Welcome back ourwitnesses and i now recognize the gentle lady from washington. Thank you mister chairman and thank you all for your very informative testimony. You all touched on this but a common refrain we hear from companies is during the course of this committees investigation but also just on my own i have many of them in my district is that they cant possibly be violating antitrust laws and the primary argument is that its because many other products either cheap or free and therefore consumers are inherently benefiting. You all have indifferent ways talk about this. To me the big question of course is is free really free . Consumers i think its increasingly clear are paying for the products that they use read theyre paying in data, theyre paying in privacy and often dont know theyre giving up and of course the Big Tech Companies use that data to build these massive empires of information about consumers then give them spectacular advantage over newcomer businesses, allow these companies to scrutinize every aspect of peoples lives, create and sell the products that have the best chance of being successful in the marketplace. Its almost a bulletproof advantage. Doctor valletti, youve mentioned the history of acquisitions. Facebook had made 67 unchallenged acquisitions, amazon and may 97 and google had made 214, mostly unchallenged acquisitions and you presided over the ecs, eu investigation of google, amazon and facebook. What kinds of access to these companies have to information about consumers as a result of those acquisitions and you talked about the thresholds being one of the potential problems for why investigations arent opened. Do the thresholds of investigation need to change if we are to challenge him of these acquisitions . Thank you very much forthe question congresswoman. Do the thresholds have to change . Im very pragmatic, to the extent people have the powers looking for acquisitions is fine by me,whatever is the method. Im even in favor in fact of changing the structure of presumption when it comes to strategic platforms. With such a humongous market power, i would wonder whether instead of asking the authorities to prove that its anticompetitive and then they could rebut efficiency to change it and say you guys are not going to merge with anybody unless you prove to us that its going to create efficiency so i would change the burden of proof. In terms of reunifications, i cannot disclose information about any case but my understanding of those cases is that some of the claims here a lot of time competition is one click away, theres always been available. I didnt see that in the data at all. I didnt see anybody on search results on page 2, i saw everybody relation so i saw a lot of stickiness, the fact that some of us may have choices that represent the averageconsumer data , its ironic that if somebody comes from academia, the ivory tower has to tell these companies theres a difference between theory and practice. In theory they can do that but in practice consumers never act on those choices, they just defaults. Commissioner furman, several of the dominant platforms serve as critical gatekeepers while also competing with the businesses that are dependent on those platforms and amazon for example runs a thirdparty marketplace but it has its own private label goods and both in committee andwhen i met with them recently , they really testified that this dual structure doesnt pose any conflicts of interest and say that its common for retailers offer private label products alongside thirdparty products. What do you say that and whats your response . We hear these analogies of comparing it to Grocery Store cereals and the white label serial and it doesnt work. I am so worried i hear from investors and venture capitalists who say im not even going to fund a business that needs to distribute through these platforms because guess what . As soon as it takes off it will be copied and all the business will be steered elsewhere and that worries me for all of those small firms who want to enter. We need to look deeply, and thats why mentioned section 660 of the ftc act to scrutinize big picture of course individual companies, we will look iftheres anticompetitive conduct. We have to go after it and fix it but writ large across these markets we all need to understand how this works so we can figure out how to maintain our economy that is why brent and thriving. Related to that, my time is expired but what are the tools of the fcc is not using that youcould be using . There are so many Things Congress has equipped us with and one of the pieces that i hope that we will use much more aggressively and thoughtfully is competition rulemaking. It doesnt need to put any burden on any company that can clarify the law about whats legal and whats not so that we dont have to spend millions of dollars on paid economist and litigators that slow down divisions and ultimately may harm a lot of people in the process and we need toresuscitate the use of that tool. Thank you very much, i yield back. I now recognize Mister Armstrong for five minutes. Thank you, i appreciate it. Miss layton, i just want to talk about data portability and you say that its overrated can you just explain that a little bit . I think we have the premise of number portability , we know from the Telecom World when youre going to go from one mobile character carrier to another you want to take your phone number but i think when you look at the internet world where you have multiple kinds of platforms, if you have social network data, that doesnt facebook, it doesnt necessarily met to amazon though the data is not really valuable to another platform. The bigger thing i think is something thats come up in this hearing. I think were overrating the value of data overall because as a person who worked in the Analytics Industry i had interfaced with 2000 companies and after time, the data the grades and if you are an innovator its less interesting for you to get a platforms data. If youre going to innovate you want to do something new and different. So data portability is the answer to cure all ills is underrated area ive seen this in some of the economist studies in gdp are as well as that users dont also value dataportability. And i said that to, the basic framework is you should have control over your own data but as ive been here ive learned way more about this than before i became a member of congress is part of the reason and its fairly complicated is as to what is there and i think thats part of the reason. You say consumers dont really necessarily see this as a benefit, is it because they dont understand what it is or because. There are switching costs and i think thats a fair point that other panelists have raised but i guess what id say is the value to having, if we think we should have five major Search Engines and this is somehow that makes it competitive, what makes competition in thisindustry new technology . Is doing Something Better and different more efficiently so where i think we should focus on is that the innovators look at the other parts of the economy where the opportunities are. There are green fields, in fact area that the way it is todaywill be the way it is forever. When we talk about data portability, where talking about moving. In other areas theres an entire market niche whether its bills of lading, free on board, those types of issues so when youre dealing with this data portability, as anybody looked at the liability shift as we move from one person to the other . If theres a bridge which, part of the Privacy Concern is breach of data and it usually ends up with a Credit Card Company or a bank but if its portable, more than one person is handling that data as it moves from whether its microsoft, amazon, facebook to somebody else. That is a fair point. And my question is along with that portability portion is the cost of compliance not for Large Companies who quite frankly weve seen this and i want to ask you a question about a dodd frankand allergy. Larger companies arent necessarily scared of regulation read what they want is regulatory certainty. All are companies that employ four or five people when youre dealing with data portability have a compliance cost associated with that while were trying to regulate this, we have to be concerned that we dont regulate , we dont have the inverse effect where the cost of regulation makes it prohibitive. With your experience with the gdpr and the california solution now, let me clarify first that it is very new so having empirical evidence is a long shot but its just been happening for a short period. Gdpr has been introduced because its a fundamental principle of privacy that individuals want to ensure so anytime we do a costbenefit analysis you want to see the impact on firms but also the benefit that we get if whatever privacy revelation is enforced. The second point is that im skeptical when i hear some of these numbers which are typically coming from institutions which are funded by google, facebook. They european evidence is that google and facebook lost on the advertising side after the introduction of gdp are so it is a cost of compliance about whether its only the low firms , the finality that you hear is from the big guys, not thesmall guys. Im going to ask mister chopra, we dont have big banks and we dont have the exception of national companies, big business. We are a Small Business state. The single biggest thing ive heard and this has been long before the 11 years since dodd frank was introduced, in our rush to regulate, banks caught up in it so there are, are there any lessons we can learn from how we did dodd frank so that we dont sweep up the little guys in regulation . If you have 37 compliance officers on the fifth floor and you go to 40, if you have two employees and you have to go to five you may no longer have a local bank. One thing i would urge you to think about is complicated rules, they actually benefit those who have a lot of lawyers and lobbyists to get around it and lobby for exemptions. In my testimony i talked about the importance of bright line rules and even bands because when i have the same conversations with community bankers, they will say if im banned from doing fine because thats really easy to understand. But if its so complicated, guess what . The largest bank in the world , they find their way in and get their exemptions. They win and the small guys lose andthats not a system or a country i want to live in. I dont know if theres time for me to add because we are at negative time. Congressman, i think you make an important point and i think youre absolutely right about worrying about the Small Businesses. Sometimes in regulation its tricky because there is a tradeoff. Something that might be harmful for any size business to do, you make the rule and its easier for the large one to comply than the small one and you end up entrenching the incumbents. In this area of competition you can make sure that doesnt happen because if youre talking about rules, code of conduct as i proposed Digital Markets unit to do, you cant keep people off your platforms, you can let them on other platforms. You cant prioritize your own product, those rules would only apply to companies that i would just designate as having strategic market status, only apply to the Largest Companies area if youre a Small Company and you want to prioritize your own products, you want to keep people off your platform or make rules, you can do any of that. Theyre only worried about if you have some bottleneck power of using it. I have a unanimous consent just to put Ranking Member collins statement into the record. I now recognize the distinguished gentle lady from the state of florida. Thank you much distinguished gentleman from colorado. I want to thank you mister chairman and thanks to all of you for being with us today. Thanksfor your patience as we want to cast our vote. I want to start with mister chopra. Several of your statements, youve argued that the core problem leads to dominant platforms, at least dominant platforms who engage in serial privacy violations is their Business Model. Which relies on the monitor use of data and incentives facebook and google to engage in constant surveillance. What problems do you see with the behavioral advertisements , Business Model. I think were seeing more and moreevidence that behavioral advertising again, that is advertising to a demographic of one. Exposes us to a whole lot of risks including manipulation and shenanigans in our democracy. It is very, very profitable though. Facebook earned 55 billion in revenue. Google, even more. Advertising business is big and im concerned that that behavioral advertising model is inconsistent with how we have thought about immunity online. Right now we give rod immunity under section 230 of the communications decency. Id support that immunity that i dont know if its consistent with this behavioral ad model and surveillance. What you see as the solution. What role can, how can Congress Play a greater role in dealing with this problem. Part of it obviously is through Better Privacy protection. Ill speak about how i looked at the Facebook Order violations. Repeated an early violations of that order. Settlement not only completely let executives off the hook, and they paid a small fine and their stock went up, theres no substantive limitations on their use or sharing of data and for repeat offenders, there needs to be some bands on this type of behavior because if theyre going to break the law have to look at the economic incentive that is driving it. I think you said earlier that when you have billions and billions of dollars , 5 million in a settlement, its like not much incentive to change your behavior. Thats right. When these big fines are not big penalties for Big Companies and i worry its not a penalty, its an incentive. Also want to urge congress to think about how do we beat up individual liability and ftcs facebook settlement, we did not depose Mister Zuckerberg or mister sanford but guess what, they got full immunityin the settlement and if the Court Approves that , what kind of standard are we setting and i just think thats fundamentally wrong. Doctor, i want to ask you about that but some have argued that heightened concern about digital monopolies is misguided given that Companies Like ibm, yahoo, myspace and blackberry were all once viewed as dominant, but ultimately were taken over by new firms and i know we talked a little bit without naming the specific companies early but could you do, do you agree with that you or what your feelings about . It we believe in economic competition . Sure as a principal but i see theeconomic evidence, when it comes to some , keep in mind social networks, other mind perhaps silicon marketplaces, nominative going on to have awarded . In the long run were alldead but i think we will fix some problems before we are dead. Before that. But in light of your, im going to move on to doctor furman. In your view how readily available is quality data to new entrants . If an entrepreneur wants to launch a new Search Engine for example what challenges can he or she expect to face in light of googles existing dominance and i know we have kind of talk about this space, protecting privacy and competition but i just want to make sure its clear , not just the people in congress but to the listening public as well, whose directly being impacted by the decisions made. Google has a very good algorithm. Google also has a huge amount of data about how consumers search to train the algorithm. A bright kid in a garage could come up with a good algorithm that they wouldnt have anything like that type of data in order to make it work nearly as well as google works today. Thank you and mister chair, id also like to hear from miss layton. Any response to either of the questions that i asked that you would just like to respond to. Vacuum, i appreciate the opportunity area i would agree with doctor furman that when we look at artificial intelligence, thisis a greenfield. Youre correct that the scientists sitting in the garage or on the lab could come up with a lifechanging or transformative algorithm. I am, in contrast to the other panelists i dont believe the data is a bottleneck because of having people working in the industry, the data you collect the grades over time if youre an innovator you will look for the spaces where there are opportunities. Its less interesting to look in the past, you want to look to the future to say how would i, where could be a place where i would add value in the future. Healthcare is one of the most inefficient industries. It takes up one fifth of our gdp. That is where we need to have data to make it more efficient and lower the cost so what i would like us to do is to look forward, i dont want us to adopt revelations that peter based scientist from making tomorrows innovations because they have to have all these permissions and releases from everyone. They may not lookat personal data, theres other areas where there is no personal data involved. Quantum computing, astronomy and so on and they may go in those fields probably the biggest area where we can create the benefit is on human health. And so for example in iceland have this amazing registry of genomic data that was collected for many decades. Gdp artist putting all of that up in the air. Can you find the cancer treatments, can you look at a lot of the new innovations . We dont know now because that was not collected under the gdpr environment so there again, thats the question i would have. Health is an area where we need to see are we putting the bottleneck on the innovation . Thank youmister chairman. I now recognize myself for five minutes. One other the other questions we are grappling within this investigation is whether or not our antitrust agencies like the ftc have fallen short as in effect of a cop on the beat in this digital marketplace and whether or not that is due to insufficient legal authority, or whether its due to weak leadership or as i like to refer to it the need for enthusiastic and creative leadership. Is it partly the result of regulatory capture . What is your view, what should we be thinking about as we look at this insufficient or inadequate enforcement of our antit