tv The Communicators Is Big Tech Too Big CSPAN August 8, 2020 6:34pm-7:15pm EDT
through the daily washington journal program or through our social media feeds. americans --d by american cable television companies and brought to you today by your television provider. recently, the ceos of amazon, facebook, google and apple were virtually on capitol hill for a hearing on big tech and antitrust. that is our discussion this week on "the communicators." joining us is sarah miller, who is with the economic liberties project. she is the executive director there. and former congresswoman barbara comstock, who is now a senior advisor at baker donelson. is big tech too big? what is your answer to that?
>> i think the obvious answer to that is absolutely. the members of the subcommittee, both the democrats and a number of republicans, really focused in on the power of the separations and the way we communicate and the way we engage. that was a dominant theme of this hearing, and also got into the guts of how these businesses work, how they abuse their dominance, how they engage in predatory behavior, and other businesses affecting everyday families. it was really quite a remarkable hearing. and we saw this just a couple of years ago, when mark zuckerberg, they really had no idea how the corporations work. so this was a pretty remarkable
moment and the ongoing investigation into monopoly power in general but especially as relates to this. >> congresswoman comstock? >> the gallup has an 18% approval rating. a great american success story. these are companies who have approval ratings in the 70's and 80's and have gotten us through this pandemic over these six months, five or six months, whether it is connecting us with work, connecting us -- a company that has really come on during the pandemic, also connecting us with health care. telehealth has boomed. and connecting our children with education, which we now look at it going in the fall. helping small businesses.
that was an area. all of these things i think demonstrate that these tech companies are in a world that works, and you think over the past five or six months, what has worked in your life? your smart phones have worked. you have been able to google things, or if you use another platform, you can connect with family and friends. you have been able to get your loved ones in connection with doctors. and this is the world that works, whereas congress, with their 18% approval rating, is not getting things done on covid, on the economy, and i think they are kind of tone deaf, and it has been said that the american public do not understand, but the american people understand that well,
because when they were trying to get those unemployment checks, it was the tech companies who had to go into a lot of states and help them upgrade their technology so people would get their unemployment checks. it is the tech companies working with the health care providers. they donated money. they are even helping newspapers. they got funds for that. so i think you have a real contrast between the world that works, which i was privileged to represent a lot of these companies, and the ecosystem which they have created. the next facebook, the next amazon. and i think there is a real contrast in that, and you did not hear a lot about the consumer welfare, because the consumers like these companies. >> sarah miller? >> there are not going to be more facebooks, more amazons, and more googles, because our policymakers have allowed this handful of organizations to amass this power over their
respective markets to shut down competition and engage in self referencing and editorial behavior that is really hands down in the economy. these corporations rose to power because antitrust laws and policymakers focused on maintaining competition in markets when they were very small, and that focus shifted away. in fact, policymakers have encouraged monopoly power and consolidation across the economy. and i think one thing that really came through in yesterday's hearing was that we hear a lot of rhetoric about standing up for small businesses from members of congress, but yesterday's hearing actually put forward the voices of small business people who are being preyed upon by these corporations, amazon, facebook,
google. they have so much power as gatekeepers over our economy and over our commerce, and that really came through. members of congress -- members of that subcommittee lifted up the voices of small businesses whose voices have been arbitrarily cut off by these organizations, businesses and business models and products relentlessly copied or acquired for anticompetitive reasons. and that was really, really remarkable. these companies understand how they work and understand the predatory practices they are engaging in and maintain and grow their dominance, and they really stood up for the first time since i have worked in politics in a meaningful way for small businesses, and i think that congress's 18% approval rating would go up if they did more. >> sarah miller, when you talk about predatory practices, can you give an example?
>> sure. amazon is a good example of this. amazon is 200 million businesses reaching customers, even more in the pandemic when they have to reach customers. what amazon also does is sell their own products on that platform. they have the benefit of all of the data that goes through that platform around other merchant businesses and their sales, and what they have done with that data is use it to copy other business products and then preference their version above the other businesses, so this is the practice that we saw anecdotally happen regularly, so that is one problem. the other problem is just that they have so much information about these corporations, and they tie their own services together. so if you want to sell a product on amazon, what you see is you might have more ability to reach customers if you use the amazon
fulfillment services, so this is something that is not legal and should be enforced against but has not been, and it extracts huge fees. yesterday, the institute for self-reliance came out with their report that shows that amazon charges 30% fees for businesses that transact on their platform, up from just 18% a couple of years ago, so that extraction became hurtful for businesses and became a tax on businesses and is one that members of congress yesterday spoke out against and held corporations accountable for. >> barbara comstock, what is your response to what you have heard? >> we did not hear a lot, because a lot was anonymous, and then they did not let the business leaders respond in detail, like when they were talking about your information that is online, and somebody
tried to explain you can actually delete some things, like your search history, and if you do not know how to do that, you can go on google, "how do i delete my search history, and find out, and they really did not want to hear the answers. i thought the hearing yesterday was much like the hearing the day before with attorney general barr, where they had already made their -- they were telling their stories or anecdotes, and then they really would not let the different business leaders try to describe that. i think they were trying to -- the ceo's, to explain the business, trying to explain that, and it did not quite fit in the sec. that they wanted to tell their story. but i have to strongly disagree with the concept about these companies. you see people largely in the west complaining about we do not want to have these big companies. well, china has a lot of these big companies, and that is their
competition here. when you look at the companies in the space, 11 of them are american, nine of them are chinese. the european model, which many want to follow, certainly the chairman of this committee wants to, they do not have any big tech companies, because they do not look at the consumer welfare. they are looking at all of the other issues that the democrats were looking at. now, republicans were attacking them on bias issues and not antitrust issues. the antitrust issue at stake here is consumers and if they have an overwhelming market. ironically, when they were there, nobody talked about they all compete with each other and with other big companies like microsoft. you know, when you look at browsers, you know,
internet explorer was the top one 10 years ago, and now, chrome is. that came from competition. yahoo! was the original search engine. remember? in 1998, how they wanted to search. they are the new aol, and nobody could compete with them, and then this is the 2007 cover of "forbes" magazine, who said nokia. how are we going to catch up with them? it 2007, the iphone came out. and then americans did compete, and i think 10 years from now, you're going to see a lot of different things going on in this space, and these particular leaders understand you have to innovate, or you die. keeping up with the competition. just an example of us on zoom. zoom came out of nowhere. i do not need members of congress -- when i work with the tech community a lot, and i would not pretend to be an expert on technology, certainly
these members of congress have never run a business, tried to start a company. their stories come you can read books and how they lost their dominance, like yahoo!. so let's let the free market work this out. that has always been the republican position. i was certainly happy to see sensenbrenner, who has worked on this for a long time, talking about we do not need new antitrust laws. we can look at particular examples and see if there are any violations, but we do not need the new laws being talked about, where we go in and break up our most successful companies that are investing billions and billions of dollars. some of these companies are investing $20 billion in r&d. combining government
research and development, and our biggest competition right now, and the eu lost in the tech space along time ago, and we have some like the chairman trying to advocate for that, where we do not have these great american success stories anymore. sarah: amazon has 75% of e-commerce. facebook and google-controlled digital advertising businesses. and apple obviously controls how millions of developers reach consumers, so there is a whole range of issues related to market power and a predatory behavior that that market power enables these to participate in. it was remarkable to me that you essentially had mark zuckerberg and jeff bezos admitting to
acquire competitors to shut down competition rather than investing in innovation that we were talking about. that has been their strategy from the beginning, to buy up competitors, to squash competition, and to maintain their dominance through a strategy of monopolizing markets and through leveraging network effects. on another point, the china talking point is really quite tiresome. i think it is a good topic, but our economy has not been successful because we have a handful of goliaths that do not really innovate, that maintain a dominant position. china has infinite ability to support these large institutions, but our strength as an economy has always been because of our dynamism and because of innovation that real competition creates. so this is really a myth that we should look at the authoritarian, communist regime to model our economy after, and is a really dangerous one. facebook, amazon,
google, they are all squashing innovation and crushing competition, and at the same time hurting businesses all across the country and really putting people out of business. so i think that some of these kind of talking points about china is really a scare tactic, quite honestly, and it is not rooted on what has historically made our economy so strong, which is the ability for someone with a good idea to compete and grow in that way. that is not how these corporations are growing now. in the very beginning, yes. they were innovative. no question about it. and they delivered important services, and they could do that in an environment that was competitive, and basically the
failure of the antitrust and policymakers to understand how these corporations were achieving dominance and to buy into their talking points about being innovators really has been a huge problem for the last 12 years or so, so i think, congresswoman comstock's point, that needs to be updated. we have not seen that type of innovation in years, and that is because you cannot compete anymore in a real way against facebook and google. they can crush you and cut off your ability to reach customers. barbara: i want to make it clear that china has a very different model, and i am not advocating for that at all. i am advocating for us to continue the light touch regulation, not the heavy government, like jeff bezos knows how to run a tech company and what pieces need to go together. i think the reason we have succeeded for years in the
tech space and have bipartisan support for them was because we have these tech companies who are thriving -- these are american companies. american success stories. the opportunity to buy google, and some of these companies say, i am not going to be bought, and they go on to be huge successes, and certainly, if you listened to the ceos yesterday, jeff bezos left his job and started out when the dot com bubble hit in the 1990's. he was not even profitable then. he stayed at it. these are american success stories. and zoom, another american success story, but we want to have american free market principles. we do not want to adopt other models. the chinese model is off the table, but china is competition, when you look at areas like cloud computing. major investment. they have been
helping nih and our health care community to help us with a cure for diseases. google helps our small businesses. certainly, if you want to start up a business, you go with google or amazon and use their tools, you can then go on and start your own company. the next google or the next facebook, coming for the talent that these companies support, and i think that is an important thing that the u.s. government should invest in, and these companies do, the talent pipeline and human capital, and all of these companies are companies that have invested in people and invested in creating that pipeline with talent, and they are so important to that,
and certainly, u.s. government, and when i was in congress, it was more money for the tech talent pipeline. those are jobs that are making the united states, and what is going to be a talented environment with china, not by adopting china tactics but by adopting the good american success stories that allowed our tech community to be number one in the world, and people talk about breaking it up. what is going to come after that? we don't know. we have not run tech companies. i have learned from the people who do this to go out and do this and let the flowers bloom. allow the ecosystem. the ecosystem for great talent, great community and technology, to have that talent pipeline, and have companies that can innovate, make mistakes. all of the
companies you named before, they had mistakes. they had failures as well as successes. and when i worked in the virginia community, they have all of these small -- it is mostly small businesses, and it is the ecosystem you want to create. your tax system. your regulation system. regulation, more regulation, will make it harder to get further. people like steve case are going around lying to the rest. let's create that ecosystem without attacking these companies.
>> congresswoman, what about sarah miller's comment, that these large tech companies are prohibiting smaller entrepreneurs from entering the market? well, i do not see that, but there are companies, and if they come forward, there is antitrust law where they can look at it, and there is a consumer standard, and they are dominant, the doj guidelines are that they roughly control two thirds of the market. but when you look at search and advertising, there are different ways of calculating it, right? walmart is a big competitor online now as well as in person selling. in fact, they have both different competitive aspects, and in search, if you are looking for a book, you may not go to google or facebook. you may go to amazon first, because you know they are a bookseller. it depends on what you're looking for. they are all very competitive right now, but if startups are having problems,
let's talk to them along the lines of what steve case and other entrepreneurs are doing, trying to get more investment for women , tech companies. i am a big advocate of that. i have a leadership program at george mason university, trying to promote more women in tech, funding women in tech, funding minority communities who do not have that opportunity, get that in the pipeline. and what can we do to give the startups money and startup funds? what will be more helpful for them to get into that ecosystem in advance? and oftentimes, we find business going to the next level, the mid-level, and that is where it stops, and there are a lot of issues there that you can look at without breaking up the big tech companies, because we want to have not just $4 trillion companies. i would like to see 40 or 400 and have america lead the world, because i think the world is much safer than having
china lead with their bad policies with these things. >> sarah miller, what is the american economic liberties project? >> we are looking at the business and economic challenges across the american economy, and it is extraordinarily pronounced in the tech sector, but many sectors of the economy, large and small. so what we have seen over the last 40 years in particular is with the consumer welfare standards, which really does not prioritize looking at actual competition in markets. it prioritizes reductions in price only, and we have seen that approach to antitrust, which has not how antitrust was enforced for much of our country's history. it turned out to be a failure. it was a pro-monopoly approach. it was not true. in fact, a study that came out this year says an average family pays thousands more compared to when we had a much more dynamic economy in 1980. so we essentially have an economy that is structured very
concentrated, and i would say we have private regulators, private taxation because of the power of these large behemoths. small businesses in a survey recently found that 70% of them responded that their biggest concern was actually amazon, not taxes, not regulation. so what we are actually seeing is private institutions, private corporations, who are not democratically accountable. regulators, tax of small businesses and the market so they benefit themselves and enhance their own power at the expense of everyone else with which they have an economic relationship, so the idea that we are helping consumers is not true. in fact, another study found that after mergers in markets, prices go up by 7% in those markets, and another study
found that markups have increased by 300% since 1980, so this whole idea that in general, prices go down when operations get bigger, it is just kind of nonsense. it is not really taken seriously anymore with a lot of lip service. the facts show it is not true. >> and -- >> one example, advertising costs. small business, advertising costs have come down 40%. $100 in print -- what you get for $60 with online ads that are much more targeted and effective. you have seen government using this. dod, to
recruit the military, the navy. they can target it to the people of appropriate ages, gauge their interest, and do things like that, which are much more effective than a big ad campaign on tv, but for small business, in particular, that saves money. for social media, much more cost-effective than having to put ads on broadcast tv or a newspaper locally, so i think you definitely see a lot of costs coming down. certainly, for everyone who has a phone, we now have the power in our phone, and it costs less then when we had phones back in the 1980's. i mean, i remember when i was in college, my phone bill was higher than my smart phone bill is now, but i did not have a computer. i did not have unlimited
calling. when i would call my husband, i would have loved to spend hours on the phone, but i had to pay by the minute, and there was not competition, and the cell phones came in, and you think of all that they do. who would think that we would be watching television and all that we do on our cell phones, and the costs have gone down while giving us more usage, and that is why these companies are so popular. to have the elites come in -- the wall street journal had an excellent editorial today saying everybody hates big tech, except all of these people who use it. and so you had, yesterday, democrats saying too big, we want to break you up. republicans say, you are mean to us, we do not like what you say or your employees, and yet the american people by 70% or 80% or more are saying, "do not take away our smartphones. let us have these tools." this is the world that works. create a better ecosystem for
people to start businesses and to advance to that stage, but do not attack american success stories. host: barbara comstock served in congress from 2015 until 2019, currently a senior advisor at baker donaldson, among other things. which tech companies are you working with, congresswoman? barbara: well, i work with net choice that represents a number of tech companies. i had legislation in the statehouse to support data centers which provide the ecosystem so we could all be online all of the time that we are now, and that has worked spectacularly through the entire pandemic. then i do work with google. i was an advocate when i was in congress of these tech companies both small and large, because i saw how they improved our daily lives, particularly when congress focused on health care.
they had a hearing on how we can use apps and technology to be able to map our diseases. kids with diabetes can get tools to track on their smartphone what their blood sugar is like, and their parents can monitor it at the same time, so they can be in school. what modern technology has done in the health care field, it has advanced in telehealth over the last few months by removing a lot of the regulations that existed before. i do not think we will go back to that regulation, because we have had years to advance in just a few months because we have removed some of the things that were holding it back. so i think we have to go to the entrepreneurs, find out what are the tools we can give them to advance, and help them start to be a successful tech company, but it is not breaking up the american success stories.
they had to challenge the googles and aol's. myspace is still out there. people just don't use it. there are other browsers. you can use bing and duckduckgo. we do not know what it will be 10 years from now, but we have a very competitive tech ecosystem. i think we need to let it thrive and grow and continue to solve the problems that we have seen them address and put their money in, in research, in helping disadvantaged communities, and helping our education community, and nobody has been better throughout this pandemic than our tech companies, which is why congress has an approval rating of 18%, 89% of americans say, "thank you. it helps my life to have this kind of technology available." host: so, sarah miller, what would be the solution to the kinds of problems you have described?
sarah: one thing i know is it is really hard to find defenders of tech companies who are not on the payroll. i was on a radio show with an academic who ended up agreeing with me that facebook should never have bought instagram. i think it is common knowledge that these markets are extraordinarily consolidated and because of the network effect, that will not change if policymakers do not act. and i encourage the congresswoman to dive into the situation that the antitrust committee is looking at, because we have elevated time and time again the voices of entrepreneurs, small businesses, and medium-sized businesses who are being abused by these corporations and are preventing the next wave of innovation and technology from taking place. that is one thing that has been really remarkable about the investigation, is the understanding of how these markets operate in a very sophisticated way.
that was on display. i think there are two ways to think about this, and all of these corporations are different. they operate in different ways. they have different problems. they are not like the tobacco companies, where they are very similar. they require unique solutions. at a basic level, their power needs to be dealt with, and their power needs to be dealt with both because it is crushing competition but also because it is fundamentally a threat to democracy, as the chairman noted in his statement yesterday. to have these huge behemoths who have great economic and political power that can blanket washington, can fund institutes, like george mason university, that can exert their influence in direct and indirect ways is extremely dangerous, and that for all of the people and all of the businesses that do not have those resources at their disposal. so i would say from a solutions
standpoint, structural reform, structural separation. you know, fixing the mistakes that the enforcers in the past have made under this kind of narrow, consumer-focused framework is critically important, and i was heartened to see so much focus on power and market structure in the hearing. i think the other things that need to happen, and it is different for different corporations, are clear rules of the road and regulation, enforcing laws that are already on the books that have not been enforced in a very long time that protect other businesses and consumers in many cases from predatory behavior, so things like predatory pricing, which amazon engages in regularly with really no accountability. things like copying competitors. amazon, google, facebook, apple. things like discriminating between different sellers or different entities with which you have an economic relationship.
apple gives amazon prime a sweetheart deal in the app store. everyone else has to pay top dollar. these are all types of predatory activities that in the past we had enforced against to protect economic dynamism and help people move from having a good idea to being able to grow to be large and to scale. there is not a problem with bigness. there is a problem with monopoly power. and that is what we see in digital markets today without question, and that is also throughout a range of different industries in the economy, whether you're looking at meatpacking and agriculture or hospitals or media. challenge.ystemic this is what our organization focuses on, the tip of the spear is digital markets, and yesterday's hearing was really a watershed moment. congress comes together, both democrats and a number of republicans, to really ask some very serious and important questions about the monopoly
power of these institutions. host: alright, we are already over our allotted time, but i have a final question for each of you. sarah miller, i will start with you. tim cook, jeff bezos, mark zuckerberg, what did you hear from one of the four ceos that really caught your ear either positively or negatively? sarah: the one thing that really struck me, and it was early, i think in one of the first sets of questions, is mark zuckerberg essentially admitting that they purchased instagram in order to prevent a competitor from rising up that could threaten their dominance. he admitted that in it email that the subcommittee had in the file, and then he also admitted that in the hearing yesterday. bezos made a similar statement, saying they had purchased corporations to achieve market position.
these are mergers that should not have been approved in the first place, and we have to make sure we enforce against it in the future, and then i think congress is taking a very serious look at it. host: congresswoman comstock, your former colleague, jim jordan, called out tech companies for having an amplified conservative bias. -- an anti- conservative bias. do you agree with that? barbara: no, i do not. in terms of what i -- i think some groups that have complained that they have been discriminated against. you hear complaints from both sides, but i find these tools very effective. but what i heard from those leaders of those businesses was the american success story, and all the things they are doing to help our current economy thrive and grow and how to make america
the most competitive tech ecosystem in the world, and i believe those tools are in place now, and can be, and the antitrust law was included there. but what i did not hear the democrats say anything about how it is harming consumer welfare, and that is the standard, and you cannot call the company a monopoly when they have three or four competitors. you call the monopoly, they are not a monopoly in search when you are sitting there, and there is google, facebook, pinterest, all of these companies are search companies, so that is not a monopoly. you notice they never put the numbers up there, or they create numbers that they do not have. but you can go through each of those spaces and see if there are competitors, whether it is phones, apps, search, ads, and they all have competitors and do not reach that two thirds or more threshold, and they certainly are not monopolies, so
i do not think they understand what the word "monopoly" means when they can call any of these companies in a very, very competitive market, which i think they demonstrated by talking about how they compete with each other as well as with smaller companies. everybody is competing with zoom now on streaming. that is a good thing. the streaming market -- netflix, disney, hulu. that has thrived during the pandemic, and i do not think that will change. people don't just get one, they go to more. it is a whole new ecosystem where people did not think they would have more than one or two competitors before now. host: former congresswoman barbara comstock, and sarah miller, the executive of the american economic liberties project, thank you. barbara: thank you. ♪ has unfiltered
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president. sen. shumer: thank you for coming. it was a disappointing meeting. we wanted to begin to meet in the middle you'd unfortunate, they rejected it. -- could meet in the middle, and unfortunately, they rejected it. they said they could not go much above their existing $1 trillion, and that was disappointing. the bottom line is very simple. there are only really two choices. choice one, negotiate for them. there are only two choices for them -- negotiate with democrats and meet us in the middle. don't say it is your way or no way. if we do that, we can accomplish a whole lot of things. the other