Transcripts For CSPAN3 House Judiciary Subcommittee Hearing

CSPAN3 House Judiciary Subcommittee Hearing On Online Data Privacy July 13, 2024

The subcommittee will come to order. The chair is authorized to declare recesses at any time. This one on the role of data and privacy in competition. I recognize myself for an opening statement. I should state the obvious, im not the chairman of the subcommittee. The chairman of the subcommittee will be here in a few minutes. Digital technologies have provided americans are a remarkable array of services. It has never been easier to share news and information, to publish content and communicate with loved ones. As with technological revolutions of the past this has up ended the balance of power across our country. Its important to understand how these imbalances are affecting americans. The committees ongoing oversight of competition in Digital Markets is a key part of this process. Todays hearing will examine the role that data plays in creating rolls of power and how this affects competition. As previous hearings have shown, its controlled by a small number of companies. They are perfectly positioned to track each communication that passes through their channels. Intermediaries have long collected information, the large firms of the Digital Economy have unprecedented opportunity. The time they wake up and go to sleep, a precise location at the each hour of the day, and the content of their private communications. Several of these platforms receive must be, they have an incentive to collect as much information as possible so they can target consumers with precision. This trove of personal information can be used by companies to discriminate based on the users race, gender or income or to intrude on personal privacy. In light of these trends, there are two questions that i hope will be addressed in todays hearing, first, how are Digital Technologies and the Data Collection they enable affecting competition. Is there something unique about Digital Markets that enables firms to acquire and maintain market power in novel ways. Maximizing Data Collection can provide a company with a significant advantage. A large and continually growing set of consumer data, allows them to expand into new lines of business often with a competitive edge. Frequently, the most dominated companies are the ones who have captured the most data from as many sources as possible. In recent years, scholars have described this as leader take all, crushing any potential competition. In other words, competitors of Digital Markets have a strong incentive to collect as much quickly on users as quickly as possible as part of a strategy to compete in the marketplace and to achieve market dominance. This raises serious questions about whether it is good for society, for Data Collection to be the key dimension on which companies are looking to outcome pete one another. Several platforms make money by selling advertisements, heightened those incentives. The second question is how Data Collection increases the way that dominant companies can abuse their market power. Does the collection and use of data enable new conduct. For example, platforms that serve as intermediaries for commerce have insight into their rivals Business Models, a dynamic that raises significant concerns. With these issues in mind, i look forward to hearing from our panel of Witnesses Today. I yield back the balance of my time and i recognize for his opening statement, the distinguished Ranking Member, mr. Sensenbrenner of wisconsin. Thank you. We continue our oversight in the state of competition in the tech sector. Our primary focus has concerned large on line platforms. The specific topics we address today, the roles that data and data privacy play in competition and the ways in which we can better protect the privacy of consumers online data concern these same platforms. Data is in many ways the life blood of the internet. Numerous issues are swirling around the use of this data. For example, these include allegations that, one, platform needs for very large accumulations of data can operate as a barrier to market entry by new platforms. Platforms can leverage that data to compete unfairly with thirdparty competitors that are dependent upon their platforms. Three, incumbent platforms, pursue mergers in order to kill off competition for Data Acquisition and market shares. It is my hope our hearing can help us determine fact from fiction when it comes to these allegations. I have stressed before, antitrust laws do not exist to punish success, but to foster it. Congress and antitrust enforcement agencies need to be careful not to overreach to extend or apply antitrust laws in ways that end up punishing success. Its a pressing innovation and limiting consumers welfare. The supplies not just the issue concerning competition for data, it applies to issues concerning privacy. If were going to address data privacy through legislation, we must get it right. I do not say this in a vacuum, governments have already begun to lay down laws to address these issues. The most predominant example to date is the European Unions general Data Protection regulation gdpr. Following in the footsteps has the California Consumer privacy act or ccpa which is modeled on the gdpr. The testimony offered before the Senate Judiciary committee in march by one of our Witnesses Today, constituted a powerful indictment of the gdpr. However well intentioned, the gdpr is already producing substantial Collateral Damage to consumer welfare in the health of the Digital Economy. Its likely that the ccpa will have the same affects. All of these effects are avoidable. We need to put in a better means of protecting consumers privacy on line. I hope our Witnesses Today can help us work our way through these important issues and before yielding back, let me ask unanimous consent to insert in the record a number of statements and submissions to the record that i have received, one from the center of george mason university. Without objection. A joint statement by the national cta, ctia and u. S. Telecom. Without objection. A letter thats been sengt to myself from epic. Org. The Vice President and general counsel of net choice. Without objection. I now yield back the balance of my time. I thank the chairman for opening the hearing. I recognize myself for an opening statement. In june this committee launched a bipartisan investigation into the state of competition. The purpose of this is to document conduct online, to examine whether firms are engaging in bad conduct. Since launching the investigation, the committee has held a series of bipartisan hearings as part of this top to bottom review. Most recently, i have requested documents, communication relevant to the four dominant platforms. On monday, the Committee Received tens of thousands of documents. And we expect to receive and review additional materials in the weeks ahead. Well continue to hold hearings and round tables and conduct oversight to insure the goals of the investigation are met. As i said before, this work is essentially to the constitutional responsibility to conduct oversight of our antitrust laws to insure theyre working. Congress, not the courts, agencies or private companies enacted the antitrust laws. Congress must be responsible for determining the current laws or enforcement levels are keeping up with the Digital Markets. We have much work ahead of us, but im proud of the work of my colleagues, along with their dedicated staffs and look forward to continuing this important bipartisan work together. Todays hearing is an opportunity to advance our understanding and keep competition online. The role of data and privacy. Over the past year, several leading International Competition experts have published reports that have focused on this issue. As th these reports have noted competition is important. The breadth and depth of user Data Collected by the incumbent digital platforms provides them with a strong competitive advantage, creating barriers to rivals entering and expanding in relevant markets and allowing the incumbent Digital Markets to expand into adjacent markets. The united kingdoms expert panel similarly reported that large throes of data tip markets in favor of a single platform, killing off competition. Data plays an Important Role in the ability of startups to obtain venture capital. The panel of experts reported that investors evaluate startups based on their access to data. A new entrant starved of data quantitatively speaking to a tech giant is at a disadvantage and investors will be unlikely to invest if they view the data deficit as in surmountable. This is consequences for entrepreneurs and startups that get locked out the market and mer never get a chance to compete. Theres broad agreement among antitrust experts data can be abused for anticompetitive purposes. These tactics have create an innovation kill zone around dominant firms. Whether its facebooks use of inova to spy on its compet iters, amazons ability to identify clones being sold in its marketplace. We know the abuse of data has seriousi serious ramifications. Theres a growing consensus in the United States and abroad that privacy is an important dimension of competition online. While many Online Services claim to be free, we know people pay in the form of their personal information and their attention which are both critical for Online Advertising revenue. In a statement submitted for todays hearing, market c consolidated harm consumers by diminishing quality by privacy terms. The misuse of data and harm to privacy is not only an indicator of low quality caused bide lack of competition, but it also can be used to cement a firms dominance in the market as well. In other words, in a market that has vibrant competition, firms have strong incentived to respond to consumer demand. Incumbents have no incentive to deliver users privacy. I had the pressure lers of disc this who reinforces the market dominance. Its clear the relationship between competition and privacy is not either or, they are concepts that must be at the forefront as we consider proposals to resore ttore. Id like to take one moment to thank the chairman rod simms for his statements. Chairman simms is unable to attend today. I want to thank him and his team for all their hard work in advance of this hearing on this issue. Now its my pleasure to introduce the todays witnesses for todays hearing. Our first witness is the honorable chapra, the Democratic Commission at the federal trade commission. Before joining the ftc, he was instrumental in establishing the Consumer Financial protection bureau. He worked on the agencys Implementation Team after the passage of the dodd frank act and became the First Student loan ombudsman. He made significant in roads towards addressing the student loan crisis in the United States. He was nominated by President Trump to serve as an ftc commissioner in 2018 and was confirmed unanimously by the senate on april 26th, 2018. Commissioner received his b. A. From Harvard University and his mba from the university of pennsylvania. Our second witness has been a professional of economics at the Imperial College of london since 2007. He served as the chief competition economist for the European Commission for three years where he focused on competition and Digital Markets. He served as a professional of economics at the university of rome and still served as a visiting professional of economics. He is currently a Research Fellow at the center for Economic Policy research and the Manheim Center of innovation. In addition to his work as an economist, he also received his diploma from the [speaking in a Foreign Language] our third witness is jason thurman, a professor of the practice of Economic Policy at the Harvard Kennedy school. Before joining the faculty in 2017, professor thurman served as chair of the Economic Advisor during president obamas second term. He was an assistant to the president and Principle Deputy director. He currently served as a nonresident fellow as well as an advisor on digital market university. He received his phd from Harvard University as well as his masters in science from the London School of economics. Our final witness is rosalyn lawton. She served as a visiting researcher at a Vice President of stran consort before continuing with aei, dr. Layton worked as the director of Search Agency services at ibm. Shes published dozens of times of numerous publications including forbes, u. S. News and world report and served on President Trumps Transition Team in 2016 helping to establish his federal communications commission. Dr. Layton received her ba from American University, and her phd fr from auberg university. If you would please rise i would begin by swearing you in. Tmesis raise your right hands. Do you swear or affirm under penalty of perjury the testimony youre about to give is true and correct so help you god . Let the record show the witnesses answered in the affirmative. Thank you you may be seated. Know that each of your written statements will be entered into the record in its entirety. Summarize your testimony within five minutes. When the light switches from green to yellow you have one minute to end your testimony. Commissioner, you may begin. Thank you, mr. Chairman. Ranking member sensenbrenner. I serve as the federal trade commissioner. Oversight from congress is a pillper of sound transparent government. And ive been honored to testify many, many times before members of congress, including before chairman elijah cummings, whose energy and passion will be missed by so many of us. Todays topic could not be more important or timely as it seems almost daily. We learn of problems stemming from the lack of competition. To this end, i think we need to focus on four ways that companies undercut competition. Concentration, conflicts of interest, contracts and capture. Market power is concentrated with a few giants in so many industries. Conflicts of interest allow these dominant firms to sometimes rig the market in their favor at the expense of upstarts and new businesses that fairly compete. One sided take it or leave it contracts and online terms of service impose selfserving regulations on consumers and Small Businesses. And all too often, the government is too captured by those incumbents who use their power to dictate their preferred policies. In my testimony, i discuss how competition in the Technology Market is structured around data. A valuable asset with very unique economic features we need to take into account. Our personal data is powering the profits of Tech Companies that offer basic searches like email, search or photo sharing that are not truly free. Fortunately, many of my colleagues around the world are also pushing forward. Reports from regulators in australia, the united kingdom, European Union are must reads for this committee and everyone concerned about the future of our Digital Economy. In the United States, as you know, our efforts are a work in progress. And i agree that we need to take a fresh look at our policies and guidance. And as we do, its important that the federal trade commission conduct a rigorous review of quantitative market data and an analysis of the financial incentives driving market distorting behavior. Since joining the commission, i have argued that the ftc should be using our authority under section 6b of our act to get the data we need to effectively police these markets and report our findings to you and the public. When it comes to enforcements, i am more optimistic. Now that scores of states attorneys general both republican and democrat are teaming up to investigate anticompetitive conduct in the Digital Economy. In this moment, it is an all its all hands on deck. And i stay in constant communication with them. Decades ago our state ags played a pivotal role in ending microsofts chokehold over the future of the internet. Without that action, there would likely be more facebook, google or amazon. While the ftcs recent settlements with Googles Youtube gave headlines, they did little to fix the problems that fuel these Companies Data abuses. Big fines are not big penalties for the worlds biggest companies. As weve seen time and again, when

© 2025 Vimarsana