. Okay, yes, I understand that. Look, I get the
fact that you can always point to areas where things could get
worse. Mandatory disclosures of personally identifying
information on the web or otherwise. It is rather significant
here that these things that you're talking about, steps that
you've taken to exclude would-be competitors from the
marketplace in circumstances in which Google's happy to provide
advertisers with an alternative making them more dependent on
Google, or it does in pretty much your bottom line.
Ms. Slaiman, do you agree with Google's statement? Are
consumers better off with only Google being able to collect
these types of data?
Ms. Slaiman. No, I don't agree with that statement. I don't
think that users' privacy is improved, and I think it's a
problem for competition. I really think we're being presented
here with a false choice. There's another alternative, which is
that some of this data should not be tracked at all.
Senator Lee. Sounds like you agree with my reluctance to
accept the premise that people are safer because of this. I
just realized I'm dangerously over time. Chairwoman Klobuchar
has been very indulgent. I apologize. Thank you.
Chair Klobuchar. Thank you. Next up Senator Cruz. Thank
you.
Senator Cruz. Thank you, Madam Chair. Mr. Satterfield, my
questions will be for you. Last week, the Wall Street Journal
ran a damning article entitled, ``Facebook Knows Instagram Is
Toxic For Teen Girls, Company Documents Show.'' The tagline
below it was quote, ``Its own in-depth research shows a
significant teen mental health issue that Facebook plays down
in public.''
I know about this article because my wife, Heidi, who reads
the Journal every day said, ``You need to read this article
now.'' I read it word for word.
All of us know that these products are addictive and that
companies like Facebook design them in this way in order to
maximize addiction, to capture eyeballs, which captures data,
which is then used to sell advertising. For years, Facebook has
been publicly insisting that its products aren't harmful and
particularly that they're not harming teenagers.
We now know that was a lie. Facebook knew that its
products, and specifically Instagram, was destroying the lives
of far too many teenage girls. Facebook knew this because
Facebook conducted its own studies into how Instagram affected
young users and found that Instagram is harmful to a sizable
percentage of them.
In fact, a slide from 2019 summara--summarizing this
research said quote, ``We make body image issues worse for one
in three teen girls.'' Another Facebook slide said quote,
``Teens blame Instagram for increases in the rate of anxiety
and depression.'' Another slide said quote, ``Teens who
struggle with mental health say Instagram makes it worse.''
Most egregiously, one presentation said that among teens who
reported suicidal thoughts, 13 percent of British users and 6
percent of America's users traded--traced their desire to kill
themselves to Instagram.
This should've made Facebook stop dead in its tracks and
ask what in the hell you were doing. Instead, Facebook publicly
downplayed the risk to young users and committed to push, to
make sure more at-risk teenage girls used Instagram because
more users including more teenagers means more money, whatever
the human cost.
This is appalling. The American people deserve a thorough
investigation into Facebook's willingness and eagerness to
mislead the public about the risks of their own products.
The Wall Street Journal article states that the research
has been reviewed by top Facebook executives and was cited in a
presentation given to Mark Zuckerberg.
Mr. Satterfield, is this accurate? Did Mark Zuckerberg have
personal knowledge of this Facebook research?
Mr. Satterfield. Senator, I don't know the answer to that
question, but, you know, to your other points, I would strongly
disagree with the notion that our products are unsafe. I
strongly believe they are safe----
Senator Cruz. Let me ask you. Did you have knowledge of
this research, Mr. Satterfield?
Mr. Satterfield. I'm sorry, Senator. I've read the Wall
Street Journal article----
Senator Cruz. Did you have knowledge of it before the Wall
Street Journal article?
Mr. Satterfield. Senator, I'm generally aware that we do
research on our products.
Senator Cruz. Are you familiar with this research?
Mr. Satterfield. I wasn't familiar with this research
outside of the context of the Journal article, no.
Senator Cruz. Wait a second. Your title is vice president
of privacy and public policy, and you had no idea about
Facebook's own research showing that you're violating the
privacy and destroying the lives of teenage girls. You didn't
know about it? Is that what you're testifying today?
Mr. Satterfield. Senator, we're a large company, we have a
lot of teams working on a lot of different issues. I don't work
on these issues, safety and well-being.
Senator Cruz. You didn't know about it?
Mr. Satterfield. I didn't. Other people did. We're happy to
connect----
Senator Cruz. You have zero knowledge whether Mark
Zuckerberg knew about it or not?
Mr. Satterfield. I--Senator, I don't know that. I don't
know.
Senator Cruz. You knew you were coming to testify in this
hearing. I'm going to guess you read the Journal article before
you showed up to testify?
Mr. Satterfield. Senator, I came here to testify on data
issues and antitrust----
Senator Cruz. Did you read the Journal article before you
showed up to testify?
Mr. Satterfield. Senator, yes, I've read the Journal
article.
Senator Cruz. Okay. Presumably, you prepared for today's
testimony, yes?
Mr. Satterfield. Yes, Senator, I prepared.
Senator Cruz. Did that preparation involve enquiring
whether the Wall Street Journal was accurate when it said Mark
Zuckerberg was aware of this research?
Mr. Satterfield. Senator, I can't get into the issues that
we discussed during prep with my lawyers.
Senator Cruz. Why not? You're here testifying on behalf of
Facebook. I'm asking whether you inquired, whether the Journal
was right, that Zuckerberg knew about this research? Did you
inquire about it, or did you remain willfully blind and not
want to know if Zuckerberg knew about it?
Mr. Satterfield. Senator, respectfully, I'm here to testify
about data and antitrust issues. I don't work on these issues.
I'm happy to put you in touch with the folks that do----
Senator Cruz. Again, you're the vice president of privacy
and public policy and so putting in place policies that result
in more teen suicides, that does not fall within your purview?
Mr. Satterfield. Senator, I don't agree with that
characterization. I work on privacy. There are many people that
work on these issues at the company.
Senator Cruz. Okay. Let's take the specifics of Facebook's
research. I read a quote a minute ago, quote, ``We make body-
image issues worse for one in three teen girls.'' I didn't
write that. Facebook wrote that. Is that an accurate statement?
Mr. Satterfield. Senator, we do this research in order to
inform hard conversations that we have at the company.
Senator Cruz. I didn't ask why you did the research. I
asked if the statement that was the result of your research is
true?
Mr. Satterfield. Senator, this is the research that was
discussed in the Journal. This is research that we did
internally.
Senator Cruz. Was that a conclusion of your research? Yes
or no?
Mr. Satterfield. Senator, I'm aware of the Wall Street
Journal article. I've read the Wall Street Journal article
which discusses the research.
Senator Cruz. All right. Let's try another conclusion. The
Facebook research concluded that 13 percent of British users
and 6 percent of American users trace their desire to kill
themselves to Instagram. Is that a conclusion of your research?
Mr. Satterfield. Senator Cruz, respectfully, we have teams
that work on these issues. I'm not on those teams. We would be
happy----
Senator Cruz. Respectfully, you're not answering the
question. It's a simple binary question. Did your research
conclude that or not? If it's not, show us the research that
didn't conclude that? If it is, then the question is, ``What's
the culpability of a company that knows it is contributing to
an expanding teen suicide?'' Did your research conclude that
six percent of American users trace their desire to kill
themselves to Instagram? Yes or no?
Mr. Satterfield. Senator, again, these aren't issues that I
work on at the company. I'm happy to bring folks in for a
briefing with you and your staff.
Senator Cruz. I understand that you would prefer a briefing
without the public being aware of it, but I'm the father of two
girls, including a teenage girl. Let me ask you something. In
your judgment, in the judgment of Facebook, is increased teen
suicide an acceptable business risk?
Mr. Satterfield. Senator, of course not.
Senator Cruz. Has Facebook quantified how many additional
teenagers took their life because of your products?
Mr. Satterfield. Senator, again, with respect, these aren't
the issues that I work on. I came here today to talk about data
and antitrust.
Senator Cruz. Let me ask you. What would you say to the
parents of a teenager who took her own life because of your
products? What would you say when, two years ago, you had
research that you conducted that concluded your products would
contribute to and expand teen suicide? What would you say to a
parent on behalf of Facebook who was facing that horrific
tragedy?
Mr. Satterfield. Senator, obviously losing a child to a
tragedy like that is devastating. I have children. I take these
issues incredibly seriously myself.
Senator Cruz. Does Facebook?
Mr. Satterfield. Of course, we do, Senator.
Senator Cruz. Then what did you do differently? You got
these results two years ago. What conduct changed? You don't
get to say you take these issues seriously if you continue
doing exactly the same and profiting off of--off of
applications that are endangering the lives of teenage girls.
What did you do differently because of this research?
Mr. Satterfield. Senator, we did this research to inform
our decision-making. We have consistently made----
Senator Cruz. Did anything change?
Mr. Satterfield [continuing]. Improvements to the product--
--
Senator Cruz. Did anything change?
Mr. Satterfield [continuing]. To address issues like well-
being. I would love to have a team come in----
Senator Cruz. Did anything change?
Mr. Satterfield. Senator, we've made changes to our
products over the last, you know, 10, 12 years----
Senator Cruz. Did anything change to reduce the risk of
teen suicide because of your product? Did you read this
research and say, ``Oh, my God, this is horrifying. Let's
change''? Did you do anything to change, or did you just say,
``Hey, we're printing money so we're good with this''? Which
one was it?
Mr. Satterfield. Senator, I would love to have a team come
and give you and your staff a full briefing on these issues. We
have made significant----
Senator Cruz. It's the American people who deserve a
briefing.
Mr. Satterfield [continuing]. To safety and security. I
would love to share more about this with you with the folks who
work on these things.
Senator Cruz. The entire American people deserve to know
the answers to these questions.
Chair Klobuchar. Thank you very much. I'm going to finish
up here with my second round of questions, and I want to bring
us back to the subject of the hearing on data, because we have
some major opportunities to move, right now, legislation that I
think will be very helpful.
The first I've mentioned, which is right in front of us
before the House, the bill that Senator Grassley and I have to
modernize the merger filing fees. We also have opportunities in
this budget in reconciliation, and you know, my view is--and I
guess I'll ask you this, Ms. Slaiman. The President can appoint
aggressive enforcers. He can issue executive orders which was
great, but if we don't have the resources to take on the
world's biggest companies, is it going to all work?
Ms. Slaiman. Right. I think you're absolutely right, Madam
Chairwoman. We need more funding for our antitrust enforcement
agencies. Obviously, that alone is not going to be sufficient
so I'm glad that you're working on a lot of other important
pieces of the puzzle as well, but that's an important one that
we ought to be able to get done.
Chair Klobuchar. Okay. Very good. Then we have not seen a
lot of antitrust enforcement against mergers or anticompetitive
conduct based on the issue raised by what this hearing has for
the most part focused on, which is data. It's clear that big
data does raise complex competition issues, but I'm doubtful
that when you see some of these court cases recently that in my
mind have gone in the wrong direction to begin with, but then
we have this complex area of data and what that means for
dominant carriers with no new laws or adjustment of laws.
That's why the Competition and Antitrust Law Enforcement Reform
Act that I introduced with Senators Leahy, Blumenthal, Booker,
and many others would update our laws.
Could you talk about how this would help to address
competition issues raised by big data?
Ms. Slaiman. Yes. Thank you so much, Madam Chairwoman. I
think that's absolutely right that recently, and not so
recently--it's been going on for decades now--that our
antitrust laws have been narrowed and narrowed by these court
decisions. So, now that we are facing the difficult challenges
of big data, it's very difficult to bring a case, for example,
where innovation harms are an important part of, you know, what
the agencies are trying to argue. I think it will be incredibly
helpful to have your legislation in place that updates the
legal standard both for mergers and for exclusionary conduct.
Exclusionary conduct in particular is how a lot of these
big data concerns are happening, and it has really been
difficult to bring exclusionary conduct to cases, which is a
broader problem beyond big data, but it's particularly relevant
here.
Chair Klobuchar. Maybe we could talk a little bit about
that, you know, the relevance of it.
As we look at privacy legislation, and I know, Mr.
Satterfield, you talked about privacy legislation, and in your
written testimony and past blog posts you've written about the
need for Congress to enact it that could create rules to govern
how platforms should use, analyze, and share data. What
restrictions do you think the U.S. Government should put on
targeted advertising, both from a privacy and competition
perspective, and should such legislation be limited to
platforms like Facebook, Google, and Amazon, or should it apply
to data brokers too?
Mr. Satterfield. Thank you, Senator. We think the
comprehensive privacy legislation is incredibly important for
the Congress to take up and pass. In terms of who it should
apply to, we think it should apply across the board to
companies that process people's personal data. We think that it
should have components like basic rights around your data, the
rights to access, correct, delete and move your data to another
service. We think that companies should be required to build
internal processes to make sure that they're thinking about
privacy when they build their products and services. I think
that those are the basic components of the framework that we
would advocate for.
Chair Klobuchar. Anyone else like to comment on the rules
the Federal Government should put in place to ensure the market
for targeted advertising remains competitive, which is a little
different than just privacy?
Ms. Colclasure. I'd like to jump in.
Chair Klobuchar. Okay.
Ms. Colclasure. Say that I think we need an accountability-
based law. We've been advocating for a Federal law for almost
20 years, and we believe it's very important for all Americans
to have the same rights and for businesses to have
predictability and certainty. The accountability construct is
one that says it parses out, and this is especially important
for digital advertising, that you should use data for benefit,
for good purpose, and you are responsible and answerable, the
accountability construct, for detecting and preventing harm.
I love what Senator Blumenthal said earlier, that data is
an abstract of a person, and I believe it deserves all the
dignity that we people should have. So when you process data,
when you activate data for digital advertising, it's about
fairness, not manipulation, and that's the way we govern data,
and that's what we believe, and that's what we advocate for in
addition to the basic rights. We parse privacy out. It's the
right to an area of seclusion. Where can we as people be free,
natural, unobserved humans? The right to agency. That's that
choice, participation, control, access. Then the right to fair
processing. That is the third piece of privacy and that is in
the digital age.
The reality of digital is it's getting so complex people do
not want to sit in front of a NASA space station control panel
and say, ``Yes, yes. No, no. Yes, yes.'' We have to get the
defaults right, and it has to be that participants, all
participants, are accountable for, ``Do no harm'' and ``Do good
things in service to people.''
It is privacy by design. The computer code is the conduct.
Thank you, Senator.
Chair Klobuchar. Okay. Very good. Ms. Slaiman, you may want
to add to that, but one of the goals of competition as to
policy is to ensure there's a broad range of choices. If ads
are targeted based on data companies have collected about each
of us and the inferences they have made about our interest,
does that raise concerns for you about consumers abilities to
freely choose the products and services that are best for them,
ranging from financial services, housing, healthcare,
employment opportunities, and more, when some of them are being
targeted because of their data that they didn't really know
they shared compared to other competitors?
Do you want to address that?
Ms. Slaiman. Yes, that's something that we're very
concerned about. I do think that creates an opportunity for
anti-competitive discrimination. It also creates an opportunity
for discrimination, racial discrimination, and gender
discrimination, and we've seen instances of that happening, so
I think these are very serious harms that we need to be
addressing.
To focus on the anti-competitive discrimination, I do think
in addition to the consumer choice limitations, we're also
concerned about the impact that this has on businesses. If a
business is assessed by one of these algorithms to not be
popular with a certain category of users, that can make things
incredibly difficult for them because of the power of these
platforms, because they occupy that gatekeeper role. It's much
different than if a brick-and-mortar grocery store decides not
to show your product, you can go somewhere else. With these
gatekeeper platforms that's not a practical real option for
companies. There's a variety of harms I think that come from
that.
Chair Klobuchar. Mr. Erickson, what is your company doing
to ensure that competition is not being distorted by your
targeted advertising systems with Google?
Mr. Erickson. Senator, thank you for the question. I think
primarily consumers need to have transparency over their data,
how data is being used, and meaningful choices about the use of
that data. On the Google platforms, we provide an easy way for
consumers to see exactly what data is stored relative to their
account. They can delete that data if they want to. They can
also make changes to say they don't want behavioral advertising
targeted ads to them. They don't want to see--they want to mute
ads on third-party sites, so I think the important thing here
is to ensure that consumers have transparency and that they
have meaningful choice, and we think privacy legislation should
reflect those values as well.
Chair Klobuchar. Okay. Earlier in my opening, I talk about
Apple recently rolling out an update to its users, prompting
them to agree or opt out of being tracked from across the apps
they use. Early indications, as I noted, suggest a lot of them
are doing it, something like 75 percent. Has Google considered
doing something similar, including for its Android operating
system?
Mr. Erickson. Senator, thank you. Google has announced that
they will--we will stop supporting privacy-intrusive tracking
technologies, like third-party cookies. At the same time, we've
opened up a dialog through our Privacy Sandbox initiative to
have a discussion with advertisers, with publishers, with
governments, on how the industry can move to more privacy-
enhancing, privacy-protective business models that still allow
small businesses, website owners, to be able to have an ad-
supported business and provide free products and services to
consumers.
Chair Klobuchar. Through the initiative the Privacy Sandbox
initiative, you've mentioned some of these changes that you
made to your web browser, Chrome.
However, from a competition perspective these changes have
raised concerns that Google will still have access to detailed
data, but others won't. How do you respond to those concerns?
Mr. Erickson. Senator, when we announced that we would
cease support of these intrusive tracking devices, the third-
party cookies, we also announced that we would not substitute
those for alternative tracking mechanisms, but rather the idea
behind the Privacy Sandbox was try to move as an industry
toward more privacy, secure technologies that would still
support an ad ecosystem but in privacy-enhancing ways.
Chair Klobuchar. Do you want to respond to that, Ms.
Slaiman, and then I'll just ask you the last question here?
Ms. Slaiman. Thank you so much. The Privacy Sandbox creates
a situation where Google is still getting the data. They may
call that privacy because fewer companies are getting the data,
but Google is still able to fully exploit that data.
I don't think that that is giving users more privacy.
Chair Klobuchar. Okay. My last question of you is about,
you know, I've asked you some questions on the record, later,
on mergers and things like that, and my bill, but just a kind
of broad question here, Ms. Slaiman. In your opinion, do we
need new laws to fully address the competition issues raised by
big data, or can we just live with what we've got? That's
called a softball.
Ms. Slaiman. [Laughter] Thank you so much. We absolutely
need new laws, and that's something that we're working very
hard on. I think we need to use all of the tools at our
disposal, so we need to increase enforcement with the current
laws that we have.
We need to push for rulemaking at the FTC with the current
laws that we have, but at the same time, it is so important
that we have improvements to the antitrust laws and sector-
specific antitrust laws focused on big tech.
Chair Klobuchar. Very good. I think that says it all. Do
you want to add anything, Senator Lee? Oh, you do? Okay.
Because we want to have a 4-hour hearing, not just three and a
half, no. Go, I'm kidding. Go ahead.
Senator Lee. I can go for four and a half.
Chair Klobuchar. No, that's okay. Why don't you just finish
up here.
Senator Lee. I'll keep this brief. Mr. Satterfield, what's
going to happen to the employees at Facebook involved in
providing the leaked documents to the Wall Street Journal? Are
they going to be retaliated against?
Mr. Satterfield. Senator, I can't discuss H.R. issues in a
public forum.
Senator Lee. Would it be appropriate for you to retaliate
against them, assuming they broke no laws? Would it be
appropriate for you to retaliate against them?
Mr. Satterfield. No, Senator, of course not. Of course, it
wouldn't be appropriate to retaliate against anyone.
Senator Lee. Will you issue a commitment to me that
Facebook will not retaliate against them?
Mr. Satterfield. Senator, yes. I'm happy to commit to that.
Senator Lee. That would be wonderful. Thank you. I
appreciate that.
Chair Klobuchar. Okay. I want to thank everyone for coming.
There is a lot going on. We have a bill this week before the
full Committee for markup on venues that Senator Lee and I have
done together, the companion in the House. We have the funding
bills and proposals that are very ripe for action right now. We
have other bills that are tech-specific with Senator Blumenthal
and Senator Blackburn and myself with the App Bill. We have
interoperability proposals from the past, and then we have
discrimination bills, anti-discrimination bills for
exclusionary conduct and the like, that we're in the middle of
right now, working on. The House, of course, has proposals,
some similar to ours, some different, but we've been working
closely with our counterparts, which is Representative
Cicilline and Representative Buck.
Then also we have broader bills. We had a hearing on
meatpacking and consolidation in the grocery area. We have a--
which went--was very well attended with the full Committee
here. Senator Lee and Senator Grassley have a broad bill on
antitrust. I have another one with a number of co-sponsors.
There are some similarities in the bill right, Senator Lee?
Yes, there are.
We're also looking at that across industry lines about
things that we can do that aren't just about tech, actually,
that hit the fact that we're seeing consolidation across this
country from everything from cat food to coffins.
It's not really good to end with the word coffin, so--
although, you know, we're not too far from Halloween, but I
just want to thank the witnesses and assure you that we
continue to want to work with everyone, but we know we need
change, that just keeping on going like we are and saying,
``Everything is fine, and we trust you,'' and it's just not
enough. You know, we're glad that these companies have been
successful. We're glad they employ people, we truly are. I have
a Fitbit. Senator Lee and I have compared some of our Fitbit
data over the years. I'm not going to reveal that, although you
guys already know it, so there.
And--but, at the same time, we believe in capitalism and
encouraging capitalism and rejuvenating capitalism, and a lot
of what's going on right now has the obvious privacy concerns,
many of which you heard today with a lot of understandable
emotion. But then there's also competition concerns that once
you get so big and have so much dominance that there are these
barriers to entry. They make it impossible to allow
competition, and that, in turn, of course, in the long term
allows for too much money in the same few hands. It allows for
companies to start preferencing themselves, and while we've
seen incredible developments in technology, we do not deny
that, we'll never know of some of the new bells and whistles on
privacy we might've seen if we didn't have Facebook buy
Instagram or WhatsApp, if there'd been some control on that.
It's one of the reasons that I support looking back in some of
the most consolidating industries, just as we did during the
days of the AT&T breakup, to figure out what we can do to make
this area more competitive.
You're not going to find a more interested and energized
Subcommittee than this one, as you could see from today,
including some visitors that aren't even on the Subcommittee
that we welcome. So, thank you.
We will keep the record open for--is it a week? Okay, very
good.
Thank you to Mark and to Avery for their work, and Senator
Lee and his staff. Do you want to add anything, Mike?
Senator Lee. Thank you.
Chair Klobuchar. Okay. Thank you. The hearing is adjourned.
[Whereupon, at 5:28 p.m., the Committee was adjourned.].
[Additional material submitted for the record follows.]
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