[Congressional Record Volume 168, Number 119 (Tuesday, July 19, 2022)]
[Senate]
[Pages S3497-S3502]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AMERICAN INNOVATION AND CHOICE ONLINE ACT
Ms. KLOBUCHAR. Mr. President, I rise today, as I will many times, to
address my colleagues on the topic of competition policy, especially in
our digital markets where we have a situation where a few Big Tech
titans have grown into the largest corporations our country has ever
seen.
Just today, there is new reporting that shows that Google and Amazon
have used their gatekeeper power to eliminate their competition for
years. I don't think we are surprised by this, but this is new
information that I think is important, as we learn new things all the
time, that my colleagues know.
According to a 2014 memo first obtained by the House Judiciary
Committee, a Google executive described--this is what the memo says--
``grave concerns'' about a new service from a rival ``competing with
their core search experience.'' The documents also included an email
from 2009 in which Amazon executives discussed ways to stop a company--
that would be Diapers.com, a company it later bought--from advertising
on their own platform.
This gets to the core of what we are talking about here and why we
must take action. This email that was made public today reads:
We are under no obligation to allow them to advertise on
our site. . . . I'd argue we should block them from buying
product ads immediately, or at minimum price those ads so
they truly reflect the opportunity costs.
What does that mean? Well, Amazon could charge their rival whatever
they wanted for advertisements and try and keep consumers in the dark
about lower prices. That is only two from the dozens of documents newly
released today by the House Judiciary Committee.
I come to the floor today because the evidence is clear and continues
to mount. These dominant tech platforms have abused their power for
years, and now we are at a crossroads. Will America continue to be a
place where entrepreneurs lead our economy forward or will we become a
country where a handful of monopolists get to dictate who gets a chance
to succeed?
Remember when they all started--whether they were in garages or
whatever--they started with this idea that they were platforms for
sharing this information. I don't think anyone ever conceived they
would also own things on the platform and then preference those things
over other competitors. That is what is going on now. This is where
consumers go to make their decisions about what they are going to buy.
When you have situations where Google has 90 percent of the search
market, that is a monopoly, clear as can be. The decisions we make and
the actions we take today will set the trajectory for American
innovation, for ingenuity, and prosperity for the next generation. I
say we must meet the moment.
As a member of the Senate Judiciary Committee, I have had the
opportunity to serve as chair of the committee's Subcommittee on
Competition Policy, Antitrust, and Consumer Rights. From my vantage
point, I can tell you it has become painfully obvious, as many of my
colleagues--Democrats and Republicans--have seen, that we have a
serious competition problem throughout our economy, especially in Big
Tech but not only in Big Tech. This issue impacts all Americans every
single day.
Why are there only two dominant smartphone operating systems? Why do
social media companies face so few consequences for playing fast and
loose with our personal data? Why does Amazon keep raising prices that
consumers and small businesses pay? The answer is simple: They are
monopolies. That is what monopolies do. They are the big guys on the
block, and there is a lack of competition.
Despite the volume of evidence that supports taking action, Congress
has yet to pass a single bill on online platform competition since the
dawn of the internet. That is right. At the beginning, we were told we
don't want to squelch these new products and competition. That made
sense back then, but it doesn't make sense now.
This evening, I am going to talk about the problems consumers and
small businesses are experiencing in the online marketplace and the
cost of inaction. It is really easy around this place not to act, to
say things are too hard to deal with, whether it is climate change,
whether it is immigration reform, whether it is tech policy from
competition to privacy. But at some point, you have to stop blaming
other people and do something about it.
I am going to review how other countries are attacking this problem
and actually taking it on. I will discuss the many examples throughout
history when Congress and enforcers have stepped up to confront
monopoly power. This has long been a problem in our country.
You go way back to the Founding Fathers. So many people actually came
to America because they wanted to be entrepreneurs. They don't want to
have to buy all their tea from the East India tea company. You think
about the Senators from the past taking on monopolies. Whether it is
the railroad trust, whether it is the sugar trust, they took on
monopolies.
There are old cartoons in this very Chamber, our Old Senate Chamber,
showing these big, bloated monopoly trusts looking down on the Senators
because they controlled them. We don't want that to happen in our
modern day because we know many times from the past, the Senate did
stand up and do something. That is the case I am going to make today
for why my bipartisan bill with Senator Grassley, the American
Innovation and Choice Online Act, is necessary to level the playing
field in our digital economy.
First, let me say a word about what we are up against. That is what
everyone sees. I am trying to measure my audience today on C-SPAN
versus what we believe is well around $100 million that the Big Tech
companies have purchased for ads, especially in States where Senators
are up for reelection where they have purchased ads all over the
country. But people do listen. There are a few people here right now,
and if I give this speech in different ways a number of times, I can
win.
Let's talk about what we are up against. When I talk about the
dominant digital platforms, I am talking about some of the most
powerful companies in the world with armies of lobbyists and lawyers--
thousands and thousands of lawyers and lobbyists. I have two. They are
sitting right here in the Chamber.
We do have kind of a David and Goliath situation, but the lawyers for
Big Tech are everywhere, in every corner in this town, at every
cocktail party, and all over this building. I tell my colleagues they
don't even know sometimes when someone is trying to influence them
because they may think they are just talking to a friend or someone who
worked on their campaign a while ago. But once they talk about
antitrust and Big Tech, they should ask the person if they are being
paid by a tech company or if they are on the board of a tech company or
if they have some affiliation with one of the Big Tech companies
because, time and time again, they have been surprised to find the
answer is yes.
But these Big Tech companies aren't just lobbying my colleagues; they
are also lobbying the American people with astroturf campaigning and
other dishonest PR tactics.
At the same time that I have been working with my colleagues in good
faith on commonsense solutions to online competition problems, these
companies have been telling anyone who will listen that acting to
protect competition in our digital markets will sometimes or somehow
cede our national security or it will outlaw Amazon Prime--claims that
were disputed by the Department of Justice and Amazon's own lobbyists
in the press. That is just two examples. We deal with this all the
time. They will say anything and everything. Senator Grassley and I
came down here together to the Senate floor to refute this a few months
ago.
[[Page S3498]]
Then, of course, there is the money. I think this is actually the
best evidence of just how big and dominant and bullying these companies
are, running ads in States where people are in tough races. I think
they get the message. They are showing they are out there. They are
showing they are going to be able to put whatever money it takes into
ads to stop this bill. How obvious can it be? Message received: We are
out here, and we can hurt you.
And, by the way, they wouldn't be spending millions and millions of
dollars to stop us if we didn't have momentum. Let me give you some
numbers. In 2021, Big Tech companies spent more than $70 million
combined lobbying Congress. That does not include these ads I am
talking about. In the first quarter of this year, Facebook, Meta;
Amazon; Alphabet, which is Google; and Apple spent more than $16
million lobbying Congress. That is in one quarter. And you see my two
lawyers on the other side.
In just one recent week in May, one industry group, the Computer and
Communications Industry Association, spent $22 million on TV ads
against this bill. That is $22 million against one bill in 1 week. So
when you see those TV ads, which they love running in Washington so
that Members will see them, remember that number, $22 million, and
think ``two lawyers.'' That is what we are up against.
But it doesn't surprise me. I am not trying to win a popularity
contest with the tech companies. That ship has sailed. I am simply
trying to do the right thing.
Since I am a Senator and not a tech-backed industry group, I don't
get to spread my message with a multimillion-dollar ad campaign. I
don't have paid actors, but Big Tech lobbyists can't stop me from
standing here today on the floor of the Senate and tell you the truth.
The truth is these companies will stop at nothing to protect their
profits, even if it means stifling the innovation and ingenuity that
has made our Nation's economy second to none. American prosperity was,
of course, built on a foundation of open markets and fair competition.
It is competition between companies that give consumers lower prices,
drives manufacturers to constantly innovate and improve their products,
and forces companies to pay fair wages to compete for workers.
Competition provides opportunities for entrepreneurs to start and
grow new businesses, fueling future economic growth. But if you look at
our markets today, we see big cracks in that free market foundation. We
see bigger businesses and fewer competitors and more dominant companies
using their market power to suppress their rivals and line their own
pockets.
As an example, more than two-thirds of U.S. industries have become
more concentrated between--and these are the last figures we had, 1997
and 2012, because our government doesn't really collect these figures
because someone stopped them from doing it. The White House highlighted
this problem a year ago in its Executive order on competition, pointing
out that in over 75 percent of our industries ranging from agriculture
to banking to healthcare, a smaller number of large companies now
control more of the business than they did 20 years ago.
This is raising prices overall for Americans. The lack of competition
is estimated to cost the median American household $5,000 per year. The
problem, of course, is most obvious in the tech industry because that
is a relatively new area compared to some of our more embedded
industries. And while, over time, we did things with pharma, we have
done things in other areas, there is, as I noted, no law passed since
the advent of the internet involving tech competition.
Tech has given us some great products. I am wearing one, a Fitbit. I
use Google Maps, order from Amazon and other places, carry an iPhone.
Over the last several decades, companies like Google, Amazon, Apple,
Facebook, Microsoft have created many great innovations. We went from
the Wall Street Gordon Gekko days with his cell phone affectionately
known as the Brick, that weighed 2 pounds and was 13 inches long, to
cell phones the size of a watch.
But while these tech companies were once scrappy startups innovating
to survive, they are now some of the largest companies the world has
ever known. And when you get that big--guess what--you have
responsibilities, you have to be accountable. You aren't just out there
as a brandnew startup doing whatever you want. But that is the
mentality.
They are still introducing new products; that is great. But they are
also gatekeepers, and they use their power as gatekeepers to stifle
competition and innovation by their competitors and the businesses that
have no choice but to use their services. So that is a problem.
So if you want to sell something big time, you better get on the App
Store. But when you get on the App Store, depending on the size of your
company, as you get bigger--let's say you are Spotify--you have to pay
30 percent of the revenue you make on that App Store to Apple for the
pleasure of competing with their own product, Apple Music.
So to my colleagues I say this: Yes, you can love the products; you
can love the CEOs themselves; you can love the companies--but you also
have to love competition and love and take seriously the unique role
that we are supposed to play as Senators and as Members of Congress to
ensure there is an even playing field.
You go back, way back, to the godfather of capitalism, Adam Smith,
who said to always watch out for the standing army of monopolies. We
knew from the beginnings of this country that we would have to step in
time and time again to make sure that we rejuvenate capitalism. That is
what this is about.
Throughout history, whether in telecom in the 1990s with the breakup
of AT&T--which, by the way, made the company, according to one of their
former presidents, stronger--or by passing the Hart-Scott-Rodino Act in
the 1970s, to stopping sweetheart merger settlements, Congress has
brought down prices over time by ensuring that there is competition. It
is actually a uniquely American way to do things.
I am grateful for our friends in the House, Chairman Cicilline and
Ranking Member Ken Buck, who led bipartisan hearings on Big Tech and
its anticompetitive conduct. They gave us a whole treasure trove of
information. They conducted an 18-month investigation in the House
Judiciary Committee--18-months--focused on how the largest and most
dominant digital platforms harm small businesses, quash innovation,
raise prices, and reduce quality.
This is, by the way, what bothers me when some of our colleagues say,
Well, we don't know enough.
Seriously? Eighteen months of an investigation. And anyone in this
room--it is public--can go look at it: 1,287,997 documents and
communications--this is on the record--testimony from 38 witnesses, a
hearing record that spans more than 1,800 pages, 38 submissions from 60
antitrust experts from across the political spectrum, and interviews
with more than 240 market participants, former employees of the
investigative platforms, and other individuals totaling thousands of
hours.
That doesn't even include what we have done in the U.S. Senate
Judiciary Committee. So, please, spare me hearing that we have not
learned enough about this.
The report is 450 pages, but let me read some excerpts that capture
the harms to consumers and small businesses that we have seen as a
result of our failure to update our competition policy.
Here we go. This is from the record:
To put it simply, companies that once were scrappy underdog
startups that challenge the status quo have become the kinds
of monopolies we last saw in the era of oil barons and railroad
tycoons. Although these firms have delivered clear benefits to society,
the dominance of Amazon, Apple, Facebook, [and] Google has come at a
price.
These firms typically run the marketplace in each of their areas. You
all know that. Everyone in this room knows that because 90 percent of
the people, when they are doing a search engine, they go to one that is
Google. You know the dominance of Amazon. You all know the dominance of
these companies.
These firms are in a position that enable them to write one set of
rules for others while they play by another or to engage in a form of
their own private quasi-regulation that is unaccountable to anyone but
themselves.
[[Page S3499]]
[T]he totality of the evidence produced during this
investigation--
This is from the House--
demonstrates the pressing need for legislative action and
reform. These firms have too much power, and that power must
be reined in and subject to appropriate oversight and
enforcement. Our economy and [our] democracy are at stake.
The subcommittee identified numerous instances in which
dominant platforms engaged in preferential or discriminatory
treatment. In some cases, the dominant platform privileged
its own products or services. In [another], a dominant
platform gave preferential treatment to one business partner
over [the other]. Because the dominant platform was, in most
instances--
And this is what is key--
the only viable path to market, its discriminatory treatment
had the effect of picking winners and losers in the
marketplace.
That is us. We are supposed to pick the winners and the losers in the
marketplace and decide what is the best product based on what is
supposed to be the least priced or what is supposed to be the highest
quality. But now they have inserted themselves while at the same time,
in many instances, placing their own product above others, not because
they are less money, not because they are better, but because they are
theirs.
Google, for example, engaged in self-preferencing--
I am back to the report--
by systematically ranking its own content above third-party
content, even when its content was inferior or less relevant
for users. Web publishers of content that Google demoted
suffered economic losses and had no way of competing on the
merits. Over the course of the investigation, numerous third
parties also told the House subcommittee that self-
preferencing and discriminatory treatment by the dominant
platforms forced businesses to lay off employees and divert
resources away from developing new products and towards
paying a dominant platform for advertisements or other
ancillary services. They added that some of the harmful
business practices of the platforms discouraged investors
from supporting their business and made it challenging to
grow and sustain a business, even with highly popular
products. Without the opportunity to compete fairly,
businesses and entrepreneurs are dissuaded from investing;
and, over the long term, innovation suffers.
By virtue of functioning as the only viable path to the market--and
that is what they are in so many instances--dominant platforms enjoy
superior bargaining power over the third parties that depend on their
platform to access users and the market.
Their bargaining leverage is a form of market power [in]
which the dominant platforms routinely use to protect and
expand their dominance.
Since 1998, Amazon, Apple, Facebook, and Google
collectively have purchased more than 500 companies. The
antitrust agencies did not block a single acquisition.
They did not block a single acquisition. And as I look back, I
remember, just--in bright lights--that e-mail that was discovered
during the House hearing in which Mark Zuckerberg wrote, ``I would
rather buy than compete.''
``I would rather buy than compete.'' To me, that pretty much is
exhibit A. The House report has far more information than I could ever
share in a single speech, but I will be sharing it over the next few
months.
But overall, the House report found that if there was true
competition, we would have a more dynamic and innovative tech center
with more small and medium-sized businesses. Maybe if Facebook hadn't
bought them--remember, ``I would rather buy than compete''--an
independent Instagram, an independent WhatsApp--because Meta now owns
them--could have developed the bells and whistles and privacy controls
and other things. We will never know.
Why will we never know? Because they bought them. But if you have big
monopolies that buy up all of that potential innovation, that buy up
smaller companies, you lose the ability to get at some of the major
challenges that we see in our country.
I believe in the market. I was in the private sector for over a
decade. I believe in capitalism, but if you don't have an even playing
field for competition, you have got a problem.
Over time, if left unchecked, big companies dominate markets, exclude
their rivals, and buy out their competitors.
As one of the witnesses at a hearing that I chaired with Ranking
Member Lee said before our Subcommittee on Competition Policy, Alex
Harman of Public Citizen put it:
When companies face less competition, either because of
consolidation, or from forces that make competitive threats
less likely, they invest less in research and development.
They in turn are less likely to produce new innovations [that
benefit consumers and the economy]. And, all too often,
companies across the economic spectrum that depend on these
gatekeeping firms to reach the marketplace slash jobs and cut
back on developing new products.
As one founder put it: ``It feels like we are treading water with
cement blocks around our feet.''
This is what has been going on in our country. It describes the
problems we are facing from these digital gatekeepers. We have also
heard from many other companies, nonprofits, trade associations, about
what has been happening to them as a consequence of the monopoly power
wielded by the largest digital platforms.
Consumer Reports says this:
Multiple investigations and studies have found that the
largest online platforms have too much market power, and that
this is resulting in harm to consumers, businesses, and the
economy.
A group of 60 small and medium-sized businesses wrote a letter
saying:
Gaining access to the dominant platforms and integrating
with their services has increasingly become a take-it-or-
leave-it process replete with anticompetitive demands. It
doesn't serve American consumers or small and medium sized
businesses when the tech behemoths use their platform
dominance to tilt the competitive scales.
In January, the National Association of Wholesaler-Distributors
wrote:
Unchecked, Amazon's dominance threatens to cripple the
highly competitive B2B system in the United States.
The American Hotels and Lodging Association, not exactly a radical
group, wrote:
Dominant technology companies give their own paid
advertising products and services preferential treatment and
placement within their platforms to ensure that, despite the
specifics of what a consumer may be searching for, they will
likely be steered down a booking path that benefits the
search provider.
Not that benefits you, but benefits one of the biggest companies the
world has ever known.
From a group of 40 small and medium-sized businesses back in January:
Due to their gatekeeper status, dominant technology
companies can: use manipulative design tactics to steer
individuals away from rival services; restrict the ability of
competitors to interoperate on the platform; use non-public
data to benefit the companies' own services or products.
And I could go on.
So what do we have here? Google has 90 percent market share in search
engines. Apple controls 100 percent of app distribution for iPhones,
and Google controls the other app distribution, so they are what we
call a duopoly. Three out of every four social media users--and there
are 4 billion of them--are active Facebook users.
Amazon is expected to seize half of the entire e-commerce retail
market this year. That is what is happening.
What are we doing? Let me repeat: We have done nothing. We have done
nothing. We have had hearings; we have thrown popcorn at CEOs. But we
haven't passed one bill out of the U.S. Congress to do anything about
this competitive situation.
What do other countries do? Well, other countries are now leaving us
in the dust. They look to our leadership because America has always
been known as a country of entrepreneurs and a country that encourages
competition, but now look what is happening. Canada introduced
legislation in April to make the dominant digital platforms fairly
compensate news publishers for their content, following Australia's
lead, which took similar action about a year earlier. And Europe is
moving forward with its Digital Markets Act, DMA, a broad and sweeping
piece of legislation that will place many new obligations on digital
gatekeepers. The legislation puts rules of the road in place for how
the digital gatekeepers determine search rankings, set defaults,
process and use personal data, negotiate with business users on their
platforms, interoperate, and demonstrate the efficiency of their
digital advertising programs and the effectiveness of them. It also
required gatekeepers to notify the European Commission about intended
mergers and other deals that include the collection of data.
If that sounds more intense than the bill Senator Grassley and I have
put together, it is more intense. But the
[[Page S3500]]
point is that it has gone through the European Parliament.
In the European Union, we are seeing the effects of efforts to rein
in Big Tech. Just last week, Amazon made a settlement offer to the
European Commission in an attempt to resolve an antitrust case. The
European Commission investigations into Amazon's conduct were launched
in 2019 and 2020 and involved three key issues that implicate self-
preferencing conduct in the United States too. First, the Europeans
investigated whether Amazon used nonpublic data from sellers. Remember,
the sellers have no choice if they really want to sell their stuff.
They have to go on Amazon, right? So they have to give data to get on
that platform. What they found out was that Amazon was using the
nonpublic data from sellers to inform its own targets for new product
development.
That is what monopolies do.
The little sellers have no choice but to sell on the Amazon platform.
Then Amazon says: Oh, now we are going to see what products are good
and how they are doing because we uniquely have all the information,
and then we are going to copy that product, either directly, as they
did with a four-person luggage carrier firm where they literally ripped
off every detail of the product--based on reporting from the Wall
Street Journal we now know that--or they just know this product is
doing well so they do one just like it, and then they put it at the top
of the search engine. Amazon has sworn under oath in the U.S. Congress
that it does not do that.
Well, now let's look at what is happening in Europe. Amazon also
tightly controls who wins the coveted Buy Box, often awarding that
preferred placement to itself. Third, Amazon requires sellers who want
to be Prime to use Amazon's logistics services even if there could be a
better alternative.
We are not getting rid of Prime. We are just saying you have got to
open the door so there could be alternatives.
Amazon's settlement offer is filled with elements from my bill. That
is what is so interesting because around this place or if you watch the
TV ads, you would think the world was going to end. If we did a modicum
of things while investigations are going on--of course, we know that
there are various investigations in the Justice Department and around
the country at the FTC. We are just going to sit there and let this
continue until every appeal is made?
Here is what is so interesting. In Europe, under the offer that
Amazon just made in Europe, Amazon will stop using seller data to
decide what private label products to launch, make it easier for third
parties to win the Buy Box, and allow sellers to participate in the
Prime program without using ``fulfillment by Amazon'' services to
manage logistics like warehousing and shipping.
My bill with Senator Grassley and what was called the ``Ocean's 11 of
cosponsors'' because everyone has such different political beliefs, but
we come together in support of capitalism for this bill--this bill that
we have here, that is what it would do. It would require Amazon to do
the same things that I just mentioned that they put forward in their
settlement offer in Europe. Yet Amazon has claimed, in its multimillion
dollar ad campaign, that this will break Prime in the United States.
The hypocrisy is simply stunning.
Why should consumers in Europe and small businesses in Europe have
the benefit of the offer they are giving them, and we in the United
States--we, who host their company--try to simply put the same
requirements into law, and we are told: Oh, this is outrageous, when
they are offering the exact same thing in other countries.
The British have been working on these issues, too, particularly when
it comes to app stores. And I want to thank Senators Blumenthal and
Blackburn for their leadership in this area. The Competition and
Markets Authority in the United Kingdom just last month issued a final
report on the app store ecosystem, reaching the following conclusions.
This is in the United Kingdom, which is, of course, a government that
is different than the one we have here.
This is from the Brits:
Apple and Google have each captured such a large proportion
and volume of consumers in the UK that their ecosystems are,
for practical purposes, indispensable to online businesses.
I think that is pretty fair to say that is what is going on around
here.
Let me continue with the Brits.
Apple and Google act as gatekeepers to most UK consumers
with mobile devices, and as a result can set the rules of the
game for providers of online content and services.
The evidence demonstrates that in the areas where Apple and
Google generate the vast majority of their revenues from
their mobile ecosystems, there is room for greater and more
effective price competition. In the case of Apple's mobile
devices, both firms' app stores, and Google's search and
advertising services, the evidence strongly suggests the
prices charged are above a competitive rate. . . . Consumers
would get a better deal if Apple and Google faced more robust
competition, either from each other or from third parties.
The report continues:
Weak competition within and between Apple's and Google's
mobile ecosystems is harming consumers, and will do so to a
greater degree . . . absent [any] intervention. Most
importantly, we are concerned that consumers will miss out on
innovative new features or transformative new products and
services that are held back or discouraged by the power that
Apple and Google wield.
That is one report.
If we continue to fail to take action in this country, we will lose
our leadership position when it comes to antitrust on the global stage.
That actually is not that great of a thing because then we are letting
other countries determine what is going to happen to the future of
competition. That is a huge risk for our country. It is time to take
action just as Congress has done before when facing significant
evidence of market failures and massive consolidation.
So when Big Tech companies talk about this bill or really any serious
antitrust effort, they try to make it sound like we are pushing for
some kind of unprecedented action. And, as I just discussed, that is
not true because we know they are getting all kinds of pushback in
other countries and actually are making settlement offers that are
exactly akin to some of the things we have in the bill.
But it also isn't true in the history of our own country.
I think everyone--while people don't think they have something in
their background to do with monopolies or their dads or their moms or
their grandparents had nothing to do, everyone has got something about
competitive policy that affected their lives in the past or affected
their relatives. For me, I think of the James J. Hill House in St.
Paul. No, we never lived there. I will get to that in a minute.
Calling it a house is actually an understatement. The 36,000-square-
foot mansion has 22 fireplaces, 13 bathrooms, and a 100-foot-long
reception hall. It was constructed in 1890, which is the same year that
Congress actually finally did something about competition by passing
the Sherman Act.
The man who built this house, James J. Hill, was a railroad magnate
whose railroad ran from St. Paul to Seattle. He consolidated multiple
railroads across the country using a legal concept called a trust--that
is why we have antitrust--in which the stockholders of multiple
competitors transferred their shares to a single set of trustees. There
were all kinds of trusts, as I mentioned--rail trusts, oil trusts.
Standard Oil Trust controlled more than 90 percent of the country's
refining capacity. The Sugar Trust controlled 98 percent of refined
sugar. And we had trusts in everything from sewer pipes to thread.
When I was growing up, my mom would like to take me to see the
Christmas lights by that house and other estate houses, and I remember
at some of the houses, unlike this one, there were actually people in
it and kind of ducking down. She loved to show me those things on my
way from piano lessons in her red car. And she would remind me that in
order to build that house, Hill needed workers. Hill needed the
monopoly railroads that gave him the money to build this humongous
mansion, and he needed cheap labor to do the work.
That is where my family comes in. That is where the Klobuchars fit
in. My great-grandpa and my grandpa were both miners in the iron ore
mines in Northern Minnesota, and they did the work that supported the
monopolies. Over time, unions came in; wages got better; the mines got
safer. But in the end, that is how he built his house.
[[Page S3501]]
Our Nation, as I noted, has a very, very rich and difficult history
of dealing with monopolies. But every single time, whether it was the
East India tea company and throwing that tea into the harbor--yes, it
was about taxation without representation, but it was also about a
monopoly company. Every single time we have found a way to push back,
whether it was farmers in the Granger movement with their pitchforks
taking on the cost of rail, whether it was in Chicago, the Pullman
strikes, strikes by workers against monopolies in the beef industry.
Finally, in 1901, Republican President Teddy Roosevelt rode his
antimonopoly horse right into the White House. He finally did something
about it. He used the first passed antitrust law, the Sherman Act, and
was able to actually take on the trusts. And since then you have seen
this rejuvenation over time. Sometimes, there is a lull, and then
things get so bad--like what happened with AT&T--that between
Democratic and Republican administrations, people come in and do
something about it.
I know a little bit about this because my first job out of law school
was representing MCI at a law firm, and that is when they were fighting
to get into the monopoly market. Finally, when AT&T was broken up, what
happened? Long distance rates went way down, and we finally got a cell
phone industry because one company wasn't controlling everything
because they did not have at that time--after a while--they were cool
at first, and then they didn't have any kind of incentive to innovate.
Then they finally did.
That gets us to the present where we have been hanging out and
waiting and doing nothing for now decades and decades since the advent
of the internet. And it is time to act--hence, our legislation.
January 1, 1983, is considered the official birthday of the internet.
So it has been 40 years since then, and we still have not passed, as I
noted, competition legislation. That is why our group of Senators have
come together. And that includes Dick Durbin, Lindsey Graham, Richard
Blumenthal, John Kennedy, Cory Booker, Cynthia Lummis, Mazie Hirono,
Mark Warner, Josh Hawley, Steve Daines, Sheldon Whitehouse, and several
more who are supporting the bill and said enough is enough.
Our bill creates rules of the road for these platforms. That means,
first of all, that they can't abuse their gatekeeper power by favoring
their own products or services and disadvantaging rivals in ways that
harm competition. In other words, in the examples I have used, Amazon
will not be able to use small business's data in order to copy their
products and then compete against them. Apple won't be able to stifle
competition by blocking other companies' services from interoperating
with their platforms. And Google won't be able to bias their platform's
search results in favor of their own products and services without
merit. That is what our bill does.
Amazon should rank products based on price and quality, not based on
their own profit margins. The world's largest and most powerful
platforms shouldn't be allowed to copy a small business's private data.
I used the example of luggage carriers. There are many, many more.
Another challenge to cracking down on antitrust violations is how
difficult and time consuming it can be to try these cases in court.
Currently, the government has to spend millions on economic experts and
years in the courts, and even after all that, the likelihood of victory
because of very conservative Supreme Court cases in the last few
decades is small.
This bill streamlines things in this area. It doesn't break up the
companies. Some people would like to do that. That is not what this
bill does. It doesn't stop mergers. I think we should put in stronger
merger guidelines, but that is not what this bill does.
This bill simply gives us rules of the road for these companies to be
fair going forward, while we figure out the other things that need to
be figured out.
So support for this bill:
The Boston Globe, October 2021, said on their editorial page that
``[i]f the largest platforms can't be trusted to enforce even their own
anticompetitive policies, then Washington has little choice but to
act.'' They noted that the bill I have with Senator Grassley represents
``a chance for Congress to turn concern over Big Tech's sway into
action.''
The Seattle Times, March 2022, wrote that ``[a]s antitrust efforts
ramp up in Congress, Big Tech is fighting back, unleashing an army of
lobbyists, enlisting business groups to apply pressure and engaging in
fearmongering to avoid critical legislation.''
Let me tell you, a lot of our Senators have proved that
fearmongering.
Lawmakers must forge ahead and support legislation that
reins in the tech giants' worst impulses, ensures fair
competition and protects consumers and small businesses. But
no matter what the tech companies say, antitrust legislation
will not slay these giants or kill innovation . . . that is
not its goal. What it will do is limit Big Tech's ability to
run roughshod over competitors and consumers. Enough
Democrats and Republicans agree, but time is running out.
Congress needs to act.
The Washington Post editorial, in April of 2022, called our bill a
``sound'' bill and pressed for movement on the legislation, including
by writing as follows:
Antitrust . . . needs revisions that prevent dominant
companies from building barriers to a marketplace where those
consumers will have both choice and protection. Legislators
should view the bills before Congress as an opportunity to
achieve this aim at last.
The bill also has support from Agency experts who have enforced
antitrust laws and worked to protect competition in the U.S. markets.
The Department of Justice has endorsed the bill. I know this is after
the Department of Justice under the previous administration--under the
Trump administration, with Bill Barr as the Attorney General and Makan
Delrahim as the head of Antitrust--actually started the initial
lawsuit--the major, major lawsuit--against Google and after the FTC,
under the Trump administration, started the lawsuit against Facebook.
They filed major lawsuits that are being continued by this
administration.
The Department of Justice wrote this:
The Department views the rise of dominant platforms as
presenting a threat to open markets and competition, with
risks for consumers, businesses, innovation, resiliency,
global competitiveness, and our democracy. By controlling key
arteries of the nation's commerce and communications, such
platforms can exercise outsized market power in our modern
economy. Vesting the power to pick winners and losers across
markets in a small number of corporations contravenes the
foundations of our capitalist system, and given the
increasing importance of these markets, the power of such
platforms is likely to continue to grow unless checked. This
puts at risk the nation's economic progress and prosperity,
ultimately threatening the economic liberty that undergirds
our democracy.
The Department of Justice continued:
If enacted, we believe that this legislation has the
potential to have a positive effect on dynamism in digital
markets going forward. Our future global competitiveness
depends on innovators and entrepreneurs having the ability to
access markets free from dominant incumbents that impede
innovation, competition, resiliency, and widespread
prosperity.
And Commerce Secretary Raimondo testified before our Senate Commerce
Committee--I was there--saying:
I applaud your efforts and . . . clearly agree that we need
to improve competition, which increases innovation.
She said:
Last month, the DOJ released a views letter--
That is what I just read--
on behalf of the administration in support of the American
Innovation and Choice Online Act and the [Commerce]
Department and I . . . support . . . and concur with the aim
of [that] legislation.
It is not just officials currently in these roles who support this
bill. Roger Alford, who served as a Deputy Assistant Attorney General
in the Antitrust Division from 2017 to 2019, wrote to us, saying:
Bills such as S. 2992 provide hope that Congress will
restore competition to digital marketplaces.
And while people may have seen the disingenuous ads on TV against the
bill, I think it is worth reading portions of the letters that we have
received.
The Consumer Federation of America wrote:
To maintain a healthy economy, it turns out we need both
sensible regulation and antitrust enforcement. . . .
[[Page S3502]]
The American Innovation and Choice Online Act addresses the
key issues in a sector of the digital economy that has not
been addressed by competition policy and antitrust law. It
targets big data platforms, which can abuse their market
power as gatekeepers and vertically integrated firms, using
self-preferencing and data to block competition. . . .
Antitrust legal scholars wrote--and I will put all of this in the
Record. More than 60 small- and medium-sized businesses wrote, and
YELP, DuckDuckGo, Y Combinator, and other businesses wrote that S. 2992
will ``help restore competition in the digital marketplace.''
Small Business Rising wrote that the legislation ``is a critical part
of the solution to the harms caused by the outsized power of the tech
giants.''
As the president of Hobby Works, a Maryland hobby shop, said
recently, ``All that any small business asks for is a somewhat level
playing field and a somewhat fair environment in which to compete.''
I will end with this: Monopoly power, consumer choice, and reduced
innovation aren't topics that came up for the first time when we marked
up and passed this bill. I just read to you the thousands and thousands
of pieces of documents and testimony from the House for 18 months that
our colleagues Representative Cicilline and Representative Buck put
together. So don't tell me this is the first time, when that went on
for 18 months and when we have had hearing after hearing in the U.S.
Senate.
It is time to stop throwing the popcorn at the CEOs and actually do
something. We got this bill through the Judiciary Committee with a 16-
to-6 vote just 6 months ago. Now it is time to bring this bill to a
vote on the floor.
We have monopoly problems. You can still like the products. You can
like the companies if you want--OK--but at some point they have gotten
so big that you have to put some rules of the road in place to ensure
that we can have the next Google or that we can have another competitor
to Google or that we can have a true competitor to Amazon or that we
can find, finally, social media platforms that protect our privacy and
our data and our democracy. This isn't going to happen if you just let
four big platforms control the day. As long as they do, which looks
like it will be for the well foreseeable future, at least let's protect
capitalism by putting some rules of the road in place.
I yield the floor.
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