Transcripts For CSPAN2 The Communicators Is Big Tech Too Big 20240712

Apple were virtually on capitol hill for hearing on big tech and at the trust. Thats our discussion this week on the communicators. Joining us is cerebellar who is with the American Economic liberties project. Shes the executive director, and former congresswoman Barbara Comstock two is now a Senior Advisor at Baker Donelson. Sarah miller, the question i always ask quite a bit at the hearing was his big tech too big . What is your answer to that . Guest i think the obvious answer to that is absolutely. The members of the subcommittee, both democrats and republicans really focused in on the power of these corporations over the way that we communicate and the way that we engage in commerce. That was the dominant theme of this hearing, and he also got into the guts of how these businesses work, how they abuse their dominance, i think gauge and predatory behavior and just how they are hurting other businesses, small, medium sized businesses and everyday families. Families. It was really quite a remarkable hearing and just night and day from the hearings we saw just a couple of years ago when members of congress were grilling Mark Zuckerberg broglie didnt ask any kidnappings this get a percentage of the corporations work. Yesterday was a pretty remarkable moment in kind of the Ongoing Investigation into monopoly power in general but especially in regards to check platforms and Digital Markets. Host congresswoman comstock . Guest yesterday what we saw was a congress who, the gallup today has an 18 18 apl rating, was attacking four of the Great American Success Stories, and these are companies who have Approval Ratings in the 70s and 80s and have gotten us to this pandemic over these six months, five, six months, one of its connecting with work, we have a new company that truly come on during the pandemic, but also connecting us with our healthcare, telehealth has boomed over these platforms, and connecting our children with education which we now looks like it will go through the fall that will be the case. They had been helping Small Businesses. That is an area that wasnt discussed but all of these things demonstrate that these Tech Companies come from the world that works. When you think about over the past five or six months what his work in your life . Your smartphones have worked. Youve been able to google things or if if you use another platform you can look up information. Youve been able to connect with family and friends through calls like this pic youve been able to get your loved ones in connection with their doctors, this is the world that works were as congress with their 18 Approval Rating is that getting things done on covid, on the economy, and they need to be they are tone deaf and the chairman has been saying the American People dont really understand what tech is doing. The American People understand that pretty well because window try to get those unemployment checks it was the Tech Companies that had to go into a lot of the states and help them upgrade their technology so people would get their unemployment checks. Its the Tech Companies that are working with our healthcare providers. A lot of that its been, then that it will surely come toned and money. Are helping newspapers. They cut funds for that such think of a real contrast between the world that works which i was privileged to represent a lot of these companies, the ecosystem that they create witches all their Small Businesses. The next google, the next facebook or amazon, and i think theres a real contrast in that and you didnt hear a lot about the consumer welfare because the consumers like these companies. Host sarah miller . Guest i think one thing to note is that there are not going to be more facebooks, or amazons and more googles. Because are at the trust policy makers has allowed these handful of corporations to amass an enormous amount of power over the respective markets. To shut down competition and engage in self referencing and predatory behavior that is really tamped down on dynamism in the economy. These corporations rose to power because antitrust laws, and that policymakers focused on mckinney competition in markets when they were very small, and that focus shifted away. In fact, policymakers have encouraged this monopoly power and consolidation all across the economy. One thing that really came through in yesterdays hearing was that we hear a lot of rhetoric about standing up for Small Businesses from members of congress but yesterdays hearing actually put forward the voice of the Small Business people who are being preyed upon by these corporations, amazon, facebook, google, they have so much power as gatekeepers over our economy and over our commerce, and the really came through. Members of congress, members of that subcommittee lifted up the voices of Small Businesses whose livelihoods have been arbitrarily cut off by these corporations, or businesses whose Business Models and products have been relentlessly copied or acquired under anticompetitive reasons. That was really, really remarkable. These members understand how the copies were, i understand the predatory package and they really stood up for the first time in my kind of work in politics in a meaningful way for smaller businesses. And i think that congress is 18 of overwriting would go if we found more of it. Host when you talk about predatory practices, can you give an example . Guest sure. So amazon is a great example of this. Amazon owns a platform thats more than 2 million businesses used to reach customers, even more independent when so many businesses have to reach customers through online means. What amazon also does is sell their own products on that platform. They have the benefit of seeing all of the data that goes through their platform about other merchants businesses and their sales. What they have done with that data is use it to copy other businesses products and then preference their version above these other businesses. So this is a practice that weve heard anecdotally happen regularly. So thats one problem. The other problem is just that they have so much information about these corporations and they tied their own services together. So if you want to sell a product on amazon, what you see is you might have more ability to reach customers if you use the amazons of film and services. So this is something that is not legal and should be enforced against it but hasnt been, and it really extracts huge fees on Small Businesses. Yesterday the institute for selfreliance came out with the report showing amazon charges 30 future businesses that transact on its platform, up from just 18 a couple of years ago. That extraction and that rent seeking hurt Small Businesses. The tax on Small Business and one that members of congress yesterday spoke out against and held these corporations accountable for. Host Barbara Comstock, what is your response to what you avert . Guest i actually didnt come i dont think what a lot of that because a lot of the things are talking about were often anonymous and it wouldnt let the different Business Leaders respond, like when youre talking about your information is online, as somebody was trying to explain you can actually delete some of your things, delete your Search History and if you dont know how to do that you can go on to google, how do i delete my Search History, and you can find out. They didnt want to hear really the answers. I thought the hearing yesterday was much like the hearing the day before with attorney general barr where they had already made their decision. They were telling their stories or anecdotes and then they wouldnt really let the different Business Leaders try and describe that. I think they were trying to, i think the business, the ceos, explain the business that we run, let us try to explain it. It didnt quite fit in there 30 seconds but i have to strongly disagree with the concept that we are not going to see more about these companies. You see people largely on the left complaining about we do want to have these Big Companies. Well, china has a lot of these Big Companies and thats our competition here. When you look at the 20 Top Companies in this space, 11 11f them are american, nine attorneys. The european model, the chairman of this committee wants to follow, they dont have any big Tech Companies because they dont look at the consumer welfare. They are looking at all these other issues that the democrats were looking at. Republicans were attacking for more on the bias issue in the antitrust issue. The antitrust issue at stake here is consumers, if ever a overwhelming market, ironically those who with her know we talked about they all compete with each other. With of the Big Companies like microsoft. When you look at browsers, Internet Explorer was the top 110 years ago and now chrome is. That came through competition one, ten jessica. Who was the original search engine. Remember yahoo . It was 1998 companies that said how they won the search wars. They are the new aol and nobody can compete with them. And then this is a 2007 cover of Forbes Magazine where they said nokia. Who is ever going catch nokia . In 2007 the iphones came out. Then American Companies to compete. I think ten years from now youre going to see a lot of Different Things going on in this space, and these particular leaders understand you have to innovate or you die. Keeping up with the competition just an example that we are on the zoo. Whom came out of nowhere and was a winter because the responded to consumers. I dont need members of congress who dont i worked with the Tech Community a lot but i would not pretend to be an expert on technology in any way and certainly these members of congress have never run a business, try to start a company. There are stories, you can read books, yahoo , search and how they lost their dominance. Lets let the free market work this out. That has always been the republican position. I certainly was happy to see represented sensenbrenner who is worked on this a long time talk about we dont need new antitrust laws. We can look at particular examples, see if they have any violations but we dont need the kind of new laws that chairman sicily is like but were we go in and break up our most Successful Companies that are investing like 20, billions and billions of dollars. Some these companies are investing 3 billion in r d so we can compete. Entropy with temperatures are biggest competition right out in the tech space. The eu lost in the tech space a long time ago, yet we have people like chairman sicily any kind advocate for eu [inaudible] the Great American Success Stories anymore. I have a theory to that. One is corporations exert extreme market dominance. Amazon is 75 in ecommerce. Facebook and google controlled Digital Advertising markets. They have monopoly. Thats a of the ticket when an apple controls the app app stoe which the millions of developers which consumers. So theres a whole range of issues both related to market power and the predatory behavior that that market power enables these companies to participate in. It was remarkable to me that you acidulated Mark Zuckerberg and jeff bezos admitting to acquiring competitors to shut down competition. Rather than investing in the innovation that Barbara Comstock was talking about. That is been their strategy from the beginning, to buy it competitors, to squash competition and to maintain dominance through through a stf monopolizing markets and through leveraging Network Effects. On another point the china talking point is really quite tiresome. Its a good scare tactic but our economy has not been successful because we have a handful of goliaths that dont really innovate, that maintain a dominant position. China has infinite state capital to support these large institutions, but our strength as an economy has always been because of our dynamism and because of the innovation that real competition creates. So this is really a myth that we should look towards and not fear of authoritarian communist regimes about our economy after, and it is a really dangerous one. Facebook, amazon, google, they are all squashing innovation and crushing competition, and at the same time hurting businesses all across the country and really putting people out of business. I think some of these talking points about china, its really a scare tactic, quite honestly, and its not rooted in what has historically made our economy so strong, which is our ability for somebody with a good idea to compete on the merits and drawn that way. That is not have these corporations are growing now. In the very beginning, yes, they were innovative, no question about it and to deliver important services. But they could do that in an environment that is competitive. Essentially the failure of antitrust enforcers and the policymakers to understand that these corporations were achieving dominance and to buy into the talking points about being innovators really has been a huge problem for the last 12 years or so. So i think her point about 2007, early 2000s needs to be updated. We weve not seen the type of innovation in years and that is because you cannot compete anymore in in a realistic way against facebook and google. They can crush you, they can off your belly to reach customers, amazon is the same. Guest i want to make clear that my point on china is china has very different model and im not advocating for that at all. Im advocating for us to continue the light touch regulation, not the heavy government knows best, the chairman telling us he knows how to run a tech Company Wants to go in and decide what peace it should be together or not. I think when you let the recently succeeded for years in the tech space and has bipartisan support for this was because we have these Tech Companies who are thriving on these are American Companies, american Success Stories. Yahoo passed up the opportunity to buy google, and some of these comp is say hey, im not going to get bought and they go on to be huge successes. Certainly if you listen to the ceos yesterday, when jeff bezos left his job and started out, the dot com double hit in the late 90s, he wasnt even profitable than by the state added. These are american Success Stories that are working. Here are on zoom, another american Success Story can but we want to have American Free market principles. What im saying is we dont want to adopt the european model. The chinese model is off the table, but china is competition. When you look in areas like artificial intelligence, quantum computing, our major Tech Companies are making major investments. Weve been helping nih and our Healthcare Community insurer, help us live, cure for diseases. Google helps are small pieces. Certainly if you want to start at the business, you grow with google over or with amazon ande their tools. You can didnt go off and start your own company. Probably the next google or the next facebook will come from the talent pool at these companies support. I think the most important thing that the u. S. Government should invest in and these companies certainly do is the talent, pipeline, and human capital. All of these companies are companies that have invested in people and invested in education and creating the pipeline of talent and they are so important to that, and certainly the u. S. Government, one of the things i worked him when i was in congress was more money for the tech Talent Pipeline because those are the jobs of the future, the jobs will make the United States able to what would be a challenging environment with china and the threats we face with them, not by adopting china tactics but by adopting the Great American Success Stories that have allowed our Tech Community to be number one in the world. And i want people talk about breaking it up, what is going to come after that . We dont know. You and i havent run Tech Companies. I want the people who know how to do this to go out and do this and let thousands of flowers bloom and allow the ecosystem, the ecosystem for great talent, for great immunity and technology is to have that Talent Pipeline and have companies that can innovate, make mistakes. All the companies you have for the come they made mistakes. They had failures as well as successes. Thats the story of technology, and when i worked in, a member of the virginia community, they have all these small its mostly Small Businesses, and its the ecosystem you want to create, not your taxes and, not to regulation system. Your regulations will make it harder, or regulation will make it harder for the next started to get further. Like steve case for going around talking about the rise of the rest. Thats great that ecosystem. We can do this without attacking these successful story companies. Host congresswoman, what about center is point that these large Tech Companies seras point that these large dick countries are prohibiting small optimism entering the market . Guest i dont see the butt is our companies and the come forward and there as a system undercurrent antitrust law when they can look at it and its a consumer standard and sing at their dominant in the market and the guidelines i think usually indicate they control twothirds of the market. When you look at things like search and advertising, theres different ways of calculating it. Walmart is a big competitor in online selling now as well as in person selling. In fact, they are both different competitive aspects. In the Search Market if youre looking for a book him and i go to google or facebook. You may be going to amazon first because you know they are a book cellar so depends on which looking for. These are all very competitive right now but they also still allow for starters to come in and get started having problems lets talk to them along the lines of steve case and other entrepreneurs are doing trying to get more investment for women Tech Companies. Im a big advocate of that. I have a young Womens Leadership Program at George Mason University and were trying to promote more women tech come funding women in tech, bending minority canaries that dont have that opportunity, get that in the pipeline. And what we do to help startups get money and start up funds . What would be more helpful for them to get into that ecosystem in advance . And oftentimes we find business going to the next level, the midlevel, thats where it stops and theres a lot of issues that you can look at without breaking up the big Tech Companies. Because we want to have not just four, windows company. I like to see 40. I want to see america lead to the will because thats much safer than having china lead with their bad policies way to do these things. Host sarah miller, what is the American Economic liberties project . Guest we are an organization that receives one of our biggest social economic challenges all across the american economy. Thats an extraordinarily pronounced in the tech sector but it serves across many sectors of economy, large and small. What weve seen is over the last 40 years in particular enforcers embrace this consumer welfare standard which doesnt really prioritize looking at actual competition in markets. It prioritizes projections around price only. We have seen that theoretical approach to antitrust which has not been the way at the trust was in force for much of our countrys history. Proven to be a failure. Its been a promonopoly approach. A lot of the predictions have proven to be not true. In fact, a study they came earlier this year found the average family pays 5000 more because of the concentration in the economy compared to when we had a much more dynamic economy in 1980. We essentially have an economy that is structured to be very concentrated and we have i would say private regulators, private taxation because of the power of these large behemoths. Small businesses in a survey recently found that 70 of them responded that the biggest concern was actually amazon, not taxes, not regulation. What we are actually saying is private institutions, private corporations who are not democratically accountable, step in as regulars, step into tax model businesses, stepped in to structure markets so they benefit themselves and enhance their own power at the expense of everyone else with which they have an economic relationship. So this idea that were helping consumers is not true. In fact, another study found after mergers in conservator markets, prices go up by 7 in those markets. Another study found that markups have increased by 300 since 1980. 1980. So this whole idea that in general prices go down when corporations get bigger, its just not, its kind of nonsense. Its that really taken seriously anymore even though we still have a lot of folks who give that service. The facts to show that it is not true. Guest one example, advertising costs, Small Business, advertising costs have come down 40 . You would have to spend 100 in print company, what you get for 60 with online ads that are much more targeted and effective. Thats why you see the government uses dod to recruit military, in the navy, recruit in the military. They can target it to the young women and men who are the appropriate pages. Much more effective than the Big Ad Campaign a tv. But a Small Business particularly does save money. Social media am much more Cost Effective than having to put ads on broadcast tv or might be a hostile newspaper locally. So i think you definitely see a lot of costs coming down. Certainly for everyone who has a phone, we now have the power in our phone, and it costs less than when we had phones back in the 1980s. I remember when i was in college my phone bill was higher than my smart phone bill is now. But i didnt have a computer. I didnt have unlimited calling. When i would call my thin boyfriend now husband i wouldve loved to spend hours on the phone but had to pay by the minute. There was in competition. Then when the cell phones came in he think all the they do. Who thought will be watching tv, during all the things we do on our smartphones . The costs have gone down over time while getting as more usage, and thats why these companies are so popular. So to have the elites come in, under the wall street journal had an excellent editorial today saying everybody hates big tech, except all these people who use it. Yesterday, a democrat with st. Kitts to become well to break you. Republicans say, youre mean to us, we dont like what you say we dont like your employees, yet the American People by 7080 or more are saying do not take away our smartphones. Let us have these tools. This is working. This is a world that works. Create a better ecosystem for people to start businesses and to advance to the midstage and but do not attack american Success Stories. Host Barbara Comstock served in congress on 20152019, currently a Senior Advisor at Baker Donelson among other things. Which Tech Companies are you working with . Guest i work with that choice to represent a number of Tech Companies. I had legislation in the statehouse to support data centers which provide all the ecosystem so we can all be online all the time that we are now, and that his work spectacularly to this entire pandemic. And then also do work with the google. I i was an advocate when i was n congress of these Tech Companies both small and large because i saw have improved our daily lives, particularly when congress focus on healthcare. I had a hearing on how we can use apps and technology to be able to map our diseases. Kids now have diabetes can get tools to track on their smartphone, what their blood sugar is like, and the parents can monitor it does the same time so they can be in school into things. What modern technology has done in the healthcare field is now advanced in telehealth over these past few months by removing a lot of the regulations that existed before. I dont think well go back to the vacation because we have had years of advanced in just a few months because we removed some of the things that were holding it back. I think weve got to go to those entrepreneurs, find out what other tools we can give them to advance and help them start that next successful tech company, but its not breaking up the american Success Stories. They had to challenge the google and the aol. Remember, my space was before facebook. Its still out there. People just dont use it. There are other browsers, you can use bing and duck duck go. You dont know what it will be ten years from now but we have a very competitive tech ecosystem. I think we need to let it thrive and grow and continue to solve the problems that weve seen them address, and they have put their money in in the research, in helping disadvantaged communities and helping our education community. And nobody has been better about this pandemic and our Tech Companies which is why when congress at about 18 , 89 of americans that said thank you, its helped highlight of this type of technology available. Host so sarah miller, what in your view would be a solution to the problems you have described . Guest i think one thing i would note is a truly hardtofind defenders of the tech copies or were not on ther payroll. I was on a radio show not that long ago with an academic lecture ended up agreeing with me that facebook never shouldve been allowed to buy instagram. I think its really Common Knowledge that these Digital Markets are extraordinarily consolidated, and because of the Network Effects and the gatekeeping power that is not going to change if policymakers do not act. I would encourage the congresswoman to really dive into the investigation of the antitrust subcommittee is undertaking because it has elevated time and time again the voices of entrepreneurs, Small Businesses and mediumsize businesses who are being abused by these corporations and are preventing the next wave of innovation and technology from taking place. Thats one thing thats been really remarkable about the investigation is its understanding of how these markets operate in a very sophisticated way. There are two ways to think about this position, and all of these corporations are different. They operate in different ways. They have different problems. They are not active Tobacco Companies where they are generally very similar. They all require a unique solution. At a basic level their power needs to be dealt with and the power needs to be dealt with both because its crushing competition and also because it is fundamentally a threat to democracy as the chairman noted in his statement yesterday. To have these huge cms that have great economic and political power that can blanket washington lobbyist, i can find institutions like George Mason University that can really exert their influence than direct indirect ways is extremely dangerous, and that for all of the people and all of the businesses that dont have those sorts of resources at their disposal. So i would say from a solution standpoint, structural reform, structural separation. You know, axing the mistakes that the enforcers in the past have made under this kind of very narrow consumer focused framework is critically important, and i was really heartened to see so much focus on power and Market Structure in the hearing. The other things that have to happen, and its different for different corporations, are clear rules of the road and regulations and enforcing laws that, in fact, already on the books that have not been enforced in a very long time that protect other businesses and consumers in many cases from predatory behavior. So things like predatory pricing, which amazon engages in regularly with really no accountability. Things like copying competitors. Amazon, google, facebook, apple, things like discriminating between different sellers or different entities with which you of an economic relationship. Apple gets amazon and what else has to pay top dollar. These are all types of predatory activities that in the past we have enforced against to protect economic dynamism and help people move from having a good idea to being able to grow to be large and escape. There is not a problem with business. There is a problem with monopoly power and that is what we are seeing in Digital Markets today without question, thats also what we actually route a range of industry and economy whether youre looking at meatpacking in agriculture or hospitals or media. This is a systemic challenge. Thats what our organization focuses on, but the tip of the spirit is been digital and yesterdays hearing was really a watershed moment in congress coming together, both democrats and a number of republicans, to really ask some very serious and important questions about the napoli power of these institutions. Host we are already over or a lot of time but i have a final question for each of you. Sarah miller, we will begin with you. Tim cook, Mark Zuckerberg and jeff bezos for the first time on the hill for mr. Basis. What did you hear from one of those four ceos that really kocher here in a positive or negative way . Guest one thing that really struck me and it was very early, again one of the first questions was Mark Zuckerberg essentially admitting they purchased instagram in order to prevent a competitor from rising up that could threaten their dominance. He admitted that it email that the subcommittee had in files and also admitted that any hearing yesterday. Jeff bezos made a similar much waste of a purchase of the corporations to achieve market position. So these are mergers essentially that should not an approved in the first place. We need to make sure we can force against them in the future and i think congress will be taken very serious look at. Host congresswoman comstock, your former colleague jim jordan called up the Tech Companies for having an anticonservative bias. Do you agree with that . Guest no, i dont come in terms of what, i think you also have, you have some businesses or socialist groups that have complained that the adventist come against, too. You hear complaints from both sides but i find these tools are effective. But what i heard from those leaders of those businesses was the american Success Story, and all the things theyre doing to help our current economy thrive and grow, had to make america the most competitive tech ecosystem in the world. And i believe those tools are in place now and can be, and antitrust law is included there. But what i i didnt hear the democrats anything about was how it is harming consumer welfare, that is the standard. You can call the company a monopoly when they have three or four competitors. They are saying their monopoly. Youre not a monopoly in search when youre sitting there, google, amazon, facebook, all these companies are search companies. Thats not a monopoly. So you notice they never put the numbers out there, or they create numbers that they dont have, but you can go through each of those spaces and see that there are competitors, whether it is phones or apps or search or ads, and they all have competitors and dont reach that sort of twothirds or more threshold, and they certainly are not monopolies. I dont think you understand what the word monopoly means when they can call any of these companies who are in a very, very competitive market, which i think they demonstrated by talking about how to compete with each other as well as with smaller companies. Everybody is competing with zoom now on stream. Thats a good thing. The streaming market, netflix, disney, hulu, that has thrived during the pandemic and i dont think that will change. People dont just get one, they go to morph and its all the ecosystem that nobody really thought would have more than one or two competitors before now. Host former congresswoman Barbara Comstock, sarah miller, sector director of the American Economic liberties project. Thank you both for being on the communicators. Guest thank you. Cspan has unfiltered coverage of congress, the white house, the Supreme Court and Public Policy events. You watch all of cspans Public Affairs programming on television, online, or listen on our free radio app and be part of the National Conversation the cspans daily washington journal programs or to our social media feeds. Cspan, created by americas cabletelevision companies as a Public Service and brought to you today by your television provider. Weeknights this month were featuring booktv programs as a preview of what is available every weekend on cspan2. Enjoyed booktv on cspan2. The perjury case against President Trumps former advisor Michael Flynn will be heard in the d. C. Circuit on tuesday. The panel a thin judge will decide whether a federal judge the court judge must dismiss the charges against Michael Flynn as recommended by the justice department. Hear the case live tuesday at 9 30 a. M. Eastern on cspan and cspan. Org or listen live with the free cspan radio app. Former education secretary arne duncan and other education officials testified on the safety of reopening schools during the pandemic. They took questions from members of the house select subcommittee on the coronavirus crisis. The hearing will come to order. Without objection the chair is authorized to declare a recess of the committee at any time. I now recognize myself for an opening statement. In july 11, President Trump tweeted, and i quote, the dems think it would be bad for them politically if u. S. Schools open before the november election,