Congress Puts Big Tech in Crosshairs
July 16 2019 - 5:45PM
Dow Jones News
By Ryan Tracy
WASHINGTON -- Concerns about the power of Big Tech echoed across
the capital on Tuesday, with politicians in both parties demanding
more regulatory scrutiny of four giant companies' reach and their
plans for expansion.
In three hearings, which were focused on Facebook Inc.'s
cryptocurrency plans, alleged Google censorship, as well as on an
antitrust examination of Facebook, Google, its owner Alphabet Inc.,
Amazon.com Inc. and Apple Inc., the companies took punches on a
range of political and policy issues.
"In an effort to promote and continue this new economy, Congress
and antitrust enforcers allowed these firms to regulate themselves
with little oversight," said House Antitrust Subcommittee Chairman
David Cicilline (D., R.I.) at the outset of a hearing featuring
executives from the four U.S. tech giants. "But as a result, the
internet has become increasingly concentrated, less open and
growingly hostile to innovation and entrepreneurship."
In their testimony, the companies said that they still face
competition in markets from advertising to apps, and that their
online platforms have facilitated the growth of many other smaller
companies.
"We have helped reduce prices and expand choice for consumers
and merchants in the U.S. and around the world," said Adam Cohen,
Google's director of economic policy.
Mr. Cicilline's hearing raises the prospect of Big Tech's worst
fear: Actions to break them up or fundamentally restrict their
business models.
That threat hasn't materialized yet, and may not for years, if
ever. The Justice Department and the Federal Trade Commission have
privately divvied up jurisdiction for potential antitrust probes of
the four companies, with the Justice Department preparing for an
investigation of Google, The Wall Street Journal has reported.
Those probes could take years to unfold.
Major legislation on privacy, antitrust or other tech-related
issues also doesn't appear likely to pass a divided Congress before
the 2020 elections.
Opponents of the companies nevertheless hope criticism from
Capitol Hill could lend political backing to regulators who may
want to rein in the companies' power -- much the way analysts
credit congressional scrutiny for helping to fuel the successful
U.S. antitrust case against Microsoft Corp. in the 1990s.
Growing scrutiny of Silicon Valley is extending beyond antitrust
probes to hit the companies' reputation and their plans to extend
their reach, particularly for Google and Facebook.
In the past week, President Trump invited critics of Facebook
and Google's YouTube to the White House and promised he would
explore regulatory solutions to maintain free speech on social
media.
Mr. Trump separately said Tuesday that his administration should
look into Google's ties to the Chinese government, elevating the
political risk of the search giant's yearslong effort to build a
presence in that huge market.
Separately, YouTube faces an FTC investigation over allegations
that it has improperly gathered data on minors, prompting the
online-video giant to weigh changes to how it handles content for
children.
Facebook will face a $5 billion FTC fine for violations of its
privacy promises, the Journal reported last week -- an action that
is expected to come with ongoing scrutiny of the company's privacy
practices.
Also under the microscope: Facebook's plan to launch the
payments-enabling cryptocurrency Libra as soon as next year. "I
think we're going to take more time than that," Federal Reserve
Chairman Jerome Powell said of Facebook's timeline in a July 11
hearing. David Marcus, the Facebook executive in charge of the
project, said later Tuesday that Libra wouldn't launch until
regulators' concerns are addressed.
Republicans appeared more resistant to crack down on the
companies. In response to attacks on Facebook in the hearing on its
cryptocurrency, Sen. Pat Toomey (R., Penn.) warned against
"strangl[ing] this baby in the crib."
Rep. James Sensenbrenner (R., Wis.), the House Antitrust
Subocmmittee's top Republican, told colleagues: "Just because a
business is big doesn't mean it's bad."
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
July 16, 2019 17:30 ET (21:30 GMT)
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