Congress Grills Big Tech Companies     07/17 06:08

   (AP) -- Big Tech faced tough questions Tuesday as federal lawmakers focused 
on issues of potentially anticompetitive behavior by technology giants and 
expressed bipartisan skepticism over Facebook's plan for a new digital currency.

   Companies such as Apple, Google, Facebook and Amazon have long enjoyed 
nearly unbridled growth and a mythic stature as once-scrappy startups --- born 
in garages and a dorm room and a road trip across the United States --- that 
grew up to dominate their rivals. But as they've grown more powerful, critics 
have also grown louder, questioning whether the companies stifle competition 
and innovation, and if their influence poses a danger to society.

   Both Democrats and Republicans had grievances to air, even if there wasn't 
much consensus on what to do about them.

   An afternoon panel of the House Judiciary Committee focused on whether it's 
time for Congress to rein in these companies, which are among the largest on 
Earth by several measures. Central to that case is whether their business 
practices run afoul of century-old laws originally designed to combat railroad 
and oil monopolies.

   For some legislators, mostly Democrats, those laws are in need of updates or 
at least more stringent enforcement. Ultimately such action could lead to 
breaking up big online platforms, blocking future acquisitions or imposing 
other limits on their actions.

   Subcommittee chairman David Cicilline, a Rhode Island Democrat, charged that 
technology giants had enjoyed "de facto immunity" thanks to current antitrust 
doctrine, which typically equates anticompetitive behavior with higher prices 
for consumers. That allowed them to expand without restraint and to gobble up 
potential competitors, he argued, creating a "startup kill zone" that prevents 
smaller companies from challenging incumbents with innovative services and 
technology.

   A panel of four mid-level executives from the companies countered that their 
firms continue to innovate, that they face vigorous competition on all fronts 
--- including from one another --- and, perhaps most of all, that they were not 
monopolists in any way, shape or form.

   Facebook, for instance, has argued that it is not a monopoly because it has 
many competitors in businesses as diverse as private messaging, photo sharing 
and online advertising.

   So Democratic Rep. Joe Neguse of Colorado asked Facebook's head of global 
policy development, Matt Perault, to name the world's largest social network by 
active users. (It is Facebook.) When Perault said he couldn't, Neguse ticked 
off four of the six largest --- Facebook, Facebook Messenger, Instagram and 
WhatsApp --- and had Perault verify that all are owned by Facebook.

   "We have a word for that and that word is monopoly, or at least monopoly 
power," Neguse said.

   The company representatives didn't help their case by pleading ignorance on 
multiple occasions. Google's director of economic policy, Adam Cohen, said he 
was "not familiar" with how much Google pays Apple for the right to supply the 
default search engine for Safari on iPhones. (Rep. Jamie Raskin, a Democrat 
from Maryland, said It was $9 billion in 2018 and $12 billion in 2019.) Cohen 
also said he was "not familiar" with allegations of widespread fraudulent 
listings on Google Maps.

   Amazon also faced some pointed questioning. Cicilline asked Nate Sutton, an 
associate general counsel at the online retailer, whether it uses the data it 
collects about popular products to direct consumers to Amazon's own in-house 
products.

   Sutton said the company doesn't use third-party sellers' data to "directly 
compete" with them. Cicilline, affecting disbelief, twice reminded Sutton that 
he was under oath. "Amazon is a trillion-dollar company that runs an online 
platform with real-time data," he said.

   Expert witnesses suggested it might be time to reassess antitrust policy. 
Timothy Wu, a law professor at Columbia University who has advocated for more 
expansive antitrust enforcement, noted concerns about a fall in the number of 
startups being formed, and wondered aloud whether the U.S. will remain a place 
where startups thrive and launch new industries.

   Fiona Scott Morton, a Yale economics professor, argued that stifled 
competition has hampered innovation and hurt both smaller businesses and 
consumers, who have no choice but to surrender their privacy and watch more 
advertising.

   Others, mostly Republicans, rejected what they described as a big-is-bad 
approach in favor of keeping antitrust enforcers narrowly focused on protecting 
consumers when there's clear evidence of harm such as price gouging.

   Attorney Maureen Ohlhausen, a former Republican commissioner and acting 
chairwoman of the Federal Trade Commission, said the government can still 
protect against anticompetitive behavior without "reducing the focus on 
consumer welfare." She warned against "drastic" steps such as breakups that 
carry "serious risk of doing more harm than good for competition and consumers."

   Earlier in the day, a Facebook executive appeared before a Senate panel to 
defend the company's ambitious plan to create a digital currency and pledged to 
work with regulators to achieve a system that protects the privacy of users' 
data. David Marcus, who leads the Libra project, faced sharp criticism from 
both Democrats and Republicans.

   "Facebook is dangerous," asserted Sen. Sherrod Brown of Ohio, the 
committee's senior Democrat. Like a toddler playing with matches, "Facebook has 
burned down the house over and over," he told Marcus. "Do you really think 
people should trust you with their bank accounts and their money?"

   Republican Sen. Martha McSally of Arizona said "the core issue here is 
trust." Users won't be able to opt out of providing their personal data when 
joining the new digital wallet for Libra, McSally said.


(KA)