Senate Examines Implications Of Big Data And Big Tech On US Consumers

big data collection in 2018 we had an extraordinary hearing with the head of facebook mr zuckerberg he faced 42 senators who had questions for him because of overlapping jurisdiction of the committees so it was an ordeal that went on for some period of time i was somewhere in the middle of the pack and the question i asked him was very basic would you mind sharing with us the name of the hotel you stayed in last night and after a kind of embarrassed and awkward pause he said no i said well would you mind sharing with us the emails that you've sent out in the last 24 hours and who you sent them to he said no and i said really isn't that the issue we're getting down to privacy and my right to say there's a line i'm going to draw and you can't cross it legally to invade my space and invade my privacy in today's world information is economic power companies are using it to make more money i share the concerns my colleagues that have enabled the collection of too much information by selected few giant companies there could be benefits and efficiencies to big data but there are costs and impact and these cost and impact affect everyone including our children i introduced the clean slate for kids online act because i was concerned with the amount of data collected and stored on our children and grandchildren every click a child makes on the internet leaves a trail of personal data that can last a lifetime companies that market online products and apps geared toward children are accumulating massive amounts of personal data and the kids never had the chance to even consider giving informed consent my bill would give every american enforceable legal right to demand that internet companies delete all personal information collected about a person when she was under the a he or she was under the age of 13. kids deserve the right to request a clean slate once they've grown up and are old enough to appreciate the consequences of data collection this bill gives them a basic privacy protection it's one aspect of data collection that can be manipulated and impacted on consumers and competition today's hearing is an important part of that effort to shine light on big data collectors i thank senator klobuchar and senator lee thank you very much chairman durbin and i wanted to make clear that this hearing is one of a series of hearings that senator lee and i are conducting our bipartisan review of america's competition issues and i thank uh my staff as well as senator lee and his staff are helping to plan the hearing today we're going to be talking about how competition is affected and threatened by the use of big data big data is at the core of our modern economy as senator durbin so well pointed out powering targeted advertising and driving artificial intelligence to select what products and services we are shown online and increasingly offline as well in this hearing we'll explore the companies that control the data the state of competition and barriers to entry and the effects of big data on consumers their choices and their privacy now i'd like to be clear about what we mean when we say big data technology companies such as google facebook and amazon collect an enormous amount of information as senator durbin pointed out about our daily activities in real time they know what we buy who our friends are where we live work and travel and more in fact their very business models their very business models were set up around getting that information and then using it to profit through services such as google's gmail and facebook's instagram though those services are offered to us for free these companies and advertisers use the data they collect about us to sell to other companies so in the end you can't get around the fact we are the product we are the product that makes the company's money big tech companies are not the only ones keeping tabs on all of us data broke brokers including caneso and its sister company axiom also by process and sell massive amounts of personal information about consumers and they've actually been doing it since before we even knew what the inter they collect information from the department of motor vehicles from public records from our grocery store loyalty cards and even from other data brokers today they also buy our browsing histories and guess how much money we make in what religion we practice this data has immense competitive value and the way that it is collected and used has important impacts on consumers i'll give you an example the simple act of a consumer visiting a utility company's website to pay a monthly gas bill allowed dozens of companies to profit off of her for the most part without her knowledge facebook and google are likely to know about that consumer paying her bill even though they had nothing to do with the transaction if if the gas company runs advertisements on facebook as many do facebook would have trackers embedded on the gas company's website and if the consumer if she uses the world's most popular web browser chrome google would know what websites she visited both companies collect and analyze this kind of information building a detailed profile of the consumer and giving advertisers access to her online for a price of course but not something she gets paid at the same time data brokers like axiom are buying and selling data from utility providers so they also potentially know that she paid her gas bill and they pair that information with their other purchasing habits location data financial information family details and their guesses about her race and gender they sell this kind of information to governments advertisers health care companies and others just a few years ago axiom had a partnership with facebook to combine their data for advertisers and share the profits at that time facebook would have supplied the consumer's online activities and axiom would have provided her on offline activities and advertisers could use them both to show her ads facebook ended that program in 2018 raising questions about whether massive technology companies now have so much data that they don't need to buy from data brokers in today's hearing we will discuss how this kind of control over enormous data affects competition while data-driven targeting can filter out things we don't want show us products that might be of interest and help some small businesses reach new customers it also functions as a gatekeeper to important services and opportunities and so we talk a lot in the space as senator durbin did about the privacy concerns and obviously there's big concerns about that i've been a long time advocate for privacy legislation federal privacy legislation i think its time has long come and i know we are looking at focusing some resources into these privacy uh issues uh in the bill that's currently been debated in the senate but we also have to look at another piece of this and that is that there are real threats to fair competition from these massive data sets and the artificial intelligence inferences that these companies make based on them for example after years of complaints and a federal lawsuit facebook is reportedly still disproportionately showing job ads for mechanics to men and for preschool nurses to women that distorts labor markets and it doesn't help us to get to where we need to be to be able to recruit people for these jobs we also see the control that big data has serious implications for healthy competitive marketplaces data can be a barrier to entry unless you have a lot of it you may not be able to reach consumers successfully the big data allows you to target ads to create algorithms that others who might want to be entering the market can't do if they don't also have the data it can be another way the powerful internet gatekeepers maintain control of how small businesses reach customers and earn outside profits from that control the impact of big data should also play an important role in merger analysis as dominant digital platforms try to acquire other companies with massive troves of consumer data the anti-trust agencies must place greater emphasis on determining the competitive impact of obtaining even more data through mergers this is why i talk about that our laws have to be as sophisticated as the markets that we today operate in we all want opportunities for new and innovative companies to emerge and for new markets to develop when big data inhibits competition by allowing those who have it to block access to markets for those who do not we need to step in and fix it this means enforcing our existing anti-trust laws to their fullest extent to protect competition it means updating our antitrust laws for the modern economy just as we've done centuries past it's like every 50 years or so we do a major update well the time has long passed for today's tech world my bill competition and i trust law enforcement and reform act would do so by updating the legal standard to prohibit harmful mergers and anti-competitive conduct shifting the burden to dominant companies to prove that their acquisitions and most significantly here their exclusionary conduct doesn't threaten competition we also have to make sure that our anti-trust enforcers have the resources to do their jobs they can't take on the biggest companies and some of the most complex conduct the world has ever seen with duct tape and bad band-aids senator grassley and i with the support of this committee got our bill through to update the merger fees which will bring in over 100 million dollars for both agencies it has passed the senate we are awaiting action in the house we have every reason to believe we'll get it done but there's more we can do not only in the reconciliation bill before us but in the year-end budget to make sure these agencies have what they need we also need competition reform specifically targeted attack these are things like issues of interoperability we've been talking about app stores recently there's a major bill on that bipartisan that's been introduced as well as bills targeting discriminatory conduct with tech companies as we explore pass forward we see that the dynamics of data mining are already changing in recent months apple rolled out an update that lets iphone and ipad users decide whether they want to be tracked online by facebook and other apps that was a major good change and what happened what do we know so far early reports indicate consumers have overwhelmingly opted out of being tracked more than 75 percent senator lee decided not to be tracked on apps or their apple devices when they were posed that simple straightforward question but as we push for increased consumer privacy we must make sure that monopolists don't fool us into handing over all control of our data to them at the expense of fair competition we must both fight monopolies and protect consumer data guess what we can do both things at once but i don't want us to not realize this brave new world we are in where having the data at all completely advantages certain companies who are the gatekeepers and makes it much more difficult to have a competitive market i will now turn it over to ranking member league thank you thank you chairwoman klobuchar i like the band-aids and duct tape analogy i knew a guy named fred tranto used to say you have a spool of baling wire a roll-up duct tape and a pair of vice grips you can fix anything but i'm sure he wasn't talking about anti-trust maybe not this yeah but thank you i think the title of today's hearing is an apt one um as big data does itself by its very nature present big questions although the answers might not always be what we expect on the one hand data is increasingly valuable and it's often essential to developing and improving technologies that'll power our economy through the rest of the 21st century these technologies obviously have a bearing on consumer markets and retail markets but they also make enormous contributions to national security and national defense and likely influence global strategic thinking in countless ways at the same time as more and more data about us is collected the risks of unauthorized disclosure increase considerably the the more valuable and the more useful our data becomes the more companies will do to obtain it and the more we can start to expect more intrusions into our privacy and privacy too can be weaponized to entrench market incumbents and provide them with a convenient pretext for excluding competition and in some cases evading it all together i see several key considerations going forward the first is the value of our data viewing user data as a form of payment for online services is no longer just a theory it's how the companies themselves and how many antitrust enforcers view the market it's time for lawmakers and for the public to catch up we need to reframe our understanding and our expectations of supposedly free online services to realize that they're not in fact free at all but they come at a cost a cost that's often opaque unstable and significantly greater than we may realize the second consideration which flows naturally from the first is the need to reinforce our ownership and our control over our data when we recognize the value of the data that we provide for companies like google and facebook in exchange for their services and realize the massive imbalance in bargaining power that consumers had had up until this point it should compel us to take greater care that our data is truly ours that we have the ability to meaningfully consent to its use and to revoke that consent each of these will help to promote competition in markets that rely heavily on data by forcing companies to compete for the quality of services offered in exchange for our data and for the right to continue using our data speaking of data and product quality it's often claimed that better data will mean better services but that depends entirely on how the data are put to use intrusions on our privacy are an obvious threat to quality but so too are the more insidious threats like those uncovered recently by the wall street journal about facebook it may be that the most pressing question when it comes to data access and aggregation is not whether it's entrenching monopolies but whether it's leading big tech firms to act with flagrant disregard for the effects of their businesses on society at large finally we should be reticent to immediately embrace concerns that focus merely on the bigness of data access or aggregation data is not a finite resource it's constantly being generated by innumerable sources and no one company could likely ever control all data necessary to its or a competitor's business moreover punishing companies for obtaining the data sets necessary to achieve economies of scale and scope smacks of penalizing success and that's not something we should be doing in the name of tearing down all barriers to entry will we next demand that market incumbents share their trade secrets their expertise and their intellectual property with competitors all these questions and more should make for a deeply interesting and informative discussion both at today's hearing and in the years to come i look forward to it thank you madam chamber thank you very much senator lee i'm going to introduce our witnesses now some are remote some are here with us steve satterfield mr satterfield is a vice president on the public policy team at facebook he leads the team responsible for developing and advocating for the company's positions on privacy and data related regulations prior to joining facebook he worked at covington and burling as a privacy lawyer markham erickson mr erickson leads google's centers of excellence a global team of subject matter experts focused on the application of law and policy with respect to technology and the internet prior to joining google mr erickson was a partner at steptoe and johnson sheila koclajer miss colclosure is the global chief digital responsibility and public policy officer at ipg caneso she is responsible for leading the global data policy and digital responsibility strategies at the company she previously worked at the sister company the data data broker axiom as its global chief data ethics officer and public policy executive she also served as staff assistant here in the united states senate where i would like to add that john robb mr robb is an author and podcaster with the global gorillas report he is alumnus of the united states air force academy and yale university he previously served in uniform as a pilot and with the special forces he is also the author of the book brave new war charlotte slayman has been with us in the past ms slayman is the competition policy director at public knowledge a non-profit dedicated to promoting freedom of expression and open internet and access to affordable communications prior to joining public knowledge she served as an attorney with the fdc and here in the senate as a legislative aide we thank you and if the witnesses could please stand and raise your right hand including our remote witnesses do you swear that the testimony you will give before the subcommittee shall be the truth the whole truth and nothing but the truth so help you god i do thank you uh you may be seated i will now recognize the witnesses for five minutes of testimony each and why don't we begin with you mr satterfield thank you thank you chairwoman klobuchar ranking member lee and members of the subcommittee good afternoon and thank you for the opportunity to be here today my name is steve satterfield and i'm vice president of privacy and public policy at facebook where i focus on developing and sharing the company's perspectives on data regulation globally i appreciate the subcommittee's interest in the topics of today's hearing and the work that you all do to ensure the competitiveness of american markets and to shape data policy i believe facebook has an important perspective here given the substantial contributions we've made to the technology sector and the nearly 20 years since our founding we believe that many of the concerns expressed by congress and other stakeholders with respect to privacy and content moderation can be addressed by appropriate legislation and we stand ready to be a productive partner in those efforts now as you know our company is currently facing multiple lawsuits including those brought by the federal trade commission and a number of state attorneys general and that will limit what i'm able to address today but i assure you we want to be helpful where we can and i look forward to our discussion like many services facebook helps people share connect communicate or simply find entertaining content each day millions of americans use facebook to connect with people and businesses to share and view a wide range of content to join communities of interest and to set up fundraisers for good causes among many other things all of these activities support our mission to give people the power to build community and bring the world closer together and data helps make all of this possible at facebook we use and analyze data responsibly to provide personalized user experiences we also use data to improve our products to provide measurement analytics and other business services to promote safety integrity and security to communicate people who use our services and to research and innovate for social good including by connecting and lifting up marginalized communities and addressing humanitarian crises data also helps us show people better and more relevant ads which keep facebook free it lets advertisers reach the right people which benefits more than 10 million businesses and non-profits for the data people trust us with we recognize that we have an important responsibility to protect it we work around the clock to help protect people's accounts and we build security into every facebook product we offer a number of tools that provide people transparency and control over the data we receive and we've steadily made improvements to the privacy protections and controls we offer we also have a variety of tools to help users understand the data facebook has about them we're always working to develop technologies that enhance the way people connect and communicate and data is key to that work we know that if we don't keep innovating and improving we'll fall behind when facebook started we faced established competitors including aol and myspace with lots of user data that didn't protect them from competition success comes from creating products users value and enjoy not from how much data you have as our ceo mark zuckerberg hasn't explained we believe that strong and consistent competition is vital because it ensures the playing field is level for all facebook competes hard because we're up against other smart and innovative companies we know that our future success is not guaranteed especially in a global tech industry defined by rapid innovation and change technological innovation has created an ever more competitive environment and we invest heavily in our products and services to stay relevant competitive committing more than 18 billion dollars to research and development last year we're proud of our record and we'll continue to focus on building and updating our products to give people the best experiences possible thank you and i look forward to your questions thank you very much mr satterfield uh next up mark emerickson of google chairwoman klobuchar ranking member lee and distinguished members of the subcommittee thank you for the opportunity to appear before you today my name is marcum erickson and i'm a vice president of global government affairs and public policy at google where i oversee a global team of subject matter experts focused on the application of law and policy to technology and the internet data should be used to make consumers lives better by improving the quality and diversity of products and services available while protecting users privacy and giving them control in my testimony i will describe how google uses and protects data the safe data mobility empowers consumers and boosts competition that data alone does not guarantee better products for consumers data plays an important role in making google products and services people use every day functional and helpful and we are committed to treating that data responsibly and protecting privacy with strict protocols and innovative technologies google combines industry-leading technology with insights from data to develop products that help people find directions build businesses and search for information on an individual level what data is collected and how it is used depends on how each person uses our services and how they manage their privacy controls data is one element of our ads business where it helps us connect people with relevant advertisements advertising is google's main source of revenue and it enables us to make many of our flagship flagship products available for free to billions of people around the world the ads shown are often informed by a search query or page content but they can also be based on a user's interest or their personal data if their privacy settings permit we do not sell our users personal information to advertisers or to anyone our business relies on ensuring our users trust specifically in how we use and protect their data we work to maintain that trust by offering industry-leading controls to manage privacy three billion users visit google accounts every year where they can review and change their privacy settings and delete data stored with their account we constantly innovate to improve privacy across our products and on our platforms for example privacy sandbox is a collaborative initiative that aims to build a more private and secure web because many publishers and advertisers rely on online advertising to fund their websites and connect with consumers we will continue to partner with the industry civil society and governments to get this balance right in addition to our work to advance privacy preserving technology we contribute data and expertise to the broader ecosystem data portability empowers consumers to choose services or online platforms based on quality and individual preference not because they're locked in since 2011 google takeout has enabled users to easily move their content to competing services with more than one billion gigabytes exported from google products additionally through our leadership in the data transfer project google makes it easier for other companies to provide tools that let users seamlessly move data between online services we are also proud of our contributions to the open source community many of the largest successes in the machine learning ecosystem have come from data that is openly available on the web senators data by itself does not guarantee better nor more successful products rather it is the investment innovation and methods that matter not just the amount of data that a company may have cutting edge technology or new ideas allow companies new companies to succeed sometimes without any data at all new entrants such as zoom snapchat spotify pinterest and many others they've all become successful because they provide an innovative product not because they have access to data from established companies our focus is continually improving our products and our greatest source of innovation comes from extensive research and development last year alone we spent over 27.6 billion dollars on research and development which is nearly 10 times what we spent in 2009. at google we are committed to protecting data through privacy security and user control and improving our products in a way that ensures more consumer choice and competition we will continue to engage with policy makers and regulators as well as other stakeholders to support thoughtful regulation that encourages innovation and protects consumers for example we have long supported federal privacy legislation in the united states and we encourage to congress to enact such legislation thank you for the opportunity to discuss our work with you today and i welcome your questions uh thank you very much mr erickson uh next up miss cole pleasure chairwoman klobuchar ranking member lee members of the committee good afternoon thank you for the opportunity to speak today i'd like to make several key points about the importance of fair and open data use the intersection of pri of data privacy laws and federal competition practices and their potential impact on today's connected marketplace first responsible companies are ready for a comprehensive federal data privacy law that is good for citizens and good for america i work for canesso a subsidiary of the inter-public group of companies or ipg one of the largest and most data-driven advertising agency holding companies in the world we strongly support a national privacy law ipg's business is built on four pillars of consumer trust accountability fairness safety and transparency we work hard with our industry partners to instill these values throughout data driven advertising second in today's economy any privacy law functionally will be a competition law whether a legislature intends it to be or not america needs a future fit national privacy law and appropriately applied antitrust policy in our connected marketplace both of these have data availability use and control at their core a federal privacy law should be people-centered and ensured data is used to serve people limiting who can collect control and use data won't work a privacy law that restricts who can collect data would give data control and thus market control to a few companies and unavoidably weaken competition as we have seen in other jurisdictions market power belongs to whoever controls the data a federal privacy law should preserve data sharing for beneficial and innovative purposes while making companies responsible and accountable for harmful uses similarly competition policy should ensure that companies with better technology better ideas and innovation but which may not have adequate data of their own are not foreclosed from the marketplace a company shouldn't have to create a first party platform to compete today's connected marketplace increasingly is dominated by companies who thrived thanks to ready access to consumer data national laws that in effect limit data to just a few dominant players risks putting more power in those few players hands in our data intense economy overly restrictive data use and sharing laws preclude robust competition vibrant innovation and the possibility of the small company finding and competitively serving its audience we emphasize how essential data availability open data flow and fair uses of data are to innovation competition and a vibrant market of connected participants federal privacy law and competition law should provide for responsible and accountable data sharing so that everyone can compete we urge you to consider the effect of mergers on who controls the consumer data value change and thus on competition an analysis of the growth of the major online platforms shows the role that acquisitions have played in the development of dominant data positions to protect people the fair use of their data and support a robust trustworthy and competitive connected marketplace federal law should promote fundamental privacy rights for citizens and enable responsible accountable use and sharing of consumer data by commercial enterprise this allows the market to continue to provide a wide array of benefits to people including things like safer online payments ready access to business and consumer credit access to free content and platforms and cost-effective and efficient advertising for all especially small business and new market entrance we at ipg have built accountability and responsible data practices into everything we do we believe that corporate america is ready to responsibly collect and share consumer data and be accountable for its actions in doing so we encourage the committee to protect the fair and open use of data as fundamental to competition we urge the committee to help develop a federal privacy law that is future fit for the digital age and protects consumers and enables a connected marketplace in which all participants can compete fairly so long as they engage in safe and accountable data use and sharing i thank the committee for its attention and look forward to your questions very good thank you very much um and next up john rob oh thank you so much for the invitation i'm a bit of an outlier here i'm not a lawyer but um big data and the ais that articulated are clearly already valuable uh they'll become more valuable over time as they're integrated into all of the products and services that will be sold in the next 20 or 30 years unfortunately there isn't a clear approach to how to deal with this big data in the marketplace currently there's three major methods of actually dealing with data we have it in china where they have incorporated this big data into their national security and implemented a national security totalitarian state you have in europe who's suppressing the aggregation of big data through privacy laws basically turning it into something to be destroyed rather than embracing it that'll affect their economic capabilities long term reducing their capabilities to you know produce high quality products in the future um but you know it does award them uh better uh social stability and then we have the us which is still you know up in the air we're still trying to decide what to do with it if you use a framework on the economic model for the united states the way we're treating data right now is very futile it's basically a feudal system where you have the the corporations are acting as you know the lords um and owners of the data and they farm people for their data uh as they traverse their platforms um that's clearly not sustainable over the long term uh you know it will create you know wealth inequalities as big data and its ais move towards the center of the economy and that uh you know that will also create social instability the solution to that is the same solution we used uh to eradicate feudalism in the past is that data ownership is to give people ownership over their data so they can exercise exercise ownership privileges associated with it and reap the benefits for having that ownership that means taking data off the big platforms putting it into a central repository you know that's controlled by the by the owner of the data where it can be pooled with others and then resold or lent to organizations that will make use of it build ai's that are uh useful in a variety of different ways it doesn't always have to be commercial it could be open source efforts it can be non-commercial university development but putting the con consumer putting the individual in the driver's seat changes the whole equation it could also be a source of royalties and revenues for that individual driving their personal prosperity forward it's a different way to approach it it does destroy the data directly through privacy but it allows them to benefit from from data as it moves forward there's also a strong tie between big data and his ais to the national security component that's going to come into all of this tangentially uh i don't think people fully appreciate how much things have shifted over the last 20 years all of the technologies that needed that are needed to implement a national security data-driven surveillance state are have lept forward substantially and that most of the shift has occurred within within the context of the corporate development we've seen a shift from what governments used to be only able to do to now corporations are only able to do it china has embraced that and they're using those corporations to gather the data create the tools and control their society the problem here in the united states is that there aren't any natural limiting factors to prevent that from happening here um we don't have any protections against the overreach at the in the corporate realm uh we don't have any like we do against government overreach uh we don't have any speed free speech rights we don't have any uh rights of access uh we don't have uh the ability to resolve uh disconnection because this connection in the modern environment can can radically reduce your ability to operate in that in the world um so we need a set of digital rights that we can exercise over to protect us against any kind of overreach at the corporate corporate side thanks okay very good thank you uh next up uh charlotte slayman with public knowledge chairwoman klobuchar ranking member lee thank you so much for the opportunity to testify today on behalf of public knowledge a non-profit working in the public interest for over 20 years i'm charlotte slayman competition policy director at public knowledge gatekeeper power is at the root of big tech's competition problems experts policy makers and advocates the world over have identified gatekeeper power sometimes bottleneck power sometimes strategic market status as the power the dominant digital platforms have over other businesses ability to reach their customers right now big tech has the power over us and our data and we need to protect both users and a competitive market with new laws and rules to promote fair competition against them until we have a real choice to leave these platforms if we're not happy with them they won't have the incentive to win us over and we'll continue to miss out on disruptive innovations that challenge the status quo i want to take this opportunity to highlight important legislation that i think can help to address the underlying power dynamics that have led us here interoperability data portability and delegate ability are the privacy protective ways to neutralize the power that big data confers upon dominant digital platforms right now if i'm frustrated with how facebook treats my data i don't really have the option to leave because my friends and family the businesses groups and even schools i need to communicate with are on facebook interoperability would allow competition to flourish by letting users communicate across platforms look to the access act for a model of implementing interoperability to maximize competition and protect privacy these platforms can abuse their gatekeeper power to freeze out would-be competitors from the market and one of the tools for that anti-competitive discrimination is big data gatekeeper platforms can put their own products first on the page give them the best attention-grabbing design and point users away from companies that pose a competitive threat while this offends our basic notions of fairness this behavior would be difficult to stop using our existing antitrust laws we need a non-discrimination law to reliably stop it and i'm so glad to see news reports that chairwoman klobuchar is working on just such a bill here in the senate there's a strong model in the american choice and innovation online act from chairman david cicilline in the house strict limitations on mergers by dominant digital platforms and giving our federal anti-trust enforcers the ability to sue to break up vertically integrated dominant digital platforms are also important parts of how we can address gatekeeper power the platform competition and opportunity act and the ending platform monopolies act are strong examples of how these tools could work these four bills were recently endorsed by a bipartisan group of 32 state attorneys general app stores and operating systems preference their own products when it comes to communication with the user and to data the open app markets act zeros in on the gatekeeper role that app stores play purposeful narrowing of our anti-trust laws by the courts have left big business with a license to engage in a host of anti-competitive conduct a myopic focus on price and other easily quantifiable effects leaves out important innovation and consumer choice harms that antitrust is supposed to address chairwoman klobuchar's competition and antitrust law enforcement reform act would help rein in the power of big data by updating the legal standards for blocking mergers and stopping exclusionary conduct competition is not a panacea for the challenges of big data we also urgently need new privacy laws to protect users and a digital regulator to comprehensively address the policy questions surrounding digital platforms a comprehensive federal privacy law can be pro-competitive by creating a level playing field for dominant incumbents and new entrants alike for decades washington has taken the perspective that we need to let digital businesses run wild to see what great innovations they might come up with but today unscrupulous data practices and consolidated power have led us to a place that isn't anyone's dream of what the internet was supposed to be these largely unregulated platforms have been allowed to amass powerful gatekeeper roles where they need not fear competition or government intervention for users to really have control we need to have a real choice to leave these platforms we need real competitors and we need switching to be easy to get those things we need new laws and rules to promote fair competition on and against gatekeeper platforms like google and facebook congress has already done the laudable work of introducing a series of bills to combat these harms the best time to pass them was 10 years ago but the second best time is now thank you okay very good um why don't we start out mr satterfield mr erickson facebook and google both collect data about consumers to enable targeted advertising which is the principal way i believe your companies make money how important is consumer data to each of your companies you can start mr satterfield thank you chairwoman klobuchar the way that we look at it is success comes from building great products and not from how much data you have okay but is just if you could just straightforward answer the question how important is consumer data to your company in your profit model you know data is important you know to connect people to relevant experiences that includes showing them relevant ads but again i'd say that you know the success we've had has come through building uh great experiences and and not from the amount of data that we collect um mr erickson how do you answer that for google yeah thank you senator for the question at google we provide a means for people to find relevant information and helpful information on the internet and to do that we have to understand what they're looking for but anyone can use our products for free without providing or storing any personally identifiable information with us we provide transparent mechanisms for users to understand how their data is being collected and how their data is being used and meaningful tools to give consumers the ability to see the data that is stored in their account and to make choices like delete the data or use one of our auto delete tools to set up regular cadences where information such as their search history or viewing history or location history if they've opted into location history can be regularly deleted we've also as i mentioned in my testimony since 2011 have created tools to give consumers the ability to take the data that they've provided to us and move it to a competitor's site we don't want users to work to to engage with google because they feel locked in because their data is with us we want them to be able to go to the services and the technologies that suit their needs based on a competitive dynamic rather than any sense of lock-in okay um when we go to you ms slayman i was just looking at some twitter feed someone just reported that they were talking with a few friends on one of the sites um going back and forth online about being a female politician a while back including a tv makeup artist for some reason and this person said they referred to me as inimitable online and within an hour they got an online ad for chanel inimitable mascara linking the tv makeup artist comment with their adjective so is that possible i don't know if this is true or not but i'm just saying this is what's happened to me and how important is the data to these companies they've kind of gave round around about answers here um and what does it mean for other platforms trying to compete if they don't have the data so i think the data is very important i appreciate what the other witnesses have said that there is also a role played by their innovative engineers i think that's absolutely right but the data is important and that's why we're concerned about whether it's being treated competitively or not um you know i think the relevant ads are not always what is best for us it's what's best for the platform and sometimes that lines up with what's best for us and sometimes it doesn't um so we need to make sure that we have protections for users and for the competitive marketplace when we're looking at that problem mr sativa along the same lines last quarter facebook publicly reported that its advertising revenue per users in the us and canada was 51.58 i want to ask you a few questions about that uh the comp the comparable number for europe was only seventeen dollars and eight cents in asia it's four dollars and thirteen cents and the rest of the world you reported advertising revenue per user of about three dollars why is the value of a user in the uf we're so much more than the rest of the world especially when we're comparing ourselves to um comparable countries in europe senator i think there are a lot of factors that go into those average revenue per user uh numbers okay i just that's not really an answer though man that's the beginning of an answer so what what what we're doing is we're breaking down revenue per region according to the number of of folks that we serve in those regions that's what's reflected in the numbers that you're describing okay why don't we go to you mr rob do you think facebook should pay all of its u.s users 51.58 for facebook's use of their data which that we now know it's in their recent fiscal report maybe the individual profit centers which is all of us should actually get the money back well if you own the data uh you would at least be able to uh compare offers and get paid for its usage i don't think you'd get the full amount obviously right but maybe there'd be a discount but you could get a good chunk of it just like you do when you um you know when you're a consumer and they you go and buy something or you sell something is probably the better better example um that's correct mr rob um when companies collect data about us and either sell it or use it to target us with ads we aren't just the consumer or the user anymore and we really have to start thinking about this because i think when we get on these platforms we you know can have fun people do business but they don't realize every single second they're on there they are creating profits but they are not reaping uh the benefit um we are in fact our data is a commodity but consumers as i note aren't getting enough in return and i've discussed the idea of somehow putting a tax on the data for these companies to pay you have written about paying people for their data in your opinion what is the strongest argument for ensuring that the tech companies have to pay for the consumer data that they collect and use and if facebook and google had to pay for using consumer data how do you think their behavior would change okay the most compelling argument is that uh it would change the perspective people have on data if they were in in if they had ownership rights over it um by unlocking it by you know through ownership uh you don't just limit the data to what uh that facebook collects or google collects to what they can do with it you then open it up to what all of these other companies can actually do with it and they can generate revenue you know people in control of their data that people who have ownership of their data they will be more willing to give more uh and and if they can set permissions on in terms of how it's used uh they'll feel comfortable with it they'll feel like they're participating in the economy uh rather than being observers or being uh treated as as as resources it's a complete phase shift it's not even comparable to what we have now okay um and i thought it was just so interesting i'll go back to you mr erickson mr satterfield my last questions here uh i just thought it was interesting when apple um unleashed the power of allowing people to opt out that 75 percent did that because i think it's partly because they did it in a pretty straightforward way because i know i try to do it sometimes and then i on some site and i don't know if i've opted out and it's really complicated for people or they make me opt-in to try to do something and i can't figure it out and you're just trying to order something online um mr erickson ms you've spoken about putting consumers privacy preference first and giving them the ability to change what is collected and used about them and i understand how you think that protects user privacy but from a competition policy perspective it seems like we look beyond what benefits an individual user even if millions of consumers give you permission to collect and use their data shouldn't we be concerned about the competitive impact of your exclusive access to their data which you use to compete with companies that don't have that data do you want to answer that mr erickson first sure thank you senator for the question at google we do want to make sure that consumers first understand how their data is being collected and how their data is being used and we do want to give them meaningful choice about their use of their data unlike facebook a user can use google services for free they do not need to establish an account or provide any personally identifiable information to google we never sell personally identifiable information about our users even when they do sign in and they can delete that information at any time most users when they're using online services are providing similar information if not the same information to multiple online services so in that regard the data is really not not the data is really non-rivalrous from a competition standpoint it's easily gotten by other companies that want to purchase data from for instance data brokers or or other entities but i think the key here for us is to put users in a position where they have meaningful choices and meaningful control about the use of their particular data okay do you want to take a crack at that one mr satterfield from facebook's perspective yes thank you and it just just to be clear facebook services are also free um but but to your question chairwoman klobuchar you know this the statistics are so interesting right now the average user has something like 46 apps that they're using every month there's more than 100 apps on the average person's phone people are sharing more data in more places than they ever have been before so we think that there's there's a lot of data out there that's being used for innovative purposes including to show people apps i think they all know that they're sharing their data on all those apps well senator we hope so i mean we think transparency and control is our core values of ours we think that they should be core values of other companies as well i just if you could answer though do you think that they know they're sharing that data do you think they all know that i mean on on facebook uh madam chairwoman they do i'm confident of that and we these are core values of ours we invest a lot in providing transparency and control i think with respect to other companies this is an area where congress could intervene make sure they do transparency and control are could be core components of a federal privacy legislation okay i'm gonna um just just one follow-up because i really want to turn up from ms slayman um does do you think that's true that they all know this do you think we need uh and by the way the companies are now coming to us saying they want privacy legislation after opposing it um various iterations of it after all the states have started to get into the act which is kind of a pattern we've seen in other areas here but um do you want to respond to this quickly and then i should let senator lee ask some questions yes i'm sure there are many users who do not know that they are sharing the data i also think even if they know about the data that they're sharing it's quite complicated to understand what that data can be used for that data can be used to figure out additional information about you so a user may be making a decision to share some data not realizing what that data actually could tell a company about who they are and their preferences i also think i want to respond to the point that mr erickson made about google doesn't sell your data i think it's important to keep in mind that google has within them the capacity to fully exploit your data without ever selling it because they have the advertising system so within this one large vertically integrated company they can both collect the data and fully exploit it to advertise to you so the the necessity for selling uh isn't there and they can still be exploiting it just as effectively okay thank you very much senator lee thank you mr satterfield i'd like to start with you i want to start by asking you about some recent reports about facebook the first is from jeffrey fallon at the washington post now he did a deep dive into facebook's collection of user data including revealing that facebook's own financial modeling estimates that facebook's estimates of its user data is worth an average of 164 dollars per user per year now this would seem to confirm my own view and that of several state attorneys general uh including uh my home state attorney general sean reyes in utah that facebook isn't actually a free service as you suggested a moment ago but but rather it's one that we pay for with our data what's concerning is that there's so little transparency in the transaction and you've sort of confirmed that now moments ago by saying that that it is completely free now i'm never told what my data is worth you're not even acknowledging that it is worth anything or that there's any kind of a transaction involved here and what i get in return is always subject to change you change the systems by which posts are reviewed what's prioritized what's deprioritized now it's basic antitrust law that you look for symptoms you look for signs and one pretty consistent sign of monopoly power involves the ability to set prices and control output what could be a better example of that very thing than facebook's ability to demand data from its users as as it does without telling them it's value or even acknowledging that it has a value at all while providing a service whose quality whose features whose terms of service in terms of use are subject to change at any moment and they do frequently change at any moment can you answer that question for me thank you senator you know respectfully i think we see things differently we don't see data as something that people give us in exchange for providing our services we see data as something that's that's we use to provide the service to them to provide value to them okay just so you disagree with the assumption that when you're when there's a service out there that purports to be free you you you you are the product you are sort of what's being served i mean i i i get your point nobody's paying out of pocket with money they're not paying in literal coins or virtual tokens to go on there but um you are in fact a for-profit business enterprise you are in fact profitable and you do that because there's something of value so i think we're quibbling here over sort of nonsensical distinctions between literal payment which i didn't say nor did i imply so i guess i'd ask you to answer the question accepting the premise that i think all the rest of us in this room and pretty much every other american would acknowledge exists it which is the premise that your service is um well purports to be free it is in fact paid for in the sense that people contribute their their time they give their time and with their time you acquired data you're able to monetize that so with that understanding i i i'm i i'm asking you that it is a is a basic principle of antitrust law that um one side of monopoly power is the ability to set prices and control output with that premise can what's your response to that about the fact that i'm asking what better example could one find once one accepts this premise than that of facebook's ability to demand data from its users without telling them the value of that data and without uh a service when dealing with the services quality and whose features and whose terms of service are subject to change at any moment and often do well senator you know again respectfully that that's just not how we think about data all right how are we used to value people all right i get it that's not how you think about it it's clear to me you don't want to answer that whatever i was throwing you a bone there to try to allow you to engage in that dialogue we'll move on to the next question look the wall street journal released a series of bombshell reports last week on internal facebook documents that revealed shocking absolutely stunning lapses in facebook's ability to protect facebook's consumers uh from its users from being harmed by using its platforms this too looks like the behavior of a monopolist uh a monopolist that's so sure that its customers have nowhere else to go that it displays a reckless disregard for quality assurance for its own brand image and even just being honest with its users about the obvious safety risks that it's subjecting its users to particulates is teenage users in light of these reports doesn't it look to you like facebook lacks competition senator thank you the journal series that you're referencing raises a really serious and important questions but i i think it misses the mark in terms of what we're trying to do in the matters that it describes how does it miss the mark how does it miss the mark any more than revelations years ago about tobacco companies concealing the dangers of tobacco how is that missing the mark any more than the revelations about tobacco and what tobacco companies knew about what they were doing to their own users well senator i i think what what what's being discussed in these articles are issues that we have identified ourselves and that we're attempting to work through as a company this is research that we're doing ourselves in order to identify gaps and issues and to address them to make our platforms safer so i i i think these are these are self-identified issues and these are internal deliberations that are dedicated to one thing which is making the platform a safer place for the people who use it miss slayman i i'd like to turn to you in your testimony you advocate for updating the antitrust laws to tackle problems like big data um but it seems to me that we had to first try to enforce the laws we have which i think in most circumstances are more than up to the task if in fact we will utilize them if in fact we will utilize the law and reinforce the law the reason we haven't used antitrust law to address many of the problems in big tech has everything to do with things that could be accomplished with the law in other words it's not just because the courts have said no it's not because enforcers have taken these things repeatedly to the courts and the courts have smacked them down that that hasn't been the case it's rather been because our antitrust enforcers simply didn't bring the cases to begin with now look at look at the obama administration president obama's antitrust enforcers let google off the hook after a two-year monopolization investigation ignoring ignoring rather specific rather conclusive staff recommendations to sue they failed to stop facebook from buying instagram and failed to stop facebook from buying whatsapp nascent competitors that uh that they acquired at the time and they failed to stop google from buying its way to dominance of digital advertising moreover in the last year of the trump administration alone just the last year of that administration um the trump administration which finally uh filed cases against google and against facebook that the obama administration had turned down uh the ftc blocked 27 mergers now so far in 2021 the ftc now supposedly run by anti-truth hawks eager to protect competition has filed just seven merger cases one of which is the case against facebook and five of which were filed in fact by the outgoing trump administration so can't we agree that the problem of antitrust law isn't just the law but lacks antitrust enforcement i'm sorry thank you ranking member lee uh we absolutely need to improve antitrust enforcement um i believe it will be very important to improve the antitrust laws as well but there have been lapses in enforcement i think there are some situations where the antitrust enforcers have correctly identified that the law wasn't there for them um but there absolutely are also cases that they missed that i wish they had brought so improving anti-trust enforcement is definitely an important part of this effort mr erickson and and mr satterfield all right i want to ask both of you this question the wall street journal and the new york times reported about a year ago that google and facebook had entered into an agreement to partner together with regard to digital advertising setting aside the question of whether data can be a barrier to entry shouldn't we at least be concerned when two companies with possibly the greatest access to user data secretly agree not to compete with each other for the primary way in which that data is to be used which is digital advertising we'll start with you first mr erickson thank you ranking member lee uh at the time of that agreement we publicly announced uh facebook's participation in our open bidding platform as well as 25 other companies that are participating in that platform we thought it would be useful to publishers and accretive to publishers where we have multiple ad networks competing for the publisher's inventory and having large ad networks like facebook uh benefits consumers there's there's no truth to the allegation that these this our auction system is somehow rigged in facebook's favor if they provide the highest bid uh they'll win if they don't uh they'll lose but at the end of the day those 25 companies which facebook is one of them creates more competition and more demand for the publisher's inventory okay yeah so you're saying that just one of them you're just two of those companies you are in fact uh the two biggest arguably the two biggest companies with access to this much data you don't see there's if there's any antitrust implication associated with this when two companies with possibly the the greatest access to user data agree not to compete with each other when it comes to digital advertising you see no anti-trust implications for that senator respectfully that's that's not the agreement there is no uh prohibition for facebook to uh provide their ad network and compete on other uh auction systems uh competing on google's auction system uh with other ad networks creates actually more competition and more competitive dynamics which ends up benefiting uh the publishers who are selling their inventory mr satterfield my times expired can you respond to that same question senator i don't have anything to add to what mr erickson said we compete hard we compete fairly we did so here as well oh well i'm i'm not surprised to hear that you don't think there's anything unseemly we'll get back to that later my time's expired thank you very very good senator lee i was off in the other ante room doing another hearing and i can see you you used your time well with that we turn it over to senator blumenthal and we've also been joined by uh senator holly and center crew senator blumenthal thanks madam chair and i want to thank both you and our ranking member for holding this hearing i hope it will be the beginning or maybe another step in an effort to forge a bipartisan effort on privacy law i've been working with one of our colleagues senator moran on a draft for quite some time we have come very close and i am very hopeful that we'll continue to make progress because this issue of privacy is one of the central ones of our time there's no question as you madam chair pointed out so well that data is the source of pay and power to these companies it is not only a source of vast revenue it is also the fulcrum of dominance and the ability to prevent others from entering the market and the companies have learned how to do it very adroitly and have adapted to the challenges that have been put to them by the kinds of answers that we've seen today uh and i want to return to those issues that my colleagues have raised so well but first let me just ask a few questions about the wall street journal investigative report that was published last week showing the heinously destructive impact of instagram on teens uh the simple fact of the matter is that facebook has known for years that instagram is directly involved in an increase in eating disorders mental health issues and suicidal thoughts especially for teenage girls despite that horrifying risk facebook is now dead set on pushing instagram to even younger children far from being transparent about this danger as mr satterfield just attempted to represent facebook in fact has been blatantly deceptive and disingenuous about it last month on august 4th senator blackburn and i wrote to mark zuckerberg and asked him specifically about this issue we asked and i'm quoting has facebook's research ever found that its platforms and products can have a negative effect on children's and teens mental health or well-being such as increased suicidal thoughts heightened anxiety unhealthy usage patterns negative self-image or other indications of lower well being it wasn't a trick question it preceded the published reports in the journal we had no idea about the whistleblower documents that were ultimately revealed facebook dodged the question quote we are not aware of a consensus among studies or experts about how much screen time is too much end quote we are not aware well we all know now that that representation was simply untrue internal documents reported on by the wall street journal demonstrate that facebook has known for years that instagram harms children and young people and for years facebook studies have found clear links between instagram and mental health problems and it was common knowledge in the company so that the response was a clear attempt to mislead congress and misinform parents i ask that the wall street journal report of september 14 by george wells jeff horowitz and beepa cedarman be made a part of the record adam here it will be thank you thank you so the comparison to big tobacco made by senator lee is entirely apt and i know something about big tobacco because i sued big tobacco and i remember the revelation of the documents that showed big tobacco not only knew but had done experiments proving that cigarettes cause cancer they had denied it for years they had the knowledge about the damage done to people who smoke my question to you mr satterfield is why did facebook misrepresent its research on mental health and teens when it responded to me and senator blackburn senator thank you um i respectfully i i don't agree with that characterization but i i do understand the frustration and concern that we're hearing about these reports you know the the safety and well-being of the teens on our platform is a top priority for the company we're going to continue to make it a priority this was important research we're proud that we did it uh we're going to continue to you know study these really important issues why did you conceal it senator we we didn't make it public is we don't with a lot of the research we do because we think that that's an important way of encouraging free and frank discussion within the company about hard issues do you have more research that shows the destructive effect of your platform on teens senator i i'm not aware of any other research on teens i don't work on these issues i work on privacy and data are you not aware in the same way that the company responded that it was not aware when in fact it knew about the research senator i i apologize i'm not familiar with the context of that letter or what went into the response you know what i can tell you is that we think it's important to be having a dialogue with with congress on these issues and and we're prepared to work with you and your team uh going forward will you work with me and my team by appearing on september 30 at a hearing that we've invited you to do senator i know our folks have been in touch with your staff you know to to discuss that it's something that i think we're discussing right now well we are discussing it right now i'm asking you for a commitment that your company will send a high-ranking qualified and knowledgeable representative to that hearing on september 30. senator blackburn and i uh are respectively the ranking member and chairman but it includes senator klobuchar and lee they are members as well uh we need to hear from someone who's capable of answering these questions and it should be next week will you commit to have someone at that hearing senator we're going to follow up promptly on this we know these are incredibly important issues and we want to work with you uh and and your staff going forward mr sanders i just want to point out to you that your company contrary to what you just told this committee is continuing with this really unfortunate charade vice president nick clegg doubled down on the misleading statement in fact uh this weekend when he said the research is quote still relatively nascent and evolving end quote but according to one of these studies facebook found 13 of british users and six percent of american users traced a desire to kill themselves to instagram how is it not misleading to tell this committee that the research is unclear if according to your own research tens of thousands of teens have suicidal thoughts directly because of instagram don't you think you owe us an explanation next week senator i i appreciate the concerns i do and i i do think that nick was accurate in his op-ed uh what i can tell you is that we we can commit to working with you and your staff going forward on these issues has facebook ever conducted research that found instagram was more toxic to teens than another than other social media platforms senator i'm not aware of that but these again these aren't issues that i work on at the company uh you know we're happy to follow up with you and your staff well will you follow up next uh this september 30th by having someone at that hearing who can tell us the answer by the way the answer is that you have found instagram is more toxic than snap and tick tock it's more of a facebook problem your own research has shown it i'd like somebody to come provide an answer and explanation next september 30th we're going to get back to you promptly senator i can commit to that all right i want to ask uh about another area uh but perhaps i should wait until i hope we'll have a second round yeah or we will we will thank you thank you oh well thank you so much senator blumenthal uh next up uh senator holly then senator ossoff and then you senator cruz if it works thank you thank you madam chair and thank you senator lee also uh for holding this hearing thanks to the witnesses for being here this is such an important topic mr satterfield let me just pick up where senator blumenthal left off can i just ask you a fundamental question are teenagers safe on any of your platforms senator we're working really hard to make that the case so they're not now senator i we we are investing a lot in safety and integrity across all of our platforms we've invested billions of dollars are you concerned though that that teenagers are are currently subject to all kinds of uh potential predators the social effects i mean you're saying you hope that they'll be safe on the platforms are they not safe now senator i i think it's our responsibility to invest the the resources that we need to to to make sure that these things don't happen you know that's why we're investing billions of dollars in protecting the integrity of our platforms by these things do you mean things like this let me read a few quotes 32 percent of teen girls said that when they felt bad about their bodies instagram made them feel worse quote we make body image issues worse for one in three girls end quote new quote teams blame instagram for increases in the rate of anxiety and depression this reaction was unprompted and consistent across all groups so how about this teens who struggle with mental health say that instagram makes it worse or how about this social comparison is worse on instagram or how about this aspects of instagram exacerbate each other to create a perfect storm when it comes to body issues identity uh depression anxiety that doesn't sound like a very safe platform to me those of course are all from your own internal research what do you have to say about that senator uh again these aren't issues that i work on but i we we do have teams that are working across all of those issues body image well-being and so forth we're investing you know we're doing research like this so that we can identify gaps and address them and we're going to continue to do so will you make the research public senator again generally the way that we approach research is that we keep it confidential to encourage free and frank discussion about it internally it's the keeping it confidential actually sounds like a notice uh about these really important issues i haven't been the senate that long but this sounds like that's a no let me let me try again you've already done the research this research is completed you've done it you know the results you know the data you've actively misled congress for years now you've deliberately misled senators as recently as just a month ago senator blumenthal was just telling putting on the record you have the research will you make it public yes or no senator i i respectfully i'd strongly reject uh those characterizations the issue of greater transparency let's try answering my question will you release the research yes or no senator it's something we're looking into how to provide greater transparency with appropriate context around the research what would the appropriate context be exactly what's the context for uh 32 percent of teen girls saying that they feel worse when they use instagram is there context i'm missing there what is it that parents need to need to know what's the context exactly i'm intrigued by that statement well senator i i mean i i think it's it's a it's a broader view of what the potential impact of services could be on on on folks and oh like maybe the things that instagram does that's positive that outweighs all of the terrible effects that it has on teen girls and others is that what you're talking about your benefits let me ask you guys how much money does does instagram make for facebook every year senator i i don't i don't know the answer to that how much money do you make from teens being addicted to instagram every year senator i i wouldn't agree with that characterization how much money do you make from your teen users every year senator i i i don't know the answer to that question bet it's a lot i'll give it to you for the record i think that i think we all know what's really going on here you won't release the research because this is a cash cow for you and you won't answer our questions because you make a gobble money on this i mean it's the whole reason mark zuckerberg wanted to get instagram in the first place right i mean back in 2012 mark zuckerberg wrote to his own chief financial financial officer that buying instagram will give us time to integrate their dynamics before anybody else can get close to their scale all we know why facebook bought instagram it was to get rid of a competitor to gobble up all the data and now they've done that and now it's making teenagers sick and destroying their mental health but you know hey it's lucrative it's really it's it's amazing how about this will you commit to suspending any efforts to develop the instagram kids product that would target children under the age of 13. senator we know that tweens are online uh and you know we want them to have an experience that is a good one there's a healthy one like the one that teenage girls are having on instagram right now that kind of an experience senator respectfully these are issues that we take incredibly seriously that we're investing in you know there is no more important priority than the safety and well-being of the people who use our products [Laughter] i really can't believe you're saying that i mean really i've listened i've listened to facebook and and these other big tech companies before these committees for years and uh i guess just two years although it feels like 20. and uh you always dissemble you always mislead but i can't believe that given the research that you have conducted that you can sit there and say that teen's health and security and safety is your top priority clearly it's not and you won't share any of the data you're stonewalling every member of this committee what about this it will you at least commit to keeping behavioral advertising out of any product that a a kid can access the senator we think that you know advertising is potentially very valuable we have made changes uh with respect to teams under 18 limitations around the ability of advertisers to use our products to reach them so let's see you won't reveal the research you won't restrict your advertising you won't pull back on plans to target children under the age of 13 with this platform which you know is toxic for so many teenagers especially female teenagers and yet their health and well-being is your top priority do i have i got that right did i miss any part senator i'm not sure i said any of that uh what i would say is again these are incredibly important issues to the company we're committed to having a constructive dialogue with congress about them and we're going to continue to invest heavily in them at the company oh i'm sure you'll invest heavily in it i have absolutely no doubt about that that i think is probably the truest statement you've made today i have no doubt you will continue to pour money into instagram as long as you can extract money from it and from the teenagers whom you are quite frankly exploiting here's just a final question for you why should why should you be able to advertise to teenagers at all i mean why given all the dangers inherent in collecting their data which is what you're doing on instagram why should you be able to advertise to teenagers why shouldn't we prohibit that senator as you know advertising supports our service we do think that additional protections for teenagers are appropriate we've put those in place we're going to continue to look into ways to keep teenagers safe on our services while being able to support them with advertising shatterfield the truth is you and i both know that your product isn't safe your platforms aren't safe they're dangerous you know it we know it you've stonewalled us you've stonewalled the public it's time for some accountability and all i can say is accountability is coming thank you madam chair thank you very much senator holly before i turn it over to senator ossoff i just want to something when i was asking my questions that could lend some information to you here they facebook publicly reported that last quarter its revenue advertising revenue per user which i presume includes teams in the u.s and canada was 51 and 58 cents per user so i guess just to follow up mr satterfield do you have the breakdown for teens versus the rest that we could get maybe not today but later senator the the only breakdown i'm aware of is the one you reference which is the average revenue per user and does that include instagram is it company-wide center i believe it's company-wide okay all right and then the center how we compared it to some of the other countries uh which were a lot less uh than our country so we'll have to be looking into that how much revenue they make with that i'll turn it over to senator ossoff thank you so much madam chair uh first question please for you um is called sure does axiom or any other ipg company provide services to entities outside of the united states based upon or linked to data about u.s persons thank you senator for your question uh of course i'm at canesso and formerly at axiom and a part of the ipg family so axiom data we we at axiom and at konesso both we do have uh clients that are multinationals and we have clients that operate in other markets around the world and part of the services we provide are data enabled services uh marketing and advertising services so yes thank you and uh do caneso axiom or other ipg companies provide data connected services or services based on or related to data about us persons to federal agencies state or local law enforcement or any other public sector actors in the united states of course again i'm speaking about axiom axiom does have and shortly to be retired an identity authentication product which is made up of regulated data and provided for regulated service and that is a we call that our risk product suite and it solves things like know your customer obligations that financial services have and um that we're actually exiting that business shortly and concentrating on marketing and advertising and is that the only product or service that you sell to any public sector entity in the united states we do other things like marketing and advertising data enabled services like we supported an ad council advertising campaign to help get information out to to help with the pandemic another example i can think of is we helped the american red cross when the hurricane katrina hit new orleans several years ago we helped get data to them for some marketing communications to go out and find find audiences so they could learn about help and services from the american red cross we have a few other campaigns like that that i am aware of does does that help thank you do any ipg entities provide any services or have any financial relationships direct or indirect with any agencies or clients at the department of defense in the intelligence community or in federal state or local law enforcement um it is not an area of concentration and i i am i i don't know the answer right off uh i would i feel like for the record yes i i i do not know the answer right off but i promise i will go and research it and get you an answer so that i can be be certain of course uh there may be confidentiality issues that i'll have to navigate if we do have those sorts of contracts but i'll i'm glad to go research and get you an answer so just to be clear miss coakley sure you are not personally aware and have never heard of any financial relationship between an ipg entity and the department of defense the us intelligence community or any federal state or local law enforcement entity um i do know that axiom of course i'm not at axiom now and axiom historically has had some relationships with some of that community but i do not have the knowledge to share this but i'll research it for you well what what are you aware of what do you recall um we do have some um we did i again i'm i don't i'm not in command of the knowledge because i'm not at axiom now but um there are some governmental agencies that we have worked with uh most of it like the veterans administration was advertising and trying to do outreach to their veterans community so rather than fish around if i if you might allow me senator i'll go and research and get you an exactly right answer if that would be okay thank you do any ipg entities have direct or indirect financial relationships or provide any services or products to any foreign governmental entities not to my knowledge will you please double check for the record i certainly will thank you and how does axiom or how do other ipg entities engage in their activities obtain device identifiers such as imei or msi numbers um well uh at axiom and at canesso of course we operate in the digital advertising and marketing space and we run a unified ethical framework as the basis for our data governance program uh when we either source data we undergo a due diligence process i always like to say not all data is the same and not all data uses are the same some of the data like device ids that is a connecting piece of data that we use to enable and activate digital advertising campaigns on behalf of our clients so it may be that it flows in from one of our connected partner ecosystem providers like an advertising network or a publisher and we sit in the middle as a connector um that is typically how the um how the data flows does that help do you place any limitations does axiom or any ipg entity place any limitations on the form category type of entities to whom you'll sell services absolutely senator thank you for that question uh we we do as i mentioned we use what's called a unified ethical frame for our data governance program we practice an accountability-based data governance program forgive me but my time is limited which types of entities specifically uh will you not license data to or provide services to well we always they have to be a legitimate commercial enterprise we don't provide data to individuals or data enabled services to individuals it was it is to commercial entities for a legitimate ethical purpose we judge the data use and context via our privacy impact assessment process we check it off against legal requirements regulatory requirements co-regulatory requirements we do a harm detection and prevention test and then very important to all of us we do a fairness test i mentioned in my opening remarks that we're people centered and that is we design from people outwards from the engineering layer outwards my time is limited i appreciate the elaboration of that policy let me ask you this question does any ipg entity or has any ipg entity provided any service or sold any product to private investigators no a very long time ago there was one business that axiom owned that we divested that did serve pis but that might have been 10 or 15 years ago so the answer is no today and which firm was that it was a it was a axiom on we had acquired an entity we operated it for a few years and then we sold it and i apologize i cannot recall the name right now thank you ma'am madam chair i may return for a second round if we have the opportunity i yield excellent uh senator blackburn thank you madam chairman um ms slayman let me come to you first i know that you're aware that senators blumenthal klobitar and i filed the open market app store bill so that we could address google and apple and their stranglehold on that app market so very quickly how do apple and google's data practices factor in to this app store and how they limit the use there and do they incentivize um the app store developers to continue the monopoly over over this market that they have so how are they manipulating that marketplace very quickly thank you so much senator blackburn and we were so glad to see the introduction of the open app markets act i think that's going to be really important not just for big data but for gatekeeper power writ large when it comes to app stores but in particular with regard to big data i think the app stores and the operating systems have this privileged position where they can treat um users decisions about their data differently based on whether the app is owned by the app store company or the operating system company or whether it's a competitor so one thing that's really important is to make sure that those are being treated the same so that we have a level playing field for competition i i think that's important and that privileged position that they exercise is important to note and you mentioned the gatekeeper property and how that would apply to other applications whether it is publishers and other forms of content development so i i think that this is an important bill that that we get passed in on the record very quickly on filter bubbles and i know you mentioned that how do you address how do you think we could address the filter bubbles and the platform's secret algorithms if you will that really kind of manipulate that consumer experience online so one of the ways that big data is used is to decide what products to show the users the platforms again are in this this gatekeeper role where they're making those decisions a lot of times that's based on an algorithm that is fed by data that they're collecting from users um so those decisions about which products to show to users which services to offer to users those are decisions that the platform gets to make and that's limiting the options that a user sees yeah and i think that uh the open apps market act gives us that footing as i said that gatekeeper role to begin to address that so that the consumer online consumer has a more private and a more genuine experience and we're looking forward to getting that bill passed so thank you for those comments uh on that because i agree with you i think the implications we're going to see it writ large in in the industry mr satterfield if i may come to you for just a moment um as you're aware senator blumenthal and i have kind of been doing a deep dive on what you're doing with this data that you're collecting on teenagers and from working with whistleblower and from the data that we've seen basically reams of data at this point we are concerned about this amount of data that you are keeping on teens basically what you're doing is building a virtual presence a virtual you of these teenagers do you think that is a violation of the children's online privacy act the fact that you're tracking and following and building these files on these children senator noah we're complying with the law we we do think it's really important to provide protections around teens experiences on our services these are things that we've we've been investing in we've been consulting with third-party experts so that we do this okay who are the third party experts that you're uh consulting with because when we talk to teachers to parents to pediatricians to psychologists and when we look at the data that you have collected from teams and the changes that they have recommended that you make to your platform it's like you're turning a blind eye to that because you're chasing a dollar so why don't you bring some clarity to bear on that senator this isn't something that i work on at the company i'm happy to get back to you with more on the third party experts if you're the victim of privacy and public policy one would think that you probably were in meetings and that you would have a a stakeholder position in what your company chooses to do on that issue are you not involved in these discussions of privacy and how to protect this data and thereby how to protect the virtual you of these children and teams that are using your platform well senator yes of course i was talking about safety experts and experts on well-being and such yes of course i'm involved in privacy issues including privacy issues that affect the teens on our platform do you have any plans in the works to use the data that you have collected the data that teens gave you the information they gave you when they participated in your mental health survey are you going to use that to put protections in place for these teens on your site yes or no senator all of the research that we do you know informs the decision making in the company so it's certainly something that but the decision making that you are exercising shows that you're making decisions that allow you to be more profitable not that you're making decisions that are based on the welfare of that child so why do you collect so much data on your users if you do not use it to improve the user experience so you're not using it to protect children or to improve the user experience so for the record why don't you tell us what you're using this data for senator we are using the data that that we collect when people use our services to improve their so why would teams that took your mental health survey say why would older teens say we're advising our younger siblings not to use instagram not to be a part of this online community because they feel like you're not following what they're asking you to do so what are you using the data for are you using it for micro targeting to go in and target advertising are you using it to feed them uh to push them further down paths if they click on one something then you keep feeding them more of that why don't you for the record tell us what you're using this data for you've got reams of it senator when it comes to the the data that we collect when people use our services we do a couple of things we use that data to provide the service we use it to improve the service to provide enhanced experience tell me what improvements you have made that would keep teens healthier and safer give me three examples of things you've done that would keep teams healthier and and safer as they use your platform well senator you know with respect to instagram we have made changes to the ways in which uh adults can can contact uh potentially uh younger users we've made changes to the way in which people can can comment and we we've made changes that are designed to address potential bullying and harassment in comments we've we've made resources available on well-being and body image issues we've made a number of investments over the years that address these kinds of issues do you nibble around the edges are you aggressive are you going to stop allowing human traffickers sex traffickers drug traffickers to use your platform whether it's in the u.s or other countries is that the kind of improvement that you're making well senator respectfully absolutely not there's there's no place on facebook it happens like that it happens there's a mexican drug cartel that's been on your platform you didn't take them off senator that that organization was designated and banned on our platform if what you're referring to is the the organization from the wall street journal article you know i i have to tell you and i have grandchildren i have two grandsons and a granddaughter my grandsons are 12 and 13. and my granddaughter is a year old and i tell my grandsons all the time that they cannot trust you all with their information i think what you have done to a lot of these children is inexcusable i think the fact that you collect this data you monetize that data you benefit from that data and then knowing you have this data don't you think parents would have liked to have known that this was taking place on your site i do and i think it is unfortunate that you all have hesitated to answer the questions that senator blumenthal and i have but we do look forward to having a representative from your company come next week and answer the questions that we have in our hearing and madam chairman we look forward to hearing more from google and apple about the open market apps uh bill and with that i will yield back my time thank you very much senator blackburn um second round um uh senator blumenthal let me just say mr satterfield if if you fail to have someone here on september 30th there can be only one reason that you're continuing the concealment let me just be very blunt you've been sent here to defend the indefensible but at some point mr zuckerberg should get the message houston we have a problem and better to be here on september 30 then continue to evade responsibility i thank my colleague senator blackburn for putting it so succinctly and so eloquently and i just want to point out that behind the numbers and the perhaps seemingly abstract questions there are real human beings young women and men who are deeply hurt by these images the focus on body images on self-worth that comes along with those images in one study of teens in the united states and the uk according to the journal article facebook found that more than 40 percent of instagram users who reported feeling unattractive said the feeling began on the app and about a quarter of the teens who reported feeling not good enough said the feeling started there and many felt in quotes addicted to the app and felt that they were deprived of self-control again the analogy to big tobacco is undeniable it's an analogy not an exact comparison but the exploitation of that kind of attraction even addiction i think is reprehensible and um i really do hope that um that you understand that there is a certainty here which is accountability is coming as senator blackburn has said and and senator hawley put it exactly accountability is coming and it will be bipartisan i want to shift uh to the issue that senator blackburn also raised our bipartisan bill the open app markets act would set robust rules to promote competition and strengthen consumer protection i am proud that this bill is bipartisan i want to thank my colleague senator klobuchar for her leading role in this area and she is a co-sponsor of the bill it's received wide support as was mentioned earlier from consumer groups antitrust experts and app developers uh miss lame and i especially appreciate your reference to it and the support that public knowledge has provided for the bill two companies google and apple have gatekeeper control of the dominant app stores that allow them to dictate the terms for everyone their duopoly allows them to set the terms and they do if app developers don't like the terms there's nowhere for them to go that is what we call a broken market not even facebook is immune to google and apple's gatekeeper control big as facebook is powerful as it is it's not immune apple has blocked the facebook gaming app from the app store at least five times and it's prohibited other cloud gaming services from becoming available on the app store apple has also forced facebook to remove a notice informing consumers about the so-called apple tax that is the infamous 30 rent fee that they extract from digital goods and services but the little guy is as much a victim as the big guys like facebook and the open markets the open app markets act would protect developers ability to offer competitive prices tell consumers about lower prices and give consumers the right to make their own decisions about the apps they installed that's what's called competition and a free market or at least freer than it is now and it would mean that facebook and others don't have to pass the apple tax on to consumers and small businesses it would mean that iphone users could sideload facebook gaming directly onto their phones if apple continues to block the app these are basically pro consumer and pro competition rules mr satterfield would facebook support congress setting fair clear enforceable rules on app stores that would prevent apple and google from using their gatekeeper power to extract excessive rents and block competition like what happened to you and your app facebook gaming senator thank you our team is looking at the bill and we're providing feedback through the you know the normal channels uh you know we're continuing to work with you and the other co-sponsors and providing that feedback what are the normal channels we're communicating with your staff and others well let me point out i in case it isn't obvious and i think it is that facebook really should support these kinds of rules if it is in favor of competition and open markets and uh not just for you but for others mr erickson apple has claimed that if we allow consumers to make their own decisions all sorts of really horrible or terrible things are going to happen but unlike apple google has allowed side loading and better developing access on android from the very start given apple's alarming claims would you characterize everyone's apple phone as insecure or vulnerable to cyber security risks because that's what apple says will happen if we eliminate the apple tax of 30 percent senator thank you for your question uh if i may step back for a minute uh we we share the values that you and senator blackburn have that consumers should be able to choose the lawful applications to download those um and that there should be competition uh in this marketplace we're taking a look at your legislation as well and and we'll be happy to to engage with you um going forward the android ecosystem no we do believe we provide a very safe and secure uh ecosystem for app developers to reach a global audience of billions of users in 190 countries and that's not undermined by allowing consumers to be able to to download applications outside of the app store or to side load those applications so you do believe android is secure senator yes uh let me just close uh this round of questioning because i know my colleagues matt may have other questions and i cannot help but make this observation about the action uh just over the last weekend by google and apple at the behest of vladimir putin to censor their apps uh in fact sensor apps that we use to organize democratic protests in russia apple has taken down thousands of apps from its app store at china's request almost a third of them relate to human rights and it includes hong kong protests and lgbtq rights you know in a tweet i analogized what's going on here to neville chamberlain and the attempt to appease germany i view it as very much the same kind of appeasement of vladimir putin and the communist party in china i think it was winston churchill who said about naval neville chamberlain that he had to choose between dishonor and war he chose dishonor and he got war in fact he got both at the end of the day you're not going to appease these totalitarian dictators not even apple or google or any of the big tech companies are going to win by appeasement when it comes to human rights so i think that it's pandering it's craven pandering and it undermines our national interests and i um yield the floor madam chair thank you very much senator blumenthal center lee is next thank you very much um my next question is from mr rob mr rob what are the ramifications of our personal data having become the method of payment for so many online services well it's a loss of control loss of income and you know we're we're looking at the snapshot right now of the tech industry and we're looking at uh we're focusing in on marketing um and and the big players that exist today uh but this is going to evolve and you know i've been in the tech industry for decades and i started on the internet 25 years ago um and that was well before facebook and google even existed it's the same same thing's going to happen in the next 20 30 years is that this data is going to persist and we need to give individuals control of that data so they can learn how to you know exercise their control set permissions on how it's used and make money on on commercial apps that actually uh use it to build products and and services uh changing dynamics what if anything can we do to reassert uh our ownership and our control over our own data well i think that the the key way to do that is to get the data off of the platforms that are aggregating it and then putting it into a central repository that's managed by the individual and if they do that they're they're in control they're the focal point for actually combining that data and who's using it rather than having it sold by third parties to third parties or and combined in ways that they don't have any uh jurisdiction over uh by putting the you know the individual at the center of the equation um you know it makes life more complicated but it's an essential thing for us to move forward and be able to do this successfully long term um otherwise we're going to be caught in this you know privacy trap i mean privacy is fine but it really is just destruction of data and limitations on rather than actually solving the problem at that root are are third-party brokers like axiom um an obstacle or are they an aid to consumers trying to regain control of their data oh well the fact that they're combining data from multiple sources uh they're actually acting in opposition to what individuals should should be uh able to do if you have the individual at the center of the equation you don't need an axiom you don't need a data broker i mean they can cut deals directly with them they may even be managing the the data repository um you know it seems you know we don't have a data repository now and it seems you know fanciful to even think in terms of that but i mean we can build it i mean we can set the standards for uh how that would operate uh we can lay out those standards and have companies actually compete to deliver on those standards just like we built the web just like we built so much of what we have in terms of web architecture you know data aggregators can do business with individuals but they can't be a substitute for that mr erickson i'd like to turn to you next in the last year google announced that it would stop servicing third third-party cooker cookies in in the chrome browser now google's announcements said that the purpose of this was to protect consumers and to protect their data left unsaid was how this could impact google's ad tech competitors and also left unsaid was the amount of information that google collects from consumers browsing data location data app usage data financial transaction data etc tell me how is it that consumers uh are any more protected if google collects this data and your competitors can't can you help me understand that uh senator thank you for the question yes i i can i can uh try with the announcement that we made you rightfully point out that we would stop supporting intrusive tracking technologies like third-party cookies we made the announcement in an effort to chart a course for a more privacy enhancing web we did not unilaterally withdraw our support for that but rather uh wanted to engage in a thoughtful conversation with advertisers with with publishers that rely on an ad supported ecosystem to be able to to function their websites or to reach consumers and we want to engage with regulators and governments and and other stakeholders to explore more privacy protective technologies right those intrusive technologies sir i'm not i'm not sure you're you're grasping my question you're at least not answering it i i appreciate that you're wanting to have a thoughtful conversation i appreciate that concluded this was in your business interest and it may well been that's that's totally within your right what i'm asking you to explain is your your apparent assertion that consumers are are any more protected uh if you collect that data and your competitors can't but your assertion right i mean that that is the assertion that you're ma you made in that announcement you said you're not going to service the third party cookies in the chrome browser senator we think the advertising ecosystem uh can thrive without having privacy intrusive technologies like tracking devices like third-party cookies the data that users we want to we are transparent with the collection practices that we have and the uses of our data and we want to give consumers we do give them meaningful choice over the uses of their data including to decide that they don't want to see uh targeted ads and relevant ads they can choose not to see those or to mute ads that appear on third-party sites uh there's many many uh advertisers in the ecosystem uh the access to data from consumers uh can be gotten from data brokers uh and and other providers um so we we don't think the data in that regard is is non-rival risk the data that that consumers may provide with us uh are often provided to other online uh actors as well and some of these companies are some of the biggest companies in the world but but you you implicitly raise a very important point which is as we see regulators around the world um push us and others rightfully so to have more privacy protective technologies and to charter course to a more privacy centric web there are competitors out there that are urging competition authorities to have us make more personally identifiable information released to the ecosystem we think that we we want to engage in these conversations we think we can have a privacy-centric web while ensuring consumer choice and competition and and that publishers and advertisers will continue to be able to have a business model that will allow them to provide their websites and services uh to consumers in the way they do today i understand that and look i i get the fact that you can always point to areas where things could get worse through mandatory disclosures of personally identifying information on the web or otherwise it is rather significant here that these things that you're talking about steps you've taken to exclude would-be competitors from the marketplace in which in circumstances in which google is happy to provide advertisers with an alternative uh making them more dependent on google it does pretty much to your your bottom line ms slayman do you agree with google's statement uh are consumers better off with only google being able to collect these types of data no i i don't agree with that statement i don't think that users privacy is improved and i think it's a problem for competition i really think we're being presented here with a false choice there's another alternative which is that some of this data should not be tracked at all but you uh it sounds like you you you agree with um my reluctance to accept the premise the people are safer because of this uh i just realized i'm dangerously over time the chairman that uh chairwoman klobuchar has been very indulgent uh i apologize thank you next up senator cruz thank you thank you madam chair uh mr satterfield my questions will be for you last week the wall street journal ran a damning article entitled facebook knows instagram is toxic for teen girls company documents show the tagline below it was quote its own in-depth research shows a significant teen mental health issue that facebook plays down in public i know about this article because my wife heidi who reads the journal every day said you need to read this article now i read read it word for word all of us know that these products are addictive and that companies like facebook design them in this way in order to maximize addiction to capture eyeballs which captures data which is then used to sell advertising but for years facebook has been publicly insisting that its products aren't harmful in particular that they're not harming teenagers we now know that was a lie facebook knew that its products and specifically instagram was destroying the lives of far too many teenage girls facebook knew this because facebook conducted its own studies into how instagram affected young users and found that instagram is harmful to a sizable percentage of them in fact a slide from 2019 summering this summarizing this research said quote we make body image issues worse for one in three teen girls another facebook slide said quote teens blame instagram for increases in the rate of anxiety and depression another slide said quote teens who struggle with mental health say instagram makes it worse and most egregiously one presentation said that among teens who reported suicidal thoughts thirteen percent of british users and six percent of americans users traded traced their desire to kill themselves to instagram this should have made facebook stop dead in its tracks and ask what in the hell you were doing instead facebook publicly downplayed the risk to young users and committed to push to make sure more at-risk teenage girls used instagram because more users including more teenagers means more money whatever the human cost this is appalling the american people deserve a thorough investigation into facebook's willingness and eagerness to mislead the public about the risks of their own products the wall street journal article states that the research has been reviewed by top facebook executives and was cited in a presentation given to mark zuckerberg mr satterfield is this accurate did mark zuckerberg have personal knowledge of this facebook research i i i don't know the answer to that question but you know to your other points i i would strongly disagree with the notion that our products are unsafe uh i strongly believe they are so let me ask you did you have knowledge of this research mr satterfield i'm sorry senator i i've read the wall street journal article did you have knowledge of it before the wall street journal article senator i i'm generally aware that we do research in our products are you familiar with this research i wasn't familiar with this research outside of the context of the journal article no so wait a second your title is vice president of privacy and public policy and you had no idea about facebook's own research showing that you're violating the privacy and destroying the lives of teenage girls you didn't know about it is that what you're testifying today senator we're a large company we have a lot of teams working on a lot of different issues i don't work on on these issues safety so you didn't know about it i i didn't other people did we're happy to and you have zero knowledge whether mark zuckerberg knew about it or not i i senator i don't know that um you knew you were coming to testify in this hearing i i'm going to guess you read the journal article before you showed up to testify senator i i came here to testify on data issues did you read the turtle article before you showed up to testify senator yes i've read the journal articles okay and presumably you prepared for today's testimony yes uh yes senator i prepared and did that preparation involve inquiring whether the wall street journal was accurate when it said mark zuckerberg was aware of this research senator i i i can't get into the issues that we discussed during prep with with my lawyers why not you're you're here testifying on behalf of facebook i'm asking whether you inquired whether the journal was right that zuckerberg knew about this research did you inquire about it or did you remain willfully blind and not want to know if zuckerberg knew about it senator respectfully i'm here to testify about uh data and antitrust issues i i don't work on these issues i'm happy to put again you're the vice president of privacy and public policy and and so putting in place policies that result in more teen suicides that does not fall within your purview center i i don't agree with that characterization i i work on projects let's take the specifics of facebook's research i read a quote a minute ago quote we make body image issues worse for one in three teen girls i didn't write that facebook wrote that is that an accurate statement senator we do this research in order to inform hard conversations i didn't ask why you did the research i asked if the statement that was the result of your research is true senator this is research that that was discussed in the journal this is research that we did internally was that a conclusion of your research yes or no senator i'm i'm aware of the wall street journal article i've read the wall street journal article which discusses the research all right let's try another conclusion the facebook research concluded that thirteen percent of british users and six percent of american users trace their desire to kill themselves to instagram is that a conclusion of your research senator cruz respectfully we have teams that work on these issues i'm not on those respectfully you're not answering the question it's a simple binary question did your research conclude that or not if it's not show us the research that didn't conclude that if it is then the question is what's the culpability of a company that knows it is contributing to an expanding teen suicide so did your research conclude that six percent of american users trace their desire to kill themselves to instagram yes or no senator again these aren't issues that i work on at the company i'm happy to bring folks in for a briefing with you and your staff i i understand that you would prefer a briefing without the public being aware of it but i'm the father of two two girls including a teen teenage girl let me ask you something and your judgment in the judgment of facebook is increased teen suicide an acceptable business risk senator of course not has facebook quantified how many additional teenagers took their life because of your products senator again with respect these aren't the issues that i work on i came here today to talk about data and antitrust well let me ask you what would you say to the parent of a teenager who took her own life because of your products what would you say when two years ago you had research that you conducted that concluded your products would contribute to an expanding suicide what would you say to a parent on behalf of facebook who was facing that horrific tragedy senator obviously losing a child to a tragedy like that is devastating i have children i take these issues incredibly seriously myself does facebook of course we do senator then what did you do differently you got this these results two years ago what conduct changed you don't get to say you take these issues seriously if you continue doing exactly the same and profiting off off of applications that are endangering the lives of teenage girls what did you do differently because of this research we did this research to inform our decision making we have consistently made senator we've made changes to our products over the last did anything change to reduce the risk of teen suicide because of your product did you read this research and say oh my god this is horrifying let's change did you do anything to change or did you just say hey we're printing money so we're good with this which one was it senator i would love to have a team come and give you and your staff a full briefing on these issues we have made it's the american difficulty into safety and security i would love to share more about this with you with the folks who work on these things well the entire american people deserve to know the answers to these questions thank you very much um i'm going to finish up here with my second round of questions and i want to bring us back to the subject of the hearing on data because we have some major opportunities to move right now uh legislation that i think will be very helpful the first i've mentioned which is right in front of us before the house the billet center grassley and i have to modernize the merger filing fees we also have opportunities in this budget in reconciliation and you know my view is and i guess i'll ask you uh ask you this um ms slayman no the president can appoint aggressive enforcers uh he can issue executive orders which was great but if we don't have the resources to take on the world's biggest companies is it going to all work right i think you're absolutely right madam chairwoman we need more funding for our antitrust enforcement agencies obviously that alone is is not going to be sufficient so i'm glad that you're working on a lot of other uh important pieces of the puzzle as well but but that's a an important one that we ought to be able to get done okay very good um and then um we have not seen a lot of anti-trust enforcement against mergers or anti-competitive conduct based on the issues raised by um what this hearing has uh for the most part focused on which is data it's clear that big data does raise complex competition issues but i'm doubtful that when you see some of these court cases recently that in my mind have gone in the wrong direction to begin with but then we have this complex area of data and what that means for dominant carriers with no new laws or adjustment of laws and that's why the competition and anti-trust law enforcement reform act that i introduced with senators leahy blumenthal book and many others would update our laws could you talk about how this would help to address competition issues raised by big data yes thank you so much madam chairwoman i think that's absolutely right um that recently uh and and not so recently it's it's been going on for decades now that our anti-trust laws have been narrowed and narrowed by these court decisions and so now that we are facing the difficult challenges of big data it's very difficult to bring a case um for example where innovation harms are an important part of you know what what the agencies are trying to argue um so i think it will be incredibly helpful to have your legislation in place that updates the legal standard both for mergers and for exclusionary conduct um exclusionary conduct in particular is how a lot of these big data concerns are happening and it has really been difficult to bring exclusionary conduct cases which is a broader problem beyond big data but is particularly relevant here um and maybe we we could talk a little bit about that you know the relevance of it um as we look at privacy legislation and i know mr satterfield you talked about privacy legislation and in your written testimony past blog post you've written about the need for congress to enact it that could create rules to govern how platforms should use analyze and share data what restrictions do you think the u.s government should put on targeted advertising both from a privacy and competition perspective and should such legislation be limited to platforms like facebook google and amazon or should it apply to data brokers too well thank you senator we think that comprehensive privacy legislation is incredibly important for the congress to take up and pass in terms of who it should apply to we think it should apply across the board to companies that process people's personal data we think that it should have components like basic rights around your data the rights to access correct delete and move your data to another service we think that companies should be required to build internal processes to make sure that they're thinking about privacy when they build their products and services so i i think that those are the basic components of the framework that we would we would advocate for anyone else like to comment on the rules the federal government should put in place to ensure the market for targeted advertising remains competitive which is a little different than just privacy i i'd like to jump in okay and say that i think we need an accountability based law we've been advocating for federal law for almost 20 years and we believe it's very important for all americans to have the same rights and for businesses to have predictability and certainty and the accountability construct is one that says it parses out and this is especially important for digital advertising that you should use data for benefit for good purpose and you are responsible and answerable the accountability construct for detecting and preventing harm i love what senator blumenthal said earlier that data is an abstract of a person and i believe it deserves all the dignity that we people should have so when you process data when you activate data for digital advertising it's about fairness not manipulation and that's the way we govern data and that's what we we believe and that's what we advocate for um in addition to the basic rights we parse privacy out it's the right to an area of seclusion where can we as people be free natural unobserved humans the right to agency that's that choice participation control access and then the right to fair processing that is the third piece of privacy and that is in the digital age the reality of digital is it's getting so complex people do not want to sit in front of a nasa space station control panel and say yes yes no no yes yes we have to get the defaults right and it has to be that participants all participants are accountable for do no harm and do good things in service to people it is privacy by design the computer code is the conduct thank you senator okay very good uh miss slayman and you may want to add to that but one of the goals of competition is to policy is to ensure there's a broad range of choices if ads are targeted based on data companies have collected about each of us and the inferences they have made about our interests does that raise concerns for you about consumers abilities to freely choose the products and services that are best for them ranging from financial services housing health care employment opportunities and more when some of them are being targeted because of their data that they didn't really know they shared compared to other competitors you want to address that yes that's something that we're very concerned about i do think that creates an opportunity for anti-competitive discrimination it also creates an opportunity for discrimination racial discrimination and gender discrimination and we've seen instances of that happening so i think these are very serious harms that we need to be addressing but to focus on the anti-competitive discrimination i do think it in addition to the the consumer choice limitations we're also concerned about the impact that this has on businesses if a business is assessed by one of these algorithms to not be popular with a certain category of users that can make things incredibly difficult for them because of the power of these platforms because they occupy that gatekeeper role it's much different than if a brick and mortar grocery store decides not to show your product you can go somewhere else with these gatekeeper platforms that's not a practical real option for companies um so there's a variety of harms i think that come from that mr erickson what is your company doing to ensure that competition is not being distorted by your targeted advertising systems uh with google senator uh thank you for the question so we think primarily consumers need to have transparency over their data how data is being used and meaningful choices uh about the use of that data so on on the google platforms we provide an easy way for consumers to see exactly what data is stored relative to their account they can delete that data if they want to they can also make changes to say they don't want behavioral advertising targeted ads to them they don't want to see they want to mute ads on on third-party sites uh so uh i think the the the important thing here is to ensure that consumers have transparency and that they have meaningful choice and we think privacy legislation uh should should um should reflect those values as well okay so um earlier my opening i talked about apple recently rolling out an update to its users prompting them to agree or opt out of being tracked from across the apps they use early indications as i noted suggest a lot of them are doing it something like 75 percent has google consider doing something similar including for its android operating system senator thank you so google has announced uh that they will uh we will stop supporting uh privacy intrusive tracking technologies like third-party cookies at the same time we've opened up a dialogue through our privacy sandbox initiative to have a discussion with advertisers with publishers with governments on how the industry can move to more privacy enhancing privacy protective business models that still allow small businesses website owners to be able to have an ad supported a business and provide free products and services to consumers and through the initiative the privacy sandbox initiative you've mentioned some of these changes that you made to your web browser chrome however from a competition perspective these changes have raised concerns that google will still have access to detailed data but others won't how do you respond to those concerns senator when we announced that we would see support of these intrusive tracking devices the third party cookies we also announced that we would not substitute those for alternative tracking mechanisms but rather that the idea behind the privacy sandbox was try to move as an industry toward more privacy secure technologies that would still support an ad ecosystem but in privacy enhancing ways um do you want to respond to that miss layman and then i'll just ask you the last question here thank you so much um the privacy sandbox creates a situation where google is still getting the data so they may call that privacy because fewer companies are getting the data but google is still able to fully exploit that data so i don't think that that is giving users more privacy okay and my last question of you is um about um you know we've i've asked you some questions on the on the record on uh later on mergers and things like that and my bill but just the kind of broad question here miss layman in your opinion do we need new laws to fully address the competition issues raised by big data or can we just live with what we got that's called a softball thank you so much we absolutely need new laws and that's something that we're working very hard on i think we need to use all of the tools at our disposal so we need to increase enforcement with the current laws that we have we need to push for rulemaking at the ftc with the current laws that we have but at the same time it is so important that we have improvements to the antitrust laws and sector specific antitrust laws focused on big tech very good i think that uh says it all do you want to add anything certainly oh you do okay because we want to have a four hour hearing not just three and a half no i'm kidding i can't go for four and a half no that's okay why don't you just just just finish up um and i'll keep this brief uh mr setterfield what's going to happen to the employees at facebook involved in providing the least leaked documents to the wall street journal are they going to be retaliated against senator i i can't discuss hr issues in a public forum would it be appropriate for you to retaliate against them assuming they broke no laws would it be a process for you to retaliate against of course it wouldn't be appropriate to retaliate against anyone will you issue a commitment to me that facebook will not retaliate against them senator yes i'm happy to commit to that that'd be wonderful thank you i appreciate that okay um well i want to thank everyone for coming um there is a lot going on we have a um bill this week uh before the full committee for markup on venues that senator lee and i have done together the companion in the house we have the funding bills and and proposals uh that are very ripe for action right now uh we have other bills that are tech specific with senator blumenthal and senator blackburn and myself with the app bill we have interoperability proposals from the past and then we have discrimination bills anti-discrimination bills for exclusionary conduct and the like that uh we're in the middle of right now uh working on uh the house of course has proposals some similar to ours some different but we've been working closely with our counterparts which is representative sicilini and representative buck and then also we have broader bills we had a hearing on on meat packing and consolidation in the grocery area we had a which went uh was very well attended with the full committee here um senator lee and senator grassley have a a broad bill on antitrust i have another one with the number of co-sponsors there are some similarities in the bill right centerly yes there are um and so we're also looking at that across industry lines about things that we can do that aren't just about tech actually that hit the fact that we're seeing consolidation across this country from everything from cat food to coffins um it's not really good to end with the word coffin so um um although you know we're not too far from halloween but i um just want to thank uh the witnesses um and assure you that um that we continue to want to work with everyone but we know we need change that just keeping on going like we are and saying everything is fine and we trust you and um it's just not enough you know we're glad that uh these companies have been successful we're glad they employed people we truly are i have a fitbit center lee and i have compared some of our fitbit data over the years i'm not going to reveal that although you guys already know it so there and but with the same time we believe in capitalism and encouraging capitalism and rejuvenating capitalism and a lot of what's going on right now has the obvious privacy concerns many of which you heard today with a lot of understandable emotion but then there's also competition concerns that once you get so big and have so much dominance that there are these barriers to entry that make it impossible to allow competition and that in turn of course in the long term allows for too much money in the same few hands it allows for companies to start preferencing themselves um and while we've seen incredible developments in technology we do not deny that we'll never know some of the new bells and whistles on privacy we might have seen if we didn't have facebook by instagram or whatsapp if there'd been some um control on that and that's one of the reasons that i support looking back um in some of the most consolidating industries just as we did during the days of the at t breakup uh to figure out what we can do to make this uh area more competitive so you're not going to find a more interested and energized subcommittee than this one as you could see from today including some visitors that aren't even on the subcommittee uh that we welcome um so uh thank you um uh we will keep the record open uh for is it a week okay very good and thank you to um mark and to avery for their work and senator lee and his staff do you want to add anything mike okay thank you the hearing is adjourned you

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Length: 157min 36sec (9456 seconds)

Published: Tue Sep 21 2021