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AMERICAN INNOVATION AND CHOICE ONLINE ACT
Ms. KLOBUCHAR. Mr. President, I rise today, as I will many times, to address my colleagues on the topic of competition policy, especially in our digital markets where we have a situation where a few Big Tech titans have grown into the largest corporations our country has ever seen.
Just today, there is new reporting that shows that Google and Amazon have used their gatekeeper power to eliminate their competition for years. I don't think we are surprised by this, but this is new information that I think is important, as we learn new things all the time, that my colleagues know.
According to a 2014 memo first obtained by the House Judiciary Committee, a Google executive described--this is what the memo says--
``grave concerns'' about a new service from a rival ``competing with their core search experience.'' The documents also included an email from 2009 in which Amazon executives discussed ways to stop a company--
that would be Diapers.com, a company it later bought--from advertising on their own platform.
This gets to the core of what we are talking about here and why we must take action. This email that was made public today reads:
We are under no obligation to allow them to advertise on our site. . . . I'd argue we should block them from buying product ads immediately, or at minimum price those ads so they truly reflect the opportunity costs.
What does that mean? Well, Amazon could charge their rival whatever they wanted for advertisements and try and keep consumers in the dark about lower prices. That is only two from the dozens of documents newly released today by the House Judiciary Committee.
I come to the floor today because the evidence is clear and continues to mount. These dominant tech platforms have abused their power for years, and now we are at a crossroads. Will America continue to be a place where entrepreneurs lead our economy forward or will we become a country where a handful of monopolists get to dictate who gets a chance to succeed?
Remember when they all started--whether they were in garages or whatever--they started with this idea that they were platforms for sharing this information. I don't think anyone ever conceived they would also own things on the platform and then preference those things over other competitors. That is what is going on now. This is where consumers go to make their decisions about what they are going to buy.
When you have situations where Google has 90 percent of the search market, that is a monopoly, clear as can be. The decisions we make and the actions we take today will set the trajectory for American innovation, for ingenuity, and prosperity for the next generation. I say we must meet the moment.
As a member of the Senate Judiciary Committee, I have had the opportunity to serve as chair of the committee's Subcommittee on Competition Policy, Antitrust, and Consumer Rights. From my vantage point, I can tell you it has become painfully obvious, as many of my colleagues--Democrats and Republicans--have seen, that we have a serious competition problem throughout our economy, especially in Big Tech but not only in Big Tech. This issue impacts all Americans every single day.
Why are there only two dominant smartphone operating systems? Why do social media companies face so few consequences for playing fast and loose with our personal data? Why does Amazon keep raising prices that consumers and small businesses pay? The answer is simple: They are monopolies. That is what monopolies do. They are the big guys on the block, and there is a lack of competition.
Despite the volume of evidence that supports taking action, Congress has yet to pass a single bill on online platform competition since the dawn of the internet. That is right. At the beginning, we were told we don't want to squelch these new products and competition. That made sense back then, but it doesn't make sense now.
This evening, I am going to talk about the problems consumers and small businesses are experiencing in the online marketplace and the cost of inaction. It is really easy around this place not to act, to say things are too hard to deal with, whether it is climate change, whether it is immigration reform, whether it is tech policy from competition to privacy. But at some point, you have to stop blaming other people and do something about it.
I am going to review how other countries are attacking this problem and actually taking it on. I will discuss the many examples throughout history when Congress and enforcers have stepped up to confront monopoly power. This has long been a problem in our country.
You go way back to the Founding Fathers. So many people actually came to America because they wanted to be entrepreneurs. They don't want to have to buy all their tea from the East India tea company. You think about the Senators from the past taking on monopolies. Whether it is the railroad trust, whether it is the sugar trust, they took on monopolies.
There are old cartoons in this very Chamber, our Old Senate Chamber, showing these big, bloated monopoly trusts looking down on the Senators because they controlled them. We don't want that to happen in our modern day because we know many times from the past, the Senate did stand up and do something. That is the case I am going to make today for why my bipartisan bill with Senator Grassley, the American Innovation and Choice Online Act, is necessary to level the playing field in our digital economy.
First, let me say a word about what we are up against. That is what everyone sees. I am trying to measure my audience today on C-SPAN versus what we believe is well around $100 million that the Big Tech companies have purchased for ads, especially in States where Senators are up for reelection where they have purchased ads all over the country. But people do listen. There are a few people here right now, and if I give this speech in different ways a number of times, I can win.
Let's talk about what we are up against. When I talk about the dominant digital platforms, I am talking about some of the most powerful companies in the world with armies of lobbyists and lawyers--
thousands and thousands of lawyers and lobbyists. I have two. They are sitting right here in the Chamber.
We do have kind of a David and Goliath situation, but the lawyers for Big Tech are everywhere, in every corner in this town, at every cocktail party, and all over this building. I tell my colleagues they don't even know sometimes when someone is trying to influence them because they may think they are just talking to a friend or someone who worked on their campaign a while ago. But once they talk about antitrust and Big Tech, they should ask the person if they are being paid by a tech company or if they are on the board of a tech company or if they have some affiliation with one of the Big Tech companies because, time and time again, they have been surprised to find the answer is yes.
But these Big Tech companies aren't just lobbying my colleagues; they are also lobbying the American people with astroturf campaigning and other dishonest PR tactics.
At the same time that I have been working with my colleagues in good faith on commonsense solutions to online competition problems, these companies have been telling anyone who will listen that acting to protect competition in our digital markets will sometimes or somehow cede our national security or it will outlaw Amazon Prime--claims that were disputed by the Department of Justice and Amazon's own lobbyists in the press. That is just two examples. We deal with this all the time. They will say anything and everything. Senator Grassley and I came down here together to the Senate floor to refute this a few months ago.
Then, of course, there is the money. I think this is actually the best evidence of just how big and dominant and bullying these companies are, running ads in States where people are in tough races. I think they get the message. They are showing they are out there. They are showing they are going to be able to put whatever money it takes into ads to stop this bill. How obvious can it be? Message received: We are out here, and we can hurt you.
And, by the way, they wouldn't be spending millions and millions of dollars to stop us if we didn't have momentum. Let me give you some numbers. In 2021, Big Tech companies spent more than $70 million combined lobbying Congress. That does not include these ads I am talking about. In the first quarter of this year, Facebook, Meta; Amazon; Alphabet, which is Google; and Apple spent more than $16 million lobbying Congress. That is in one quarter. And you see my two lawyers on the other side.
In just one recent week in May, one industry group, the Computer and Communications Industry Association, spent $22 million on TV ads against this bill. That is $22 million against one bill in 1 week. So when you see those TV ads, which they love running in Washington so that Members will see them, remember that number, $22 million, and think ``two lawyers.'' That is what we are up against.
But it doesn't surprise me. I am not trying to win a popularity contest with the tech companies. That ship has sailed. I am simply trying to do the right thing.
Since I am a Senator and not a tech-backed industry group, I don't get to spread my message with a multimillion-dollar ad campaign. I don't have paid actors, but Big Tech lobbyists can't stop me from standing here today on the floor of the Senate and tell you the truth. The truth is these companies will stop at nothing to protect their profits, even if it means stifling the innovation and ingenuity that has made our Nation's economy second to none. American prosperity was, of course, built on a foundation of open markets and fair competition. It is competition between companies that give consumers lower prices, drives manufacturers to constantly innovate and improve their products, and forces companies to pay fair wages to compete for workers.
Competition provides opportunities for entrepreneurs to start and grow new businesses, fueling future economic growth. But if you look at our markets today, we see big cracks in that free market foundation. We see bigger businesses and fewer competitors and more dominant companies using their market power to suppress their rivals and line their own pockets.
As an example, more than two-thirds of U.S. industries have become more concentrated between--and these are the last figures we had, 1997 and 2012, because our government doesn't really collect these figures because someone stopped them from doing it. The White House highlighted this problem a year ago in its Executive order on competition, pointing out that in over 75 percent of our industries ranging from agriculture to banking to healthcare, a smaller number of large companies now control more of the business than they did 20 years ago.
This is raising prices overall for Americans. The lack of competition is estimated to cost the median American household $5,000 per year. The problem, of course, is most obvious in the tech industry because that is a relatively new area compared to some of our more embedded industries. And while, over time, we did things with pharma, we have done things in other areas, there is, as I noted, no law passed since the advent of the internet involving tech competition.
Tech has given us some great products. I am wearing one, a Fitbit. I use Google Maps, order from Amazon and other places, carry an iPhone. Over the last several decades, companies like Google, Amazon, Apple, Facebook, Microsoft have created many great innovations. We went from the Wall Street Gordon Gekko days with his cell phone affectionately known as the Brick, that weighed 2 pounds and was 13 inches long, to cell phones the size of a watch.
But while these tech companies were once scrappy startups innovating to survive, they are now some of the largest companies the world has ever known. And when you get that big--guess what--you have responsibilities, you have to be accountable. You aren't just out there as a brandnew startup doing whatever you want. But that is the mentality.
They are still introducing new products; that is great. But they are also gatekeepers, and they use their power as gatekeepers to stifle competition and innovation by their competitors and the businesses that have no choice but to use their services. So that is a problem.
So if you want to sell something big time, you better get on the App Store. But when you get on the App Store, depending on the size of your company, as you get bigger--let's say you are Spotify--you have to pay 30 percent of the revenue you make on that App Store to Apple for the pleasure of competing with their own product, Apple Music.
So to my colleagues I say this: Yes, you can love the products; you can love the CEOs themselves; you can love the companies--but you also have to love competition and love and take seriously the unique role that we are supposed to play as Senators and as Members of Congress to ensure there is an even playing field.
You go back, way back, to the godfather of capitalism, Adam Smith, who said to always watch out for the standing army of monopolies. We knew from the beginnings of this country that we would have to step in time and time again to make sure that we rejuvenate capitalism. That is what this is about.
Throughout history, whether in telecom in the 1990s with the breakup of AT&T--which, by the way, made the company, according to one of their former presidents, stronger--or by passing the Hart-Scott-Rodino Act in the 1970s, to stopping sweetheart merger settlements, Congress has brought down prices over time by ensuring that there is competition. It is actually a uniquely American way to do things.
I am grateful for our friends in the House, Chairman Cicilline and Ranking Member Ken Buck, who led bipartisan hearings on Big Tech and its anticompetitive conduct. They gave us a whole treasure trove of information. They conducted an 18-month investigation in the House Judiciary Committee--18-months--focused on how the largest and most dominant digital platforms harm small businesses, quash innovation, raise prices, and reduce quality.
This is, by the way, what bothers me when some of our colleagues say, Well, we don't know enough.
Seriously? Eighteen months of an investigation. And anyone in this room--it is public--can go look at it: 1,287,997 documents and communications--this is on the record--testimony from 38 witnesses, a hearing record that spans more than 1,800 pages, 38 submissions from 60 antitrust experts from across the political spectrum, and interviews with more than 240 market participants, former employees of the investigative platforms, and other individuals totaling thousands of hours.
That doesn't even include what we have done in the U.S. Senate Judiciary Committee. So, please, spare me hearing that we have not learned enough about this.
The report is 450 pages, but let me read some excerpts that capture the harms to consumers and small businesses that we have seen as a result of our failure to update our competition policy.
Here we go. This is from the record:
To put it simply, companies that once were scrappy underdog startups that challenge the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons. Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, [and] Google has come at a price.
These firms typically run the marketplace in each of their areas. You all know that. Everyone in this room knows that because 90 percent of the people, when they are doing a search engine, they go to one that is Google. You know the dominance of Amazon. You all know the dominance of these companies.
These firms are in a position that enable them to write one set of rules for others while they play by another or to engage in a form of their own private quasi-regulation that is unaccountable to anyone but themselves.
[T]he totality of the evidence produced during this investigation--
This is from the House--
demonstrates the pressing need for legislative action and reform. These firms have too much power, and that power must be reined in and subject to appropriate oversight and enforcement. Our economy and [our] democracy are at stake.
The subcommittee identified numerous instances in which dominant platforms engaged in preferential or discriminatory treatment. In some cases, the dominant platform privileged its own products or services. In [another], a dominant platform gave preferential treatment to one business partner over [the other]. Because the dominant platform was, in most instances--
And this is what is key--
the only viable path to market, its discriminatory treatment had the effect of picking winners and losers in the marketplace.
That is us. We are supposed to pick the winners and the losers in the marketplace and decide what is the best product based on what is supposed to be the least priced or what is supposed to be the highest quality. But now they have inserted themselves while at the same time, in many instances, placing their own product above others, not because they are less money, not because they are better, but because they are theirs.
Google, for example, engaged in self-preferencing--
I am back to the report--
by systematically ranking its own content above third-party content, even when its content was inferior or less relevant for users. Web publishers of content that Google demoted suffered economic losses and had no way of competing on the merits. Over the course of the investigation, numerous third parties also told the House subcommittee that self- preferencing and discriminatory treatment by the dominant platforms forced businesses to lay off employees and divert resources away from developing new products and towards paying a dominant platform for advertisements or other ancillary services. They added that some of the harmful business practices of the platforms discouraged investors from supporting their business and made it challenging to grow and sustain a business, even with highly popular products. Without the opportunity to compete fairly, businesses and entrepreneurs are dissuaded from investing; and, over the long term, innovation suffers.
By virtue of functioning as the only viable path to the market--and that is what they are in so many instances--dominant platforms enjoy superior bargaining power over the third parties that depend on their platform to access users and the market.
Their bargaining leverage is a form of market power [in] which the dominant platforms routinely use to protect and expand their dominance.
Since 1998, Amazon, Apple, Facebook, and Google collectively have purchased more than 500 companies. The antitrust agencies did not block a single acquisition.
They did not block a single acquisition. And as I look back, I remember, just--in bright lights--that e-mail that was discovered during the House hearing in which Mark Zuckerberg wrote, ``I would rather buy than compete.''
``I would rather buy than compete.'' To me, that pretty much is exhibit A. The House report has far more information than I could ever share in a single speech, but I will be sharing it over the next few months.
But overall, the House report found that if there was true competition, we would have a more dynamic and innovative tech center with more small and medium-sized businesses. Maybe if Facebook hadn't bought them--remember, ``I would rather buy than compete''--an independent Instagram, an independent WhatsApp--because Meta now owns them--could have developed the bells and whistles and privacy controls and other things. We will never know.
Why will we never know? Because they bought them. But if you have big monopolies that buy up all of that potential innovation, that buy up smaller companies, you lose the ability to get at some of the major challenges that we see in our country.
I believe in the market. I was in the private sector for over a decade. I believe in capitalism, but if you don't have an even playing field for competition, you have got a problem.
Over time, if left unchecked, big companies dominate markets, exclude their rivals, and buy out their competitors.
As one of the witnesses at a hearing that I chaired with Ranking Member Lee said before our Subcommittee on Competition Policy, Alex Harman of Public Citizen put it:
When companies face less competition, either because of consolidation, or from forces that make competitive threats less likely, they invest less in research and development. They in turn are less likely to produce new innovations [that benefit consumers and the economy]. And, all too often, companies across the economic spectrum that depend on these gatekeeping firms to reach the marketplace slash jobs and cut back on developing new products.
As one founder put it: ``It feels like we are treading water with cement blocks around our feet.''
This is what has been going on in our country. It describes the problems we are facing from these digital gatekeepers. We have also heard from many other companies, nonprofits, trade associations, about what has been happening to them as a consequence of the monopoly power wielded by the largest digital platforms.
Consumer Reports says this:
Multiple investigations and studies have found that the largest online platforms have too much market power, and that this is resulting in harm to consumers, businesses, and the economy.
A group of 60 small and medium-sized businesses wrote a letter saying:
Gaining access to the dominant platforms and integrating with their services has increasingly become a take-it-or- leave-it process replete with anticompetitive demands. It doesn't serve American consumers or small and medium sized businesses when the tech behemoths use their platform dominance to tilt the competitive scales.
In January, the National Association of Wholesaler-Distributors wrote:
Unchecked, Amazon's dominance threatens to cripple the highly competitive B2B system in the United States.
The American Hotels and Lodging Association, not exactly a radical group, wrote:
Dominant technology companies give their own paid advertising products and services preferential treatment and placement within their platforms to ensure that, despite the specifics of what a consumer may be searching for, they will likely be steered down a booking path that benefits the search provider.
Not that benefits you, but benefits one of the biggest companies the world has ever known.
From a group of 40 small and medium-sized businesses back in January:
Due to their gatekeeper status, dominant technology companies can: use manipulative design tactics to steer individuals away from rival services; restrict the ability of competitors to interoperate on the platform; use non-public data to benefit the companies' own services or products.
And I could go on.
So what do we have here? Google has 90 percent market share in search engines. Apple controls 100 percent of app distribution for iPhones, and Google controls the other app distribution, so they are what we call a duopoly. Three out of every four social media users--and there are 4 billion of them--are active Facebook users.
Amazon is expected to seize half of the entire e-commerce retail market this year. That is what is happening.
What are we doing? Let me repeat: We have done nothing. We have done nothing. We have had hearings; we have thrown popcorn at CEOs. But we haven't passed one bill out of the U.S. Congress to do anything about this competitive situation.
What do other countries do? Well, other countries are now leaving us in the dust. They look to our leadership because America has always been known as a country of entrepreneurs and a country that encourages competition, but now look what is happening. Canada introduced legislation in April to make the dominant digital platforms fairly compensate news publishers for their content, following Australia's lead, which took similar action about a year earlier. And Europe is moving forward with its Digital Markets Act, DMA, a broad and sweeping piece of legislation that will place many new obligations on digital gatekeepers. The legislation puts rules of the road in place for how the digital gatekeepers determine search rankings, set defaults, process and use personal data, negotiate with business users on their platforms, interoperate, and demonstrate the efficiency of their digital advertising programs and the effectiveness of them. It also required gatekeepers to notify the European Commission about intended mergers and other deals that include the collection of data.
If that sounds more intense than the bill Senator Grassley and I have put together, it is more intense. But the point is that it has gone through the European Parliament.
In the European Union, we are seeing the effects of efforts to rein in Big Tech. Just last week, Amazon made a settlement offer to the European Commission in an attempt to resolve an antitrust case. The European Commission investigations into Amazon's conduct were launched in 2019 and 2020 and involved three key issues that implicate self-
preferencing conduct in the United States too. First, the Europeans investigated whether Amazon used nonpublic data from sellers. Remember, the sellers have no choice if they really want to sell their stuff. They have to go on Amazon, right? So they have to give data to get on that platform. What they found out was that Amazon was using the nonpublic data from sellers to inform its own targets for new product development.
That is what monopolies do.
The little sellers have no choice but to sell on the Amazon platform. Then Amazon says: Oh, now we are going to see what products are good and how they are doing because we uniquely have all the information, and then we are going to copy that product, either directly, as they did with a four-person luggage carrier firm where they literally ripped off every detail of the product--based on reporting from the Wall Street Journal we now know that--or they just know this product is doing well so they do one just like it, and then they put it at the top of the search engine. Amazon has sworn under oath in the U.S. Congress that it does not do that.
Well, now let's look at what is happening in Europe. Amazon also tightly controls who wins the coveted Buy Box, often awarding that preferred placement to itself. Third, Amazon requires sellers who want to be Prime to use Amazon's logistics services even if there could be a better alternative.
We are not getting rid of Prime. We are just saying you have got to open the door so there could be alternatives.
Amazon's settlement offer is filled with elements from my bill. That is what is so interesting because around this place or if you watch the TV ads, you would think the world was going to end. If we did a modicum of things while investigations are going on--of course, we know that there are various investigations in the Justice Department and around the country at the FTC. We are just going to sit there and let this continue until every appeal is made?
Here is what is so interesting. In Europe, under the offer that Amazon just made in Europe, Amazon will stop using seller data to decide what private label products to launch, make it easier for third parties to win the Buy Box, and allow sellers to participate in the Prime program without using ``fulfillment by Amazon'' services to manage logistics like warehousing and shipping.
My bill with Senator Grassley and what was called the ``Ocean's 11 of cosponsors'' because everyone has such different political beliefs, but we come together in support of capitalism for this bill--this bill that we have here, that is what it would do. It would require Amazon to do the same things that I just mentioned that they put forward in their settlement offer in Europe. Yet Amazon has claimed, in its multimillion dollar ad campaign, that this will break Prime in the United States. The hypocrisy is simply stunning.
Why should consumers in Europe and small businesses in Europe have the benefit of the offer they are giving them, and we in the United States--we, who host their company--try to simply put the same requirements into law, and we are told: Oh, this is outrageous, when they are offering the exact same thing in other countries.
The British have been working on these issues, too, particularly when it comes to app stores. And I want to thank Senators Blumenthal and Blackburn for their leadership in this area. The Competition and Markets Authority in the United Kingdom just last month issued a final report on the app store ecosystem, reaching the following conclusions. This is in the United Kingdom, which is, of course, a government that is different than the one we have here.
This is from the Brits:
Apple and Google have each captured such a large proportion and volume of consumers in the UK that their ecosystems are, for practical purposes, indispensable to online businesses.
I think that is pretty fair to say that is what is going on around here.
Let me continue with the Brits.
Apple and Google act as gatekeepers to most UK consumers with mobile devices, and as a result can set the rules of the game for providers of online content and services.
The evidence demonstrates that in the areas where Apple and Google generate the vast majority of their revenues from their mobile ecosystems, there is room for greater and more effective price competition. In the case of Apple's mobile devices, both firms' app stores, and Google's search and advertising services, the evidence strongly suggests the prices charged are above a competitive rate. . . . Consumers would get a better deal if Apple and Google faced more robust competition, either from each other or from third parties.
The report continues:
Weak competition within and between Apple's and Google's mobile ecosystems is harming consumers, and will do so to a greater degree . . . absent [any] intervention. Most importantly, we are concerned that consumers will miss out on innovative new features or transformative new products and services that are held back or discouraged by the power that Apple and Google wield.
That is one report.
If we continue to fail to take action in this country, we will lose our leadership position when it comes to antitrust on the global stage. That actually is not that great of a thing because then we are letting other countries determine what is going to happen to the future of competition. That is a huge risk for our country. It is time to take action just as Congress has done before when facing significant evidence of market failures and massive consolidation.
So when Big Tech companies talk about this bill or really any serious antitrust effort, they try to make it sound like we are pushing for some kind of unprecedented action. And, as I just discussed, that is not true because we know they are getting all kinds of pushback in other countries and actually are making settlement offers that are exactly akin to some of the things we have in the bill.
But it also isn't true in the history of our own country.
I think everyone--while people don't think they have something in their background to do with monopolies or their dads or their moms or their grandparents had nothing to do, everyone has got something about competitive policy that affected their lives in the past or affected their relatives. For me, I think of the James J. Hill House in St. Paul. No, we never lived there. I will get to that in a minute.
Calling it a house is actually an understatement. The 36,000-square-
foot mansion has 22 fireplaces, 13 bathrooms, and a 100-foot-long reception hall. It was constructed in 1890, which is the same year that Congress actually finally did something about competition by passing the Sherman Act.
The man who built this house, James J. Hill, was a railroad magnate whose railroad ran from St. Paul to Seattle. He consolidated multiple railroads across the country using a legal concept called a trust--that is why we have antitrust--in which the stockholders of multiple competitors transferred their shares to a single set of trustees. There were all kinds of trusts, as I mentioned--rail trusts, oil trusts. Standard Oil Trust controlled more than 90 percent of the country's refining capacity. The Sugar Trust controlled 98 percent of refined sugar. And we had trusts in everything from sewer pipes to thread.
When I was growing up, my mom would like to take me to see the Christmas lights by that house and other estate houses, and I remember at some of the houses, unlike this one, there were actually people in it and kind of ducking down. She loved to show me those things on my way from piano lessons in her red car. And she would remind me that in order to build that house, Hill needed workers. Hill needed the monopoly railroads that gave him the money to build this humongous mansion, and he needed cheap labor to do the work.
That is where my family comes in. That is where the Klobuchars fit in. My great-grandpa and my grandpa were both miners in the iron ore mines in Northern Minnesota, and they did the work that supported the monopolies. Over time, unions came in; wages got better; the mines got safer. But in the end, that is how he built his house.
Our Nation, as I noted, has a very, very rich and difficult history of dealing with monopolies. But every single time, whether it was the East India tea company and throwing that tea into the harbor--yes, it was about taxation without representation, but it was also about a monopoly company. Every single time we have found a way to push back, whether it was farmers in the Granger movement with their pitchforks taking on the cost of rail, whether it was in Chicago, the Pullman strikes, strikes by workers against monopolies in the beef industry.
Finally, in 1901, Republican President Teddy Roosevelt rode his antimonopoly horse right into the White House. He finally did something about it. He used the first passed antitrust law, the Sherman Act, and was able to actually take on the trusts. And since then you have seen this rejuvenation over time. Sometimes, there is a lull, and then things get so bad--like what happened with AT&T--that between Democratic and Republican administrations, people come in and do something about it.
I know a little bit about this because my first job out of law school was representing MCI at a law firm, and that is when they were fighting to get into the monopoly market. Finally, when AT&T was broken up, what happened? Long distance rates went way down, and we finally got a cell phone industry because one company wasn't controlling everything because they did not have at that time--after a while--they were cool at first, and then they didn't have any kind of incentive to innovate. Then they finally did.
That gets us to the present where we have been hanging out and waiting and doing nothing for now decades and decades since the advent of the internet. And it is time to act--hence, our legislation.
January 1, 1983, is considered the official birthday of the internet. So it has been 40 years since then, and we still have not passed, as I noted, competition legislation. That is why our group of Senators have come together. And that includes Dick Durbin, Lindsey Graham, Richard Blumenthal, John Kennedy, Cory Booker, Cynthia Lummis, Mazie Hirono, Mark Warner, Josh Hawley, Steve Daines, Sheldon Whitehouse, and several more who are supporting the bill and said enough is enough.
Our bill creates rules of the road for these platforms. That means, first of all, that they can't abuse their gatekeeper power by favoring their own products or services and disadvantaging rivals in ways that harm competition. In other words, in the examples I have used, Amazon will not be able to use small business's data in order to copy their products and then compete against them. Apple won't be able to stifle competition by blocking other companies' services from interoperating with their platforms. And Google won't be able to bias their platform's search results in favor of their own products and services without merit. That is what our bill does.
Amazon should rank products based on price and quality, not based on their own profit margins. The world's largest and most powerful platforms shouldn't be allowed to copy a small business's private data. I used the example of luggage carriers. There are many, many more.
Another challenge to cracking down on antitrust violations is how difficult and time consuming it can be to try these cases in court. Currently, the government has to spend millions on economic experts and years in the courts, and even after all that, the likelihood of victory because of very conservative Supreme Court cases in the last few decades is small.
This bill streamlines things in this area. It doesn't break up the companies. Some people would like to do that. That is not what this bill does. It doesn't stop mergers. I think we should put in stronger merger guidelines, but that is not what this bill does.
This bill simply gives us rules of the road for these companies to be fair going forward, while we figure out the other things that need to be figured out.
So support for this bill:
The Boston Globe, October 2021, said on their editorial page that
``[i]f the largest platforms can't be trusted to enforce even their own anticompetitive policies, then Washington has little choice but to act.'' They noted that the bill I have with Senator Grassley represents
``a chance for Congress to turn concern over Big Tech's sway into action.''
The Seattle Times, March 2022, wrote that ``[a]s antitrust efforts ramp up in Congress, Big Tech is fighting back, unleashing an army of lobbyists, enlisting business groups to apply pressure and engaging in fearmongering to avoid critical legislation.''
Let me tell you, a lot of our Senators have proved that fearmongering.
Lawmakers must forge ahead and support legislation that reins in the tech giants' worst impulses, ensures fair competition and protects consumers and small businesses. But no matter what the tech companies say, antitrust legislation will not slay these giants or kill innovation . . . that is not its goal. What it will do is limit Big Tech's ability to run roughshod over competitors and consumers. Enough Democrats and Republicans agree, but time is running out. Congress needs to act.
The Washington Post editorial, in April of 2022, called our bill a
``sound'' bill and pressed for movement on the legislation, including by writing as follows:
Antitrust . . . needs revisions that prevent dominant companies from building barriers to a marketplace where those consumers will have both choice and protection. Legislators should view the bills before Congress as an opportunity to achieve this aim at last.
The bill also has support from Agency experts who have enforced antitrust laws and worked to protect competition in the U.S. markets.
The Department of Justice has endorsed the bill. I know this is after the Department of Justice under the previous administration--under the Trump administration, with Bill Barr as the Attorney General and Makan Delrahim as the head of Antitrust--actually started the initial lawsuit--the major, major lawsuit--against Google and after the FTC, under the Trump administration, started the lawsuit against Facebook. They filed major lawsuits that are being continued by this administration.
The Department of Justice wrote this:
The Department views the rise of dominant platforms as presenting a threat to open markets and competition, with risks for consumers, businesses, innovation, resiliency, global competitiveness, and our democracy. By controlling key arteries of the nation's commerce and communications, such platforms can exercise outsized market power in our modern economy. Vesting the power to pick winners and losers across markets in a small number of corporations contravenes the foundations of our capitalist system, and given the increasing importance of these markets, the power of such platforms is likely to continue to grow unless checked. This puts at risk the nation's economic progress and prosperity, ultimately threatening the economic liberty that undergirds our democracy.
The Department of Justice continued:
If enacted, we believe that this legislation has the potential to have a positive effect on dynamism in digital markets going forward. Our future global competitiveness depends on innovators and entrepreneurs having the ability to access markets free from dominant incumbents that impede innovation, competition, resiliency, and widespread prosperity.
And Commerce Secretary Raimondo testified before our Senate Commerce Committee--I was there--saying:
I applaud your efforts and . . . clearly agree that we need to improve competition, which increases innovation.
She said:
Last month, the DOJ released a views letter--
That is what I just read--
on behalf of the administration in support of the American Innovation and Choice Online Act and the [Commerce] Department and I . . . support . . . and concur with the aim of [that] legislation.
It is not just officials currently in these roles who support this bill. Roger Alford, who served as a Deputy Assistant Attorney General in the Antitrust Division from 2017 to 2019, wrote to us, saying:
Bills such as S. 2992 provide hope that Congress will restore competition to digital marketplaces.
And while people may have seen the disingenuous ads on TV against the bill, I think it is worth reading portions of the letters that we have received.
The Consumer Federation of America wrote:
To maintain a healthy economy, it turns out we need both sensible regulation and antitrust enforcement. . . .
The American Innovation and Choice Online Act addresses the key issues in a sector of the digital economy that has not been addressed by competition policy and antitrust law. It targets big data platforms, which can abuse their market power as gatekeepers and vertically integrated firms, using self-preferencing and data to block competition. . . .
Antitrust legal scholars wrote--and I will put all of this in the Record. More than 60 small- and medium-sized businesses wrote, and YELP, DuckDuckGo, Y Combinator, and other businesses wrote that S. 2992 will ``help restore competition in the digital marketplace.''
Small Business Rising wrote that the legislation ``is a critical part of the solution to the harms caused by the outsized power of the tech giants.''
As the president of Hobby Works, a Maryland hobby shop, said recently, ``All that any small business asks for is a somewhat level playing field and a somewhat fair environment in which to compete.''
I will end with this: Monopoly power, consumer choice, and reduced innovation aren't topics that came up for the first time when we marked up and passed this bill. I just read to you the thousands and thousands of pieces of documents and testimony from the House for 18 months that our colleagues Representative Cicilline and Representative Buck put together. So don't tell me this is the first time, when that went on for 18 months and when we have had hearing after hearing in the U.S. Senate.
It is time to stop throwing the popcorn at the CEOs and actually do something. We got this bill through the Judiciary Committee with a 16-
to-6 vote just 6 months ago. Now it is time to bring this bill to a vote on the floor.
We have monopoly problems. You can still like the products. You can like the companies if you want--OK--but at some point they have gotten so big that you have to put some rules of the road in place to ensure that we can have the next Google or that we can have another competitor to Google or that we can have a true competitor to Amazon or that we can find, finally, social media platforms that protect our privacy and our data and our democracy. This isn't going to happen if you just let four big platforms control the day. As long as they do, which looks like it will be for the well foreseeable future, at least let's protect capitalism by putting some rules of the road in place.
I yield the floor.
____________________
SOURCE: Congressional Record Vol. 168, No. 119
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