At a U.S. Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights hearing Tuesday, lawmakers sought insights from witnesses on how to address major tech platforms' dominance in the marketplace, specifically focusing on the practice of "self-preferencing" behaviors.
Senators heard from industry, academics and advocates on what they believe should be done to police the practice, in which tech giants — Google and Amazon were primarily used as the examples — favor their own products in marketing to consumers, to the detriment of smaller enterprises competing on their platforms.
While antitrust and competition may seem like somewhat irrelevant topics to privacy professionals, there's an increasing sense both in the EU and the U.S. that antitrust law could and should play a role in tackling monopolies. The idea is that the companies that own the most consumer data own the market dominance.
Here's how Luther Lowe, senior vice president of public policy for Yelp, described the problem as he sees it:
Most of the hearing was focused on antitrust enforcement. Sen. Richard Blumenthal, D-Conn., voiced frustration with the lack of cases brought by the U.S. attorney general and the U.S. Department of Justice.
Sally Hubbard, director of enforcement strategy at the Open Markets Institute, cited a lack of regulatory "will" in taking tech giants to task. She said the U.S., with its dominant players in the space, should lead global enforcement against anti-competitive behaviors and shouldn't "cede leadership to other countries."
Gene Kimmelman, senior advisor at Public Knowledge, said in his testimony that "digital platforms often require that in exchange for access to their platform, companies must give the platform access to some of their important data. Sometimes this is actually required to provide the service, sometimes it is not. Either way, this could have harmful anti-competitive effects if the platform is a gatekeeper distribution system where access to the platform can make or break a company’s commercial viability."
He said privacy and competition enforcement should work in concert, a point with which Hubbard agreed. She added "a lot of sources of dominance are data acquisition and refusal to share data with competitors. We're starting to see some platforms using privacy as a pretext to cut off competitors from their APIs," and said it's possible to allow the consumer to be empowered to control how their data is shared without thwarting competition.
Lawmakers at the hearing sought insights from witnesses on the structure of the three enforcement bodies charged with overseeing anti-trust enforcement: the Federal Trade Commission, the Department of Justice and state attorneys general.
Yelp's Lowe agreed with Hubbard and Kimmelman that enforcement cases have been lacking. He called for a wider net.
"There have been concerning reports that the state attorneys general and the DOJ are pursuing incredibly narrow theories of harm in their respective Google investigations, only looking at advertising technology. I believe making the focus too narrow would be a grave mistake. You can't look at Standard Oil without looking at oil; you cannot investigate Google without looking at search," he said.
Sen. Amy Klobuchar, D-Minn., believes the solution to the self-preferencing behaviors outlined by witnesses is legislative.
“Americans know intuitively that competition is key to the health of our markets, the future of our economy, and their own prosperity. They know that our country has a monopoly problem, which is what I think we should be focusing on,” Klobuchar said at the hearing's outset. “My focus today is also on improving enforcement against anti-competitive exclusionary conduct — and I don’t just mean problematic self-preferencing by Big Tech companies — I mean anti-competitive conduct in every sector of the economy."
She announced yesterday the introduction of the "Anticompetitive Exclusionary Conduct Prevention Act," co-sponsored by Sens. Blumenthal and Cory Booker, D-NJ. “This legislation would reinvigorate enforcement against anti-competitive conduct and enable enforcers to protect competition across our entire economy.”
Sen. Marsha Blackburn, R-Tenn., wondered how a federal privacy law might address the problem.
"As we talk about antitrust and DOJ and FTC and oversight and governance and what can be done with anti-trust, I want you to talk about having a federal privacy standard as a way to reign in some of big tech’s abuses," she told witnesses.
Kimmelman said a strong privacy bill would be wise, but reiterated it shouldn't exist in isolation of competition considerations. He said he doesn't want "privacy to be a tool to favor one kind of company over another. We all need privacy protections but it doesn’t matter whether it's sale of first party manipulation of the data" or otherwise.
Hubbard agreed a federal privacy law would help reign in potential anti-competitive behavior, but said any law shouldn't preempt state law. She fears a weaker federal law that could take "away the will of California voters," for example, who now enjoy protections under California's consumer privacy law.
But Morgan Reed, president of the App Developers Association and supported by a dozen or so app developers who sat behind him at the hearing, said he couldn't disagree more.
"A patchwork of state laws is one of the more anti-competitive things that can happen," he said, citing tech giants like Google's hundreds of hours and of work to come into compliance with Europe's privacy law, the General Data Protection Regulation. "My small businesses don't have the legal resources to serve all of those needs. So we fully support a single standard, a preemptive law that comes out of Congress that gives the smallest companies the same rules for privacy that it gives the behemoths and their giant legal teams.
"How do we meet the consumer where they are, give them what they want and also meet their privacy expectations? That is kind of the golden goose everyone is looking at right now," he continued. "You are in fact seeing major platforms deal with really competing on privacy as a consumer value-add. That to me is surprisingly refreshing. Companies are spending millions of dollars to say, 'Here’s the way we protect it."
To watch the hearing in full, find the archived live stream here.
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