Cicilline Opening Statement At Big Tech Antitrust Hearing

Wednesday, July 29, 2020

WASHINGTON – U.S. House Antitrust, Commercial, and Administrative Law Subcommittee Chairman David N. Cicilline (RI-01) gave the following opening statement at the Hearing on “Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Apple, Facebook, and Google.”

More than a year ago, this Subcommittee launched an investigation into digital markets. Our two objectives have been to document competition problems in the digital economy, and to evaluate whether the current antitrust framework is able to properly address them. 

In September 2019, the Chairman and Ranking Members of the Full Committee and the Subcommittee issued sweeping, bipartisan requests for information to the four firms that will testify at today’s hearing.

Since then, we have received millions of pages of evidence from these firms, as well as documents and submissions from more than 100 market participants. We also conducted hundreds of hours of interviews.

As part of this investigation, we have held five hearings to examine the effects of online market power on innovation and entrepreneurship; data privacy; a free and diverse press; and independent businesses in the online marketplace.

We have held 17 briefings and roundtables with over 35 experts and stakeholders in support of our work.

This investigation has been bipartisan from the start.

It has been an honor to work alongside my colleague, Congressman Jim Sensenbrenner, the Subcommittee’s Ranking Member, as well as the former Ranking Member of the Full Committee, Congressman Doug Collins.  

We worked closely with all the Members of the Subcommittee, who have taken this work seriously and studied these issues closely.

As my colleague Congressman Ken Buck recently commented, “This is the most bipartisan effort that I have been involved with in five and a half years of Congress.”

The purpose of today’s hearing is to examine the dominance of Amazon, Apple, Facebook, and Google.

Amazon runs the largest online marketplace in America, capturing 70% of all online marketplace sales. It operates across a vast array of businesses—from cloud computing and movie production to transportation logistics and small business lending. Amazon’s market valuation recently hit $1.5 trillion, more than that of Walmart, Target, SalesForce, IBM, eBay, and Etsy combined.

Apple is a dominant provider of smartphones, with more than 100 million iPhone users in the United States alone. In addition to hardware, Apple sells services and apps, including financial services, media, and games.

Facebook is the world’s largest provider of social networking services, with a business model that sells digital ads. Despite a litany of privacy scandals and record-breaking fines, Facebook continues to enjoy booming profits—$18 billion last year alone.

Lastly, Google is the world’s largest online search engine, capturing more than 90% of searches online. It controls key technologies in digital ad markets and enjoys more than a billion users across six products—including browsers, smartphones, and digital maps.

Prior to the COVID-19 pandemic, these corporations already stood out as titans in our economy.

In the wake of COVID-19, however, , they are likely to emerge stronger and more powerful than ever before.

As American families shift more of their work, shopping, and communication online, these giants stand to profit.

Locally-owned businesses, meanwhile—mom and pop stores on Main Street—face an economic crisis unlike any in recent history.

As hard as it is to believe, it is possible that our economy will emerge from this crisis even more concentrated and consolidated than before.

These companies serve as critical arteries of commerce and communications. Because these companies are so central to our modern life, their business practices and decisions have an outsized effect on our economy and our democracy. Any single action by any one of these companies can affect hundreds of millions of us in profound and lasting ways.

Although these four corporations differ in important and meaningful ways, we have observed common patterns and competition problems over the course of our investigation.

First, each platform is a bottleneck for a key channel of distribution.

Whether they control access to information or to a marketplace, these platforms have the incentive and ability to exploit this power. They can charge exorbitant fees, impose oppressive contracts, and extract valuable data from the people and businesses that rely on them.

Second, each platform uses its control over digital infrastructure to surveil other companies—their growth, business activity, and whether they might pose a competitive threat. Each platform has used this data to protect its power, by either buying, copying, or by cutting off access for any actual or potential rival.

Third, these platforms abuse their control over current technologies to extend their power. Whether it’s through self-preferencing, predatory pricing, or requiring users to buy additional products, the dominant platforms have wielded their power in destructive, harmful ways in order to expand.

At today’s hearing we will examine how each of these companies has used this playbook to achieve and maintain dominance—and how their power shapes and affects our daily lives.

Why does this matter?

Many of the practices used by these companies have harmful economic effects. They discourage entrepreneurship, destroy jobs, hike costs, and degrade quality.

Simply put: They have too much power.

This power staves off new forms of competition, creativity, and innovation.

And while these dominant firms may still produce some new innovative products, their dominance is killing the small businesses, manufacturing, and overall dynamism that are the engines of the American economy.

Several of these firms also harvest and abuse people’s data to sell ads for everything from new books to dangerous “miracle” cures.

When everyday Americans learn how much of their data is being mined, they can’t run away fast enough. But in many cases, there is no escape from this surveillance because there is no alternative.

People are stuck with bad options.

Open markets are predicated on the idea that if a company harms people, consumers, workers, and business partners will choose another option. We are here today because that choice is no longer possible.

In closing, I am confident that addressing the problems we see in these markets will lead to a stronger, more vibrant economy.

Because concentrated economic power also leads to concentrated political power, this investigation also goes to the heart of whether we, as a people, govern ourselves, or whether we let ourselves be governed by private monopolies.

American democracy has always been at war against monopoly power.

Throughout our history, we have recognized that concentrated markets and concentrated political control are incompatible with democratic ideals.

When the American people confronted monopolists in the past—be it the railroads and oil tycoons or AT&T and Microsoft—we took action to ensure no private corporation controls our economy or our democracy.

We face similar challenges today.

As gatekeepers to the digital economy, these platforms enjoy the power to pick winners and losers, shake down small businesses, and enrich themselves while choking off competitors.

Their ability to dictate terms, call the shots, upend entire sectors, and inspire fear represent the powers of a private government.

Our founders would not bow before a king. Nor should we bow before the emperors of the online economy.

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