[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
COLLUSION IN THE GLOBAL ALLIANCE FOR
RESPONSIBLE MEDIA
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON THE JUDICIARY
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
WEDNESDAY, JULY 10, 2024
__________
Serial No. 118-90
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: http://judiciary.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
56-299 WASHINGTON : 2024
-----------------------------------------------------------------------------------
COMMITTEE ON THE JUDICIARY
JIM JORDAN, Ohio, Chair
DARRELL ISSA, California JERROLD NADLER, New York, Ranking
MATT GAETZ, Florida Member
ANDY BIGGS, Arizona ZOE LOFGREN, California
TOM McCLINTOCK, California SHEILA JACKSON LEE, Texas
TOM TIFFANY, Wisconsin STEVE COHEN, Tennessee
THOMAS MASSIE, Kentucky HENRY C. ``HANK'' JOHNSON, Jr.,
CHIP ROY, Texas Georgia
DAN BISHOP, North Carolina ADAM SCHIFF, California
VICTORIA SPARTZ, Indiana ERIC SWALWELL, California
SCOTT FITZGERALD, Wisconsin TED LIEU, California
CLIFF BENTZ, Oregon PRAMILA JAYAPAL, Washington
BEN CLINE, Virginia J. LUIS CORREA, California
KELLY ARMSTRONG, North Dakota MARY GAY SCANLON, Pennsylvania
LANCE GOODEN, Texas JOE NEGUSE, Colorado
JEFF VAN DREW, New Jersey LUCY McBATH, Georgia
TROY NEHLS, Texas MADELEINE DEAN, Pennsylvania
BARRY MOORE, Alabama VERONICA ESCOBAR, Texas
KEVIN KILEY, California DEBORAH ROSS, North Carolina
HARRIET HAGEMAN, Wyoming CORI BUSH, Missouri
NATHANIEL MORAN, Texas GLENN IVEY, Maryland
LAUREL LEE, Florida BECCA BALINT, Vermont
WESLEY HUNT, Texas
RUSSELL FRY, South Carolina
Vacancy
CHRISTOPHER HIXON, Majority Staff Director
AARON HILLER, Minority Staff Director & Chief of Staff
------
C O N T E N T S
----------
Wednesday, July 10, 2024
OPENING STATEMENTS
Page
The Honorable Jim Jordan, Chair of the Committee on the Judiciary
from the State of Ohio......................................... 1
The Honorable Jerrold Nadler, Ranking Member of the Committee on
the Judiciary from the State of New York....................... 3
WITNESSES
Christian Juhl, Chief Executive Officer, GroupM
Oral Testimony................................................. 5
Prepared Testimony............................................. 8
Herrish Patel, President, Unilever USA
Oral Testimony................................................. 12
Prepared Testimony............................................. 14
Benjamin Shapiro, Editor Emeritus and Co-Founder, The Daily Wire
Oral Testimony................................................. 23
Prepared Testimony............................................. 26
Spencer Weber Waller, Justice John Paul Stevens Chair,
Competition Law, Professor and Director, Institute for Consumer
Antitrust Studies, Loyola University Chicago School of Law
Oral Testimony................................................. 29
Prepared Testimony............................................. 31
LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING
All materials submitted for the record by the Committee on the
Judiciary are listed below..................................... 91
An article entitled, ``Brand Safety: What Do Consumers Consider
To Be Inappropriate Content?'' Feb. 12, 2024,
MarketingCarts.com, submitted by the Honorable J. Luis Correa,
a Member of the Committee on the Judiciary from the State of
California, for the record
An article entitled, ``A fake tweet sparked panic at Eli Lilly
and may have cost Twitter millions,'' Nov. 14, 2022, The
Washington Post, submitted by the Honorable Deborah Ross, a
Member of the Committee on the Judiciary from the State of
North Carolina, for the record
An article entitled, ``Meet the Company Trying to Control Your
Mind,'' Aug. 2, 2023, Townhall, submitted by the Honorable
Harriet Hageman, a Member of the Committee on the Judiciary
from the State of Wyoming, for the record
Materials submitted by the Honorable Jerrold Nadler, Ranking
Member of the Committee on the Judiciary from the State of New
York, for the record
An excerpt from the transcribed interview of Robert Rakowitz,
Head of Global Media, Mars, Jun. 4, 2024
A letter to the Committee on the Judiciary, from NewsGuard
Technologies, Inc., Jul. 17, 2024
APPENDIX
A statement submitted by the Honorable Sheila Jackson Lee, a
Member of the Committee on the Judiciary from the State of
Texas, for the record
QUESTIONS AND RESPONSES FOR THE RECORD
Questions for Spencer Weber Waller, Justice John Paul Stevens
Chair, Competition Law, Professor and Director, Institute for
Consumer Antitrust Studies, Loyola University Chicago School of
Law, submitted by the Honorable Cliff Bentz, a Member of the
Committee on the Judiciary from the State of Oregon, for the
record
Response to questions from Spencer Weber Waller, Justice John
Paul Stevens Chair, Competition Law, Professor and Director,
Institute for Consumer Antitrust Studies, Loyola University
Chicago School of Law
Questions for Benjamin Shapiro, Editor Emeritus and Co-Founder,
The Daily Wire, submitted by the Honorable Cliff Bentz, a
Member of the Committee on the Judiciary from the State of
Oregon, for the record
Questions for Benjamin Shapiro, Editor Emeritus and Co-Founder,
The Daily Wire, submitted by the Honorable Wesley Hunt, a
Member of the Committee on the Judiciary from the State of
Texas, for the record
COLLUSION IN THE GLOBAL ALLIANCE FOR RESPONSIBLE MEDIA
----------
Wednesday, July 10, 2024
House of Representatives
Committee on the Judiciary
Washington, DC
The Committee met, pursuant to notice, at 10:11 a.m., in
Room 2141, Rayburn House Office Building, the Hon. Jim Jordan
[Chair of the Committee] presiding.
Members present: Representatives Jordan, Issa, Gaetz,
Biggs, McClintock, Tiffany, Roy, Bishop, Spartz, Fitzgerald,
Bentz, Cline, Armstrong, Van Drew, Moore, Kiley, Hageman, Lee,
Fry, Rulli, Nadler, Cohen, Johnson, Swalwell, Jayapal, Correa,
Scanlon, McBath, Dean, Escobar, Ross, Ivey, and Balint.
Chair Jordan. The Committee will come to order. Without
objection, the Chair is authorized to declare a recess at any
time. We welcome everyone to today's hearing on Collusion in
the Global Alliance for Responsible Media.
The Chair now recognizes the gentleman from Alabama to lead
us all in the Pledge of Allegiance.
All. I pledge allegiance to the Flag of the United States
of America, and to the Republic for which it stands, one
Nation, under God, indivisible, with liberty and justice for
all.
Chair Jordan. The Chair is now recognized for an opening
statement. Section 1 of The Sherman Act makes anticompetitive
restraints of trade illegal. This includes coordinated actions
that harm consumers by limiting the choices available to
Americans. That is exactly what the World Federation of
Advertisers, the Global Alliance for Responsible Media, and
every company that is a member of these organizations has done
over the last five years. They came together, agreed to limit
advertising on certain platforms and news outlets that
millions, millions of Americans choose to read, watch, and
listen to.
How did they do this? WFA members represent roughly 90
percent of the global advertising spend. That means that WFA
has almost complete monopoly power over advertising dollars and
a tremendous amount of market power. GARM, which is an
initiative of the WFA, includes in its memberships over 100 of
the world's biggest brands, ad tech providers, and advertising
agencies. GARM has representatives from each of the six major
advertising agency holding companies. GARM's steer team, which
acts as a board of directors for the organization and approves
nearly every action by the alliance includes Unilever and other
massive consumer goods companies as well as GroupM, the world's
largest media-buying agency. They collude to make sure that no
other advertisers support any news outlets, platforms, or
creators that these massive companies don't agree with. These
people do not like conservatives. Again, don't take my word for
it. Here is what employees at GroupM said to GARM's leader
about Fox News, The Daily Wire, and Breitbart News. Employees
from GroupM said ``They hated their ideology.'' That employee
was discussing how to pull advertising from these news outlets.
Unfortunately, it is not just GroupM. Unilever encouraged
Facebook to label one of President Trump's political ads as
misinformation during the 2020 election which would have caused
that ad to be removed from Facebook. GARM organized the boycott
of Twitter when Mr. Musk bought the platform and then they
bragged about cutting Twitter's revenue by 80 percent. Unilever
wrote to GARM's leader that the company had ``issues with
overtly partisan takes by Elon Musk.'' The example Unilever
gave was Elon Musk's handling of Hunter Biden's laptop story.
Unilever had a problem with Elon Musk releasing internal
Twitter documents to journalists and exposing how and why
Twitter incorrectly suppressed the story about the Biden's
family influence peddling. It's the Twitter files. GARM and its
members threatened platforms that don't comply, and the best
example is Spotify's--Joe Rogan's comment on Spotify, when Joe
Rogan's comments about the COVID-19 vaccine.
To be clear, any of these companies could on their own
legally refuse to advertise on a certain platform or a news
outlet or with certain content creator. Unilateral decisions
are not illegal. If they choose to pull advertising from The
Daily Wire, other similar outlets, they will not be reaching
millions of Americans who choose to consume that content, but
their competitors will. In other words, no single company can
unilaterally pull its advertising dollars off a platform or
news outlet over a long period of time because that company's
competitors will advertise and reach the audience, called the
market.
Orsted, a Danish renewable energy company explained it
perfectly when its employees wrote an email to GARM asking when
the Twitter boycott will end. Orsted told GARM that Twitter
``is an important platform for us to reach our audience, so we
would like to consider going back.'' They looked to GARM for
direction, and they were asking GARM for permission. Frankly,
that is exactly how cartels operate. They collude against
conservatives and other outlet platforms and content creators.
In fact, they come right out and say it. GARM's leader wrote
that the issue with the advertising industry and digital
platforms is the ``extreme global interpretation of the U.S.
Constitution.'' He also complained taking U.S. norms and
applying them globally is something that is a concern and said
there is a problem with Americans 230 year old Constitution.
If WFA and GARM are allowed to continue, these massive
companies can collude without consequences, the results will be
devastating. If this cartel continues to target conservative
outlets, content creators with different voices and viewpoints,
and any person that does not recite the so-called mainstream
media talking points, there will be real problems. They will
deprive these good journalists and content creators of the
funding they need to succeed. They will use their cartel to
eliminate competition based on internal biases of these massive
companies, and they will deprive Americans of the content that
they actually want to consume.
With that, I would yield to the Ranking Member for an
opening statement.
Mr. Nadler. Mr. Chair, this hearing has nothing to with
antitrust laws, since the majority's allegations wither under
even the most basic antitrust analysis. This is instead another
dangerous effort by the majority to bully companies into
promoting and supporting far-right extremist views, views that
brands understandably do not want to be associated with.
In this case, the majority seeks to undermine companies'
First Amendment rights and to make it harder for them to avoid
monetizing online and offline harm through advertising. This
includes harm like the creation and distribution of
exploitative images and videos of children, the promotion of
terrorism and funding the terrorist organizations, the
promotion and distribution of foreign propaganda materials, and
the promotion and distribution of racist, hateful, and
discriminatory content.
Under the majority's theory of supposed antitrust harm,
advertisers who do not want their expensive ad campaigns placed
next to hate speech, pirated copyrighted material, foreign
propaganda, and other harmful content are, quote, ``colluding
to demonetize so-called conservative content.''
Under the majority's theory, the only way to cure this
alleged harm would be for advertisers to be forced to run ads
on platforms like Twitter, now known as X; Truth Social,
Breitbart, and The Daily Wire, even though those sites are rife
with adult content, hate speech, false information,
misinformation, racist, and violent propaganda.
Further undermining this frame of harm, the so-called
victims of this made-up scheme are well supported by ad
revenue, subscriber revenue, and sales revenue. Take The Daily
Wire, the media outlet run by Republican witness Ben Shapiro.
Its website generated $220 million last year. It shows the 13th
most popular podcast in the first quarter of 2024. His website
is over 15 million followers, of course, his main social media
handles, including onsites that are members of the Global
Alliance for Responsible Media, known as GARM, the target of
today's hearing.
The Daily Wire ``receives more likes, shares, and comments
on Facebook,'' which we should note is a member of GARM and any
other news publisher by a wide margin in 2021. Even the video
link Mr. Shapiro claims to be the victim of global advertising
organizations which is self-supported by advertising revenue
and is available on YouTube, a member of GARM. This hardly
sounds like the victim of a conspiracy to suppress content.
Mr. Shapiro's content is not alone. Many so-called
conservative brands have made notable gains and corporate
reputation among consumers, and several brands who call
themselves antiwoke, invented the market to cater to customers
who wish to vote with their wallet. Advertisers have the right
to target their ads to the platforms, websites, and venues they
choose. By forcing advertisers to run ads on websites that they
deem to contain harmful information and content, the majority
would be undermining those companies' right to free speech
under the First Amendment. It is also an essential tenet of a
free market that companies are not forced to do business with
anyone. Indeed, a competitive online environment is necessary
for advertisers to easily choose where and how their ads are
rolled out.
Historically, this Committee has worked hard to protect
consumers, ensure a free and fair market, and push back on
corporate abuse, greed, and malfeasance. We have advanced
bipartisan bills to combat market concentration from online
platforms to drug pricing. We did all this because we took our
jobs seriously to protect competition in the marketplace. We
understood the unique importance of the Federal antitrust laws,
not as a weapon to use against our political opponents, but as
an essential component of the American social contract.
Unfortunately, this majority has picked a different
direction. Under the direction of the Chair, the Committee is
abusing its oversight authority. Republicans are so committed
to the belief that ``conservative content'' is being censored
despite all evidence to the contrary, that they will do
anything to undermine the efforts of platforms to moderate
their own content which the Supreme Court recently affirmed is
an exercise of their First Amendment rights, governments to
communicate with platforms about security threats, online and
offline crime and terrorist and mis- and disinformation that
threatens our Nation's health and democracy, and companies to
choose where and how to advertise their product.
This hearing is the result of a 15-month investigation that
has resulted in over 37 productions to the Committee of more
than 175,000 pages and one transcribed interview. I can only
assume that the reason the majority did not ask GARM, the main
target of this investigation, to send a witness here today, is
that the majority knows there is no evidence to support their
claim of wrongdoing. Their investigation was not designed to
uncover unlawful behavior because they knew there was none.
Instead, it was designed to chill companies' exercise of their
First Amendment rights. It was designed to make companies
afraid to speak to each other about the real connection between
the online monetization of criminal and harmful content and the
funding of offline harm.
Make no mistake, the companies represented here today and
the others that are part of GARM want first and foremost for
customers to see their ads where and when they expect them and
to make purchases based on those ads. Second, and importantly,
they do not want their expensive ad campaigns to fund people,
(1) who pirate content; (2) who promote and execute terrorist
acts; (3) who make and distribute harmful and exploitative
images of children; and (4) others who use the internet to
distribute and fund crime.
Republicans are so determined to prove their conspiracy
theory that conservative content is being censored that they
would do anything, including launching a fruitless and harmful
investigation, to bully companies that do not hold their views.
Hopefully, we will get back to doing the serious work of the
American people very soon and not continue to waste taxpayer
dollars on fishing expeditions designed to help hate and
criminal activity spread on- and offline.
I thank the witnesses who are appearing today, and I yield
back the balance of my time.
Chair Jordan. The gentleman yields back. Without objection,
all other opening statements will be included in the record.
We now introduce today's witnesses.
Mr. Christian Juhl is the Global CEO of GroupM, one of the
world's largest media-buying agencies with more than $60
billion in annual media spending. GroupM's agencies and
subdivisions include Mindshare, Wavemaker, EssenceMediacom,
T&Pm, and others.
Mr. Herrish Patel is the President of Unilever USA and CEO
of Unilever's Personal Care North America Division. As CEO of
Personal Care North America, Mr. Patel oversees brands
including Dove, Degree, and Axe, among others.
Mr. Benjamin Shapiro is the host of the Ben Shapiro Show, a
daily political podcast and radio show. He is also the editor
emeritus of The Daily Wire which he co-founded in 2015. Mr.
Shapiro has written a number of books on current events, and
routinely speaks at conferences, colleges, and universities. If
you can believe what the Ranking Member said, has a website
that generates $220 million a year, the 13th most popular
podcast and 15 million followers. Imagine what he could do if
GARM wasn't targeting The Daily Wire.
Finally, we have Mr. Spencer Waller is the Justice John
Paul Stevens Chair in Competition Law, Professor and Director
of the Institute for Consumer Antitrust Studies at Loyola
University, Chicago School of Law. Professor Waller's courses
and research is focused on antitrust, class actions,
innovation, and intellectual property.
We welcome our witnesses and thank them for appearing
today. We will begin by swearing you in. Would you please rise
and raise your right hand?
Do you swear or affirm under penalty of perjury that the
testimony you are about to give is true and correct to the best
of your knowledge, information, and belief so help you God?
Let the record reflect that the witnesses have answered in
the affirmative. Thank you.
Please be seated. Please know that your written testimony
will be entered into the record in its entirety. Accordingly,
we ask that you summarize your testimony in five minutes.
Mr. Juhl, we will begin with you.
STATEMENT OF CHRISTIAN JUHL
Mr. Juhl. Chair Jordan, Ranking Member Nadler, and the
Members of the Committee, thank you for the opportunity to
appear before you today. My name is Christian Juhl. I am the
Global Chief Executive Officer at GroupM, a media investment
company.
In simple terms, we buy ad space across channels including
television, digital, and print. Our clients place ads within
that space. Brands tell us the message they want to share from
the audience they want to target. We then advertise on which
media environments would be best suited for the product and buy
ad space on those channels on the brands' behalf. Collectively,
brands invest billions of dollars in advertising annually to
shape how they are perceived. One of the marketer's biggest
fears is that years of brand value could evaporate overnight as
a consequence of bad ad placement. Companies spending millions
of advertising dollars do not want to risk their brand on a
strategy that could backfire. Brands consistently inform us, as
their agency, that they do not want to advertise next to hot
button or divisive content. They want predictable, reliable
environments.
In 2017, news outlets reported that major brands were
unwittingly advertising next to ISIS propaganda.
Unsurprisingly, they faced significant consumer push back.
Brands also had to contend which reports of Russian troll
farms, infiltrating platforms to disrupt Presidential
elections. Most recently, brands had to develop advertising
strategies in the context of a pandemic that divided Americans.
This resulted in a growing emphasis on brand suitability or
market fierce desire to protect a brand's value by ensuring
their ads are not placed adjacent to content that could
negatively affect their reputation.
Brand suitability is particular to each brand. What is
unsuitable to one may be perfectly suitable to another. All
brands generally agree they do not want to appear next to
illegal or harmful content. Many also seek to avoid ad
placements near content that while not illegal does not align
with their values. With the increasing focus on brand
suitability, brands wanted to better understand how publishers
were identifying, prohibiting, and removing harmful content.
What they found was every platform took a different approach.
Definitions of harmful content also varied. Without consistent
standards, companies were concerned their ads would end up
appearing in unsuitable environments.
We believe that consistent standards were needed to help
our clients connect with consumers which is why we and other
organizations came together to establish the Global Alliance
for Responsible Media, or GARM. GARM developed standard
definitions of content that brands might consider unsuitable so
that advertisers and publishers could speak the common language
about sensitive content. Adoption of GARM's definitions is and
always has been completely voluntary.
For GroupM's part, we follow our clients' ad placement
wishes according to their risk tolerances and priorities. These
priorities can shift quickly. It is our job to execute their
strategy with speed and precision. We leverage GARM's
definitions to provide our clients with a consistent, reliable
framework. GroupM is not the arbiter of how to categorize
websites nor do we want to be. Because we have no control over
publishers and no role in moderating content, we also rely on
independent third parties to identify domains with those
definitions and additional categories that our clients deem
unsuitable.
Among other things, those third parties consider media
platforms fact-checking resources, processes, and technologies
when they evaluate the risks placing content.
That third-party assessment informs where we will place ads
including the sites to which we will not place ads without
specific client request. Of note, approximately 94 percent of
those websites are prescribed because they infringe on IP
rights.
This Committee expressed an interest in advertising on
certain news platforms. We appreciate the importance of funding
news organizations through advertising, which is why we have
taken steps to make advertising in news, including local news,
more appealing to advertisers. Today, however, trust in news
sites is at a low point and brands generally disfavor
advertising next to news. For example, only 1.28 percent of
brand spend is allocated to online news at this point. This is
because brands prefer to avoid advertising alongside common
news content or scandal, political division, and also because
they do not need to advertise there to reach their target
audience. Alternatives such as sports and entertainment provide
a better way to reach these same consumers. This is not a left,
right, or GroupM preference. It is apolitical. It is an
industry-wide preference.
GroupM has no interest in impinging on anyone's rights to
speak or publish their points of view. We also believe
companies have the right to choose where they place their
advertisements. We all know how one bad ad placement can damage
a company's reputation and bottom line which is why brands and
the companies like GroupM that serve them need tools and
transparency to mitigate these risks.
Thank you. I look forward to answering your questions.
[The prepared statement of Mr. Juhl follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chair Jordan. Thank you, Mr. Juhl.
Mr. Patel, you are recognized. Make sure that the mic is on
and pull it real close. We can get someone to help you there.
OK. Thank you. There you go.
STATEMENT OF HERRISH PATEL
Mr. Patel. Chair Jordan, Ranking Member Nadler, and the
Members of the Committee, thank you for the opportunity to be
here today to discuss Unilever's approach to purchasing
advertising that promotes over 400 different brands, used by
more than three billion people every day, in more than 190
countries around the world.
Unilever takes great care to ensure that our advertisements
reach the consumers who use our products, promote our products
and brands, and serve our business goals of offering consumers
the brands they know and trust for their everyday needs. In
making decisions on advertising, Unilever uses its advertising
dollars to reach as many consumers as we can in an environment
that maximizes sales for our products.
Currently, about 80 percent of our U.S. advertising spend
is directed in some form of digital media. We spend the most on
digital commerce platforms like Amazon, Walmart, Target, and
Walgreens because that is where consumers are making their
buying decisions. Only 20 percent of Unilever's advertising
spending goes to social media platforms and less than one
percent goes to digital news. We want to reach all our
consumers to use our brands on platforms that support and align
with our brand. Conversely, being associated with content or a
platform that detracts from our brands, harms our brands, or is
inconsistent with our brands is decidedly not in our economic
interest.
With the use of user-generated social media content and
other online media, we have unfortunately seen repeated
instances where our brands have been associated with content
that is harmful to our brands. One earlier example, ads for
Dove soap were appearing adjacent to content glorifying
domestic violence and rape. In 2020, we suspended social media
advertising when it became clear that the polarizing content
would not serve the brands or add value to the brand spaces in
the market.
I want to be very clear on one crucially important fact.
Unilever and Unilever alone controls our advertising spending.
No platform has the right to our advertising dollars. As we
look across the available advertising inventory, recognizing we
do not have unlimited money to spend on advertising, we choose
the channels, the platforms, and the outlets that give us the
greatest commercial benefit for our advertising investments.
We have internal policies and guides on our decisions. Our
policies require our advertisement to be truthful, accurate,
and transparent. In 2018, we adopted a Responsibility
Framework, specifically for digital advertising focusing on
advertising toward responsible platforms, responsible content,
and responsible infrastructure. We have a dedicated team of
professionals who are constantly examining the advertising
marketplace, working with platforms, selecting the platforms
that meet our business needs.
We also work with the industry including the Global
Alliance of Responsible Media. GARM arose after leading
advertisers observed that ads for their brand name products
were appearing alongside despicable content. GARM's Brand
Safety floor and Suitability Framework are tools to help
platforms communicate clearly about the content they will
monetize, and to assist advertisers and agencies in making
decisions about advertising inventory that they will purchase.
Although we have made good progress in ensuring that our
digital advertising spend is advancing our brands' business
objectives, there is still more work to be done. As recently as
two years ago, Unilever received notice that certain ads from
brands had been unknowingly placed adjacent to social media
profiles involving selling and soliciting child sexual abuse
material. This is wholly unacceptable.
We must do everything in our power as both advertisers and
platforms that ensure our advertising dollars are serving the
intended purpose of reaching consumers and promoting our
brands, not funding hate and harm. I would be happy to respond
to your questions. Thank you.
[The prepared statement of Mr. Patel follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chair Jordan. Thank you, Mr. Patel.
Mr. Shapiro, you are recognized for five minutes.
STATEMENT OF BEN SHAPIRO
Mr. Shapiro. Chair Jordan, Ranking Member Nadler, the
Members of the Committee, good morning. First, Ranking Member
Nadler, I appreciate the kind words about our business. It is
very kind of you and, also, I assume we would be doing a lot
better without the institutional obstacles that I am about to
discuss.
We are in the midst of a trust crisis in the world of
media, which is because so many in the legacy media have lied
to preserve left-leaning narratives. To take the most recent
example, we were told by the legacy media that President Biden
was just fine. For years, anyone who questioned his health and
mental health was trafficking in cheap fakes.
Then, President Biden went out and engaged in a full-scale
mental collapse on stage in front of hundreds of millions of
people. So, we can see why Americans, at least Americans who
are not Democrats, do not trust the media.
The question isn't really why the legacy media have lost
Americans' trust. We know that answer. The question is why
despite that loss of trust, the legacy media continue to gain
share in the advertising market. The answer is simple. There
is, in fact, an informal pressure system created by Democratic
legislators, this White House, legacy media, advertisers, and
pseudo-objective brand safety organizations. That system
guarantees that advertising dollars flow only to left-wing
media brands. Let me explain how this works.
When a conservative competitor to the legacy media arises,
members of that legacy media and their political allies rush to
paint such competitors as dangerous. The commentator Kara
Swisher of The New York Times, for example, told the head of
YouTube that my videos of The Daily Wire were a ``gateway
drug'' that would lead children, including her own teenage son,
the watch Neo-Nazi content, never mind the yarmulke.
Elected Democrats pick up that same messaging. In 2017,
Senator Dianne Feinstein told lawyers at Facebook, Google, and
Twitter,
You created these platforms and now they are being misused. And
you have to be the ones to do something about it or we will.
Social media companies react to incentive structures
including threats. They have responded by adopting the
standards of third-party left-wing informational safety groups
like the Global Alliance for Responsible Media, or GARM. GARM
purportedly sets brand safety standards, objective standards,
by which advertisers and platforms can supposedly determine
just what sort of content ought to be deemed safe for
advertising. In reality, GARM acts as a cartel. Its members
account for 90 percent of ad spending in the United States,
almost $1 trillion. In other words, if you are not getting ad
dollars from GARM members, it is nearly impossible to run an
ad-based business. If you are not following their preferred
political narratives, the ones that Kara Swisher and Dianne
Feinstein would follow, you will not be deemed brand safe. Your
business will be throttled.
We at The Daily Wire have experienced this first-hand. In
2017, after Senator Feinstein made her threats to bring the
weight of government down on social media platforms, The Daily
Wire YouTube channels saw a one thousand percent increase in
content enforcements over a two-year period. Since 2021, after
Democrat officials further turned up the heat on social media
companies, my personal Facebook page has seen an over 80
percent drop in impressions.
Or take Joe Rogan. When Joe said that he had taken
ivermectin after getting COVID, White House Press Secretary Jen
Psaki pressured Spotify to take action, stating,
We want every platform to be doing more to be calling out mis-
and disinformation, while also uplifting accurate information.
Spotify complied. Spotify, of course, works with GARM.
So, what are the brand safety standards that GARM uses? The
standards begin with inarguable things that we have heard from
the other witnesses like preventing distribution of child
sexual abuse material or stopping terrorism. GARM doesn't draw
the line of what is criminal, abusive, or dangerous. Their
standards also include restrictions on hate speech, harassment,
misinformation, or my personal favorite, insensitive,
irresponsible, and harmful treatment of debated sensitive
social issues. Those criteria are highly subjective in theory,
and they are purely partisan in practice. For example, last
year The Daily Wire host Matt Walsh was fully demonetized on
YouTube--a GARM member. Why? For quote, ``Misgendering, which
to GARM is to say that men are not women.`` Perfectly obvious
facts now run afoul of GARM's censorship standards.
Companies targeted by GARM like The Daily Wire, Breitbart,
Fox News, and so many others, reach hundreds of millions of
people with opinions and beliefs long established as within the
mainstream of American conservative thought. GARM and its
members have no respect for the beliefs of those people. They
want them marginalized or squashed.
It is time to stand up for the First Amendment in this
Congress. Congress can do so in two ways.
First, Congress must investigate the informal and perhaps
formal arrangements between censorship cartels like GARM and
Executive Branch agencies. The Daily Wire has already filed a
Federal lawsuit against the State Department for allegedly
doing just this.
Second, Congress can itself stop engaging in violation of
free speech principles. Two weeks ago, writing in dissent in
Murthy v. Missouri, Justice Alito condemned what he called
sophisticated and coercive government campaigns against free
speech.
Members of this Committee have engaged in precisely such
campaigns. When Congressman Schiff speaks about targeting
social media companies that must be ``pulled and dragged into
this era of corporate responsibility because they are too
tolerant of misinformation,'' he knows what he is doing. He is
participating in a sophisticated coercive campaign against free
speech. When Congresswoman Jayapal blames social media for
placing America at the ``precipice of a democratic crisis,''
and calls on them to target those they deem hate groups, she
knows what she is doing. She is participating in a
sophisticated coercive campaign against free speech. When
Congressman Hank Johnson says, ``We need a Constitutional
Amendment to allow the legislature to control the so-called
free speech rights of corporations,'' he also knows what he is
doing.
We all know what these government actors, what some people
in this room are doing. You are using the tacit threat of
government action to compel private companies to throttle
viewpoints you don't particularly like. The First Amendment was
not designed to enable work arounds by elected officials. It
was directed at Congress, at you and you abdicating your
fundamental duty when you exert pressure on private companies
to censor speech. Some in this room have been doing just that
for years. We in the nonlegacy media have been feeling the
effects. In the name of the Constitution and in the name of
democracy, this should stop.
[The prepared statement of Mr. Shapiro follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chair Jordan. Thank you, Mr. Shapiro.
We now recognize Professor Waller.
STATEMENT OF SPENCER WEBER WALLER
Mr. Waller. Thank you.
Chair Jordan, Ranking Member Nadler, the Members of the
Committee, thank you for the opportunity to present my views to
you today.
I am speaking solely in my personal capacity. I do not
represent GARM or any of its member firms.
I am concerned that the antitrust issues relating to
today's hearings and the letters and document requests sent to
the various companies do not conform to a consensus
understanding of U.S. antitrust law by most courts and
commentators.
I only have access to publicly available information. So, I
cannot opine on whether there is or is not any specific
antitrust violation. Instead, I present a roadmap of the many
antitrust issues that would need to be addressed in a serious
way before any real antitrust concerns exist in this matter.
It's important to note that most members of GARM do not
compete with each other, and each has unique needs for
marketing and branding, including, as the other witnesses have
already testified, having effective marketing campaigns and
doing their best to avoid any harmful associations that damage
their brand or simply drive away purchasers.
With respect to the diverse coalition of firms in GARM, for
example, Microsoft does not compete with McDonald's; Proctor &
Gamble or Unilever don't compete with Shell, a pharmaceutical
company, or GroupM. Also, these firms do not generally compete
with content providers, such as Mr. Shapiro.
Now, the activities of GARM do not appear from publicly
available information to be a cartel, as that term is
understood in antitrust law. Cartels are a serious concern of
antitrust laws, but they normally involve an agreement between
competitors to fix prices, rig bids, limit production, divide
markets, or otherwise interfere with quality production and
innovation.
Instead, what we're talking about is the development of
terms and definitions. They call it a lexicon. It is in some
ways sort of like a dictionary. These terms do not affect the
price, production, or quality of the goods and services sold by
the members of GARM. Advertisers, media buyers, advertising
agencies may or may not rely on the GARM terminology and may
adopt any other criteria to determine how and where to place
advertising.
This is done in a public process. Everything is published
and available to you. This is very different from the secretive
processes by which traditional cartels meet to create and
enforce their unlawful agreements.
In addition, there are on its face legitimate business
justifications that the firms would be asserting, including
protecting GARM images and successful marketing strategies.
These are two types of business justifications that are
routinely considered in antitrust cases.
Characterizing GARM's conduct as a boycott doesn't really
change the antitrust analysis in any important way. Group
boycotts are only per se unlawful when they're used to
implementing some otherwise unlawful cartel agreement or where
firms with market power collectively deny a competitor access
to some key source of supply it needs to survive.
Separate from the traditional antitrust analysis that I've
outlined in my opening statement and in my remarks in my
witness statement, the First Amendment and the interest of free
expression also limit the application of antitrust laws in
important ways.
The Noerr-Pennington doctrine immunizes conduct that seeks
to influence government action and public policy through a
variety of techniques, including publicity campaigns. In short,
an agreement by firms, if there is an agreement, is not an
antitrust violation if it's designed to influence governmental
action at any level of the government--Federal, State, local,
Legislative, Judicial, or Executive Branch.
In addition, the Supreme Court and the lower courts have
shown a separate and special caution for applying the antitrust
laws to impose liability for political and social boycotts,
even if that's what's going on, even if there is a degree of
economic self-interest by the groups conducting the boycott.
One example is that the Supreme Court has held that the
First Amendment protects a civil rights boycott of White
merchants in Mississippi by the NAACP, even though some other
businesses may well have prospered or done more business
because of that boycott.
So, the Committee's expressed concerns over the conduct
examined today are not consistent with the consensus view of
the antitrust law set forth in the leading cases. I agree with
the Chair that an individual decision to do business or not to
do business is not covered by Section 1 of the Sherman Act.
However, in addition to the lack of the other issues and
evidence from the publicly available information, there are
significant First Amendment implications raised by the actions
of GARM, and these First Amendment issues suggest that, even if
the antitrust laws were fully justified and every issue in the
antitrust roadmap were satisfied, there would be a plausible
argument that the conduct was protected as a matter of speech
and free implication.
I'm running out of time, but I also want to suggest that
the policy implications of imposing antitrust liability in
these circumstances should be quite concerning, regardless of
one's political views. A leading treatise published by the ABA
Antitrust Section states,
Boycotts are a common instrument for bringing about social
change or advancing political, religious, or other
noncommercial goals.
Using the antitrust laws to challenge expressive conduct
can interfere with commonplace forms of advocacy that are used
by consumers, religious groups, political groups of all policy
and persuasions. As a result, I do not see any benefit from
further legislative action on these issues.
[The prepared statement of Mr. Waller follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chair Jordan. Thank you, Professor.
We will now proceed under the five-minute rule with the
questions.
The Chair recognizes the gentleman from California for five
minutes.
Mr. McClintock. Thank you, Mr. Chair.
I find myself a bit conflicted. I agree with both Mr.
Waller and Mr. Shapiro on matters that they've mentioned.
First, no matter how much gaslighting we have heard this
morning, it is clear to me from the internal communications in
the Committee's Report that GARM's objectives are clearly
political--to use its influence among its Members to suppress
free speech and to financially harm outlets in which the
leadership disagrees. I don't see any other reading of those
communications that reaches any other conclusion.
It is a manifestation of the ESG movement that has
financially harmed so many companies that practice it. There is
a huge economic price to be paid for this conduct. ``Go woke,
go broke'' is more than just a slogan. It is an economic fact.
Ask Disney; ask Bud-
weiser.
They pay--the companies, in GARM's case, are risking
missing huge swaths of the market that they are seeking to
reach. They pay a premium for ads in the forums. They
deliberately saturate it. They miss bargains in the forums that
they are--I'll use their word--``throttling.'' They risk
alienating the consumers on whom they rely for profits.
I was a devoted, lifelong Gillette consumer until they
launched their ``Men are pigs'' campaign in 2017. I haven't
bought a Gillette product since. That is their right as a
company to alienate me as a consumer, and it is my right as a
consumer to be alienated.
Now, if I were a stockholder in GARM's member companies, I
would be absolutely livid. I would either be rising hell in
stockholder meetings or withdrawing my investments, or both. If
I were a manager in any of these companies, I would be livid
also and I would be canceling my membership in GARM with a
strong letter to follow.
Here's the fine point of the matter: That is a beef between
the company's stockholders and their management. It is a beef
between GARM's member companies and GARM. It is a beef between
those companies and their consumers. It is not a beef between
GARM or its member companies or their stockholders and
consumers and this government. People have a right to their
opinions and to express those opinions in any peaceful manner
that they choose.
Companies are simply a collection of people gathered
together to pool their resources toward a common goal, whether
it is to make money or advance a political cause, or both.
It is a little amusing to see that the Democrats suddenly
champion this freedom because, in GARM's case, it benefits
them, but rail against the very same freedom when it comes such
matters as Citizens United. For the left, their ethics are
strictly situational. As I have often warned on this Committee,
we can never allow them to become our teachers.
Democracy extends beyond the political realm to the free
market as well. In a free market, consumers vote every day with
every dollar they spend on what the market will produce; who
best produces it; what they are willing to pay, and who they
will buy it from.
A free government exists to protect this right. That is why
I think we should be careful when we tread into this matter in
the application of government power in disputes that are
strictly between private parties.
I do think Mr. Shapiro is absolutely correct that, if this
government is in any way acting to pressure or nudge companies
to censure speech or to corrupt their business decisions for
political ends, we ought to vigorously act to stop that. If
they are just doing that to themselves, that is their right to
make stupid decisions, and government also exists to protect
that right.
Mr. Shapiro, I will give you the last word.
Mr. Shapiro. I agree with much of what you're saying. I
think that the big concern for The Daily Wire and companies
like ours is the nexus between governmental action and groups
like GARM. It appears clear to us that a well-meaning
organization that simply wanted to appeal to the broadest
possible audience would not be making political decisions about
which outlets are too right or which outlets are too left.
I'm perfectly fine with advertisers advertising on Pod Save
America or on MSNBC. The problem that we have is an informal
structure by which members of government, including this White
House, have pressured social media companies to restrict their
content. Everyone can see that.
There's a lot of ``Will no one rid me of this, of this
meddlesome priest going on?'' from members of the government
who, then, seem to be shocked when there's pushback from the
right on exactly the same sort of matter.
Mr. McClintock. Thank you, Mr. Chair. I yield back.
Chair Jordan. The gentleman yields back.
The Ranking Member is recognized for five minutes.
Mr. Nadler. Thank you, Mr. Chair.
Mr. Patel, has the Global Alliance for Responsible Media
ever required that your company Unilever avoid advertising on
any platform or website?
Mr. Patel. No, sir.
Mr. Nadler. Mr. Juhl, same question: Has the Global
Alliance for Responsible Media ever required GroupM to avoid
advertising on any platform or website?
Mr. Juhl. No, sir.
Mr. Nadler. Mr. Juhl, has your company's participation in
the Global Alliance for Responsible Media ever restricted your
company's advertising decisions in any way?
Mr. Juhl. No. It's completely optional.
Mr. Nadler. Excuse me?
Mr. Juhl. GARM is completely optional.
Mr. Nadler. Thank you.
Mr. Patel, the same question to you.
Mr. Patel. Yes, it's completely voluntary.
Mr. Nadler. Professor Waller, one of the goals of the
Global Alliance for Responsible Media is to avoid having
companies' advertising dollars funding online and offline harm,
like the creation and dissemination of commercially
exploitative and explicit images of children or the funding of
terrorism groups, or the promotion and dissemination of
explicit images and depictions of crime outside of news story
and reporting.
Is there any U.S. law that requires companies to advertise
on every website and every platform?
Mr. Waller. No, there's not. The company can individually
choose to do business or not do business with an advertiser or
an advertising agency or a platform.
Mr. Nadler. Is there any law that requires companies to
support, through advertising dollars, speech, content, or
statements that they don't believe in?
Mr. Waller. There's no antitrust law that deals with that.
Mr. Nadler. What would be the consequences if there were?
Mr. Waller. I can say that the Supreme Court has expressed
concern and not imposed liability. They typically don't force
companies to do business with each other if they don't wish to.
They're, frankly, more concerned about cartel agreements and
the other thing, rather than forcing companies to continue to
do business if they don't wish. They wish to encourage
unilateral decisions about how to proceed in the real world as
each company thinks best.
Mr. Nadler. That's what the Supreme Court has said?
Mr. Waller. Yes.
Mr. Nadler. What do you think about the--forgetting the
Supreme Court for the moment, what do you think about the
effects of such a law?
Mr. Waller. We want companies--the antitrust laws really do
a couple of things. They prevent agreements that unreasonably
harm competition. They prevent single firms from abusing their
power, and they prevent mergers and acquisitions that can lead
to either of those other problems I've already outlined. That's
what the antitrust laws do. They don't generally micromanage
the decisions of corporations as they decide what's best for
them in the market.
Mr. Nadler. Thank you.
Mr. Chair, I must note, once again, that this sham
investigation has revealed that these companies have broken no
competition law. The investigation never should have started,
but it certainly should have ended after the Committee spoke to
a representative of GARM and learned exactly what we all should
know by now: There is no basis for a claim of antitrust harm.
That does not mean that this investigation is harmless. The
Committee's power has been used to bully, intimidate, and
impoverish any organization or company that dares to disagree
with so-called ``conservative speech,'' in quotes--``speech
that in many cases causes and spreads harm both online and
offline.''
I believe that is exactly the purpose of this
investigation--to misuse the power of this Committee to bully,
intimidate, and impoverish any organization or company that
dares to disagree with so-called ``conservative speech.'' In
other words, to intimidate the exercise of free speech, to
impoverish organizations, to improperly use the power of this
Committee to force organizations to spend themselves into
poverty, and thereby, to inhibit and deter exercise of free
speech. This is a gross misuse of the power of this Committee.
We have an opportunity, Mr. Chair, to have a constructive
conversation about antitrust law and how we can help the
American people, but, unfortunately, this hearing is not it.
This hearing is an exercise in intimidation of free speech and
it's shameful.
I yield back.
Chair Jordan. The gentleman yields back.
The gentleman from Arizona is recognized.
Mr. Biggs. Thank you, Mr. Chair.
I thank the witnesses for appearing here today.
Mr. Juhl and Mr. Patel, your companies and your clients--
you, as an individual company, both sit on the Steering
Committee for GARM, is that correct?
Mr. Patel. Yes, sir.
Mr. Juhl. Yes.
Mr. Biggs. With the Steering Committee, there's been a
number of standards that have been developed by GARM. Mr.
Patel, you mentioned your company Unilever has developed its
own set of standards. Have you adopted the standards of GARM as
part of your standards as well in advertisement placement?
Mr. Patel. Well, first, Unilever created its own standards
in 2018, and then, there was an industry need to create some
standardization, which is what GARM was born for in 2019.
Mr. Biggs. My question was, though, do you, did your
company adopt those GARM standards from 2019?
Mr. Patel. We adopt the GARM standards.
Mr. Biggs. OK. Mr. Juhl, how many of your clients have
adopted the GARM standards?
Mr. Juhl. GARM exists to create the framework and the
definitions that we use--
Mr. Biggs. So, this is--well, we get that. I've read your
statement. How many of your companies--yes, how many companies
do you represent?
Mr. Juhl. We represent thousands.
Mr. Biggs. How many of those companies have accepted and
adopted the GARM standards?
Mr. Juhl. I couldn't give you an exact number, but I would
tell you most of our major advertisers use GARM as a
foundation, and then, we build on that for whatever their
custom preferences are for whatever their particular
suitability might be.
Mr. Biggs. OK. Do you get--as part of the Steering
Committee, do you have regular discussions with GARM and its
leadership, of which you're a part, regarding placement of
advertisements?
Mr. Juhl. I do not meet standards--I do not meet with GARM
on a regular basis. I've actually never met with them.
Mr. Biggs. Your company?
Mr. Juhl. Oh, the company would, yes.
Mr. Biggs. OK. Mr. Patel?
Mr. Patel. The company with me, but we 100 percent decide
where our marketing investment goes. That's Unilever's
decision.
Mr. Biggs. So, Mr. Rakowitz, who works for GARM, is their--
he's kind of the face of GARM in some respects. Have you,
either of you or your company dealt with Mr. Rakowitz in
communicating about advertisement placement and subject matter?
Mr. Patel. I haven't met Mr. Rakowitz, but we have a member
that sits on the Steering Com.
Mr. Biggs. Yes. OK. So, let's get to that for a second. In
2020, Rob Master, Vice President of Media and Digital
Engagement at Unilever, sent an email to Facebook about a
Presidential ad, and he was concerned about it violating the,
the Facebook policies. Are you familiar with that situation,
Mr. Patel?
Mr. Patel. I wasn't part of the communication, but I have
seen the communication that you're referring to, and I think
what I interpret from it, he was checking what was Facebook's
policy on it.
Mr. Biggs. I find it interesting the way you couched that.
You were checking what Facebook's policy was. Weren't you
really, your staff really checking to see if it was consistent
with your own, with your own policy, I would assume, right?
Mr. Patel. No, sir. We don't decide on what media content
goes up or goes down. That's up to the media platforms to
decide.
Mr. Biggs. So, but when you're looking for an ad safety
placement, you're not concerned, then, whether that was
consistent with Facebook's policy? You're just, basically,
inquiring about Facebook's policy and not concerned with your
own policy of placement?
Mr. Patel. What we do is, we decide all our marketing
investment. We'll decide on target audiences where we want our
brands to appear.
Mr. Biggs. So, why were you inquiring whether that was a
violation of Facebook's policy?
Mr. Patel. So, I'm not clear on why Rob Master sent that
communication, but, as I said, we decide where we want to put
our ads, whichever social media.
Mr. Biggs. Of course, of course. I appreciate that you
decide where you place your ads. The question, though, is, why
are you, then, going to Facebook and saying, ``Does this ad
meet your criterion?'' Because that indicates you're trying to
influence Facebook.
In reality, your position is we're going to place it
wherever we think is best. There's an ad over here, a specific
ad, that you're asking, ``does that meet your policy?'' That
seems to intimidate. That seems to imply that you want to
question their policy, their place, and what their platform is
doing, before you bother to place your ad.
You didn't do it that way. You just wanted to know whether
it met their policy. You didn't say, ``We're not going to do it
because we don't like it.'' That indicates that you're
interfering in YouTube's policy decision.
I yield.
Chair Jordan. The gentleman yields back.
The gentlelady from Washington is recognized.
Ms. Jayapal. I really like my colleague on the other side,
but I did not understand that argument.
Antitrust enforcement is experiencing a real renaissance
under the Biden Administration. Our antitrust enforcers have
won victories in court against employers that sought to
suppress worker pay; successfully fought to lower the price of
inhalers and are working to lower food prices by targeting
anticompetitive practices in the grocery industry. The list of
antitrust accomplishments under this Administration is
unprecedented, and the American people have noticed.
It is unfortunate that this majority has not moved forward
with the bipartisan package of antitrust bills that we passed
under Democrats in the 117th Congress that would have protected
small businesses and consumers across the country, as they were
demanding to be able to have more competition, to be able to
lower their prices, and to protect their ability as small
businesses to compete.
If we are concerned about the trustworthiness of media, and
we want to foster more responsible media, then I would suggest
we take up my bipartisan Journalism Competition and
Preservation Act. Let's debate that. Let's make sure
independent publishers across the country, newspapers in small
communities across the country, can survive.
That's not what's happening. We have begun to see some
colleagues on the other side co-opt the language of antitrust
enforcement to target behaviors that have nothing to do with
antitrust.
I know that the details of antitrust law are confusing. So,
I want to clarify a few specific legal points in plain English.
Professor Waller, as an expert on antitrust law, and in
plain English, can you explain what kind of anticompetitive
behavior our antitrust laws are designed to prevent?
Mr. Waller. Sure. I, as a teacher, try to explain complex
things in plain language, so I appreciate your approach. I can
give examples just in the real world. Over the years, the
Justice Department has brought criminal antitrust cases against
global cartels that have raised the price of vitamins, of food
additives, and smaller cases of road-building and other
expenses that taxpayers bear.
This has been a traditional priority of antitrust
enforcement. As you know, both the FTC and the Department of
Justice have major Section 2 cases going on, both in the tech
sector and otherwise, going after powerful firms that they are
alleging have violated the antitrust laws, abusing monopoly
power by a single firm, whether it is Amazon, Live Nation, or
Google, etc. They are in various stages.
There are pending mergers cases, such as the supermarket
merger that is being now litigated by the FTC in 30-some
States, where the consequences are likely, if the government is
right, higher food prices as well as harm to labor if that
merger goes through as currently proposed. Those are some of
the priorities.
Ms. Jayapal. Perfect. Actually, that Kroger's Albertson's
merger, there was an article on the front page of The Seattle
Times today, over 150 stores will close in my area, just in
Seattle, as a result of that merger.
Now, you touched on this in your prepared statement, and I
know you only have access to public information about the facts
in this case, but given those constraints, do you see any of
these antitrust elements in the information that was uncovered
by my Republican colleagues?
Mr. Waller. Based on what I have seen, I do not at this
stage. Based on publicly available information, GARM appears to
be very different from either a trade association or even a
traditional standard-setting body.
They do not appear to be creating binding industry
standards that determine whether products and services can be
sold. They are creating sets of terms that firms can use or not
use to make decisions that they each do in the marketplace.
Ms. Jayapal. So, another fruitless investigation in this
Congress. I would also add that Project 2025, the radical
right-wing plan for a second Trump Administration, calls for
more of these ideologically driven attacks on private actors in
its section on the FTC, cloaking these culture war attacks in
the popular rhetoric of antitrust and market power.
On a different note, Mr. Patel, and quickly, how do you
think consumers might view your products if there were
advertised alongside hateful, vile, or dangerous content, like
anti-LGBTQ rhetoric, child sexual abuse material, or content
promoting terrorism?
Mr. Patel. It would create severe damage to the brand
equity that we have built for decades and decades.
Ms. Jayapal. Thank you. In fact, one of our witnesses has
repeatedly made hateful and derogatory comments about LGBTQ+
people in the past. Mr. Shapiro has argued that transgender and
gay Americans suffer from a ``psychological disorder or mental
illness,'' and has denigrated same-sex couples raising
children.
I and my fellow Americans consider these deeply offensive,
hateful, and, in fact, an analysis in 2023 found that a network
of Facebook pages connected with Mr. Shapiro's website had
``earned over 17 million interactions from nearly 13,000 posts
with transgender-related keywords.''
Mr. Gaetz. [Presiding.] The gentlelady's time is expired.
Ms. Jayapal. I yield back.
Mr. Gaetz. Mr. Patel, are you part of an organization that
uses market power for censorship?
Mr. Patel. No, sir.
Mr. Gaetz. How much advertising capital do you deploy
annually?
Mr. Patel. How much marketing investment do we spend?
Mr. Gaetz. Yes.
Mr. Patel. Eight hundred and fifty million a year.
Mr. Gaetz. You spend, you said, less than one percent of
that in the news area, right?
Mr. Patel. Yes, sir.
Mr. Gaetz. That is because really your brands don't want to
be involved in these caustic news disputes or political
disputes. They want to be apolitical in the presentation of
their brand. Am I understanding that testimony correctly?
Mr. Patel. Sir, we serve 90 percent of American households
with our portfolio.
Mr. Gaetz. It is a fascinating answer, just not to my
question. Is the reason you de-emphasize news because you want
to be apolitical?
Mr. Patel. We target our investment to address the
consumers that buy our brands.
Mr. Gaetz. OK, are you doing so for political reasons or
apolitical reasons?
Mr. Patel. We don't do it for any political reason.
Mr. Gaetz. OK, so then why are the vice presidents of your
company trying to shape the way Facebook limits view of a Trump
advertisement?
Mr. Patel. Sir, I am not sure what the intention of that
communication was, but that is not--
Mr. Gaetz. I do, it was to get the Trump ad taken down, it
is pretty clear. You had two vice presidents, Rob Master and
Luis Di Como, who were pressuring Facebook to utilize
Facebook's policies to take down a Trump ad.
So, it is just hard to believe that your goal is to avoid
politics when the like not some intern at your company, but the
vice presidents at Unilever are writing Facebook saying we want
you to take this Trump ad down and apply these policies to do
it.
Mr. Patel. Sir, I am not sure what the intention of
communication was, but that is--
Mr. Gaetz. OK, I will tell you what, I will read you the
communication. It is two words. It is your vice president to
GARM when they were trying to get the Facebook ad taken down.
It said, ``Honestly reprehensible.''
So, you are using the $800 million-plus power that you have
over the marketplace. Facebook is craving your advertising
dollars, and you have two vice presidents hammering Facebook to
take down a Trump ad about whether or not Joe Biden should have
his ear inspected for an earpiece.
That was what the ad was about that you all found so
reprehensible.
Mr. Patel. Sir, respectfully, I am not sure that word was
done by a Unilever person.
Mr. Gaetz. OK. So, Mr. Di Como didn't work for Unilever?
Mr. Patel. He sits on the--if I did my homework right, I
think that came from the GARM, Rob.
Mr. Gaetz. Oh, Rob Rakowitz, yes. You are members entities
to GARM, you pay GARM. You guys are GARM. As Mr. Juhl said,
``you have to have tools in order to help you place your ads.''
So, you go fund GARM, and then here your executive--your vice
presidents are commiserating with GARM over the fact that
Facebook won't remove this.
I guess, Mr. Shapiro, when we look at these big advertising
platforms, and they are hearing the people with the advertising
dollars hammer them with this ideological tilt, what does that
do to the marketplace for ideas?
Mr. Shapiro. Obviously, it shuts down the marketplace of
ideas, which is largely the intent.
One of the things that I have heard from some of the
Democratic Members of the Committee today is an extraordinary
amount of projection. Projection wherein they suggest that
Republican Members of the Committee are trying to shut down
free speech by trying to get answers to questions about the
kind of political pressures that are being put on social media
companies, for example.
It has been Democrats who for years have been spending
their time trying to pressure social media companies into doing
their bidding by limiting the types of information that are
available to the public and how that information is actually
distributed.
One of the things that is worth noting here is that it is
not just a matter of advertising dollars flowing. The way that
it works on social media is that if you are demonetized, then
the reach of your actual content is also limited by the same
social media companies. So, obviously--
Mr. Gaetz. Do you think the frequency of those
demonetization rises when you have vice presidents of companies
at Unilever trying to hammer entities like Facebook into taking
down Trump ads?
Mr. Shapiro. Absolutely, absolutely. There is no question
that when you have internal pressures put on social media
companies to take down right-wing material, that this has an
impact on the reach of right-wing messaging, there is just no
question.
Mr. Gaetz. I guess I don't mind when Democrats say they
don't like conservative speech, or we get to say we don't like
some of their speech. That is how this works. It is when the
business community colludes and utilizes market power to shape
the way social media companies or websites disseminate
information, that the public doesn't even get to see that
debate and engage it.
The fact that it is clandestine is actually even more
corrosive to the values that undergird.
Mr. Shapiro. That is absolutely true. The complete lack of
transparency with which GARM treats both the member companies
as well as the consuming public is one of the major problems.
If they simply wish to levy a boycott against a right-wing
source, they should simply say that is what they are doing.
Hiding behind fake standards to project objectivity is a major
problem in transparency for the market.
Mr. Gaetz. Mr. Cohen is recognized for five minutes.
Mr. Cohen. Thank you, Mr. Chair.
First, thank you, Mr. Chair--this issue was already raised,
as I understand it, and addressed in a transcribed interview
with a representative of GARM. As that witness stated and as I
am sure the representatives from GroupM at Unilever would
likewise note, they are not responsible for creating or
implementing Facebook's ad policies, that is something Facebook
does.
They are as advertisers, though, rightly concerned about
the uniform enforcement of those policies. As the witness
stated, quote,
You can't imagine a global marketer, if they are trying to run
a campaign across platforms or across markets, and if they
start hitting those inconsistencies where there are actions
taken against advertising messages in campaigns that are not
clear, they are not transparent.
It creates disruption because it is like all of a sudden, I
now actually have an outage in my campaign and I am not going
to be able to reach as many consumers. I am not going to get
business results. The company is not going to perform, stock
market prices, it is all there. Basically, supply and demand is
very American. It is what we are all about, capitalism.
Is that, Mr. Patel, is that pretty much correct?
Mr. Patel. Yes, sir.
Mr. Cohen. Thank you. I would appreciate you--the app was
not taken down--the ad was not taken down, was it?
Mr. Patel. Not to my understanding.
Mr. Cohen. Yes, thank you, sir. I was in transportation
working on issues there and came here to what is a rather
bizarre hearing. Not the first we have had in this Committee.
It is our second hearing ostensibly charging specific groups
with illegal conduct without a single expert witness to lay out
that conduct and how that conduct violates the law.
This is the Judiciary Committee. We are supposed to be
looking about the law, violation of law, legal experts. Nada.
We did have two oversight hearings of the antitrust enforcement
agencies, the Federal Trade Commission and the Department of
Justice. We had two top enforcement officials here. Not once
did any Member bring up the Global Alliance for Responsible
Media, GroupM, Unilever, or any of this.
So, Republicans had the opportunity to ask antitrust
experts. They didn't. Today we have two witnesses, a large
advertiser and a large advertising buyer, who are testifying
why the Republicans just have it factually wrong. We have a
talk show host who is bitter that corporations do not want to
buy his program.
It is a good thing we have an esteemed antitrust expert
with us today, Professor Waller. He diligently and politely
explained why this legal theory that there is some antitrust
violation designed to censor conservatives is bunk.
So, that is the evidence we have before us. Thank you, Mr.
Waller, the legal theory is bunk. Clean that up a bit.
The Republicans have it backward. Their cry against
censorship is nothing more than an attempt to bully, or as they
would like it, compelled by law companies to associate
themselves with individuals and content creators the companies
believe are harmful and pay them.
Seriously, you think Unilever should be forced to advertise
and in doing so financially support posts about rape or
domestic violence? That is not the American way. We let the
private enterprise capitalistic system determine where they
want to advertise.
That is the record that is coming out of this hearing, is
that they want to force Unilever to do certain things. This is
a real concern. We have images that show how a company has a
legitimate business interest, and I would argue a social
obligation not to support this type of harmful conduct and to
be associated with it.
It also gets free speech wrong, as Professor Waller
explained. This isn't about government censoring anyone. In
fact, it is about trying to use the antitrust laws and
enforcements to compel speech.
The Republicans must read the Constitution in a funhouse
mirror. It is very much out of focus and weird shapes, and they
pick out what they want, and then they come out of the funhouse
and maybe they wake up.
With that, I have a couple of questions. I haven't read
Project 2025, so that could all be in Project 2025 where they
want to turn America over, this may be part of it.
Mr. Patel, Mr. Shapiro--or it is Shapiro?
Mr. Shapiro. It is Shapiro.
Mr. Cohen. Shapiro, thank you. I had an uncle; he was
Shapiro and his son became Shapiro. Mr. Shapiro says the
Democrats are using the tacit threat of government action to
compel private companies to throttle viewpoints that we don't
like.
Do you know what chutzpah is?
Mr. Patel. Sorry, sir?
Mr. Cohen. You know what chutzpah is?
Mr. Patel. No, sir.
Mr. Cohen. Well, that is chutzpah. We are literally in a
hearing where the Republicans are using the power of this
Committee to not tacitly threaten but actually accuse--
Mr. Issa. Would the gentleman yield for a question?
Mr. Cohen. --companies of illegal activity and investigate
them because they don't like their viewpoint. A very sensible
viewpoint, I would argue, that they don't want to be associated
with hate speech, domestic violence, rape, or harassment.
Who would want to be associated with anything that deal
with somebody who went into Bergdorf Goodman and got a woman
and took her into a locked dressing room and molested her? No,
you wouldn't want to do that. You wouldn't want to be--I could
go on and on and on about that though.
So, I will yield right now and the balance of my time.
Thank you.
Chair Jordan. [Presiding.] The gentleman yields back. The
gentleman from Wisconsin is recognized.
Mr. Fitzgerald. Thank you, Mr. Chair.
Democrats must have been given their talking points on
Project 2025 yesterday at the internal meeting of the
conference to determine who the next Presidential candidate
will be for the Democrat Party. This is the second Committee I
have sat through this morning, including Financial Services,
and Project 2025 has come up at least a dozen times. I just
find that interesting.
Mr. Patel, Unilever is a publicly traded company, meaning
you have fiduciary duty to deliver returns to shareholders,
correct?
Mr. Patel. Yes, sir.
Mr. Fitzgerald. In your 2023 Annual Report, you identify
consumer preferences as a principal risk to your business. In
examining this risk, you stated,
Our success depends on value and relevance of our brands and
products to consumers around the world.
Would you agree that the--it has got to be a critical
element in managing that risk, because you have to continue to
grow consumer preference of your brands, right?
Mr. Patel. Yes, sir.
Mr. Fitzgerald. Right. You do that through brand and
marketing investments, or advertisements I guess is another way
of describing that, right?
Mr. Patel. That is how we build brands.
Mr. Fitzgerald. Between 2021-2023, Unilever spent more than
23 billion on brand and marketing investments. That is a fairly
big chunk of your operating costs, I am sure. Would it be fair
to say that Unilever believes brand marketing delivers a
positive return on investment?
Mr. Patel. Sir, that is why we invest, to build our brands
and the equity, and that is why we are in 90 percent of U.S.
households.
Mr. Fitzgerald. Right, but if consumer preference is still
at risk, you can always do better, correct? That is obviously
the goal?
Mr. Patel. The business could always grow better.
Mr. Fitzgerald. Right. So, let me ask you this: If consumer
preference is vital to the success of your company, you
acknowledge that a principal risk and commit billions of
dollars each year to mitigating that risk, then why would you
boycott companies that reach millions of consumers? It doesn't
make any sense.
You have got this goal in place, you are pursuing it, but,
yet you are still pursuing boycotts.
Mr. Patel. Sir, we don't boycott, we have a clear internal
process. Our brands have jobs to be done, we have target
audiences that we look for our brands. Actually, 80 percent of
our marketing spend goes between 18-49-year-old women, because
they make 80 percent of the purchasing decisions for our
business.
That is how we set our choices on investment, what is right
for our brands to give us the best business return on
investment.
Mr. Fitzgerald. What about Twitter, has there been any
boycotting of Twitter? It would be in the best interest of
growing your consumer preference and delivering returns to
shareholders to utilize Twitter to make sure that your brands
are continuing to grow, right?
Mr. Patel. Sir, on Twitter, or X, as it is known now, there
was a period in 2019-2020, due to brand safety that we pulled
our investment. We have not returned to Twitter across the
world.
Mr. Fitzgerald. OK, thank you.
Mr. Shapiro, can you explain the importance, I don't want
to oversimplify this, can you explain the importance of
advertising dollars to growing The Daily Wire into the company
that it is today?
Mr. Shapiro. Sure. So, the truth is that advertising
dollars represent a far smaller share of the revenue of The
Daily Wire than they did at the very beginning. When you are
first starting a company, the possibility of starting off the
basis of subscribers alone is very difficult because you
actually don't have tremendous market reach.
The gradual increase in revenue is largely due to
advertiser revenue. So, at the beginning of The Daily Wire,
nearly 100 perent of all revenue that we had when we were
building the business was based on advertising revenue. Today,
it is significantly smaller than that because we have a very
large subscriber base.
So, the principal threat that I am here to talk about is
not about the bitterness of my company, which continues to be,
thank God, highly successful. The reason that I am here is to
talk about startup companies that are attempting to get into
the market and are being barred from an extraordinarily large
pool of advertising revenue along political lines.
Mr. Fitzgerald. Do you believe there are collective
boycotts that are happening?
Mr. Shapiro. There is no question there are collective
boycotts happening. I will say that I do appreciate the
chutzpah of some of the Democratic Members of Congress. I am
charmed by their newfound love for free markets and corporate
free speech. That one seems to be a bit of a new one to me.
It is charming only in that it requires you to ignore many
of the statements that they have made historically about the
amount of pressure they would love to bring on private
companies when it comes to free speech.
Here I will quote the Ranking Member,
These platforms are utilized as conduits to spread vitriolic
hate messages into every home and country. Efforts by media
companies to counter the surge have fallen short. Social
network platforms continue to be used as ready avenues to
spread dangerous White nationalist speech.
That was from 2019, from 2020,
It goes way beyond the fact that Big Tech misbehaves. It is the
fact this kind of power exists. That kind of power cannot be
allowed to exist in society.
Now, when you use that sort of language with regard to the
same companies, we are now hearing require free speech, I find
that somewhat difficult to swallow.
Mr. Fitzgerald. Thank you, Chair, I yield back.
Chair Jordan. The gentleman yields back. The gentleman from
Georgia is recognized.
Mr. Johnson. Thank you, Mr. Chair.
This is a sham hearing, railing against a made-up
boogeyman. I am not normally up here defending big business. As
Mr. Shapiro noted, I have said repeatedly that we need to limit
the massive dark money spending that big business pours into
our politics and pours into our Supreme Court.
Let's talk about what is really happening here. Corporate
brands care about their reputation because they sell more
products if they have a good public image. These companies
think it is bad for business to run their advertising content
next to child porn, ISIS videos, hate speech, or an
advertisement from The Heritage Foundation about Project 2025,
which is so alarming to most Americans.
Americans are alarmed, and that is why their
representatives are talking about Project 2025, a 900-page
manifesto which is the blueprint for the Trump Administration,
should he be so fortunate and we be so unfortunate that he be
reelected. Nobody wants their video--wants their advertisements
running against that kind of content. Foreign propaganda and
network disinformation campaigns.
So, these brands are working together to demand greater
transparency and accountability from platforms regarding where
their ads are placed and what kinds of content the ads are
monetizing. That just sounds to me like good common business
sense.
Am I right about that, Mr. Patel?
Mr. Patel. Yes, sir.
Mr. Johnson. How about you, Mr. Juhl, am I right or am I
wrong?
Mr. Juhl. That is correct, sir.
Mr. Johnson. Thank you. That is not really why we are here.
This do-nothing Congress has nothing to run on this fall. They
started out this Congress with 15 rounds of voting to elect a
speaker, and then they promptly proceeded to throw the speaker
out. They wasted another three weeks trying to put in another
speaker.
MAGA Republicans have given us two years of dysfunction,
two years. They don't have anything to show for it, but a few
rabbit-hole investigations of the Biden corrupt crime family,
allegedly. Twenty million dollars in taxpayer money spent
between two Committees investigating the President with the aim
of impeachment. We saw where that went.
So, they have nothing, absolutely nothing to show for their
dysfunction. So, what they are now trying to do is gin up their
base against this made-up boogeyman and give a platform to
extreme voices who want to spread misinformation. The American
people know better, and they want a Congress that will work on
behalf of real Americans on real problems.
Instead of this sham hearing, we should be working on
protecting and strengthening our democracy, which is about to
be undermined should Project 2025 go into effect.
Professor Waller, Mr. Shapiro's testimony states that,
``GARM acts as a cartel.'' You are an expert in antitrust law,
are you not?
Mr. Waller. I have devoted a lot of my career to studying
it.
Mr. Johnson. Can you explain why that assertion is false?
Mr. Waller. I have not seen any evidence and publicly
information that suggests that GARM plays a role like a
traditional cartel. It does not consist primarily of firms that
compete with each other, and they are not agreeing on the price
amount or other kinds of market division that a cartel normally
does and is normally punished for it, if you can prove.
Mr. Johnson. So, this hearing is pretty much false
advertisement, wouldn't you say?
Mr. Waller. Well, I would just caution all Members of the
Committee just not to fall in the trap that sometimes my
students do which, when they see something that they don't
like, they think it is either an antitrust violation or a
violation of the Constitution. It is just not necessarily true.
Mr. Johnson. Well, gosh, I really hope that Project 2025
does not come into play, because if it does, we will be having
a whole lot more hearings like this, sham hearings on issues
that actually suppress the rights of the people and even
business owners to conduct business in a businesslike fashion.
With that, Mr. Speaker, I yield back.
Chair Jordan. The gentleman yields back.
Mr. Juhl, what is uncommon collaboration?
Mr. Juhl. Uncommon collaboration?
Chair Jordan. Yup. This is from the Global Alliance for
Responsible Media, your working charter, priorities for
uncommon collaboration. I just want to know what you guys say
is uncommon collaboration.
Mr. Juhl. Well, I can't speak for GARM, but I think what--
Chair Jordan. You are on the board, right? You are on the
steer team, your company.
Mr. Juhl. My company is on the steering team. I think what
they are referring to here--
Chair Jordan. A founding member.
Mr. Juhl. What they are referring to here--
Chair Jordan. Are you a founding member? Founding member of
GARM, right?
Mr. Juhl. Yes, yes.
Chair Jordan. So, I am asking what, and this your charter,
your working charter, what is uncommon collaboration?
Mr. Juhl. I believe what they are referring to is a cross-
industry collaboration between agencies, brands, technology
companies, and ad tech companies.
Chair Jordan. Well, that is all warm and fuzzy, but here is
what Mr. Rakowitz, the guy you guys hired to run GARM, here is
what he says,
Uncommon collaboration is competitors working together,
competitors working together to rise about individual
commercial interest. Uncommon collaboration needs to be
understood as the industry coming together, putting aside
competitive concerns.
Mr. Waller just said we don't have a cartel here, but that
sounds a lot like a cartel to me. Would you agree? It sounds a
lot like limiting actions that would limit consumer choice.
That sounds like unlawful restraint of trade. All that stuff is
legal according to the Sherman Act. What do you think, Mr.
Juhl?
Mr. Juhl. What is the question, sorry?
Chair Jordan. The same question. You are trying to tell me,
I asked what uncommon collaboration is, which is from your
working charter, GARM's working charter.
Mr. Juhl. Right.
Chair Jordan. When Mr. Rakowitz defines uncommon
collaboration as rising above individual commercial interests.
I thought a company was focused on their commercial interest of
their individual company.
Mr. Juhl. Sir, GARM is used for a framework and definitions
to try and make order of something that quite honestly had no
order to begin with.
Chair Jordan. Well, here is what GARM did. Here is what it
looks like I think in practice. Can we put up the email from
Mr. Montgomery, who works for Mr. Juhl's company, email about
Breitbart, The Daily Wire, and Fox News.
There is an interesting parallel here with Breitbart. As much
as we hated their ideology and blank, we couldn't really
justify blocking them for misguided opinion. I don't know The
Daily Wire that well, but we should watch them carefully too.
If we block The Daily Wire, why wouldn't we block Fox News?
That seems to me uncommon collaboration in practice focused
on three conservative news outlets. Do you see it that way, Mr.
Juhl?
Mr. Juhl. Respectfully, no, sir.
Chair Jordan. Well, how do you see it then?
Mr. Juhl. I see it as this is somebody from our brand
safety team, and he is asking questions about what sort of
standards of service they have and trying to figure out what is
happening with this particular publisher.
Chair Jordan. Well, let's put up the next one, let's show
some more uncommon collaboration in practice. Put up the next
one. This is the one about Twitter.
Based on your recommendations, we have stopped all paid
advertisement because the platform was rather unsafe due to
Elon Musk's decision to fire.
This is their opinion. This is when Elon Musk bought Twitter.
But it is an important platform for us to reach our audience,
so we would like to consider going back.
Looks like you, this was a coordinated, uncommon collaboration
to boycott Twitter, but this company wants to go back because
they make a lot of money when they when they are advertising on
Twitter.
Is that what this uncommon collaboration is that GARM
engages in, Mr. Juhl?
Mr. Juhl. We are not party to this email, so I can't really
speak to this. We actually have been big supporters of Twitter
and X--
Chair Jordan. Oh, that is good.
Mr. Juhl. As recently as two weeks ago we met with Mr.
Musk, introduced to our advertisers. To be clear, we want more
choice in this industry, more places to create trusted brand
advertising.
Chair Jordan. Mr. Shapiro, it has been cited several times.
I think Mr. Nadler said in his opening statement, a number of
other people said that they come together, they collaborate,
they collude, they come together because they don't want to be
advertising onsites where there is terrorism, piracy, harmful
images of children or other crimes on those, associated with
those websites.
Do any of that activity take place on The Daily Wire
website?
Mr. Shapiro. No, it most certainly is not.
Chair Jordan. Yes, so that is just--we are all against that
stuff. What we are not for is this colluding, this
collaboration to go after different--to limit advertising
because you don't like their ideology, you don't like their
politics.
That is what we are focused on. That is exactly what is
going on out there. Frankly, as you said in your opening
statement, anybody can see it.
Mr. Shapiro. The emails that you are showing, I have yet to
see an email on the other side suggesting the possibility of
divestment from CNN, for example.
Chair Jordan. Yes. Trust me, we did a lot of investigating.
If we had that, we would have put it in our report. Didn't find
a one. Didn't find a one. It was all targeted in one direction.
They say it in their charter document.
Mr. Rakowitz says uncommon collaboration is limiting the
choice, it makes absolutely no sense to me.
With that, I will recognize the gentleman from California.
Mr. Correa. Thank you, Mr. Chair. I want to welcome the
witnesses as well.
Let's talk a little bit about brand reputation, if we may.
We all know how important brand reputation is. As Warren Buffet
has said, ``it takes 20 years to build a brand and five minutes
to destroy it.''
Let me start out with Mr. Patel. A question, sir. In 2020,
Unilever stopped, paused all social media advertising because
the environment had become very polarized and unhelpful toward
brand. Is that correct?
Mr. Patel. Yes, sir.
Mr. Correa. Let me say that consumers agree with you. That,
in fact, 82 percent of consumers also feel that it is important
that the content surrounding online ads be appropriate.
Mr. Chair, I want to submit for the record an article
titled, ``Brand Safety: What Do Consumers Consider to Be
Inappropriate Content?''
So, Mr. Patel, I am going to ask again. Unilever paused
advertising on both conservative and liberal channels, and did
not specifically target conservative platforms or content
creators. Is that correct? That is for 2020.
Mr. Patel. Yes, sir, we pulled all our advertising from all
assets.
Mr. Correa. So, Mr. Patel, it sounds like this is more of a
pure business decision and not a messaging crusade on your
part, would you agree with that?
Mr. Patel. We did what was felt best for our brands.
Mr. Correa. Business decisions.
Mr. Patel. Yes, sir.
Mr. Correa. Mr. Patel, you have testified that at Unilever,
you make decisions to advertise independently, is that correct?
Mr. Patel. Yes, sir. We make our investments on what is
right for our brands, and--
Mr. Correa. No group, including GARM, dictates or approves
where Unilever spends its advertising dollars, is that correct?
Mr. Patel. A hundred percent, Unilever makes its own
decisions.
Mr. Correa. No group directs Unilever to avoid any platform
or creator, is that correct?
Mr. Patel. Yes, sir.
Mr. Correa. So, Mr. Patel, members of GARM can come and go
freely, like X, formerly Twitter, have done, is that correct?
Mr. Patel. GARM is a voluntary organization.
Mr. Correa. OK. Professor Waller, if I may, some on this
Committee have suggested that members of GARM have colluded to
harm competition by boycotting certain platforms or speakers.
Don't businesses have the fundamental right to choose how and
where they spend their advertising dollars?
Mr. Waller. That is correct.
Mr. Correa. It is clear from Mr. Patel's answers and the
public documents that there is no collusion. Would you agree
with that?
Mr. Waller. I can only say it is a matter of I have not
read the Committee's report. Based on publicly available
information, I am seeing a discussion of unilateral decisions
on how to do business, which is the purview of each company.
You simply need more.
You need more, even if other firms are making similar or
even identical decisions, the law is clear that you need
something that shows that they are acting in a way together
rather than independent. I see you have an element of antitrust
violation chart behind you--
Mr. Correa. Well, behind me, sir, Mr. Waller is a chart of
the three elements, the mandatory elements of a Sherman Act
Section 1 violation. You need to prove all three elements.
So, Mr. Waller, let me ask you: Are you aware of any
agreement among the competitors to boycott or collude?
Mr. Waller. Well, I have no personal agreement, but I am
not hearing anything today that suggests that. In the absence
of an agreement, I can just submit there is no Section 1
violation.
Mr. Correa. So, if there is no agreement, there can't be a
Section 1 antitrust violation.
Mr. Waller. That is true.
Mr. Correa. So, there is no antitrust violation.
Mr. Waller. If there is no agreement, there is no Section
1. Then there are other requirements that your chart has two
additional requirements. You have to show an unreasonable harm
to competition and there is one, in addition, I would suggest
that if the firms involved have a legitimate business
justification for what they do, that is often enough to avoid a
violation, even if there were an agreement.
Mr. Correa. It is a lot. Thank you very much.
Mr. Chair, I yield the remainder of my time.
Chair Jordan. The gentleman yields back. The gentleman from
California is recognized.
Mr. Issa. Professor Waller, you were a Senior Advisor to
the--over here. You were a Senior Advisor to the Federal Trade
Commission under Lina Khan, right?
Mr. Waller. That is correct.
Mr. Issa. When you left, did you take copies of your work
product?
Mr. Waller. No.
Mr. Issa. Are you aware that the FTC deleted them all and
would not make them available to this Committee, so we have no
idea what you did?
Mr. Waller. I have no idea what the FTC did after I left.
Mr. Issa. You didn't take any copies? Under oath, you are
telling us that you have no records of your time there, your
opinions, or what you did there?
Mr. Waller. No. In fact, I was prohibited from doing so. I
turned in my computer, my phone, and I have no access to any of
that stuff.
Mr. Issa. OK, well, that is fine. So, they just destroyed
the evidence. The Federal Trade Commission under Chair Khan has
found everything to be antitrust. They haven't found a merger
or an acquisition they seem to like, even if they are
unrelated.
Were you part of that decision? In other words, when they
decided that the only way you can merge or acquire somebody is
if it hurts your ability to compete, were you part of that?
Because today, you are talking about nothing is--what we are
seeing here, which clearly smells like a cartel, certainly
looks like a suppression of free speech, you are saying none of
it is.
You have testified repeatedly that you see no there there,
and yet you were part of the FTC, which sees a there
everywhere. Can you explain that quickly?
Mr. Waller. I am providing a roadmap of all the issues that
I think this Committee would have to find solid evidence--
Mr. Issa. Well, I find your behavior and the behavior of
the Federal Trade Commission under your participation to be
inconsistent with your testimony, and as a result have to
discount your opinions a considerable amount.
For Mr. Patel and Mr. Juhl, Unilever is based where?
Mr. Patel. The U.S. is--
Mr. Issa. No, no, where is the stockholding parent company?
Mr. Patel. London, sir.
Mr. Issa. London. So, you are not a U.S.-based company,
other than you are a division of a foreign company. Is that
correct?
Mr. Patel. We are based, headquarters London.
Mr. Issa. OK, it is OK. You have got a wonderful British
accent. It is fine, I like that actually. So, where is GARM
based? The answer is Belgium, it is not hard.
Mr. Patel. Actually, I am not sure where GARM is based.
Mr. Issa. OK, well, our information shows it is Belgium.
So, a non-U.S. company working with a non-U.S. consortium that
controls 90 percent of advertising, all which is outside the
U.S. and outside the reach of really being discovered wants to
tell us it is not a cartel.
The one thing about a cartel is, the first way it is a
cartel is it says it is not a cartel. I think that is really
what we are dealing with here. I would ask Mr. Waller, except
that I find him inconceivably disingenuous when what he is
saying today doesn't seem to be consistent with where he was
working until recently, so I will go to Mr. Shapiro.
Mr. Shapiro, do you have more than 10 percent market share
in the advertising or social media work?
Mr. Shapiro. We certainly do not.
Mr. Issa. You don't. So, you don't have any market power.
Mr. Shapiro. Very little.
Mr. Issa. OK. If you had control or influence over 90
percent of it, do you think that the Federal Trade Commission
would be up your derriere every day with questions?
Mr. Shapiro. As things currently--
Mr. Issa. I didn't use the Yiddish term because I was
afraid--
Mr. Shapiro. Even as things currently stand, I overpay my
taxes.
Mr. Issa. OK, so basically what we are dealing with here
today is you, Fox, the others don't have individually enough
market share to, or to have market power so that you can
control the market. Clearly, GARM's influence does have 90
percent of the advertisers. According to everything we have
seen, you have been blacklisted by them.
Mr. Shapiro. That seems to be the case.
Mr. Issa. Now, the late Roger Ailes was a friend of mine. I
thoroughly enjoyed my time and the guidance he gave me, but he
also gave Rupert Murdoch a piece of guidance, and it is true
until today.
He found a niche that the company that became Fox News
could fill. He said, ``Mr. Murdoch, I found a niche I think we
can exploit.'' He said, ``Well, what is it?'' He said, ``It is
half of America.''
So, can you explain in 35 seconds or less, more or less,
one, if you know that chutzpah means nerve. I am afraid most
people aren't good at Yiddish here apparently. Although they
use it.
Can you explain to me why systematically, whether it is one
conservative media or not, that GARM is seemingly wanting us--
an outside-the-U.S. group--wanting not to have 50 percent of
Americans here advertising, and as a result seek profitable
networks?
Mr. Shapiro. It seems to me there a variety of reasons why
a group like GARM is attempting to withdraw the advertising
market from half of American businesses that happen to be on
the right side of the aisle. Those reasons range from the
overtly political to the fact that they coordinate with foreign
governments.
GARM actually does coordinate in Europe with a bunch of
European governments in consolidating standards and all the
rest. They obviously don't have the same First Amendment
restrictions that they do in the United States.
These sorts of informal arrangements have been carried
across the pond here and incentivized by, again, Members of
this body, Members of the Executive Branch, who put pressure on
social media companies to throttle particular viewpoints.
Mr. Issa. Mr. Chair, I would certainly say for the record
that if you mis- or dis-enroll half of America's access, that
is chutzpah.
Chair Jordan. The gentleman yields back. The gentlelady
from Georgia.
Ms. McBath. Thank you, Mr. Chair.
Responsible advertising standards are being questioned here
today. We should not be using taxpayer dollars to speak on an
issue that has been investigated and produced no support for
any unlawfulness.
We need to trust the facts that we have gathered, not chase
conspiracy theories or force companies to make investments
against their will.
There are so many issues that we could be focusing on here
today that would actually save millions of lives, such as gun
violence prevention, or better serve the American people and
make a positive and meaningful difference in the lives of those
that we are sworn to serve.
We could focus on measures to reform our prisons and
protect our children from online violence. Or we could make a
good-faith effort to protect the First Amendment. We have urged
our colleagues on this Committee time and time again to follow
the facts and resist the urge to chase down unbiased claims for
political clout.
We should be using tax dollars to help the very people who
pay for them. Instead of some of my colleagues in the Majority
are wasting money so that they may spread falsehoods and
distract the public from their inability to effectively
legislate.
I want to thank each and every one of you for being on this
panel today. I do have a number of questions, so if you don't
mind just kind of answering as succinctly as you possible can,
I appreciate it.
Professor Weber Waller, in the research that you have
attained on the Global Alliance for Responsible Media, are
members of GARM within their First Amendment right to
voluntarily decide whether to place their advertisements on a
certain website or platform?
Mr. Waller. Yes.
Ms. McBath. Thank you. Is this true even if multiple
members of GARM make the same decision voluntarily?
Mr. Waller. Yes.
Ms. McBath. In 2020, Spotify entered into an exclusive deal
with a podcaster for $100 million. On this podcast, the host
shared COVID misinformation, including suggesting that healthy
young adults did not need to be vaccinated, leading prominent
artists to leave Spotify over this. Grossly inflammatory
language was constantly being used, including using the n-word
repeatedly over several periods of years.
Mr. Patel or Mr. Juhl, can you explain why brands would not
like to have their advertisements appear alongside this kind of
audio content?
Mr. Patel. From a Unilever perspective, it would create
damage to what the brands stand for and the equity that we have
built for many decades around why they exist.
Mr. Juhl. From our perspective, it is much similar.
Companies spend billions of dollars over decades building their
brands, committing certain values, making them feel safe,
making it feel useful, and making it earn its place in
consumers' lives.
When you put it next to something like that at a time when
there is a massive health crisis and these types of comments
come out, it destroys those billions of dollars they have
invested over long periods of time.
Ms. McBath. Thank you for those clarifications. Mr. Patel
or Mr. Juhl, how do your companies determine what platforms and
products you wish to use for your advertising?
Mr. Patel. From a Unilever lens, what we do is--and it is
different for every brand--we have a job to be done for the
brand and we have target audiences. So, we have selective
demographics that we are trying to address through the brand
equity.
Then the team locally will work with the GroupM to
understand where that content is, and then we will target that
through advertising.
Ms. McBath. Thank you.
Mr. Juhl. I think that is exactly right. If you want to
introduce a new pickup truck in America, you are going to go
out and figure out who is most likely to buy that and how do I
match the brand values and what that truck is with the audience
segments.
So, I will make it up, but we are going to find men between
24-35 who believe in durability, toughness, and they like the
message appeal of made in America. We are going to go find the
news outlets that represent that audience best and connect them
to that audience.
Ms. McBath. Thank you for those clarifications. Mr. Patel
and Mr. Juhl, if the Committee decides today that companies
must advertise on platforms that are not aligned with their
brand, how could this affect the future of advertisements?
Mr. Patel. Respectfully, ma'am, what we believe is that we
have a right to choose where we want to choose our investments
and where we want to advertise our brands.
Mr. Juhl. I agree with that.
Ms. McBath. Thank you, and I yield back the balance of my
time.
Chair Jordan. The gentlelady yields back. The gentleman
from Wisconsin, Mr. Tiffany.
Mr. Tiffany. Thank you, Mr. Chair.
Chair Jordan. Would the gentleman hang on for one second?
We have been at it for a couple hours. If any of you need a
break, just please let us know, we can take a break. Got
several to go. Just let our staff know, and we will go.
The gentleman is recognized.
Mr. Tiffany. Yes, thank you very much, Mr. Chair.
We know from hearings in this Committee that in the 2020
election, that ads were throttled from President Trump.
Mr. Juhl, what is GroupM doing to make sure that President
Trump's ads are not going to be throttled here in the 2024
election?
Mr. Juhl. Thank you for the question. GroupM works with all
our different publishers and partners to enforce their
standards of service, to make sure that we look at what those
are. That is part of the reason that we actually use GARM and
others, is to get an industry framework and guidelines and use
third parties to look at the content that comes through and
make sure that it is performing as it should.
Mr. Tiffany. So, will you be watching companies like
Google, like Meta, like X to make sure that they are not
throttling information coming from conservatives, and in
particular, President Trump?
Mr. Juhl. We actually work with all the major publishers
around the world, and certainly here in the United States, and
meet with them on a regular basis to talk about their standards
of service, their policies, and make sure that they are living
to those standards of service.
It is really important to us to have choice in this
marketplace and to be able to connect our brands and consumers
in a wide variety of organizations.
Mr. Tiffany. So, there is a real concern that, we see this
email, there were some emails that were posted early. We have
one here from Joe Barone, Managing Partner, Brand Safety
Americas. We confirmed with Spotify that GroupM safety team
will conduct a complete trust and safety review.
This was after this was in response to Joe Rogan being on
Spotify. Spotify said we do not want to take Joe Rogan down.
You guys put additional pressure on. How can we be confident
with something like that happening? Is Mr. Barone still working
for GroupM?
Mr. Juhl. No, sir, he is not.
Mr. Tiffany. OK, so we can be confident something like this
will not happen again, where you guys use actually kind of
secondary power to, secondary authority to be able to go after
somebody like Spotify. We can be confident that is not going to
happen again?
Mr. Juhl. Sir, we routinely conduct brand and safety
reviews to make sure that these partners of ours are living to
their standards. In the case of Spotify, we didn't boycott
anything, we didn't pull our spend.
They continue to be a major media partner for us. We wanted
to understand during a health crisis in America what Joe Rogan
was talking about and did it comply with Spotify's standards of
service.
Mr. Tiffany. So, one final issue in regard to this. Is it--
has GroupM done a mea culpa in regard to this information that
was throttled in regard to the COVID disaster that happened,
not just in the United States, but across the world?
Has there been an acknowledgment by GroupM that many of the
things that were talked about by people like Joe Rogan and
others have actually turned out to be true? That they are not
misinformation? Has GroupM acknowledged that?
Mr. Juhl. Sir, I am not aware that GroupM ever came out and
said that Joe Rogan was spreading misinformation or that
Spotify the platform. We asked Spotify to clarify their
policies.
We are in the business of connecting brands and consumers
in a way that their messages can be heard in an authentic
manner.
Mr. Tiffany. So, you weren't going after Spotify?
Mr. Juhl. As I said, we never reduced our spending once. We
didn't call for a boycott, we asked for clarification from
Spotify.
Mr. Tiffany. Mr. Patel, the VP for Facebook let us know a
few years ago that they put out information telling people how
to get into this country illegally, and we have seen over ten
million people do that here in less than four years under the
Biden Administration. Your company Unilever does some
advertising on Meta, I am assuming?
Mr. Patel. Yes, sir.
Mr. Tiffany. Yes, is a Trump ad, as was alluded to by my
colleague from Florida, is that more dangerous, or is it more
dangerous to have Facebook telling people how to get into our
country illegally?
You had some VPs that said that a Trump was very dangerous
and that it should be pulled down. Is that more dangerous, a
Trump advertisement for President, or is a Facebook saying that
they are encouraging people to come into the country illegally?
Which one is more dangerous?
Mr. Patel. Sir, from an Unilever lens, we believe that is
not the content we would want our brand associated with.
Mr. Tiffany. Will you stop advertising with Meta? Because
they have encouraged people to come in illegally. If you took
an ad like that out in the newspaper, you would be in big
trouble.
It seems like the same thing should happen to Meta. They
are breaking the law and telling people to come into this--
telling people how to come to into this country illegally. Will
you be dropping your advertising from them?
Mr. Patel. Sir, that is why we work with GroupM and our
different partners to ensure our brands appear adjacent to the
content that we are targeting for the audiences that we are.
Mr. Tiffany. Hasn't GroupM failed you then? They did not
find out that they are actually encouraging illegal activity.
Shouldn't GroupM be telling you that, hey, there is a problem
here?
Mr. Patel. Sir, that would be--we also have verification
within our own organization to see where assets are appearing.
So, it would be picked up in the system.
Mr. Tiffany. I wish I could do some more followups, but I
yield back, Mr. Chair.
Mr. McClintock. [Presiding.] The gentleman yields back. Mr.
Swalwell.
Mr. Swalwell. Thank you.
Mr. Shapiro, thank you for joining us today. I think it is
important that you are here as one of the leading conservative
voices in the country. The country has, in the last couple
weeks, talked a lot about and Googled Project 2025. It is one
of the most Googled search terms right now.
You are not going to get any censorship from me. So, I just
wanted to know from your perspective, I think it would help us
understand on just like a scale of 0-100 percent, how much do
you support Project 2025?
Mr. Shapiro. I think like President Trump, I haven't looked
all that deeply at Project 2025, but it seems that Democrats on
this Committee, sort of like Peter Pan and Tinkerbell, if they
say Project 2025 enough, their Presidential candidate becomes
alive again.
Mr. Swalwell. So, let's just talk about pieces of it, and I
guess you can tell me if you support it. You probably want less
bureaucracy, right?
Mr. Shapiro. I do.
Mr. Swalwell. I want less bureaucracy. You want more
efficiency?
Mr. Shapiro. I do.
Mr. Swalwell. I want less--more efficiency. You want
taxpayer money spent wisely?
Mr. Shapiro. I do. Congrats on becoming a Republican.
Mr. Swalwell. My parents would be proud. Mass deportations,
it calls for that. Do you support that part?
Mr. Shapiro. I support the deportation of any illegal
immigrant who is in the United States who is not of benefit to
the generalized American public.
Mr. Swalwell. So, if they are picking agriculture that puts
food on the tables of everyday Americans, they have never
committed a crime inside the United States, they didn't come
across with documents. Should they be deported?
Mr. Shapiro. If they have not paid taxes and if their draw
on the taxpayers' benefits is larger than the contribution they
are making to the economy or if they are involved in criminal
activity, they should be deported.
Mr. Swalwell. How do we measure that?
Mr. Shapiro. The same way that the IRS measures my income
every year. It seems like if the IRS can track down every
aspect of every receipt that I have ever submitted--
Mr. Swalwell. So, if they were willing--
Mr. Shapiro. They can do so for hundreds of millions of
other Americans, they can do that for illegal immigrants as
well, except for the fact that no one knows how many are in the
country, thanks to this Administration.
Mr. Swalwell. So, you would be cool with creating a system
where they could pay those taxes is, they wanted to and then
stay and work and put food on our table.
Mr. Shapiro. It depends on how long it would take for them
to pay the taxes, and they would also have to go presumably to
the back of the line, although I am not sure why I am
testifying about immigration policy at this point.
Mr. Swalwell. How about banning the abortion pill, that is
part of Project 2025, do you support that part?
Mr. Shapiro. I think that this is a State-by-State issue on
a personal level.
Mr. Swalwell. I am just asking you.
Mr. Shapiro. Sure. I am a fully pro-life person, which
means that I am not in favor of the distribution of the
abortion pill.
Mr. Swalwell. Banning same-sex marriage, what about that
part?
Mr. Shapiro. I am in favor of traditional marriage between
a man and a woman, and I am perfectly fine with anyone having
any sort of voluntary sexual arrangement they seek. That is a
different thing from whether the government should attach
benefits to that personal relationship.
Mr. Swalwell. You think it is a sin to have same-sex
marriage.
Mr. Shapiro. I am confused. Are you asking me as a
religious Jew what I think about biblically?
Mr. Swalwell. I am just asking is it a sin to be gay.
Mr. Shapiro. Is it a sin to be gay? How long do we have
here, two minutes? If the basic idea is that sexual orientation
is up for government regulation, I am not in favor of the
government regulating the private consenting sexual activity of
adults.
That is a different thing, once again, from whether the
government ought to engage in actual benefits for particular
sexual arrangements that adults make.
Mr. Swalwell. Again, just you to me, is it a sin or not?
Mr. Shapiro. From a religious Jewish perspective,
orientation is not a sin, but activity is. That is also the
same perspective of most major religious, so far as I am aware.
Mr. Swalwell. OK. How about cutting Social Security, do you
support that part of 2025?
Mr. Shapiro. I am not sure what Project 2025's position on
Social Security is. I am in favor of the restructuring of
Social Security along the lines of privatization and lowering--
and increasing the retirement age.
Because you, as well as every other Congressperson, know
Social Security is going to go bankrupt, and yet everyone seems
to have an interest in lying about it for the next decade and a
half until we have to take austerity measures or radically
increase inflation or taxes.
Mr. Swalwell. Bans against books about slavery, do you
support that part about?
Mr. Shapiro. Why would I possibly be in favor of bans about
books about slavery? That would be absolutely ridiculous.
What I am in favor of is the idea that school libraries
should be able to make decisions along the lines of what
exactly is appropriate for, say, a seventh grader and whether
they ought to be treated to cartoons in Gender Queer. That is
not quite the same thing.
Mr. Swalwell. Just because we found some receipts, you did
say I think homosexual activity is a sin.
Mr. Shapiro. Yes, I am religious Jew; that's true.
Mr. Swalwell. I am sure there is a genetic component--
Mr. Shapiro. You found me out.
Mr. Swalwell. --sexual orientation, but the view of all
religious people I know has always been that sexual behavior is
something that is up to you. You said, ``I may have a desire to
sleep with many women, but I do not.''
Mr. Shapiro. I agree with me, yes. Yes, that is true.
Mr. Swalwell. Congratulations on your, yes. I am sure it is
very hard to restrain yourself.
Mr. Chair, I just want to shift to Alvin Bragg. He was
supposed to be here this week, and he is not coming. Hunter
Biden was supposed to testify, and now he is not testifying. We
were supposed to have votes on Articles of Impeachment and we
didn't.
Again, we are just wondering, you guys write great press
releases, but the payoff seems to never come. So, I guess we
will keep waiting and we will do hearings like this.
Mr. McClintock. The gentleman's--
Mr. Swalwell. Finally, Chair, you cannot yell fire in a
crowded theater, but--and that is a restriction of speech, as
you have recognized before. You can theater in a crowded fire.
You can continue to do that all you want, and we will just
waste the American people's time.
Mr. McClintock. The gentleman's time is expired. I remind
him of the first rule of holes: When you are in one, stop
digging.
The Chair recognizes Ms. Lee for five minutes.
Ms. Lee. Mr. Shapiro, we have heard a lot today from our
colleagues across the aisle and your fellow witnesses about the
need for brands to avoid placement against or association with
controversial content. The examples that we have heard cited
are truly despicable: Child sex abuse materials, terror
threats, foreign propaganda, promotion and funding of criminal
activity.
So, just to be clear, you have had personal experience
being targeted by these collusive activities and the
limitations of advertising. So, let's clarify, The Daily Wire
and its associated content, do you include any child sex abuse
materials on your website?
Mr. Shapiro. No, we certainly do not.
Ms. Lee. Do you promote terrorist activities or ISIS
videos?
Mr. Shapiro. No, we certainly do not, unlike some Members
of the Democratic Party, who seem to be--
Ms. Lee. Do you promote or fund-raising for criminal
conduct?
Mr. Shapiro. We do not.
Ms. Lee. Do you share foreign propaganda?
Mr. Shapiro. We do not.
Ms. Lee. In fact, Mr. Shapiro, is it not true that The
Daily Wire website associated content and social media involve
none of those things are instead a reflection of mainstream
conservative ideas and thought?
Mr. Shapiro. That is correct.
Ms. Lee. I would also like to discuss the concept of
advertiser engagement and return on investment. Do you have any
knowledge or information about the level of audience engagement
with advertisers who do choose to advertise on your platforms?
Mr. Shapiro. Thank God, we have extraordinary levels of
advertiser engagement with our audiences, which is why we
continue to maintain a significant ad presence despite the
obstacles we have discussed today.
Ms. Lee. If an advertiser were making a market-based
decision, do you have--a decision based on actual economic
input and engagement with the content consumers--do you have
any information or opinion about whether that return on
investment is a good one if they engage with The Daily Wire?
Mr. Shapiro. I am obviously biased in this matter, but I
obviously think it would be an excellent investment. We have
heard from certain advertisers that what they actually would
like is some sort of cover and less public pressure on them so
they can make market-based decisions.
Ms. Lee. Now, in your experience, you have actually had
your own content limited or removed or censored, have you not?
Mr. Shapiro. We have.
Ms. Lee. Would you share with us some of the examples of
content that you have had limited or censored?
Mr. Shapiro. Well, let's see. I had about 4,000 of them,
seriously about 4,000 content enforcements across our various
YouTube channels. We have actually had to engage in self-
enforcement because the corresponding information we are
getting from social media is so poor.
So, one of the things that we have had to do in past is
sort of prospectively remove material in the hopes that we will
not be demonetized if we do so.
Some of those matters have been, for example, describing
the geography of the Philadelphi Corridor, which is the border
between Israel and Egypt in the Gaza Strip. That could get us
demonetized. Any mention whatsoever of a man not being a woman,
that will get you demonetized on YouTube, for example.
As I have mentioned, when you are demonetized, it is not
merely that you are demonetized. That YouTube then has an
interest in preventing the dissemination of your message. So,
the number of people who will actually see your particular
video will be lower than if you are a monetized video.
We have example after example of this. I mentioned in my
testimony that Matt Walsh, a fellow host over at The Daily
Wire, he was fully demonetized on YouTube for pointing out that
men are not women, for example.
Ms. Lee. So, is it correct to say, then, that the collusive
activity by advertisers to choose to limit or choose to
restrict utilizing your platforms, it has both a monetary
impact and a potential impact on your ability to reach new
subscribers and viewers?
Mr. Shapiro. That is certainly true.
Ms. Lee. Now, you touched earlier on the fact that you have
obviously been able to transcend these types of barriers in
your own business operation, but you touched earlier on the
type of detrimental effect that this has on a new or startup
company.
Could you explain to us exactly how this type of conduct or
this type of collusion can inhibit the ability of new companies
to form or new thoughts or ideas to actually reach the American
public?
Mr. Shapiro. Sure. So, let's take a look at a startup
conservative media company, and GARM decides to apply its
misinformation standards, which are extraordinarily broad and
subjectively defined, to that conservative startup media
company.
They have to extraordinarily careful of what they say, to
the extent that they may not report material that they think
will be detrimental to them. We have been demonetized in the
past for even pointing out something that has now become
patently obvious to the American people, the mental decline of
the President of the United States.
If you are a startup media outlet and you are focused in on
something like that, the possibility that you will then be
demonetized by a social media platform based on GARM removing
its advertising using its standards, telling its advertisers
not to advertise on these particular platforms, that is going
to deprive you of the advertising revenue necessary to actually
build your operation, get new reporters, hire new opinion
writers, and then do the actual marketing on your own that you
would want to achieve market share.
Ms. Lee. You go all over the world and give talks and
engage with everyday citizens about the issues that are of
interest and concern to them. In your opinion and experience,
are those issues you just touched on, are they of interest to
people about, and just in general the political discourse of
things they want to hear content about today.
Mr. Shapiro. They certainly are of interest. I find it a
mass puzzle as to why the advertising market, if there is no
sort of at least informal collusion between them, have deprived
the advertising revenue from literally have the American
public.
Mr. McClintock. The gentlelady's time has expired. With--
Mr. Nadler. Mr. Chair?
Mr. McClintock. For what purpose does the gentleman--
Mr. Nadler. Mr. Chair, I need to speak to my colleague's
comments about Professor Waller. He misrepresented and maligned
the witness and falsely represented that the witness has
something to do with the majority's far-reaching
investigation--
Mr. McClintock. Sir, is there a motion--
Mr. Bishop. Point of order, Mr. Chair.
Mr. Nadler. GARM testified over a month ago on all these--
Mr. McClintock. The gentleman will--
Mr. Nadler. The majority could have invited them to speak
at this hearing, they did not.
Mr. McClintock. The gentleman will suspend. The gentleman
has a right to speak during his time, or if it is yielded on
someone else's time. If there is no motion involved, the
gentleman is not in order.
Does the gentleman wish to pursue a point of order?
Mr. Bishop. I withdraw, Mr. Chair.
Mr. McClintock. The Committee will now stand in recess for
five minutes to give the witnesses and the Members a break.
[Whereupon, at 12:05 p.m., the Committee recessed, to
reconvene at 12:19 p.m., the same day.]
Chair Jordan. [Presiding.] The Committee will come to
order. The Chair now recognizes the gentlelady from
Pennsylvania.
Ms. Scanlon. Thank you, Mr. Chair. When I was home in my
district last week, I was not surprised to be approached by
multiple constituents who were appalled by the radical
decisions that had been issued recently by Mr. Trump's right-
wing Supreme Court, particularly the U.S. v. Trump decision
which gutted the carefully constructed checks and balances on
the presidency, which had been drafted by our founders, to
ensure that Presidents would be held accountable for criminal
activity and other dictatorial tendencies.
I was more surprised at the number of constituents, and it
was not small, who wanted to talk about the Trump court's
decision to overrule the Chevron decision. Administrative law
is not usually the first thing that I get approached on, but at
picnics and out in the community, at the grocery store, the
checkout clerk wanted to know about the Chevron decision. This
is a doctrine that has required courts to defer to agencies
with subject matter expertise when interpreting Congressional
statutes.
Last month, the court said that elected judges are not to
defer to the agency experts and must substitute their own
judgment when making those interpretations. At the same time,
the court removed time limits for challenging agency
regulations.
So as my concerned constituents realized, these decisions
seriously destabilize and damaged our regulatory system. After
all, that is one of the chief objectives of the Trump
transition plan, known as Project 2025, and it is wholly
supported by the House's MAGA majority and the radical Trump
court.
Ordinary Americans are rightly concerned that these
decisions have opened the door to attacks on regulations that
have long kept us safe, that protect the air we breathe, the
water we drink, the food we eat, the medications we take, that
prevent businesses from cheating customers and that require
employers to have safe work spaces.
In addition to endangering American families, these
decisions will introduce uncertainty into nearly every part of
our economy. Over and over again, I hear from the businesses in
my district, they want certainty.
Businesses that have operated for decades in a stable,
settled, regulatory environment will now have to adjust to an
unstable and ever-changing landscape. This will raise costs to
businesses and will raise barriers to entry for newer small
firms.
In the wake of these radical decisions, Americans want to
see their representatives discussing how to keep them safe.
They want to see us supporting bills like the Stop Corporate
Capture Act, which codifies the Chevron doctrine and
strengthens the Federal rulemaking process. This is what we
should be discussing, not a podcaster's right to advertising
revenue. That is what Judiciary Republicans want to spend our
time and resources on. So, we are here today to discuss whether
conservative commentators on websites have the right to an ad
deal.
Private companies are allowed to choose where they want to
advertise. That is the free market which our MAGA Republican
colleagues claim to revere, except when the free market rejects
their deeply unpopular messages.
We are here today because our MAGA colleagues and their
right-wing-job allies cannot accept the fact that Americans and
businesses are not buying what they are selling, chaos,
conspiracy theories, and lies. Their websites are being
rejected not because of censorship or antitrust violations. It
is because their product stinks.
They are the intellectual equivalent of an Edsel, maybe New
Coke or perhaps Trump Water. If companies don't want their
products advertised on a website that runs headlines like
Disney's Not So Secret Antiwhite Agenda, that's up to them.
It's embarrassing to demand the government guarantee ad revenue
to extremist websites. These deals aren't handouts. They are
earned.
This Congress, Committee Republicans have used a corrupt
interpretation of the Sherman Act to call any business activity
they don't like illegal collusion. We saw the same nonsense at
last month's hearing on responsible investing, or ESG, which
many investment companies had implemented in response to
consumer demand. Go figure.
This is how House Judiciary Republicans have repeatedly
wasted Congressional time and taxpayer dollars with absurd
conspiracy theories, ignoring the results of their hearings,
and then making wild claims.
Mr. Waller, we hear a lot on this Committee about
weaponiza-
tion. Can you speak about how antitrust law is being weaponized
in this hearing for political purposes?
Mr. Waller. What I can talk about is I have written and
published and expressed concern going back several years about
the misuse of antitrust for political purposes. I used examples
from both the prior Democratic and prior Republican
Administrations.
Antitrust works best to preserve a competitive marketplace,
to stop the abuse of power by dominant firms, and prevent
mergers that are likely to be harmful to consumers, labor, and
other groups and suppliers. That is not a Democrat or a
Republican issue. That is just how the law has been for 130
years.
Ms. Scanlon. OK. Thank you. Thank you for your expertise. I
yield back.
Chair Jordan. The gentlelady yields back. The gentleman
from North Carolina is recognized.
Mr. Bishop. Thank you, Mr. Chair. Mr. Shapiro, I was struck
by another example of what you described earlier accurately as
projection in Mr. Swalwell's comments. The Democrats today are
expressing solicitude for, and chastise the Majority for,
chilling the sacred expressive rights of multinational
conglomerates based in foreign capitals, but interrogates you
about the intricacies of your religious beliefs on sexual
morality. I apologize on his behalf.
If it were genuine, I would sympathize with the objective
of keeping famous brands out of controversy, that they stick to
sports and entertainment. The World Federation of Advertisers
and their GARM that they have created, their members--they and
their members continue to seek--to involve themselves in highly
controversial issues.
Your colleague, Michael Knowles, in an article last year
pointed out that InBev is a member WFA. The pretext for what we
are talking about today is they want to keep their brands out
of trouble, but they rolled out the Dylan Mulvaney campaign and
destroyed the famous Bud Lite brand. They would tell us that
the purpose of this organization, all these global
conglomerates are members of, is to keep their brands out of
trouble. Disney is a member of the WFA according to Mr.
Knowles' article.
The report that the Committee has issued discloses intense
activity by GARM around Musk's purchase of Twitter. They didn't
like that. Mr. Rakowitz in a February 2023 email joked to his
colleagues about, ``being the idiot who challenged Musk on
brand safety issues. Since then, Twitter is 80 percent below
revenue forecast.'' I think that email can be taken a couple of
ways. It sort of appears that he is actually patting himself on
the back. He was called an idiot, but he is saying I am the
genius who took Twitter down 80 percent of its revenue.
There is also--one of the things that they didn't like
about Twitter was that it--say Mr. Rakowitz also wrote that he
had connected with members of GARM's steer team, these guys,
about Mr. Musk's leadership of Twitter and Unilever, has
``issues with overly partisan taste, e.g., Hunter Biden laptop
exposure.''
I think Mr. Tiffany was on to something earlier when he
begged the question about interference in American elections.
The question I think I would like to pose, I have heard a lot
from my colleagues in the time I have been here, is about
foreign malign influence.
The Hunter Biden laptop suppression very arguably had a
significant impact on the outcome of the 2020 election. So, is
this foreign malign influence? What determines whether foreign
influence, from London for example, is malign?
Mr. Shapiro. Again, I think that one of the big problems
here that we have is vague, unspecified subjective standards
that are posing as pseudo-objective standards. Under that
guise, all bias falls in one direction. When all the bias keeps
falling in one direction, you start to suspect that actually
the standard is not objective.
Once again, the standards that are being used by GARM are,
as stated by the titular head of GARM, are not aligned with the
First Amendment. This is a person who was overtly criticized
according to their report. The First Amendment itself talked
about how those standards should not apply.
So, why wouldn't he apply his own standards, or the
standards of a political side of the aisle, to advertising
dollars if they could. The use, again, of advertising dollars
is a cudgel to shut down one political side of the aisle. The
effects of that are quite clear, certainly on a wide variety of
businesses on the right.
Mr. Bishop. So, is it then--whether or no antitrust law as
it currently exists extends to that, if foreign government or
foreign-based political actors with global reach are using
their economic power to limit the expressive rights of
Americans, or certainly to intrude on and effect our electoral
processes by favoring one political side or the other to the
point of jumping and saying we don't like the Hunter Biden
laptop being exposed, is that not a legitimate object for
Congress certainly to look at? Then should Congress consider
the extent of its regulatory power to protect American's
expressive rights?
Mr. Shapiro. Certainly, quite dangerous when you have the
EU working with GARM to set standards for what companies can
and cannot advertise or should not advertise while
simultaneously attempting to regulate the social media
companies. They are largely the recipients of those ad dollars.
Mr. Bishop. What accounts for the solicitude of my
colleagues, the Democrats, for the conglomerate--the
international conglomerate's expressive rights, and their
disregard for the expressive rights of ordinary Americans?
Mr. Shapiro. Yes, the hypocrisy is rather glaring. As I
said earlier, the shocking adherence to free market capitalism
and freedom of consumer choice on the left side of the aisle
today is something to behold. They have invoked it almost as
commonly as they have invoked Project 2025 today, which frankly
I am getting a little creeped out by. I think if they say it
three times, then President Trump appears and challenges them
to a golf match or something. It's like Beetlejuice.
Mr. Bishop. It would be funny if it weren't so strange.
Thank you.
Chair Jordan. The gentlemen yields back. The gentlelady
from Pennsylvania.
Ms. Dean. Thank you, Mr. Chair. I thank all our guests for
being here today. Professor Waller, I appreciate you being here
and sharing your time and your expertise with us on these
issues of antitrust. I thank you for setting this Committee
straight when it comes to, as you put it, ``the consensus of
understanding of antitrust laws by most courts and
commentators.''
It is critical that we combat misinformation faithfully and
communicate the State of our law. It is also critical that we
not lose sight of how the content underlying this hearing
impacts businesses and people. Especially, my focus is children
and other vulnerable groups as our lives move increasingly
online.
I want to read just briefly from the charter. It says we
are committed to taking actions which better protect everyone,
children, in particular, online and working toward a media
environment where hate speech, bullying and disinformation is
challenged and taking steps to ensure personal data is
protected and used responsibly when given.
That is a pretty critical mission. I care about that for my
kids and my grandkids as we are all moving more and more
online.
Professor, what does your professional experience tell us
about GARM's objectives and the need to safeguard against the
worst kind of online content, child sex abuse material,
terrorism-related content, and deliberate hate speech or
misinformation?
Mr. Waller. What I have heard today, particularly from the
witnesses from the companies, is a concern that an antitrust
agency or an antitrust court would take very seriously as a
legitimate business concern about how the standards for GARM
assist the company in making a unilateral decision about the
types of advertising that would best serve their marketing and
brand management strategies.
So, I can't take it much past that. I am hearing something
that a court or an agency would take seriously.
Ms. Dean. I appreciate that. Mr. Patel and Mr. Juhl, maybe
you could help me here. From your perspective, if businesses
were required to place ads on certain platforms, what would
that mean for your companies? If you are comfortable speaking
to this issue that I just pointed out, I care deeply about,
what do you think it would mean for child sexual abuse victims
and survivors? Mr. Patel?
Mr. Patel. First, what I would say is telling us where to
invest wouldn't be the best return investment for our brands
and how to build the equity of our brands in the U.S. would be
the first response.
We have a clear policy when it comes to where our brands
agencies want. We don't want our brands to be near any harm.
Like my testimony shared, there were examples of child abuse,
et cetera, that brands like Dove should not be associated with
and money invested against quite frankly.
Ms. Dean. Can you give me an example of that, the ad
placement?
Mr. Patel. Yes. I think two years ago there was a Dove ad
that was next to child abuse. We had a backlash, rightly so,
from our Dove consumers to say why would the brand be
associated in adjacency to that. That is why we do what we do
on brand safety.
Ms. Dean. I appreciate that. Mr. Juhl?
Mr. Juhl. I believe the question was around if I was
required to advertise on certain channels--
Ms. Dean. Correct.
Mr. Juhl. --what would be the impact on that? I would
just--it would not be great for our business. Not great for
free economy. Not great for the brands we represent that are
trying to grow their own business. Each brand and each product
and service try to connect with different audiences. It is up
to them, and it is part of what we do, and honestly the
trillion dollar media market that exists worldwide is about
finding those audiences and how do you connect the brands with
those people? To be forced into certain paths, it would sort of
eliminate a free market.
Ms. Dean. Do you have internal conversations around the
possibility that your ad dollars could be used unwittingly to
fund child sexual abuse material? Do you worry about that? Do
you have conversations about it? Because certainly it is a high
risk.
Mr. Juhl. Absolutely. We worry and our clients worry. I
spend most of my time talking to our clients about where their
brand dollars show up and how they fund different kinds of
content. Their No. 1 concern is about providing assurances that
they are not doing societal harm.
Ms. Dean. Mr. Patel?
Mr. Patel. Yes. That is at the heart of the brand safety
conversation.
Ms. Dean. Absolutely. That is what we ought to be focused
on here. How do we protect the online world that we are all now
in? Not just through the economy and through businesses such as
yours, but how do we protect our children against this. That is
where this Committee ought to be working, not in the way we are
today. Thank you all for your expertise. I yield back.
Chair Jordan. The gentlelady yields back. The gentlelady
from Indiana is recognized.
Mrs. Spartz. Thank you, Mr. Chair, and thank you for doing
this hearing. It's actually a very, very serious issue. I have
personal experience, some of them I caused when I criticize
failures of President Biden, of President Zelenskyy, of Jake
Sullivan to deter Russia. I actually couldn't even post some of
them or just to get traction. It was kind of interesting.
So, I am sure that this is a various situation for a lot of
people and for freedom of speech, for freedom of opinion, and
we create a dictatorship of opinion, tyranny of opinion in our
country. I agree with Professor Waller. That is not a
traditional collaboration of cartel. That is not a traditional
cartel too because we actually have government coercing
businesses and using mechanism and businesses to restrain trade
and take down competition. Very interesting.
Actually, on the website of this organization, it talks it
is first of its kind, cross-industry alliance. This is actually
a flagship project of the Wall Economic Forum. We are creating
a public-
private corporation framework. We are actually creating this
global risk initiative. To control misinformation and
disinformation, to shape the future of media entertainment and
culture, and using organization like SEC, FTC, PCOB to take
down competitors and businesses that don't agree with the
dictatorship of opinion that would create--and actually it's
kind of interesting I have to tell you. Under Karl Marx and
Hayek, Communism Social, it is not a redistribution of wealth.
That is control of means of production, centralized power. Now,
we centralize in power in Washington, DC, by controlling means
and production. Maybe not in the form but in the essence by
using financial system, by using U.N. Climate Agenda and ESG
which is very vague disclosure. By using global organization to
coerce CEOs and businesses to be able to intimidate, to sign on
to something that actually could be against the interest of
their shareholders. This is very dangerous what we have right
now creating the collusion of business and government.
What my question is, as an American Congresswoman that have
to protect American public interests and now investors, so I
have a question for Mr. Shapiro. Don't you think if this
company has actually signed on to this initiative, so global
agenda initiatives that could be actually--this unusual
collaboration could be actually harmful to shareholders because
they can exclude? I think your organization, the daily action
of business, your organization, Mr. Juhl, put The Daily Wire on
the global high-risk exclusion list categorizes conspiracy
theory interest in only conservative groups on that list. Kind
of very interesting.
Don't you think if we are going to include everyone who has
a different views, conservative views in our country, that is a
risk that companies, publicly traded companies should actually
disclose?
I think SEC need to tell them so American investors know do
they want to invest in all these global initiatives and know
that their pension funds are invested in these initiatives?
Don't you think that is transparency that American public
deserves and actually protect them because they might make your
country boycott company bankrupt, because they now also
colluded to take down boards, using some illegal tools by their
interest in passive investment to become an active shareholder
and against interest of the company.
This is a pretty organized, very clever organized cartel. I
agree. It never existed before. This is a very dangerous cartel
to actually intimidate Americans and go after our First
Amendment rights and freedom of speech and using money to do
that.
So, I have a little bit of minutes remaining, so I would
like Mr. Shapiro to tell me, what are your thoughts? Do you
think American people deserve at least transparency so they
know where the money is going?
Mr. Shapiro. That is my main concern. I think the lack of
transparency is extraordinary. The question that I would have
for some of my colleagues on the panel is can they name a
single conservative outlet or conservative leaning host that
they would deem to be brand safe on behalf of their
advertisers. A single one, and if so, could they name them?
Ms. Spartz. Yes, maybe that is something for Mr. Juhl? Do
you know who is good? Because you excluded a lot of
conservative media, your company. Which are not in your risk
profile?
Mr. Juhl. There are 600,000 sites in that exclusion list. A
vast majority of those are made up of illegal content, IP
infringement. We work very hard to make sure that we understand
who those are and how we protect our brands from infringing on
them.
Ms. Spartz. Well, how do you have high level like very--
there is a lot of traction liberal groups on that list. Give me
some examples because I only see conservatives' ones. So which
ones?
MSNBC, actually, part of this interest, MSNBC is part of
your cartel. So, that's a convenient way. You want them to be
part of your cartel. So, how does that work, to be no on the
global exclusion.
Chair Jordan. The gentleman can respond. The time for the
gentlelady has expired. Does the gentleman wish to respond? I
think the question was directed at Mr. Juhl.
Mr. Juhl. The exclusion list is public. We have access to
it. There are sites on both sides of it that are represented.
Chair Jordan. The time for the gentlelady has expired. The
gentlelady from Texas is recognized.
Ms. Escobar. Thank you, Mr. Chair. I have lost count of the
number of times we have convened this Committee to advance
tired, debunked, and wholly irresponsible right-wing talking
points, but here we are again today.
This morning, my Republican colleagues are upset that
private companies that prefer not to have their ads monetized
online disinformation or disturbing content have established a
task force to address their concerns.
According to my Republican colleagues, these efforts harm
conservative media. Let's be clear, this hearing is about
Republican concerns over continuous drops in ad revenue on
social media sites like X, formerly Twitter, whose CEO has done
its best to make the site accommodating to hate speech,
disinformation, antisemitism, adult content, and other
inappropriate material since buying Twitter in 2022.
Concerned companies have paused advertising on the site or
walked away from advertising on X altogether to preserve their
brand safety and their brand's reputation. This has angered my
Republican colleagues who do not want companies to have the
freedom to make decisions in their own best interests.
Apparently, they now hate the free market, which is an
incredible turnaround. I have a question for Mr. Juhl and Mr.
Patel.
One antisemitic conspiracy theory that has proliferated in
certain quarters of the internet is the so-called Great
Replacement Theory, which claims that Jewish people are
orchestrating mass immigration to replace the White population.
Can you explain why global brands would not their
advertisements to be associated with publications or
individuals who promote the racist Great Replacement Theory?
Mr. Patel, I will ask you first.
Mr. Patel. Well, first, we want to invest our marketing
investment into the brands with the target audience that we go
after. That type of content wouldn't fit with what the brands
stand for and what our consumers would expect from the brand.
Ms. Escobar. Mr. Juhl?
Mr. Juhl. As I said earlier, brands spend billions of
dollars over decades building trust with consumers about the
products and services that they bring to market. That's how
they build their companies. That's what advertising does.
They take that and put that next to content that is
incredibly polarizing and divisive and think of the frame of
mind of the consumers that are looking at that. That is a bad
association. We want to create good associations between
products and services in the consumers.
It is not about the content in terms of being conservative
or progressive. It is about the nature of news and the
divisiveness that exists right now. So, that's why overall news
spend has come down to low single digits overall.
It isn't about progressive or conservative. It is about the
frame of mind of creating positive associations for our brands
and our consumers so that they can have the productive
conversations they want to have and continue the brand growth
over time.
Ms. Escobar. Wouldn't you say it is also about your bottom
line?
Mr. Juhl. Absolutely.
Ms. Escobar. What would happen if you have heard the debate
happening here on this dais all day. You have heard the
questions from my colleagues on the other side of the aisle.
You can sort of see the intention and where they are trying to
drive this conversation. They want to ensure that you are
forced to do what they want you to do. What would that do to
your brand and to your business and to your bottom line? Mr.
Patel?
Mr. Patel. So, first, it would severely impact the brand
equity and what the brand stands for as we built these brands
over decades and decades with substantial investment.
Second, we would get a consumer backlash because they
couldn't associate the brand with the content.
Third, the bottom line impact would be lost sales. We are
very proud to be serving 90 percent of American households
today with our portfolio.
Ms. Escobar. I appreciate it. I am running out of time. I
will just say this. You have heard a couple of members mention
Project 2025. There have been some jokes made about it, and we
have seen some of my colleagues try to run away from it.
The whole point of our bringing this up to the American
people as we have seen today is that there is an effort by our
colleagues on the other side of the aisle to force their will
on the American public and American businesses. It is
terrifying. I yield back.
Chair Jordan. The gentlelady yields back. The Chair now
recognizes the soon to be Governor of North Dakota, Mr.
Armstrong.
Mr. Armstrong. Thank you, Mr. Chair. I didn't know we were
going to talk Chevron deference. I didn't know we were going to
talk consumer welfare standard and antitrust, which we have an
entire FTC that has decided that is no longer the standard
anymore.
I think sometimes when we talk about this stuff, when you
live it, and you do it, Mr. Shapiro, you are not asking
Congress to force any particular advertiser to advertise on
your show, are you?
Mr. Shapiro. No, I certainly am not.
Mr. Armstrong. This isn't a debate and conversation we are
having right now isn't as simple as an advertiser calling you
and saying, hey, I am not going to re-up my next contract
because my ad revenue is not generating what we are doing.
Mr. Shapiro. That is a normal course of business. It has
happened from time to time.
Mr. Armstrong. It is not as simple as we can talk Shrank
and Brandenburg and fire in a crowded theater, but one of the
times you can yell fire in a crowded theater is if you see
smoke. Like, that is truly what the decision means. There is an
eminence requirement. I have been off judiciary for a while. I
haven't gotten to give my speech on fire in a crowded theater
is not actually the law. From there.
So, we talk about demonetization. We do all these things.
Explain how it works. Like you are a businessman. You provide
content. You have over a million paid subscribers, I believe?
Mr. Shapiro. Yes.
Mr. Armstrong. You understand your demographics. You
understand that has a value add. So, explain how this works and
why it is a problem.
Mr. Shapiro. OK. So, the way the demonetization typically
works is that we are notified by YouTube, for example, that
programmatic ads will no longer be placed in the content on a
particular video. We have also had videos that are taken down
by YouTube for the same sorts of reason because they are trying
to provide what GARM would call a brand safe environment. So,
they will censor those videos, or they will restrict the reach
of those videos. So, it is not just that they will receive less
revenue, it is also that the messages that are being
disseminated in those videos see less audience.
This has become sort of a common practice. I mentioned
earlier we have had probably 4,000 content enforcements across
our various YouTube channels based on some of the most
innocuous statements that I have ever made or that some of our
other hosts have ever made.
That demonetization is not just a matter of removing
prospective advertising dollars from the pockets of particular
outlets. It is a matter of also shrinking the reach of
particular accounts such as violating sort of censorship
generally, those sorts of general standards.
Mr. Armstrong. Ultimately, what it does is it forces
companies to make decisions as to whether or not they are going
to change their content.
Mr. Shapiro. Absolutely, we do that all the time. Not only
that, but outlets like YouTube also actually attempted to
demonetize or restrict your video if you mention that you are
doing that.
If you say I can't talk about this issue on YouTube because
I am going to go talk about it over at The Daily Wire, they
will then demonetize the video for you mentioning that there is
another place where they could receive that content.
Mr. Armstrong. Have you seen any metric in any of these--
how all this works that says this is--you talk about arbitrary
all those different rules.
Mr. Shapiro. Capricious, yes.
Mr. Armstrong. Is there any evidence whatsoever that this
is applied even handedly at all?
Mr. Shapiro. I have extraordinarily little evidence that
the sort of advertiser standards that GARM spells out have been
applied to my friends on the other side of the aisle. Some of
them aren't my friends. People who oppose me or oppose my
agenda.
Again, that the proof is in the pudding. There have been
zero questions about advertiser pullouts from MSNBC or CNN.
Those questions are routinely asked with regard to people on
the right side of the aisle.
I will once again ask for advertisers, please name an
outlet on the right side of the aisle that you would deem brand
safe.
Mr. Armstrong. That is my point. This isn't a particular
advertiser choosing not to advertise on a particular show or a
particular medium. This is widespread throughout the industry,
which is eventually trying to create the content.
It would be easier to deal with this--we talk about
misinformation and disinformation and all that, but we have
also been in these hearings where they were censoring
malinformation, which is a brand-new word, which is actually
true information that isn't being used in what they deem the
correct context.
Mr. Shapiro. That is correct.
Mr. Armstrong. So, we conflate the First Amendment and
censorship and all these different things at different times.
Eventually where we have to end up here is in a space where
there is the ability for people who have thought and have on
the other side of the aisle to be able to participate in a
marketplace in a way that is fundamentally fair. I don't think
advertisers are making these decisions based on where they are
reaching the most customers.
Mr. Shapiro. I think that there is a lot of fear that goes
into it, and that there has been a bait and switch that has
been played by some Members of the Democratic Party in going
after social media companies and threatening a different
incentive structure, suggesting that if they put their ad
dollars the wrong way or set their standards the wrong way,
they are going to be regulated. They are going to be targeted.
Then, the minute that anybody says that is happening, then the
answer is you are not putting pressure on advertisers. How dare
you invoke principles of free speech while attempting to tread
on it.
Mr. Armstrong. Yes. No, oftentimes they just hire former
FBI agents to do the compliance in their own social media
company. With that, I yield back.
Chair Jordan. The gentleman yields back. The gentlelady
from North Carolina is recognized.
Ms. Ross. Thank you, Mr. Chair. I would like unanimous
consent to introduce into the record, ``A Fake Tweet Sparked
Panic at Eli Lilly and May Have Cost Twitter Millions.'' I have
it right here.
Chair Jordan. No objection.
Ms. Ross. Thank you. Thanks to all the witnesses for being
here today.
I actually thought that Republicans were supposed to be
proponents of the free market. Now, I see I was mistaken
because the majority of this Committee appears intent on having
independent companies run ads on their favorite conservative
media platforms.
I hate to break it to my colleagues across the aisle, but
company's decisions not to advertise on conservative platforms,
as we have heard today, is because they are concerned about
being associated with the content on those platforms. That
content can hurt your brand and your revenue. That is not an
antitrust violation. That is the free market doing its work.
It is also not an antitrust violation for these companies
to be members of the Global Alliance for Responsible Media.
They are not forced to do that.
GARM is an organization that, as Professor Waller notes in
his written testimony, does not appear to function as a trade
association or even a traditional standard setting body.
Professor Waller also notes that GARM's members, for the most
part, don't compete with each other. Rather GARM's members are
freely associating a First Amendment right. It is explicitly
protected by the First Amendment.
So, the majority and Mr. Shapiro allege that GARM is
helping advertisers collude in violation of our competition
laws. I quote Mr. Shapiro, ``Prevent anyone from disseminating
information they don't preapprove.''
However, GARM's members lack this kind of power. They are
not gatekeepers for online information. Even if they did have
this power, the revenue Mr. Shapiro's own company and
popularity of his podcast undermine this argument.
However, even if there was collusion, which there is not,
that could be protected by the First Amendment, by the right to
association and the right to speak or not to speak.
Isn't that right, Professor Waller? Because the Sherman Act
was never intended to restrain the First Amendment expressive
actions like group boycotts. Is that correct?
Mr. Waller. Yes. The First Amendment in antitrust operates
more as a shield rather than a sword. Companies are allowed to
work together or individually to seek governmental action, to
persuade the public on matters that are of concern to them.
Ms. Ross. Professor Waller, even if it made sense to
characterize GARM's conduct as a boycott, would that make any
difference under the law?
Mr. Waller. No. You would have the same issues that we have
talked about. There would have to be an agreement. You would
have to have some substantial harm to competition. In general,
you would have to have a lack of legitimate business
justification.
Ms. Ross. OK. The courts have been consistent about this.
Is there any kind of big split in the circuit, big controversy
over this?
Mr. Waller. Not that I am aware of. Over the last 60 years,
there was a time where if you called something a boycott, it
would be treated as per se. Over time, the courts have just
backed off and said, we really--unless it is part of a--like
enforcing a cartel, it is really a case-by-case basis where you
balance the harm against the justifications involved.
Ms. Ross. The situation with GARM and it's going on with
advertisers wouldn't even come close to meeting these antitrust
standards.
Mr. Waller. In terms of the publicly available information,
what I have heard today, no.
Ms. Ross. Thank you. I yield back.
Chair Jordan. The gentlelady yields back. The gentleman
from New Jersey is recognized.
Mr. Van Drew. Thank you, Mr. Chair. Let me be clear at the
outset here because I have heard some things, words on the
other side that don't make sense. Nobody here, and we all know
this. I shouldn't even have to say it. Nobody here believes in
advocating for child pornography or violence or glamorizing
harm to others or human rights. We are supportive. Nobody here
is antisemitic.
For that matter, X is not accommodating hate speech or
porno-graphy. They just let everything be heard, everything
that is in the free marketplace of ideas. We are proponents. We
keep hearing, oh, you are not proponents of the free
marketplace. The very reason we are here is because we are
proponents of the free marketplace.
The very problem that you have and what you do is you are
stopping the free marketplace not only of goods and services
but of ideas. That is what America is based on, a freedom of
ideas. It doesn't matter if you are conservative, if you are
progressive, if you are liberal. It doesn't matter what you
believe as long as you are allowed to express yourself and let
the consumer of those ideas or those products be the one to
judge what they want to do.
The whole damn thing sounds like some kind of grand
conspiracy theory. It is like a bad James Bond movie. I can't
believe it. A global cartel--and this is what it really is, the
plain words, it is a global cartel controlling what we see, the
news we consumer, and the posts that we engage with.
The power isn't that you tell them no. You don't go to an
individual business and say no you can't do this. They know
very well that this is not what it is. It is their rating
system. So, businesses are busy being businesses. They look at
a rating system. If you get a low number, they figure you
probably shouldn't advertise on there.
It amazes me that conservative viewpoints get out there at
all. It amazes me that this election is even close. It amazes
me that people do have alternative ideas. Everybody has an
iPhone? Almost everybody does. Do you ever go to Apple News on
the iPhone? I do all the time because I want to hear what they
are saying.
Ninety some percent of the time, it is obviously,
blatantly, left. You should hear both sides. That is what this
is about. Unelected, unseen, it is undeniably a true threat to
freedom. GARM wields tremendous power. It controls, and you
know this already, 90 percent of global advertising, almost $1
trillion. We have concrete evidence. We are not making this
stuff up, of GARM organizing boycotts, like the one against
Twitter because of Elon Musk's acquisition, which the left used
to love Elon Musk because he is electric cars. He is all about
it. Now they don't, because he believes in individual freedom.
He also pressured Spotify to penalize Joe Rogan for
expressing views on COVID-19 vaccines despite not having a
direct brand concern. It is your concern. It is your ideas. You
want to change America. That is the truth. You want to change
America as we know it. It is not protecting brands. It is
silencing dissenting viewpoints.
Internal documents reveal coordinated efforts to demonetize
conservative news outlets, Fox News, Daily Wire, and Breitbart,
simply because they don't align with your ideas because you
want to change America.
This is blatant partisanship. It undermines the very
foundation of our freedom of speech. It is everything what
America is about, freedom. All those ideas in the marketplace,
left, right, middle, everybody should hear everything. You
shouldn't rate them just on the basis of that.
We know up to the 2020 election, GARM members actively
flagged and suppressed political ads from then President Trump
as misinformation.
There are so many questions, I am going to put them in for
the record. Let me ask this. Mr. Shapiro, NewsGuard ranked
leftist media organizations on average a 91, left organizations
on a 0-100 scale, right leaning organizations a 66. Can you
name a few examples, and I know you can, of leftist news sites
and newspapers who have published verifiably false stories, yet
still receive a high grade from you all because you want to
change America? Can you name some?
Mr. Shapiro. The list is extraordinarily long obviously.
CNN targeting the kids at Covington Catholic would be a
perfectly obvious example in which they lost a massive lawsuit
to one of those kids.
The attempt to treat the White House as a favorite talking
point of chief fakes with regard to the President's mental
wellness as actual fact, which has been the sort of case for
the last couple of weeks.
That is leaving aside opinion host like Joy Red who
routinely says things that are extraordinarily, celebrating
``white tears.'' These sorts of things happen all the time on
the left, but that has never amounted to a massive ding in the
rating. For example, MSNBC, Russian collusion, the idea that
President Trump was himself some sort of Russian cat's paw,
which was trotted out by the Democratic party as well as The
New York Times for literally years on end. The list is endless,
which is precisely why, if you look at the Gallup polls and
levels of trust in media, levels of trust in media right now
are at all-time lows. They were about 50 percent back in, say,
2005. Today they are South of 30 percent. There is a reason for
that. They have blown out their credibility. That doesn't seem
to blow out their credibility with GARM or News-
Guard.
Mr. Van Drew. Because they want to change America. I yield
back.
Chair Jordan. The time of the gentleman has expired. The
gentlelady from Vermont is recognized.
Ms. Balint. Thank you, Mr. Chair. Thank you to all the
witnesses. I know you are all busy people. I appreciate your
time here today.
What I have gleaned from the hearing so far is that
companies set up Global Alliance for Responsible Media out of
commonsense, out of business sense, out of the bottom-line
decisions and not essentially about ideology. I suspect many
big corporations would advertise on hard right websites if it
made business sense. It doesn't oftentimes make business sense
and that is why companies make a different decision, and some
of my colleagues are having a very difficult time accepting
that.
In the real world, most people, and I talk to constituents
a lot, are very skeptical of conspiracy theories. They do not
want to be on divisive platforms generally. They tend to unplug
from news media generally right now because of the
partisanship. They shy away from hate speech. They don't want
to be fully engage day-to-day on divisive partisan politics.
It follows that people get a negative impression of brands
that are associated with that content. This is my understanding
from everything that I have heard here today, this is at the
heart of what you are talking about in terms of brand safety.
So, we can't help that there are conservative corners of
the web that are rife with hate speech and misogyny and, yes,
some disinformation. It is simply a fact that companies
operating in the free market have to contend with that. They
have to make decisions about the situation that they are
confronted with.
As others have pointed out, I do think there is some
hypocrisy at work here when my colleagues claim to care so
passionately about the free market except when it tilts away
from decisions that companies are making against posting
advertisement on particular platforms that they think are not
helping their bottom line.
So, Mr. Patel, thank you so much for your time today. Why
did Unilever decide to join GARM? Can you just take us through
that quickly?
Mr. Patel. Well, first, Unilever created the responsible
framework in 2018, because there was a need to have safe
content with social media platforms. Then, in 2019, GARM was
built from 12 advertisers, six multimedia sites, and social
platform sites and agencies. That was because they needed some
sort of structure to say how would we define brand safety. That
is how GARM was born. It was voluntary. It is up to the social
media houses to decide on what content is uploaded and not.
Ms. Balint. I appreciate that. You said it was based on
need. Can you just flesh out for us, when you say the need,
what was that need?
Mr. Patel. The need was for advertisers to find--to make
sure we have a safe place for our brands to be adjacent to
content that we thought would be right for our consumers.
Ms. Balint. So, there are risks to brands. Could you just
give us one example of what that looks like when a decision is
being made about your product and where it is placed. How does
that potentially risk your brand?
Mr. Patel. An example would be the Dove brand that for 20
years has supported real beauty in the U.S. would be next to
content that would be harmful to--shaming body shapes, which is
not what the brand stands for.
Ms. Balint. You mentioned that--I believe you said that 75
percent of your $850 million ad budget is directed toward women
in particular.
Mr. Patel. Yes.
Ms. Balint. So, does advertising on parts of the web that
feature hate, prejudice, misogyny help you sell your products
to women?
Mr. Patel. No.
Ms. Balint. Right? No.
Mr. Patel. No.
Ms. Balint. No.
Mr. Patel. No.
Ms. Balint. Because I can speak here as a Member of this
Committee. I can also speak here as a woman, no. Right? So, we
have lost the thread here on the commonsense. I think we have
to cut through all the posturing here. Why would you want your
brand next to speech that potentially is discriminatory toward
women if most of your market that you are trying to sell to is
women?
Mr. Juhl, in your testimony, you describe an apolitical,
industry-wide preference to advertise on sports and
entertainment sites instead of news. Briefly, can you explain
once again why that is?
Mr. Juhl. It is similar to what Mr. Patel just said. We
want to avoid divisive conversations and places where we have
poor brand association.
Ms. Balint. I really appreciate that. In conclusion, I
would just like to say this is something that we all should
take to heart, that the divisive partisanship and the fear
mongering is not serving the Nation. It is also not serving our
economy. Thank you. I yield back.
Chair Jordan. The gentleman from Alabama is recognized.
Mr. Moore. Thank you, Mr. Chair. I appreciate all the
witnesses being here today. Mr. Patel, how much market share
did you say you have in the United States? How many million
dollars do you spend?
Mr. Patel. We spent $850 million.
Mr. Moore. Are any of those clients' big pharma, drug
companies?
Mr. Patel. No, sir.
Mr. Moore. None at all?
Mr. Patel. We spent our advertising on conventional media
channels.
Mr. Moore. When you are buying ads, are you placing ads for
big pharma, for pharmaceutical companies or do you just?
Mr. Patel. No, sir.
Mr. Moore. OK. OK. Ben, I have got a quick question for
you. We have heard a lot today about some experiences with GARM
and the way they have treated certain conservative medias, or
at least what appears to be a mistreatment of certain
conservative medias.
What about, how have those organizations, like say Global
Disinformation Index and NewsGuard, how have they impacted you
as a business owner?
Mr. Shapiro. Well, GARM and other organizations like it
have worked in conjunction with GDI and NewsGuard to set
standards and, again, those standards are purportedly
objective. In practice, they rarely are.
So, NewsGuard, for example, has penalized us openly for
being a conservative site. When we mention that we are actually
honest about our biases, what they say is well, that means you
are not objective as opposed to other outlets which claim to be
objective and actually are biased toward the left, for example.
So, when these standards are set, this is part of the
problem that I would hope that Congress would help uncover, the
lack of transparency in the standards is actually a weapon that
is used against one side of the political aisle. I keep asking
the question over and over and over again. Can NewsGuard name a
major right-wing outlet or conservative outlet that it deems
brand safe? Can GARM do the same because I certainly have seen
no evidence that they have deemed say The New York Times or CNN
brand unsafe in the same way that they would for conservative
outlets?
Mr. Moore. So, basically, you think liberal organizations
are not being treated the same?
Mr. Shapiro. Well, they are being whitelisted. I think that
while it is clear it is true the amount of money is being spent
in the ad market in news is declining, that does not mean that
it is declining proportionately based on politics. That is not
the case. A huge percentage of those ad dollars are still going
to purportedly objective or left-wing outlets. Virtually none
are going to right-wing outlets.
Mr. Moore. In referencing Joe Rogan, he has been mentioned
a couple times today, and I think when he said on his podcast
that young males probably didn't need to vaccinate, I imagine
that did impact a lot of the big pharma companies that do a lot
of advertising. Do you see a scenario--that is what I was
trying to get at with Mr. Patel. Do you see a scenario where
the advertisers come to say a Spotify or whoever is buying bulk
advertising for that certain group, and say, hey, this guy may
hurt our market share and could you all quiet his voice a
little bit?
Mr. Shapiro. Again, I have only skimmed the report, but I
believe there are explicit instances in their report in which
GARM actually attempted to suppress particular messages on
social media that were damaging to its product, meaning videos
that, for example, criticized particular products, did a bad
product review. They suggested perhaps these videos were
violative of GARM standards.
Mr. Moore. Mr. Juhl, I got a quick question here. One of
your employees, John Montgomery, the Executive Vice President
of Global Brand Safety, wrote a letter to the--he's the
leader--he wrote a letter to the leader of GARM, Mr. Rakowitz,
comparing The Daily Wire and Breitbart, he wrote, quote, as
much as we hated their misguided opinion--or I am sorry, ``as
much as we hated their ideology and expletive, we couldn't
really justify blocking them for the misguided opinions.'' What
ideology of The Daily Wire and Breitbart does your company hate
exactly?
Mr. Juhl. It is not an ideology that they are talking
about. John Montgomery no longer works at the company. Really,
what we are trying to do--
Mr. Moore. You said we hated their ideology in the quote.
So, what do you think--if he wasn't talking about ideology,
what did he mean exactly?
Mr. Juhl. I think that is an individual viewpoint that he
was espousing. That is not the firm decision. It is not what
GroupM's position is. I can't speak for GARM directly.
Mr. Moore. So, Ben, do you think that Mr. Juhl is answering
that correctly, that this is not their ideology? That is just
one former employee's ideology?
Mr. Shapiro. That letter does use the first-person plural,
as in we, as opposed to I. So, the idea that he was speaking
solely on his own behalf--well, also I believe in that email
signing with his corporate title at the bottom of the email it
sorts of renders belief that this is nonrepresentative of the
generalized world view of the company of which he was an
employee and in which capacity he was speaking.
Mr. Moore. Ben, I have one thing. What is hate speech?
Mr. Shapiro. This happens to be the biggest problem with
label hate speech. That it has no specific definition. We have
seen it weaponized by some people on the other side of the
aisle today to sort of broadly cover everything from things
that we would all agree are disgusting and terrible to things
that are essentially mainstream world views, for example, the
idea that biological men and biological women are separate
categories. These have all been lumped together. This is the
danger in setting up what are purportedly objective, pseudo
objective standards that are far too broad and subjectively
applied.
Mr. Moore. I love how one of the Members of the Committee a
while ago said she is a woman. I yield back, Mr. Chair.
Chair Jordan. The gentleman yields back. The gentleman from
California.
Mr. Kiley. Thank you, Mr. Chair. I find it interesting that
earlier today a Congresswoman on the other side of the dais was
justifying advertiser boycotts of Twitter or X based on how
unsavory the content is.
I logged into X as she was speaking, and it turns out she
has two active accounts. We have, I think, one of the most
ideologically diverse Committees in Congress here. I haven't
found anyone who isn't on the platform. I will yield right now
if there is anyone who isn't on the platform, and you would
like to identify yourself.
President Biden is on X. AOC--Alexandria Ocasio-Cortez is
on X. Gavin Newsome spends a ton of money advertising on X. You
would think that if there was any group that was going to be
sensitive to these sort of risks of being associated with
content you disagree with, would be elected officials. We had
essentially 0 percent of elected officials drop off of X,
whereas we had 80 percent of advertisers pull back from X. So
why is this?
Well, the Committee's report shows why it is. There was an
organized, centralized mechanism for causing advertisers to
leave the platform.
We have an email where one member company to WFA
executives, says based on your recommendations, we have stopped
all paid advertising on Twitter. One of those executives later
boasted of causing an 80 percent below revenue forecast result
for Twitter.
So, you have been brought in, Mr. Waller, by the minority
to talk about how none of this raises any real antitrust
concerns. I think the issue is, and it is certainly a
legitimate business interest to have brand-related concerns
about where your content appears.
When you decide to withdraw from a platform, you have to
balance that consideration against the loss of economic
opportunity for reaching a particular consumer base. So, just
to ground it in a realworld example, Mr. Shapiro, how many
people do you say access your platform across all the platforms
you have?
Mr. Shapiro. Speaking on behalf of just my own YouTube
channel, we had about 50 million unique viewers over the last
90 days or so.
Mr. Kiley. OK. Let's take the example of a brand. We have
headed many brands say ice creams. Presumably some of those 50
million like ice cream?
Mr. Shapiro. I would assume so, yes.
Mr. Kiley. So, if you are an ice cream company, maybe you
don't want to be associated with The Daily Wire for whatever
reason. Maybe you have cultivated a particular liberal image.
If you decide not to advertise on his platform, you have to
weigh that brand-related consideration against the loss of the
opportunity how to reach those 50 million people.
Maybe that decision becomes easier for you if you know that
you competitors are also not going to be advertising to those
50 million people.
Mr. Patel, you said that you took your advertisements off X
for a time. Did you consider at that time whether your
competitors were going to do the same thing?
Mr. Patel. No, sir.
Mr. Kiley. You had no consideration of that at all?
Mr. Patel. No, sir.
Mr. Kiley. Well, it seems to me it is sort of inherent in
this global association that now exists that this assurance
does exist to some degree. So, Mr. Waller, getting back to the
antitrust issues, I am looking at the FTC's own websites here.
It says a competitor restriction on the amount or content of
advertising that is truthful and not deceptive may be illegal
and evidence shows the restrictions of anticompetitive effects
and lacks reasonable business justifications.
They cite an order actually in a case involving the arbiter
association that actually enjoined communications that
regulated, restricted, impeded, declared unethical, interfered
with, advised against advertising, or publishing.
So, with that in view, and of the fact that we have sort of
this coordinating mechanism that exists, that is centralized,
that reaches different types of competitors and different types
of industries. We have seen action where they act in concert to
stop competing in a given segment, for example, the 50 billion
people that Mr. Shapiro reaches, and this behavior perhaps
redounds to the detriment of consumers looking at the
traditional consumer welfare standard in antitrust law.
For example, one of his listeners or readers might not
learn about the latest ice cream flavor that is available and
might go on eating the same old flavor. This is a consumer
welfare consideration.
So, why is this not a legitimate subject to antitrust
scrutiny?
Mr. Waller. That is a lot to unpack. Also, I am just here
in my individual capacity. I don't speak for, nor could I speak
for, the Federal Trade Commission.
Companies are allowed. I will take Mr. Patel at his word
that when he makes an advertising decision, he may or may not
take into account what his competitors are doing.
The mere fact that even if he did does not make that an
antitrust violation. There are dozens of cases--
Mr. Kiley. If he was assured that there was an association
that they are all part of that is providing consistent advice
as to where they should or should not advertise, does that
change it?
Mr. Waller. If he is making a truly independent decision,
no that would not change things from a point of view of
antitrust law.
Also, I would expect that Mr. Shapiro's many watchers and
listeners would be unaware of ice cream options just because
there are no ads on that platform.
Mr. Kiley. Well, that doesn't really matter. They would be
more aware of them if they are available on the platform that
they are using. So, that is the consumer welfare question.
So, would you at least agree with me that if you are
company that has brand-related concerns about a particular
platform, it is a different calculus whether to continue
advertising there if you know your competitors are also not
going to continue to advertise there? It is a different
calculus at that point, isn't it?
Mr. Waller. It may be. The most important thing is whether
it is an individual calculus or a concerted agreement.
Mr. Kiley. I yield back. Thanks.
Chair Jordan. It is hard to be an individual when 90
percent of the advertising spend. The gentleman from Virginia
is recognized.
Mr. Cline. Thank you, Mr. Chair. We have heard a lot today
about how large corporations, advertising agencies, and
industry associations through GARM participated in boycotts and
other coordinated actions to demonetize platforms, podcasts,
and news outlets and other content deemed disfavored by GARM
and its members.
I am equally concerned by the insidious relationship
between GARM partners and the government censorship by CISA.
What we have learned is that GARM's ad-tech partner, Channel
Factory, collaborated on a common lexicon for mis- and
disinformation. Mr. Juhl, did GARM's ad-tech partner
collaborate on this lexicon?
Mr. Juhl. I can't speak to that. I am happy to speak to
GroupM and what we do with our customers. I can't speak to
GARM's ad-tech partners and third parties that they have
solicited. It is an independent company.
Mr. Cline. Well, CISA utilized GARM ad-tech partner Channel
Factory to collaborate. Although GARM documents are unclear,
what is clear is that the Channel Factory Lexicon was developed
in conjunction with CISA. We have Global Chief Strategy Officer
of Channel Factory Phil Cowdell sharing the lexicon with Mr.
Rakowitz and writing the industry will need a common lexicon
and detailed definition to make progress as an industry.
Attached is the lexicon we developed with CISA and DHS, which
may provide a useful starting point.
Are you aware that DHS' cybersecurity and infrastructure
security agency helped to develop this lexicon?
Mr. Juhl. No, I'm not.
Mr. Cline. Well, the lexicon detailed definitions that
contribute to or cause mis- or disinformation, for example,
cheap fakes or malicious doctored video where content is
selectively edited is listed as a contributed force to the mis-
or disinformation. The methods by which these definitions can
be abused, especially through GARM, are clear. The Biden-Harris
Administration, for example, has made claims that certain
embarrassing videos of President Biden are so-called cheap
fakes, which we now know many of which are not, in fact, cheap
fakes but are an unfortunate reality and a serious condition.
Mr. Shapiro, do you have any concerns with CISA's
collaboration with GARM and the impact that has on censorship?
Mr. Shapiro. This is where my chief concern was in contacts
formal and informal between government actors and groups like
GARM and their third-party contractors to define standards that
act as essentially a cutout for violations of free speech.
If the government were to directly do this, it would
clearly be illegal. If the government instead puts pressure on
private companies to do it, then that should also traditionally
be illegal.
Mr. Cline. Absolutely. We are seeing this collaboration
come to light. In fact, it being misused by this Presidential
Administration to suppress or redirect to what they allege to
be misinformation, when it is an effort by the press to get to
the truth.
With that, Mr. Chair, I am going to yield you the balance
of my time.
Chair Jordan. I appreciate that. Mr. Patel, did Unilever
ever advertise on The Daily Wire? Have you guys ever advertised
there?
Mr. Patel. I am not sure if we have ever advertised there.
I don't know the answer to that.
Chair Jordan. Mr. Juhl, any of the companies you represent
ever advertise on The Daily Wire?
Mr. Juhl. Not that I know of. If they wanted to, we would
happily do it.
Chair Jordan. If they wanted to, but you don't know that
any of them have?
Mr. Juhl. Yes.
Chair Jordan. Is it like a--what did you just say, 50
million viewers over the past 90 days is what Mr. Shapiro said
at the front end? He said like 13 million followers that they
have. There is a real audience there. What did you say your
target group is, 18-48-year-old women, Mr. Patel?
Mr. Patel. Yes, sir.
Chair Jordan. Yes. Mr. Shapiro, you got any 18-48-year-old
women of those 50 million people watching your stuff or those
13 million followers, any of them 18-48-year-old women?
Mr. Shapiro. According to our latest statistics, about 65
percent of my listeners are between the ages of 18-44 and about
a quarter of them are women.
Chair Jordan. Yes, so that's a pretty big number. I mean
you guys advertise--any of the companies, Mr. Juhl, advertise
in say The Washington Post?
Mr. Juhl. Yes.
Chair Jordan. Do you advertise on The View?
Mr. Juhl. Yes.
Chair Jordan. Mr. Patel, same question?
Mr. Patel. We tend to invest less than one percent on any--
Chair Jordan. That wasn't the question. Do you advertise on
The View? Do you advertise on The Washington Post? Any left-
leaning programs or platforms that are out there, do you
advertise there?
Mr. Patel. Yes, sir.
Chair Jordan. OK. So, you do advertise there. You got a
huge market here you don't. That's sort of the point. Because
someone earlier, the gentlelady from Vermont said, ``this is
all about business sense.'' Really? Because it seems to me if
you got a platform where 50 million people are going to see Mr.
Shapiro's videos, he got 13 million followers, that is pretty
good--and a bunch of them are women.
Mr. Nadler. Would the Chair yield for a moment?
Chair Jordan. A bunch of them are women.
Mr. Nadler. Would the Chair yield for a moment?
Chair Jordan. It's not my time. It was yielded to me by Mr.
Cline.
Mr. Nadler. Would Mr. Cline yield for a moment?
Chair Jordan. If Mr. Cline was here, I am sure he would. He
is not, so I will try to get time. I know Mr. Fry is going to--
Mr. Nadler. I need about 10 seconds.
Chair Jordan. All right. The gentleman has 10 seconds.
Mr. Nadler. Thank you. There was an allegation that GARM
sites were collaborating. That is untrue. There is no
connection between GARM sites. I yield back.
Chair Jordan. The gentleman yields back. I think this is
the point. The Chair now recognizes the gentlelady from
Wyoming.
Ms. Hageman. This is an article that I am reading from. It
states there is a group of people who control what you are
allowed to see, the news you read, the videos you watch, and
the posts you engage with. You haven't heard of them. You don't
know their names. They determine through methods both direct
and indirect whether you are allowed to be exposed to
particular messages. Their decisions can bankrupt companies,
silence voices and fundamentally shift cultural norms.
Who are these people and how do they do this? Well, it is
the World Economic Forum, the World Federation of Advertisers,
and the Global Alliance for Responsible Media that was created
by them. I ask for unanimous consent to submit this article
into the record.
There are a couple of things that I believe need to be
corrected. Mr. Waller, you indicated early in your testimony
that these various companies do not compete with each other,
but that is in fact untrue. Unilever competes with Proctor and
Gamble for example. There are many other examples where these
companies, in fact, do compete against each other. So, when
they are conspiring or colluding with each other to actually
cutoff conservative media, I think that there are absolutely
antitrust considerations. Your willingness to just simply
disregard that evidence is rather laughable in light of the
information that has been brought to light today.
Mr. Patel, you stated that Unilever seeks to avoid
despicable content. That was what you stated in your testimony.
Do you consider conservative media or philosophy to be
despicable content?
Mr. Patel. No, ma'am.
Ms. Hageman. OK. Is GARM engaged in a political boycott of
conservative media sources?
Mr. Patel. GARM is not intended to represent Unilever on
where it invests and where it doesn't invest.
Ms. Hageman. That wasn't what my question was. My question
was, is GARM engaged in a political boycott of conservative
media sources?
Mr. Patel. I'm not able to answer that question.
Ms. Hageman. Mr. Juhl, is GARM engaged in a political
boycott of conservative media sources?
Mr. Juhl. Not that I'm aware of.
Ms. Hageman. OK. So, then the testimony that GARM's actions
are protected activity is not relevant to today's hearings. In
fact, GARM's operations likely constitute antitrust violations.
Mr. Shapiro, The Daily Wire covered the boycott of Bud
Lite. In this instance, Bud Lite supported social policies
which did not align with the values of many Americans. The
facts were presented to the consumers, and they used their
options that were available to select a different brand which
did not offend their personal beliefs.
This is different than when companies go into the shadows
and use an organization such as GARM to organize a boycott to
deprive consumers of the choice of where they get their news
without the consumers ever even knowing that their choices are
being limited. Wouldn't you agree?
Mr. Shapiro. I do.
Ms. Hageman. It is a very different circumstance when
consumers engage in a boycott and when companies conspire to
engage in a boycott based on the content or the philosophy of
the news organization that they are boycotting.
Is it appropriate for GARM or its members to get involved
with content moderation? Mr. Shapiro?
Mr. Shapiro. I believe that it is not. Companies should be
able to do much of this on their own.
Ms. Hageman. OK. In March 2022, there was an email from
GARM cofounder and initiative lead Rob Rakowitz. Mr. Patel, do
you know Mr. Rakowitz?
Mr. Patel. No, ma'am.
Ms. Hageman. Mr. Juhl, have you ever met Mr. Rakowitz?
Mr. Juhl. No, I have not.
Ms. Hageman. You both are on the board for GARM, is that
correct?
Mr. Juhl. We are on the advisory board.
Mr. Patel. Yes.
Ms. Hageman. You are on the advisory board, but you have
never met the gentleman who put this organization together?
Mr. Patel. We have a--at Unilever we have a senior member
that sits on the board.
Ms. Hageman. So, in his email, he talked about GARM's
boycotting and strong arming of Twitter because it opposed Elon
Musk and his free speech principles according to Mr. Rakowitz.
He wrote that Unilever has ``issues with partisan takes such as
the Hunter Biden laptop expose.'' Mr. Patel, was the Hunter
Biden--information about the Hunter Biden laptop, was that a
partisan take?
Mr. Patel. No. That is not what GARM is designed to do.
Unilever should not be involved in that conversation.
Ms. Hageman. OK. Did your organization--did Unilever avoid
advertising on any type of a website that attempted to expose
the truth about the Hunter Biden laptop?
Mr. Patel. No.
Ms. Hageman. That you are aware of?
Mr. Patel. No.
Ms. Hageman. GARM did.
Mr. Patel. GARM doesn't represent Unilever.
Ms. Hageman. Unilever is a member of GARM?
Mr. Patel. GARM doesn't represent how we invest our money.
Ms. Hageman. I am out of time. I have no further questions.
I yield back.
Mr. Nadler. Mr. Chair, I have a unanimous consent request.
Chair Jordan. The gentlelady yields back. The gentleman
from New York is recognized, the Ranking Member.
Mr. Nadler. Thank you, Chair. I ask unanimous consent to
enter into the record the portion of the GARM transcript
showing that all GARM members make their decisions
independently.
It is a tough position for advertisers because we have to
respect independence and freedom of companies. Every company
needs to make their own policies.
Mr. Chair, if the majority wanted to ask about GARM's
policies, they should have invited a witness from GARM who
would have testified that all its members act independently. I
yield back.
Chair Jordan. We invited a witness from the steer team who
direct how GARM operates. So, that is why Mr. Patel and Mr.
Juhl are here.
The gentleman from South Carolina is recognized.
Mr. Fry. Mr. Chair, I yield to you two minutes, sir.
Chair Jordan. I appreciate the gentleman yielding. I just
want to go back to where we were. So, Mr. Patel, Unilever
advertises in The Washington Post, on The View. Do you
advertise on CNN?
Mr. Patel. Very limited, sir.
Chair Jordan. But you do.
Mr. Patel. So, we are talking about three million of an
$850 million budget.
Chair Jordan. OK.
Mr. Patel. On use.
Chair Jordan. So, three million, just a little bit. All
right, just a little bit, I guess, out of $850 million.
OK. Do you advertise on Fox, Breitbart, or The Daily Wire,
just to be clear again?
Mr. Patel. We have a partnership with Fox at the strategic
level.
Chair Jordan. What does that mean?
Mr. Patel. So, Fox is one of our strategic partners for
sports and everything else.
Chair Jordan. OK. Do you advertise on Fox News?
Mr. Patel. No, sir.
Chair Jordan. Not on Fox News. OK. Do you advertise on
Breitbart?
Mr. Patel. No, sir.
Chair Jordan. Do you advertise on The Daily Wire?
Mr. Patel. No, sir.
Chair Jordan. Mr. Juhl, same questions. Do you advertise on
Fox News, Breitbart, or The Daily Wire? Not Fox Sports.
Mr. Juhl. We have a large partnership with Fox News.
Chair Jordan. You do. OK? Some of your people do. Some of
the clients you represent advertise there?
Mr. Juhl. Absolutely.
Chair Jordan. OK.
Mr. Juhl. We have an ongoing dialog with Murdochs and Fox
on a regular basis.
Chair Jordan. What about Breitbart and Daily Wire?
Mr. Juhl. They have not reached out to us directly to have
a conversation.
Chair Jordan. OK. You would welcome that? If Mr. Shapiro
wanted to reach out to you and you would welcome that?
Mr. Juhl. Of course.
Chair Jordan. OK. That is good to know. Because the guy who
you just fired, it sounds like, Mr. Montgomery, said that they
should be blocking Fox, blocking The Daily Wire, and blocking
Breitbart. Now, you want to reach out to them. That is good.
Mr. Juhl. We are open to having dialogs with anybody.
Again, GARM doesn't decide where the money is spent. We don't
decide where the money is spent. Our clients decide. It is
their budgets. They decide if that can help grow their
audience.
Chair Jordan. Mm-hmm. OK. All right. I yield back.
Mr. Fry. Thank you, Mr. Chair. Just to piggyback and pick
off from that, they make their own independent decisions, but
you advise them. At least that was the case with Mr. Rakowitz,
is that correct?
Mr. Juhl. Our primary business is advising our clients on
where they can connect with their audience.
Mr. Fry. So, for instance, Mr. Rakowitz, one-on-one, can go
to Unilever or Coca-Cola or somebody like that and talk about
why it is reprehensible that Twitter does this or that things
aren't taken down. He can advise those particular clients on
why it is important not to advertise on particular sites, is
that correct?
Mr. Juhl. I can't really speak for what Mr. Rakowitz can
and can't do. I assume he has those conversations.
Mr. Fry. You can't speak to that? Why can't you speak to
that?
Mr. Juhl. I don't know what Mr. Rakowitz does.
Mr. Fry. Well, let me ask you this. What sites--I think Mr.
Shapiro laid out a pretty good question earlier. What
conservative sites are considered brand safe according to your
metrics? Name me like one, two, five. Fox? Fox News?
Mr. Juhl. Sure.
Mr. Fry. Fox News online or TV?
Mr. Juhl. Both.
Mr. Fry. Are any of their sites?
Mr. Juhl. I don't have the full definition of what you
consider conservative versus progressive. Like I said, there
are 600,000 different sites that are listed. A vast majority of
those are illegal.
Mr. Fry. Right. They are public so I would assume that you
have access to that just as much as I do, correct?
Mr. Juhl. Sure.
Mr. Fry. So, sites like John Stossel's website, that is a
mandatory exclude. PragerU, The Federalist, Townhall,
Breitbart, The Daily Caller, Newsmax, Washington Examiner, One
America News, and tuckercarlson.com, those are all on the
mandatory exclusion list?
Mr. Juhl. I am not sure which sites are and are not on
there, but we are happy to get back to you.
Mr. Fry. Well, I would assume that you didn't just wake up
out of bed and pop up into a Congressional Hearing today,
correct? You prepared for this?
Mr. Juhl. Yes, sir.
Mr. Fry. This was not part of your preparation for a
hearing today in front of this Committee to defend the actions
of these entities and organizations? You never thought, your
team never thought to look at and examine what sites were
considered OK or not?
Mr. Juhl. We looked at that, yes.
Mr. Fry. So, you can't tell me today what sites, other than
Fox News, what conservative sites are considered brand safe?
Mr. Juhl. Not at this point, no.
Mr. Fry. What liberal sites have been put on your risky
list?
Mr. Juhl. I am not aware of the specifics on the sites,
sir.
Mr. Fry. See, I just find that this is deeply troubling.
This is why we have such a problem with it, with you and
Unilever and everybody that is in here, is that you dance
around this word salad that everything is OK. In the meantime,
you have people like Mr. Rakowitz who call it reprehensible
that a social media company won't take down what he deems
harmful content.
Do you see the problem here why the American people are
distrustful of entities like yours and others who decide what
content is safe and not, what content is problematic and not?
It is the man behind the curtain. It is the Wizard of Oz. You
are right in the middle of that and that is why people are
distrustful of you.
With that, Mr. Chair, I yield back.
Chair Jordan. The gentleman yields back. The gentleman from
Ohio is recognized.
Mr. Rulli. I appreciate that, Chair. I appreciate all your
time. I know it has been a couple hours since we have all been
here.
My point of focus is going to be directed at Mr. Patel.
Mr. Rulli. The example used during the course of the day is
Dove soap. So, I had no plans on asking a question until I
started really thinking about Dove soap.
So, my family has owned a grocery store since 1917. We have
about 45,000 SKUs. It is a product I know really well. Growing
up, my mom favored Dove soap. I don't think Dove soap has been
in my house probably for over 15 years. We use Irish Spring
now. I was trying to think to myself when is the last time I
saw a Dove soap ad?
Now, I am a conservative family, and I look at a lot of
different outlets, whether it is online or whether it is TV or
radio or everything you can imagine. I haven't heard a Dove
soap ad in at least 10-20 years.
So, if I was responsible for my shareholders, and I have to
go there, and I have to answer them, if I am doing the best job
possible, per your words, the protection of the brand, you are
using these extreme examples of situations where the brand
might be associated with a freak situation versus a normal
family with kids. Now, we never see a Dove soap ad, ever.
So, let's look at a couple of different things. In my
family, I have a couple Democrats that are brothers. I love
them like I love everyone. My mom made a rule. In our grocery
business, we love Democrats as much as Republicans because she
has brought up the example of Michael Jordan. Michael Jordan
was asked to go against Ronald Reagan. The big media said you
got to condemn Ronald Reagan for all the wrongs that he is
doing. Michael Jordan responded to, even Republicans buy tennis
shoes.
So, Mr. Patel, even Republicans buy Dove soap. So, how do
we sit here for hours and hours of testimony, how do you go to
these shareholders of the Dove soap company and explain to them
that we left out half of the population of America that doesn't
deserve to see an ad to tell you how delightful Dove soap could
be in your life? Your response, my friend.
Mr. Patel. First, it is disappointing that you haven't
bought soap for 15 years.
Mr. Rulli. Dove soap.
Mr. Patel. Dove soap. I would like to address that at some
point.
Mr. Rulli. Irish Spring.
Mr. Patel. What I would share is that Dove as a brand has
over 62 percent penetration in the U.S. That is agnostic of any
conservative or liberal perspective. We advertise close to
nearly 150 million on Dove. So, it is not a lack of advertising
on the Dove brand. We make it very specific who we target,
which is 18-49-year-old women.
Mr. Rulli. I appreciate that. I would change my point of
focus over to Mr. Shapiro and any response to that type of
question.
Mr. Nadler. Would the gentleman yield for a second?
Mr. Rulli. I will.
Mr. Nadler. Thank you. Irish is owned by Colgate Palmolive.
Colgate Palmolive is a member of GARM. Thank you.
Mr. Rulli. In response to that, being in the grocery aisles
every day, the Irish Spring colorful box actually pops out and
sells itself. I wish there were some Dove advertisements to
remind me how wonderful my life would be with Dove soap. So,
with that point of focus, we will move back to Mr. Shapiro.
Mr. Shapiro. The soap battles were amusing. I was enjoying
that actually. As far as the generalized point that you are
making, which is that half of the audience of the United States
is largely being ignored by certain advertisers, that obviously
is true. That doesn't mean that conservatives don't watch
sports or don't watch entertainment. That is where presumably
they are getting their exposure to Dove soap.
When it comes to the original question that the Chair was
asking, which is whether, for example, Unilever advertised with
The New York Times, with MSNBC, with CNN, or with The View, all
which are supposed to have said extraordinarily controversial
things, the answer was yes. When it comes to would they
advertise or have they advertised on conservative news outlets,
the answer typically is no. I also should mention at this point
that I have been told by the advertising department in my own
company that GroupM's managing director actually told us
explicitly The Daily Wire has an uphill battle based on our
politically conservative content.
So, again, the idea the philosophy and ideology never take
part of this--
Chair Jordan. Will the gentleman yield? Will the gentleman
yield, Mr. Rulli? Will the gentleman yield?
Mr. Rulli. I will.
Chair Jordan. I just want to clarify that. So, just a few
minutes ago, Mr. Juhl said if you reached out to them, they
would be willing to talk and consider advertising. That
actually happened?
Mr. Shapiro. I have been told by, again, the people who--we
have our own advertising department that deals with advertisers
obviously.
Chair Jordan. Sure.
Mr. Shapiro. They did tell us that they had spoken with the
group and managing director who said we would have a tough time
breaking into their market specifically because of our
political orientation.
Chair Jordan. So, Mr. Juhl, what he said under oath here
doesn't--
Mr. Shapiro. They never talked to Mr. Juhl to be fair.
Chair Jordan. I understand that. I am not saying that, Mr.
Juhl. That doesn't comport with what happened when The Daily
Wire talked to GroupM?
Mr. Shapiro. That is what I have been told.
Chair Jordan. That is interesting. I yield back to the
gentleman.
Mr. Rulli. I yield my time back.
Chair Jordan. I just want to point out that Mr. Rulli is a
grocery store owner, so he knows a little something about
putting things in the aisle.
Does the Ranking Member have any closing comments?
All right. Gentlemen, we want to thank you for being here.
I know it--OK. Then, the gentlemen is recognized.
Mr. Nadler. Mr. Chair, we have heard a lot of talk today
about GARM allegedly taking down a Trump 2020 campaign ad. I
asked unanimous consent to enter into the record the full email
exchange related to that ad, which shows that Facebook did not
take down the ad and said, ``Well, some may find the ad
objectionable, it doesn't violate any of the stated advertising
policies.''
Chair Jordan. Without objection. If I could, really quick.
Mr. Juhl, you said you would be happy to work with The Daily
Wire if they reached out to you. I don't know anything about
how the advertising world works. Is that how it normally
happens? Do they reach out to you and say, hey, we would like
you guys to advertise here, or do you say, wow, this is a
platform with 15 million followers, 50 million views on
YouTube. That is someplace we want to go as a potential to make
our clients some money. How does it work normally?
Mr. Juhl. Generally, publishers come to us and say this is
the audience we have. This is the type of content we have.
Would this be appropriate--
Chair Jordan. So, it is that way. So, it is from The Daily
Wire to you?
Mr. Juhl. Yes.
Chair Jordan. OK. Then just to be clear, that happened?
Mr. Juhl. Apparently, neither of us knew it.
Chair Jordan. Yes, that happened, and your people told his
people, the GroupM people told The Daily Wire people, sorry, it
ain't going to work. You guys are too darn conservative, which
is the whole point of today's hearing.
Mr. Juhl. I can only go on with what Mr. Shapiro said.
Chair Jordan. I can only go on that, too. He hadn't told us
anything--
Mr. Juhl. What he said was an uphill battle, I think, not
that it won't work.
Chair Jordan. Well, OK. Then I'll change it. It's uphill
battle, right? It's not an uphill battle to get it on The View,
The Washington Post, and CNN, and everything else. That is the
point. That is the point.
We want to thank you all for being here. Oh, I got to read
something here. That concludes today's hearing. We thank our
witnesses for appearing before the Committee. Without
objection, all Members will have five legislative days to
submit additional written requests for the witnesses and
additional materials for the record. Without objection, the
hearing is adjourned.
[Whereupon, at 1:42 p.m., the Committee was adjourned.]
All materials submitted for the record by Members of the
Committee on the Judiciary can be found at: https://
docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=117518.
[all]