A common refrain we hear from Tech Companies is, during the course of the investigation, but also on my own, since i have minute them in my district is that they cant be violating Anti Trust Laws and the primary argument is that many of their products are cheap or free, and therefore they are inherently benefiting. We have talked about this, to me the big question is its free really free . Consumers are paying for the product that they use, paying ended up, paying in privacy that they give up and often dont know they are giving up. The big Tech Companies and use that data to build these massive empires of information about consumers that give them spectacular advantage over newcomer businesses, allowing the companies to scrutinize every aspect of peoples lives, create and sell products that have the best chance of being successful. You mentioned the history of acquisitions. Facebook at made 67 on talents acquisitions, amazon has made 97, and google had made 214, mostly unchallenged acquisitions. You presided over the investigation of google, amazon and facebook. Two kinds of access, what kind of access to the half as a result and you talked about the threshold being one of the potential problems for why investigations arent opened. Do the threshold of investigations need to change, if we are able to challenge these acquisitions. Thank you very much for the question. Im very pragmatic, to the extent that people have the powers to look into those acquisitions, its fine by me. Im even in favor of changing very strategic platforms with such a big market power, i would wonder instead of asking the authorities to prove there is anticompetitive, then they could rebut with efficiencies to say you guys are not going to merge with anybody unless you prove to us this is going to create efficiencies. So i would change a little bit the burden of proof. In terms of investigations, i cannot disclose any information on any case. But my understanding of those cases, is some of the claims we hear is one click available, i didnt see that in the data at all. I didnt see anybody going and clicking on search results on page 2. So everybody being stuck with the defaults in the installation. So the fact some of us may have choices doesnt represent the consumer too. So its something that its a difference between theory and practice. But in theory they can do that. But consumers dont act ton practices, just fall on defaults. Thank you. Commissioner chopra, several of the platforms serve as gate keepers while competing with the businesses on those platforms. Amazon has a third market marketplace but own goods. When i met with them recently and in committee, they really testified that this dual structure doesnt have any conflict of interests and say its common for people to offer private label products alongside third party. Whats your response to that . I think we hear these analogies to comparing it to Grocery Store cereals and it doesnt work. 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 the small firms that want to enter. So we need to look deeply, thats why i mentioned South Carolina shun 6 b of the ftc act to scrutinize big picture. Of course, individual companies we will look if there is anticompetitive conduct, we have to go after it and fix it. But across these markets we exp, what is the tools that ftc is not using that you could be using . Well, there are so many things that congress has equipped us with. And one of the pieces that i hope we will use much more aggressively and thought fully is competition rule making. It doesnt need to put any burden on any company but it can clarify the law about whats legal and whats not so that we dont have to spend millions of dollars on paid economists and litigateors that slow down decisions and may ultimately harm a lot of people in the process. And we need to resuscitate the use of that tool. Thank you very much. Thank you. I now recognize armstrong for five minutes. Thank you very much. Armstrong. Miss layton, i want to talk fw about data portability. You say its over rated. Can you explain that a little bit . I think we have the premise of number portability. We know from the Telecom World youll go from one mobile carrier to another, you want to take your phone number, thats fine. But i think when you look at the internet world where you have multiple kinds of platforms, so if you have social network data, that doesnt, from facebook, it doesnt necessarily map to amazon. So there is the data is not really valuable to another platform. The bigger thing i think is something thats come up in this hearing, i think we are overrating the value of data overall. Because as a person who worked in the analytics industry, i had interfaced with 2,000 companies, they actually after time the data degrades. And if you are an innovator, its less interesting for you to get a platform status. So data portability is i think overrated. I also seen this in studies is that users dont value data portability. And i have said that too, the basic framework is you should have control over your own data. But since ive been here, ive learned way more about this. Part of the reason, its fairly complicated as to what is there. And i think thats part of the reason. Like when you say consumers dont really necessarily see this as a benefit, is it because they dont understand what it is . Or because of how you said it . Well, for one thing there are switching costs. I think thats a fair point other panelists have raised. But if we think we should have five major Search Engines, this is somehow makes it competitive. What makes competition in this industry is new technology, doing Something Better and different and more efficiently. So where i this i we should focus on is innovators look at other things in the economy. Its not like it is today will be this way forever. I guess whether we talk about data portability, we are talking about it moving, right . In other areas there is entire market niche. So when you are dealing with this data portability, has anybody looked at the liability shift as we move from one person to another . Yes. Because if there is a breach, which part of the Privacy Concern is breach of data and usually ends up with a Credit Card Company or a bank. But if its portable, i mean more than one person is handling that data as it moves from whether its microsoft, amazon, facebook, to somebody else. Yeah, thats a fair point. If i may, just, yes. Then my question is, along with that portability portion, is the cost of compliance flot for Large Companies who quite frankly we have seen this, and i want to ask you about an analogy before im done. Larger companies arent necessarily scared of regulation. What they want is certainty. Smaller companies that employ four or five people when you are dealing with data portability now have a cost associated with that. While we are trying to regulate this, we have to be very concerned that we dont regulate we dont have the inverse effect where the cost of regulation makes it prohibited. The European Experience with gpr, california solution now, let me clarify first this is very new so having empirical evidence is a long shot because this has been happening for a short period of time. Lets remind our its been introduced because fundamental principal of privacy individuals want to ensure. So any time you do a cost benefit analysis, surely you want to see it on firms. But also there is a benefit we get whatever privacy regulation is enforced properly. And the second point is that im very skeptical when i hear some of these numbers which are typically coming from institution which are funded by google, facebook. The european evidence is that google and facebook lost on the advertising side after the introduction of gdpr. So it is a cost of compliance, but whether its the only small firms, the narrative that you hear is from the big guys, not the small guys. Im going to bring the analogy back and ask mr. Chopra here. We dont have big banks, with the exception of some companies, north dakota, we are Small Business state. Single thing ive heard, the decade, 11 years since todd frank was introduced, in our realm to regulate what are really bad actors, the dakota bank is caught up in that. So are there any lessons we can learn in our quest to do whatever it is we dont sweep up the little guys in regulation . If you have 37 compliance officers on the fifth floor and go to 40, its not the end of the world. If you have two employees and go to five employees, you may not have a local. One thing i would really 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 bans. Because you know what, ive had those same conversations with community bankers. They will say if im banned from doing it, fine. Because thats easy to understand. But if its so complicated, guess what, the largest banks in the world, they find their way in and get their exemptions. They win. And the small guys lose. And thats not a system or a country i want to live in. Mr. Chairman, i dont know if there is time for me to add to that. Because we have negative fine. No, go ahead. Congressman, i think you make an important point and i think you are absolutely right about worrying about the Small Businesses. I think 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, easier for the large one to comply than the small one, and you end up entrenching the incombants. In this area of competition, you can make sure that doesnt happen, because if you are talking about rules, code of conduct, as ive proposed for dig mall market to do, digital market to do. You cant prioritize your own products. Those rules would only apply to companies that i would designate as having strategic market status, only apply to the largest companies. If you are a Small Company and want to keep people off your platform, want to make rules about what other platforms they go, you can do any of that. We are only worried about if you have some bottleneck power abusing it. Thank you, dr. Furman. I have a unanimous consent to put Ranking Member collins statement into the record. Without objection. I now recognize the distinguished lady from florida, ms. Demings for five minutes. Thank you very much to the distinguished gentleman from colorado. I want to thank you, mr. Chairman, and thank to all of you for being with us today. Thank you for your patience as we go to cast our votes. I want to start with mr. Chopra. And several of your statements youve argued that the core problem that leads to dominant platforms, that leads dominant platforms platforms is data and involves them in engagement. What problems do you see with the behavioral advertisement Business Model . Well, i think we are seeing more and more evidence 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. The 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 broad immunities under section 230. I support that immunity, but i dont know if its consistent with this behavioral ad model and surveillance. Mr. Chopra, what do you see as the solution . What role can how can congress ply a bigger role in dealing with this problem . Well, part of it, obviously, is through Better Privacy protection. Ill just speak about how i looked at the Facebook Order violations, the repeated and early violations of that order. That settlement not only completely let executives off the hook, and they paid a small fine and their stock went up, there is no substantive limitations on their use or sharing of data. And for repeat offenders, there needs to be some bans on this type of behavior. Because if they are going to break the law, we need to look at the economic incentive that is driving it. I think you said earlier when you have billions and billions of dollars, 5 billion in a settlement, there is not much incentive to change your narritive. Thats right. Big fines are not big penalties for big p cans. I worry its not a penalty. Its an incentive. I also want to urge congress to think about how do we beef up individual liability. Ftc facebook settlement, we did not depose mr. Zuckerberg or sandberg, but guess what . They got fuel immunity in the settlement. And if the Court Approves that what kind of standard are we setting . I think thats fundamentally wrong. Dr. Valletti, 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 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 can you just kind of, do you agree with that view . Or whats your feelings about that . Its almost an act of faith. Do we believe in competition . Sure, as a principle. But then i see the empirical evidence. When it comes to social networks, this has been going on for almost a decade. So is that long enough to have a tworry . Yes, i think. In the long run we are all dead but i hope we can fix problems before we are dead. laughs thank you for that bit of hope and sunshine. Im going to move on to dr. Furman. In your view, how readily available is highly quality data to new entrants if an entrepreneur wants to launch a new Search Engine. I know we talked about this space, protecting privacy, competition. But i just want to make sure its clear to not just the people in congress, but to the listening public as well, who is directly being impacted by the decisions made. Yeah. Google has a very good algorithm. Google also has a huge amount of data about how consumers search to train that algorithm. A bright kid in a garage could come up with a good algorithm. But 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 mr. Chair, if i could just, id also like to hear from miss layton, just in response to either of the questions that i asked that you would just like to respond to. Well, thank you. I appreciate that opportunity. I would agree with dr. Furman, that when we look at artificial intelligence, that this is a greenfield. Hes absolutely correct that a scientist sitting in the garage or in the lab could come up with a life changing or transformative kind of algorithm. I am, in contrast to the other panelists, i dont believe data is a bottleneck. Because of having been a person working in the industry, the data you collect degrades over time. So if you are a new innovator, youll looking for 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 . Health care. Its one of the most efficient industries. Takes up one fifth of our gdp. Thats where need to have it efficient and lower the cost. What i want us to do is look forward. I dont want to do adopt regulations deter scientists from making tomorrows regulations because they have to have all these permissions and releases from everyone. Now they may not look at personal data. There are other areas where there is no personal data involved. Quantum computing, astronomy, so on, they may go in those fields. But probably the biggest area to create the benefit is on human health. For example, in iceland, they have a registry of genomic data, 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. There again, thats the question that i would have. So health is an area where we need to see are we putting the bottleneck on the innovation. Thank you so much. Thank you, mr. Chairman. Thank you. I now recognize myself for five minutes. Commissioner chopra, one of the questions we are grappling with in this investigation is whether or not our antitrust agencies like the ftc have fallen short in the beat on this digital marketplace and whether or not that is due to insufficient legal authority, whether its due to weak leadership, or as i looic to refer to it the need foreign thus assic and creative leadership. Is it partly result of regulatory capture . What is your view . What should we be thinking about as we look at this inadequate enforcement of our antitrust agencies particularly ftc. What do you see as the source of that . Mr. Chairman, one of the things i reflect on a lot is how did the ftc miss much of the sub prime mortgage crisis that originated in the nonbank sector . The ftc was really the only cop on the beat there. And we saw what happened. So one of the things i think i took away from what ive learned on that is, number one, we need to use the tools we have much more energetically. Two, we need to be much more analytical and not think in the world of theoretical economic models but real evidence and look at how markets actually work. So of course, we can use more authority. We can use more resources. But the number one thing we need to do is energetically use the tools we have. And for you to think about, and dr. Valletti mentioned this too, should we be thinking about changing presumptions . Should the largest firms on the planet, should the burden be on them to show why their merger or roll up of of tons of companies is in that interest . So there are ways that you can change the way courts are acting. And i urge you to do that. The but i also urge you to conduct oversight that makes sure agencies are using every tool you have equipped us with. Great. In february, commissioner, you gave remarks to a conference at the university of colorado where you said, and i quote, competition Enforcement Actions like the bell labs consent to create conditions for scores of startups to intero accelerate and flourish. While we often focus on the cost of action and regulation, we should also be asking ourselves about the cost of inaction, end quote. Do you believe lawmakers should be considering remedies like the wunds imposed on bell labs,