Transcripts For CSPAN3 House Judiciary Subcommittee Hearing

CSPAN3 House Judiciary Subcommittee Hearing On Entrepreneurship And Online... July 13, 2024

Cspan is brought to you by your local cable and satellite provider. Cspan, your unfiltered view of government. Next a Congressional Panel looks at Online Platforms and impact on entrepreneurship in the u. S. Well hear from google, apple, facebook and amazon officials who talk about ecommerce. This portion of the house judiciary hearing is is an hour and 50 minutes. Good afternoon. The subcommittee will come to order. Without objection the chair is authorized to declare recesses of the committee at any time. We welcome everyone to the second of our series of hearings investigating competition in the digital markets. This one on innovation and entrepreneurship. I now recognize myself for an opening statement. 30 years ago the First Software for the worldwide web was released into the Public Domain to create a Global Communications network. Within a few years, search and browsing services were built onto the software to give people tools to communicate, share and explore information through decentralized platform that was designed to be open and nondiscriminatory. An internet pioneer and codesigner of the internet testified in 2006 on behalf of google that the overarching principle of the internet is no central gatekeeper should exert control over of the internet. It meant entrepreneurs with new ideas for applications need not worry about getting permission to reach end users. Over the following decades, our open and competitive internet revolutionized our lives, our work, our businesses and entire world. Millions of new good paying jobs were created and greater access to information promised renewal of our democracy and social progress. This environment also fostered the growth and dynamism of four companies that will testify at todays hearing google, amazon, facebook and apple. Each of these American Companies have contributed immense technological breakthroughs. They were started on shoe string budgets. But in an effort to promote and continue this new economy, congress and antitrust enforcers allow these firms to regulate themselves with little oversight. As a result, the internet has become increasingly concentrated, less open and growing hostile to innovation and entrepreneurship. I quote, there are only one or two Significant Players in important digital spaces including internet search, social networks, mobile and desktop operating systems and electronic book sales, end quote. Google controls nearly all the Search Market in the United States, and over 90 of all internet searches are conducted via google platforms. Amazon controls nearly half of all online commerce in the United States. Despite statements from the company that it only captures a small amount of retail, half of American Families have an amazon prime account, up 35 from three years ago and amazons closest competitor, ebay, controls less than 6 of the market for online commerce. Facebook controls over 58 of the u. S. Social media market and has approximately 2. 7 billion monthly active users across its platforms. Notwithstanding the growing popularity of tik tok, facebook captures it over 80. Of Global Social media revenue. And as facebook cofounder chris hughes has recently observed, no major social Networking Company has been founded in the United States since the fall of 2011. Apple is under increasing scrutiny as abusing its role as player and referee in app store at prices than the competitive market may allow. As the Supreme Court recently noted in apple versus pepper, regardless of price, and i quote, apple pockets a 30 commission on every app sale, end quote, in addition to developer membership fees and a 30 commission on its on inApp Purchases. A former apple executive who oversaw app store approvals for seven years has also described apple as having, and i quote, complete and unprecedented power over their customers devices and using this power as a weapon against competitors, end quote. Although apple has made a series of laudable commitments to protect consumers privacy online, as the New York Times Editorial Board recently noted, its management of the app store is, quote, dangerously reminiscent of the anticompetitive behavior that triggered United States versus microsoft, a landmark antitrust lawsuit that changed the Tech Industry. Several leading experts suggest the dominance of these firms is unchallenged by rivals due to search features. As they reports have found, the combination of high network effects, high switching costs and the selfreinforcing advantages of data can result in a winner take all market that shield dominant firms from competitive threats. At the same time theres growing consensus that it is consensus among Venture Capitalists and startups that theres a kill zone around google, amazon, facebook and apple that prevents new startups from entering the market with Innovative Products and services to challenge these incumbents. Dropped significantly from above 10,000 startup financings in 2015 to just above 6,000 in 2018, while the number of Venture Capital deals from investment beneath 1 million have also declined significantly. Even when Tech Startups escaped the investment kill zone, they remain extremely reliant on these platforms in other ways. According to a recent report in bloomberg, 17 out of 22 initial Public Offerings by significant tech knoll companies such as lyft and pinterest cited Online Platforms as risks to their business. I quote, the tech giants have the pow tore change their services at any time generating havoc downstream. On smaller firms. While the explosion of the early internet connected local businesses to broader markets, theres growing concern that anticompetitive practices and the gatekeeper role of Online Platforms is now imperiling Small Businesses in our communities. I quote, powerful online gatekeepers not only control Market Access but also directly compete with the businesses that depend on them. Undermining entrepreneurship and economic opportunity. As i said before, this trend is not compatible with the open internet or its defining features that allowed innovation and entrepreneurship to flourish. As tim wu will testify today, the United States is at risk of losing the best of our innovation culture and instead being a country of giant lumbering concerns. Innovative dream of being bought, not of buying something of their own. For purposes of todays hearing, this trend is not the inevitable consequence of technological process. Its the result of policy choices were making as a country. Over the past decade, the Largest Technology firms acquired over 436 companies, many of which were actual or potential competitors. According to a New York Times report, the 270 Companies Google acquired, 171 involve actual or potential competitors and facebooks 92 total acquisitions, 46 involved actual or potential competitors. Not a single one of these acquisitions was challenged by antitrust enforcers, in fact, only a handful of these were closely scrutinized. In the two decades since the Justice Department filed its landmark monopolization case together, these enforcements have created a de facto immunity for Online Platforms. I hope todays hearings provides a sober and serious discussion about these trends and possible paths forward to addressing them. As we can expect the next 20 years to be far less innovative from the last. In other words, this hearing isnt just about the companies before us today. Its about ensuring that we have the conditions for the next google, the next amazon, the facebook, and the next apple to grow and prosper. With that in mind, i thank both of our panels of expert witnesses for appearing before us today. I now recognize the gentleman from wisconsin for his opening statement. Mr. Sensenbrenner. Thank you. Entrepreneurship are the hallmarks of the american economy. This has been true in the past and remains true now in the digital age. Todays hearing will focus primarily on the impacts, large or outlined platforms, have on innovation and entrepreneurship. This is a critical topic. I want to stress that we must take a fair and balanced approach to it. There are some who advocate that the biggest platform should just be broken up because they supposedly dominate too much of the market. That seems misguided for several reasons. First, just because a business is big doesnt mean that it is bad. Antitrust laws focus on the conduct of companies and whether that conduct is anticompetitive. They do not exist to punish businesses just because theyre big. Likewise, the antitrust laws do not exist to punish success. On the contrary, they exist to foster it. Most innovative, successful, and Competitive Companies often become very big. Not through anticompetitive conduct or violations of antitrust laws but simply by providing a Better Service or product than the other companies in the marketplace. Second is the written statements offered by some of our witnesses attest big Online Platforms can present Small Companies in many sections with a better way to reach the most customers. Breaking up big businesses simply because theyre large end up hurting lots of Small Businesses throughout the country. Third, breaking up big platforms wont necessarily solve a problem associated with those platforms. For example, the privacy issues are prominent in todays discussions of whats going on wrong online. But breaking up the big platforms into smaller ones might actually compound the problems of protecting privacy. I raise these points not to dismiss the idea that there might be genuine issues of anticompetitive conduct in the online ecosystem, however, i want to offer a counterpoint to some of the more radical positions that are being articulated. We should take a serious look at allegations of wrongdoing. Perhaps, well hear some of those today. But we should not rush to amend the antitrust laws or break up companies by congressional fiat based upon false notions that being big is inherently bad or that everything a big company does should be presumed to be anticompetitive. I yield back the balance of my time. Thank you, mr. Sensenbrenner. I want to acknowledge that mr. Nadler and Ranking Member of the full committee, mr. Collins, are on the floor right now and when they come to committee, theyll be recognized if its okay for mr. Sensenbrenner for their opening statements. At this time now i would like to introduce our panel. We have two panels of Witnesses Today. Its now my pleasure to introduce todays first panel. Our first witness is adam cohen. Before joining google, mr. Cohen was an economic correspondent for dow jones and the wall street journal. Mr. Cohen received his a. B. From Harvard University and m. S. From the London School of economics. Our second witness, matt perault, head of Global Policy development at facebook, leading the companys Global Public policy Planning Efforts on Law Enforcement and human rights officers and also overseen Public Policy for whatsapp, oculus, and facebook, Artificial Intelligence research. Before joining facebook he was counsel at the Congressional Oversight Panel as well as a consultant at the world bank. He received his bachelors degree from brown university. Mpp from Duke University Stanford School of Public Policy and jd from harvard law school. Our third witness is nate sutton. Oversees all competitionrelated litigation and regulatory matters for the company. Before joining amazon, mr. Sutton was a Trial Attorney with the department of justice antitrust division. He also worked at the law firms of William Conley llp from 2001 to 2007. He received his b. S. In Nuclear Engineering from North Carolina State University and jd from the university of chicago law school. The last witness or our panel is kyle andeer, Vice President of Corporate Law at apple. Prior to joining apple, mr. Andeer spent four years as deputy chief trial counsel with the federal trade commissions bureau of he also served as the principal competition attorney adviser to commissioner Jay Thomas Roche as well as the dojs antitrust division. Mr. Andeer received his b. A. From the university of pennsylvania and jd from the university of California Berkeley School of law. We welcome all our distinguished guests on the first panel. Now if you please rise, ill begin by swearing you in. Please raise your right hand. Do you swear or affirm under penalty of perjury that the testimony youre about to give is true and correct to the best of your knowledge, information and belief, so help you god . Let the record show the witnesses answered in the affirmative. Thanks. You may be seated. I ask that you summarize your testimony in five minutes. To help you stay within that time, theres a timing light on your table. When the light switches from green to yellow, you have one minute to conclude your testimony. When the light turns red, it signals your five minutes have expired. Mr. Chairman, well begin with you. Chairman cicilline, Ranking Member sensenbrenner, distinguished members of the committee, thank you for the opportunity to appear before you today. My name is adam cohen and im director of Economic Policy at google. In my role, i lead our Public Policy work on antitrust issues. Google was founded in 1998 by 2 students who had a big idea. Organize the worlds information and make it universally accessible and useful. In their earliest form, Google Search results were simply ten blue links on a web page. 20 years later, we provide our users with much richer results including direct answers to questions, pinpoints on a map when they search for an address and direct links to flights, products and other information. As a responsible and Successful Company were proud offer record of continued innovation. We face constant pressure to improve our products and services, both sure signs of a competitive marketplace. Ill focus on the power of google and Wider Technology sector with creating for the u. S. Economy. Our investments in new technologies and entrys competitive dynamics. For the u. S. Economy, googles products and services create significant value, generating an estimated 335 billion in Economic Activity in 2018. This has benefited a wide range of consumers and businesses across the country. Firms that once operated in a local or regional market now reach national and International Customers using our tools. Weve also made substantial direct investments in the u. S. Economy. Last year, we hired more than 10,000 people and invested over 9 billion in datacenters and offices across the country. In february, we announced plans to invest an additional 13 billion this year with major expansions in 14 states. These new investments will give us the capacity to hire tens of thousands of additional employees and create more than 10,000 new construction jobs. Overall, the Technology Sector supports roughly 12 million american jobs. Equivalent of 7. 6 of the u. S. Workforce. For consumers, Technology Companies continue to provide innovation and better prices. Prices in the tech sector fell in 2018 compared to an increase in the rest of the private sector. When it comes to investing in innovation, Technology Companies are americas largest spenders on research and development. As an example, google last year spent 21. 4 billion on research, development, and related areas. Three times more than in 2013. Our continuing investments spur innovation that improves our own products and services and also supports and accelerates innovation among other firms. We share many of the result of our research in new technologies. Typically, through opensource software. This helps broad communities of developers to use ou

© 2025 Vimarsana