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 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," House Antitrust Subcommittee Chairman David
Cicilline (D., R.I.) said 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."
The hearings come as public-opinion polls show that more
Americans are concerned about how tech companies protect their
personal data and are looking to Washington to step up
oversight.
There is also scrutiny over the role of tech companies as
gatekeepers. 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 on Tuesday that his administration
should look into Google's ties to China, elevating the political
risk of the search giant's yearslong effort to build a presence in
that huge market. YouTube also faces an investigation by the
Federal Trade Commission 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.
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 FTC 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 Big Tech -- much the way analysts credit
congressional oversight for helping to fuel the successful U.S.
antitrust case against Microsoft Corp. in the 1990s.
Scrutiny of Silicon Valley is growing beyond antitrust probes to
hit the companies' reputation and their plans to extend their
reach, particularly for Google and Facebook.
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 Tuesday that Libra wouldn't launch until regulators'
concerns are addressed.
Some 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."
Facebook has worked for more than a year with partners to
develop Libra. Despite its promises about cooperating with
regulators, lawmakers on Tuesday said they have heard such
assurances from Facebook before on matters ranging from privacy to
the policing of the company's platforms.
At a Senate hearing on alleged censorship, Sen. Ted Cruz (R.,
Texas) accused Google of "playing Big Brother" by collecting swaths
of data on Americans who use its search engines and controlling
public discourse through its dominance of internet search.
Mr. Cruz said the tech giant's frequent response -- that its
results are produced by algorithms -- is inadequate. Algorithms are
"written and maintained by people," he said.
Karan Bhatia, Google's vice president of global government
affairs and public policy, told Mr. Cruz the company has built
platforms that operate in an apolitical way.
At the antitrust hearing, Facebook and Amazon faced the most
questions. Mr. Cicilline and others pressed the e-commerce company
on whether it uses data gleaned from other sellers who introduce
and favor Amazon's own new products on its platform.
"The best purchase to you is an Amazon product," Mr. Cicilline
said.
"No, that's not true," objected Nate Sutton, Amazon's associate
general counsel. "Our incentive is to help the seller succeed
because we rely on them."
At times, the executives sidestepped questions. Mr. Cohen, the
Google economic policy chief, was asked about a recent Journal
article about fake listings on Google Maps. He said he wasn't aware
of it.
Rep. Joe Neguse (D., Colo.) asked Matt Perault, director of
public policy at Facebook, "What is the largest social-media
network platform company by active users in the world?"
Mr. Perault said he didn't know, to which Mr. Neguse said: "It's
Facebook." Around 2.7 billion people globally use Facebook's
services each month.
The hearings were also punctuated at times by lawmakers'
personal experience.
Pressed by Rep. Hank Johnson (D., Ga.) about competition, Mr.
Perault said the company faces significant competition in
advertising and other markets.
"I'd like to get a list" of competitors, Mr. Johnson replied.
"So that I can do some shopping around."
"Why do you keep getting that alert for the iCloud?" Rep. Greg
Steube (R., Fla.) asked Kyle Andeer, Apple's chief compliance
officer, referring to the company's promotion of its cloud-storage
product. Mr. Andeer said he wasn't aware of the details.
Katy Stech Ferek in Washington contributed to this article.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
July 16, 2019 19:20 ET (23:20 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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