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tv   Heads of Facebook Amazon Apple Google Testify on Antitrust Law Part 1  CSPAN  July 29, 2020 9:11pm-2:14am EDT

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or listen on the go with the c-span radio app. facebook,of amazon, google, and apple appeared together virtually at a house judiciary subcommittee hearing on competition within the tech
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industry. they took questions about the use of third-party seller data and allegations of anti-conservative bias. >> the subcommittee will come to order. without objection, the chair is authorized to declare recess at any time. welcome to today's hearing on marketing power. amazon, apple, facebook, and google. i would like to remind members we have established a distribution list dedicated to circulating specific motions or other written materials members might want as part of our hearing today. if you would like to submit materials, submit them to the email address distributed to your offices. we will circulate materials as quickly as we can. thatld also remind members face coverings are required for all meetings in an enclosed space such as committee hearings. i expect all members on both sides of the aisle to wear a
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mask except when you are speaking. i recognize myself for an opening bateman -- opening statement. this committee launched an investigation into digital markets to document competition problems in the digital economy and evaluate whether the current antitrust framework is able to address them. september 2019, the chairman and ranking members of the full committee and the subcommittee issued sweeping bipartisan requests for information to the firms that will testify at today's hearing. we have received millions of pages of evidence. documents and submissions from market participants. we conducted hundreds of hours of interviews. we have held five hearings to examine the effects of online privacy,novation, data a free and diverse press, and independent businesses in the online marketplace. the result of 17 briefings and roundtables, 35 experts and stakeholders in support of our work.
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this has been bipartisan from the start. it has been an honor to work alongside my colleague of the subcommittee's ranking member, and the ranking member of the full committee, doug collins. we have taken this work seriously and studied these issues carefully. kimbaleague congressman recently commented, this is the most bipartisan effort have been involved with. the purpose of today's hearing is to examine the dominance of amazon, apple, facebook, and google. amazon runs the largest online market place in america, capturing 70% of all online sales. it operates across a vast array of businesses from cloud computing and movie production to transportation logistics and small business funding. amazon recently hit $1.5 trillion, more than walmart,
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salesforce, ibm, and at sea combined. apple is a dominant provider of smart phones with more than 100 million smartphone users in the united states as well. apple sells services and apps including financial services, media, and games. facebook is the world's largest provider of social networking services with a business model that sells digital ads. despite privacy scandals and record-breaking fines, facebook continues to enjoy booming profits. google is the world's largest online search engine, capturing more than 90% of searches online. it controls key technologies and digital ad markets and enjoys more than one billion users across six products including browsers, smartphones, and digital apps. , theseo the pandemic corporations already stood out as titans in our economy. in the wake of covid-19, they are stronger and more powerful than ever. as families shift their work,
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shopping, and communication online, these giants stand to profit. locally owned businesses meanwhile face an economic crisis unlike any in recent history. it is possible our economy will emerge this crisis more concentrated and consolidated than before. these companies serve as critical markers of commerce and commune occasion. because they are so central to life, decisions have an outside effect on our economy and democracy. any single action by one of these companies can affect hundreds of millions of us in profound and lasting ways. --hough these corporations we have observed common patterns and competition problems over the course of this investigation. arst, each platform is bottleneck for a key channel of distribution whether they control access to information or a marketplace. these platforms have the incentive and ability to exploit
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this power. they can charge exorbitant fees, contracts,ressive and expected data from people that rely on them. second, each of these platforms uses its infrastructure to survey other companies, and whether they might pose a competitive threat. each platform has used this data to protect its power by cutting potential for rivals. these platforms abused their control over technologies to extend their power, whether through self referencing, predatory pricing, or requiring users to buy additional products. they have wielded their power in destructive ways to expand. today's hearing will examine how each of these companies have used this playbook to maintain dominance and how their power affects our daily lives. why does this matter? many of the practices used by
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these companies have harmful economic effects. they discourage entrepreneurship, destroy jobs, and degrade quality. they have too much power. this power staves off competition and innovation. while these companies produce innovative products, their dominance is killing small andnesses, manufacturing, the engines of the american economy. several of these have harvested and abused people data. when everyday americans learn how much of their data is being mined, they can't run away fast enough. in many cases there is no escape from the surveillance as there is no alternative. people are stuck with bad options. open markets are predicated on the idea that if a company harms people, consumers, workers, and business partners will choose another option. that choice is no longer possible. i am confident addressing the
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problems we see in these markets will lead to a stronger, more vibrant economy. concentrated economic power leads to concentrated political power. this investigation goes to the heart of whether we as a people govern ourselves or whether we let ourselves be governed by monopolies. american democracy has been at war against monopoly power. we have recognized concentrated markets and concentrated political control are incompatible with democratic ideals. be at the railroads or the oil tycoon's or at&t and, we took action to ensure no private corporation controls our economy are democracy. we face similar challenges today. these platforms enjoy the power to pick winners and losers, shakedown small businesses, and enrich themselves while choking the competitors. their ability to dictate terms, call the shots, a bend sectors
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sectors, represent the power of a private government. with that i recognize the ranking member of the subcommittee for his opening statement. >> thank you, mr. chairman. i want to thank the ceos for working with the subcommittee to appear today. the memorial service for john lewis on monday required our attention. this hearing is vital to our oversight work and i appreciate your flexibility. throughout my time in congress, i have prioritized one of our seminal responsibilities. part of that is the periodic review of the effectiveness of our laws. i think it is a good and timely thing that we are now turning our attention to technological innovations, which brings us to all of your companies. our country is stricken by a pandemic, a dramatic
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illustration of the extraordinary reliance americans have on technological innovations. these unexpected and unprecedented times, your companies have provided innovations so our nations can meet a myriad of our daily needs. virtual business with doctors, connecting socially distant families, or keeping our small and large businesses connected. withresponsibility comes increased scrutiny of your dominance in the marketplace. i want to reiterate something i said throughout this investigation. being big is not inherently bad. quite the opposite. in america you should be rewarded for success. we are here to better understand the role your companies have in the digital marketplace and importantly, the effect they have on consumers and the public at large. my colleagues and i have a great
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interest about what your companies do with accumulated power. we also know the marketplace is driven by data. it follows that those who control the data control the marketplace. there are broader questions surrounding data. who owns the data? do companiesbility have to share it with their customers or competitors? what is the fair market value of that data? is there anything monopolistic in acquiring this data? what about monetizing it? these are complex issues congress, regulators, even your own companies are wrestling with. since the investigation began, we have heard from many who are quick to say your successful companies have grown too large. since this hearing was announced
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it seems those complaints have gotten even louder. while i find these complaints informative, i do not plan on litigating each of these complaints today. antitrust law and the consumer has served this country well for over a century. laws have provided the framework to make way for our most successful and innovative companies. i will be the first to highlight that. however, as the business landscape evolves, we must ensure our existing antitrust are primed to meet the needs of our country and its consumers. i share the concern that market dominance in the digital space is right for abuse. particularly when it comes to free speech. as we know companies like facebook, youtube, and twitter, have become the public square for political debate to unfold
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in real time. ,eports that dissenting views often conservative views, are isgeted and censored as soon troubling. consumers are -- conservatives are consumers, too. they need the protection of antitrust laws. the power to influence debate carries with it responsibilities. let the facts be our guide. your companies are large. that is not a problem. your companies are successful. that is not a problem either. i want to leave here today with a more complete picture of how your individual companies use your size, success, and power, and what it means to the american consumer. i yelled back the balance of my time. thehe chair now recognizes gentleman from new york, mr. nadler. >> thank you, mr. chairman. i thank you, ranking member, and
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the subcommittee members, for have put into this investigation. i appreciate you calling this hearing so we can hear from amazon, apple, facebook, and google. i look forward to important dialogue. today it is effectively impossible to use the incident -- the internet without using the services of these companies. concentration of power in any form, especially economic or political power, is dangerous to a democratic society. that is why we must examine these and other companies. lawsnsure our antitrust need.the tools they this committee has completed a year-long investigation into competition. they are the lens through which i approach today's hearing.
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the internet has delivered an arm's benefits to americans including economic ash enormous benefits to americans including economic opportunities. there is growing evidence that a handful of corporations have captured an outsized share of online commerce. providing retail, online computing,cloud which hundreds of thousands of other businesses rely on, these essentialcomprise the infrastructure for the 21st century. these companies have the ability to control not just the markets. the problem is not unlike what we faced 130 years ago when railroads transformed american life. creating a key chokehold the railroad monopolies could exploit.
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they charged tolls, extorting producers who relied on their rails. they discriminated on farmers picking winners and losers across the economy. could use their dominance in transportation to pay for their own services. these tactics by the railroads spread despair across the country. congress initiated an investigation to document these problems and enacted legislative solutions to outlaw anticompetitive practices of the railroad industry and other industries dominated by monopolies and trusts. congressional oversight and legislative reform could not prevent the inexorable arrival of new technologies of human progress. instead, congress recognizes these powerful new technologies have reshaped the balance of power in our economy and it was
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the role of congress to ensure the new monopolists do not abuse their power. the digital economy has similar challenges. while the underlying technology is different, new intermediaries have the ability to control access to critical markets. if you are an independent merchant, developer, or content producer, you are reliance on powerful intermediaries. , many the economy businesses live in fear of exclusion from these platforms. effect some companies have shared with the committee during this investigation. 's currentmittee review of competition continues a long tradition in this committee of oversight and the antitrust laws in our economy. from the days of chairman emmanuel seller, the house judiciary committee and antitrust subcommittee have conducted inquiries into industrial sectors showing signs
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of consolidation and anticompetitive conduct. continued on a bipartisan basis over the years. the 1950 report from the subcommittee on monopoly power describe their mandate, quote, it is the providence of the subcommittee to investigate factors which eliminate competition, enter small businesses, or promote undue concentration of economic power. to make recommendations based on those findings. following this proud tradition with industry and government witnesses, consultation with subject matter experts and with careful and any painstaking review of large evidence provided by industry participants and regulators. themately it is responsibility of the antitrust enforcement agency to enforce the law. congress has an obligation to
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set whether existing antitrust laws and that will to enforce those laws and policies are adequate to address the issues facing our country and to take action if they are found to be lacking. given a dominant role that these four companies plan our economy and society, it is only reasonable that our careful examination of the antitrust laws begin with them. i appreciate the participation of all of our witnesses today. an investigation would not be complete, it has hardly begun without hearing from the companies. i yield back the balance of my time. >> i think the gentleman and i recognize the gentleman from ohio. jordan: i want to think the ranking member. i'm not sure how me more committing -- committee hearings
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we will have this congress, but i want to thank him for his great work for the constituents of his district in wisconsin for this many years and for the work that he has done for this entire committee. --ill just cut to the taste chase, big tech is out to get conservatives. that's a fact. july 20, 2020, remove the home pages of the daily caller. last night they censored bright art. june 16, 2020, google threatened to defund the federalist. google and youtube announced a the contentring that conflicts with recommendations of world health organization's. think about that. world health organization's. the organizations that lie to us . if you contradict something they say, they can life for china. you say something against them, you get censored. june 29, 2020, amazon bands 20
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-- amazon bands president trump's account on twitch. amazon bands a book critical of the coronavirus lockdown written by a conservative commentator. may 27, 2020, amazon won't let you give to the family research alliance defense fund, but you can give to planned parenthood. facebook, june 19, 2020, takes down pose from president trump's reelection campaign. facebook silences a pro-life organization advertisement. facebook -- former facebook employee admits facebook routinely suppresses conservative views. and i have not even mentioned twitter. we actually invited, mr. chairman. we asked you guys to invite him as one of our witnesses. you guys said no. they shadow bent -- they shadow band to members of this committee. , only four,senate
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only for get shadow band. what mr. dorsey tell us. he said it was just a glitch in our algorithm. i asked him what did you put in the algorithm. a nickel for every time i heard it was just a glitch, i would not be as wealthy of our witnesses, but i would be doing all right. we have heard the excuse time and time again. twitter sensors president trump's tweet on the right to minneapolis. twitter censures the white house for quoting been a president's comments about the right to minneapolis. sensors the president again for saying he will enforce the rule of law against any autonomous zone and washington, d.c. , itcan tweet all you want happened in seattle but the president will not have one in washington, d.c. cannot do that. you give band and censored. he's going to have one in washington, d.c., oh, no, you can't do that.
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you get banned. censored. dozens of examples. i forgot one. i forgot one. just last week, july 21st. july 21st. the leader of iran, islamic republic of iran, largest state sponsor of terrorism. twitter allows this tweet. quote, the islamic republic of iran will never forget the mar tor dom of sul mannie and will strike a blow in the united states. so you can threaten the citizens of this great country, the le leader of the largest state sponsor of terrorism, that's just fine, but oh, the president says he's not going to allow some autonomous zone in d.c. and he gets censored. all kinds of examples. most of them from this year and that's what's critical to understand. thmost of them from this year, election year. that's what concerns me and so
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many americans because we saw what google did in 2016. we all know about the e-mail the day after the election where top executives at google talked about the silent donation. in spite of their efforts to help clinton, president trump won. but we're 97 days before an election. and the power as the previous chairman and ranking member have said, the power these companies have to impact what happens during an election, what people, what american citizens get to see prior to their voting is pretty darn important. that's why this committee hearing is important. we all think the free market is great. we think competition is great. we love the fact these are american companies. what's not great is censoring people. censoring conservatives and trying to impact elections. if it doesn't end, there has to
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be consequences. that's what i'm concerned about what i think so many americans are concerned about. i look forward to hearing from our witnesses, mr. chairman. before i yield back, we have a colleague. i would ask unanimous consent that mr. johnson, the ranking member of the constitution subcommittee be allowed to participate in today's hear iin our customary practice for subcommittee hearings. >> the gentleman makes a unanimous consent. >> i would object. objection is heard. >> and now using today's -- >> why are we not allowing, it is customary. there was a anonymous consent request. objection was heard. i will now introduce our witness. >> this has never happened in the history of the committee. >> i will now introduce today's witnesses. our first, jeff bezos. mr. jordan, i have the time. >> we're talking about people's liberties here. >> mr. jordan, you made a unanimous consent request. objection was heard. those are the rules. it is now my pleasure to
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introduce the rules. jeff bezos -- >> put your mask on. >> of mr. bezos founded amazon in 19 -- excuse me. i'm going to remind members of this committee unless you are speaking, our rules require you to pearwear a mask according to attending physician. i'm speaking about another member of this committee. i'll begin again. it is now my pleasure to introduce today's witnesses. our first is jeff bezos. chief executive officer of he founded it in 1994 as an online bookstore. since then, they've grown to be the largest retailer on the internet. he also oversees into areas including cloud computing, digital streaming and artificial intelligence. he received his bachelor's of science from princeton. the second witness, chief executive officer of alphabet and google. he joined google in 2004 and has
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helped manage a number of successful products including google chrome, g mail and android operating system. he also overshowed the company's popular search products. prior to this, he worked at mckenzie. received a degree in metallurgical engineering, a masters from stanford university and an mba from the wharton school of university of pennsylvania. our third witness is tim cook, chief executive officer of apple. mr. cook joined apple in 1998 and served as chief operational officer under steve jobs. in 2011, mr. cook was named ceo. while at apple, he has overseen their expansion into new markets, the launch and developments of apple pay, apple watch, icloud, apple card and home pod. prior to joining apple, he served as director of north american fulfillment for ibm. he received a bashlor of science from auburn and mba from duke university school of business. our last witness is mark
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zuckerberg. founder, chairman and ceo of facebook. mr. zuckerberg initially launched facebook in order to help connect college students at his school more easily. since then, the company has grown into the world's largest social media platform with 1.7 billion global daily active users. he attended harvard before leaving the focus full time on developing facebook. we welcome all of our distinguished witnesses and thank them for participating in today's hearing and now, we'll begin by swearing you in and before i do that, i wanted to also remind you that you are the only ones from your respective companies invited to testify today. and in accordance with normal house practice in section g of the house remote committee proceeding regular lactions, yo sworn testimony must be your own. let me know if at any point, you wish to mute yourself if you wish to confer with your county counsel. will you mute your microphones and raise your right hands. do you swear or affirm under
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penalty of perjury that the testimony you're about to give is true and correct to the best of your knowledge, information and belief, so help you god? >> yes. >> yes. >> i do. >> let the record show the witnesses answereded in the affirmative. thank you and you may remain seated. your written statements will be entered into the record in their entirety. u i ask you summarize your testimony in five minutes to help you stay within that time, there's a timing light in webx. when the light switches from green to yellow, you have one minute to conclude. when it's red, it signals your five minutes have expired. mr. bezos, you may begin. >> thank you, chairman. ranking member and members of the subcommittee. i was born into great wealth. not monetary wealth, but the wealth of a loving family. a family that fostered my curiosity and encouraged me to dream big. my mom, jackie, had me when she was a 17-year-old high school
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student in albuquerque. being pregnant in high school was not popular. the school tried to kick her out. but she was allowed to finish. after my grandfather negotiated terms with the principal. she couldn't have a lock er. no extra krirk lars and couldn't walk across the stage to get her diploma. she graduated and was determined to continue her enl kags, so she enrolled in night school, bringing me, her infant son, to class with her throughout. my dad's name is miguel. he adopted me when i was 4. he was 16 when he came to the u.s. from cuba by himself shortly after castro took over. my dad didn't speak english and did not have an easy path. what he did have was grit and determination. he received a scholarship to college in albuquerque, which is where he met my mom. together, with my grandparents, these hard working, resourceful and loving people made me who i am. i walked away from a steady job
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on wall street into a seattle garage to find amazon, fully understanding that it might not work. it feels like just yesterday i was driving the packages to the post office myself, dream thag one day, we might afford a forklift. customer obsession has driven our success. i take it as an article of faith that customers do the right thing. you earn trust slowly over time by doing hard things well. delivering on time. offering every day low prices. making promises and keeping them and making principled decisions, even when unpopular. our approach is working. 80% of americans have a favorable impression of amazon overall. who knew americans trust amazon to do the right thing? only their doctors and the military. the retail market is
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extraordinarily large and competitive. more than 4% of u.s. retail. there's room in retail for multiple winners. we compete against large players like costco, kroger and of course, walmart. a company more than twice amazon's size. 20 years ago, we made the decision to invite other sellers to sell in our store. to share the same valuable real estate we spend billions to build market and maintain. we believe that combining the strengths of amazon's store with the vast selection of products offered by third parties would be a better experience for customers. and that the growing pie of revenue and profits would be big enough for all. we were betting that it was not a zero sum game. fortunately, we were right. there are now 1.7 million small and medium u sized businesses selling on amazon. the trust customers put in us
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every day has allowed amazon to create more jobs in the united states over the past decade than any other company. hundreds of thousands of jobs across 42 states. amazon employees make a minimum of $15 an hour. more than double the federal minimum wage. and we offer the best benefits. benefits that include health insurance, 401(k) retirement and parental leave, which includes 20 weeks of paid maternity leave. more than any place on earth, entrepreneurial companies start, grow and thrive here in the u.s. we nurture entrepreneurs and start ups with stable rule of law. the finest university system in the world. the freedom of democracy. and a deeply accepted culture of risk taking. of course, this great nation of ours is far from perfect. even as we remember congressman john lewis and honor his legacy, we're in the middle of a much needed race reckoning. we also face the challenges of
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climate change and income inequality and are stumbling through the crisis of a global pandemic. still, with all of our faults and problems, the rest of the world would love even the tiniest sip of the elixir we have here in the u.s. immigrants like my dad see what a treasure this country is. they have perspective and often can see it even more clearly than those of us who were lucky enough to be born here. it is still day one for this country and even in the face of today's humbling challenges, i have never been more optimistic about our future. i appreciate the opportunity to appear before you today and i'm very happy to take your questions. >> thank you, mr. bezos. mr. bachai, you are now recognized for five minutes. >> thank you, mr. chairman. rank king member and members of the subcommittee. before i start, i know this
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hearing was delayed for the ceremonies to honor the life of john lewis. because of his courage, this world is a better place. he'll be deeply missed. it's hard, discussion of opportunity. this has never been more important as a the global pandemic poses dual challenge to our health and our economy. expanding access to opportunity through technology is personal to me. i didn't have much access to a computer dwrgrowing up in indiao you can imagine my amazement when i arrived in the u.s. for graduate school and saw a lab of computers to use when ever i wanted. accessing the internet for the first time set me on a path to bring technology to as many people as possible. it inspired me to build google's first browser, chrome. i'm proud that 11 years later, so many people experience chrome for free. google takes pride in the number
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of people who choose their product. we are even prouder of what they do with them. from the 140 million students and teachers using g sweet for education to stay connected during the pandemic. to the 5 million americans gaining digital skills to grow with google. to all the people who have turned to google for help. to find iing the fastest phone learning how to cook a new dish on youtube. google's work would not be possible without a long tradition of american tradition. we employ more than 75,000 people in the u.s. across 26 states. the promise of policies estimated that in 2018, we enlisted more than $20 million in the u.s., citing as the largest capital in america that year and one of the top five for the last three years. one way we contribute is by building helpful products. research found free services
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like search, j mag mail, maps a photos provide thousands of dollars a year to the average american and many are small bidses using our digital tools to grow. a family owned stone company in wiscons wiscons wisconsin uses google my business. a a store in vista, rhode island credits google with helping them reach customers online during the pandemic. nearly one-third of small business owners say that without dingital tools, they would have had to close all or part of their business during covid. on the way we contribute is by being among the world's biggest investors in research and development. by the end of 2019, our rnd spend had increased tenfold over ten years. from $2.8 billion to $26 billion. and we have invested $9 billion
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in nine years. our engineers help america remain a global lead ner emerging technologies like artificial intelligence, self-driving cars and computing. just as america's technology leadership is not inevitable, google's continuedguaranteed. today, users have more access to information than ever before. competition rises to innovate and leads to better products. lower choices and more choices for everyone. for example, competition helps lower costs by 40% over the last decade, with savings passed down to consumers. open platforms like android also support the foundation of others. using android, thousands of mobile operators build and sell their own devices without paying licenses fees. this has enabled billions of consumers to offer cutting edge smart phones, some for less than $50.
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whether building tools for small businesses, google succeeds when others succeed. treating it responsibility. i've never forgotten how access to technology and innovation changed the course of my life. google aims to build products that increase access to opportunity for everyone. no matter where you live, what you believe or how much money you earn. we are committed to doing this responsibly in partnership with lawmakers to ensure every american has access to the incredible opportunity technology creates. thank you. >> thank you. mr. cook is now recognized for five minutes.
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>> chairman, ranking member, members of the subcommittee, thank you for the opportunity to offer testimony. before i begin, i want to recognize the life and legacy of john lewis. i join you in mourning of not only a hero, but someone i knew personally whose example inspires me and guides me still. every american owes john lewis a debt and i feel fortunate to hail from a state and a country that benefitted so profoundly from his leadership. my name is tim cook. i've been apple's ceo since 2011 and a proud employee of this uniquely american company since 1998. at apple, we make ourselves a promise and our customers a promise. it's a promise that we'll only build things that make us proud. as steve put it, we only make
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things for our family and friends. you could try to define this difference in a lot of ways. you can call it simplicity of design all those things are t e true, but if you want to put it simply, products like iphone just work. when customers give iphone a a 99% satisfaction rating, that's the message they're sending about the user experience. but we also know that customer haves a lot of choices and that our products face fierce competition. companies like samsung, lg, huawei and google have built successful businesses with different approaches. we're okay with that. our goal is the best. not the most. in fact, we don't have a dominant share in any market or in any product category where we do business. what does motivate us is that
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timeless drive to build new things we're proud to show our users. we're focused on those innovations, on deepening core principles loiike privacy and security and creating new u features. if 2008, we introduced a new future of the iphone called the app store. launched with 50 apps, it sewhi seemed like a lot at the time, the app store provided a safe and trusted way for users to get more out of their phone. physical media like cds had to be shipped and were hard to whereupon dat update. from the beginning, the app store was a revolutionary alternative. developers set prices for their apps and never paid for shelf space. we provide every developer with tools like compilers, programming languages and more than 150,000 essential software
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building blocks called apis. the app store guidelines ensure a high quality, reliable and secure user experience. they're transparent and applied equally to every developer. for the vast majority of apps, developers keep 100% of the money they make. the only apps that are subject to a commission are those where the developer acquires a customer on an apple device and where the features or services would be experienced and consumed on an apple device. in the app stores's more than ten-year history, we have never raised the commission or added a single fee. in fact, we've reduced it for subscriptions and exempted additional categories of apps. i'm here today because it's reasonable and appropriate. we approached this process with respect and humility. but we make no concession on the facts. what began as 500 apps is now more than 1.7 million.
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only 60 of which are apple software. if apple is the gate keeper, apple wants to open the gate wider. we want to get every app on the store, not keep them off. contributions are consistent. the ecosystem is responsible for 9 million jobs and facilitated 138 billion in commerce in 2019 alo alone. i share the committee's belief that competition promotes innovation, that it makes space for the next great idea. and that it gives consumers more choices. since apple was founded, these things have defined us. the first mac brought opportunity and possibility into the home. the ipod helped musicians and artists to share their creations and be paid fairly for it. this legacy does much more than make us proud. it inspires us to work tirelessly to make sure tomorrow will be even better than today.
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thank you very much. i look forward to responding to your questions. >> thank you, mr. cook. mr. zuckerberg is now recognized for five minutes. >> thank you. before i begin, i want to add my voice to those honoring congressman john lewis and his service to our country. america has lost a real hero who never stopped fighting for the rights of every person. chairman, ranking member, mem r members of the subcommittee, thank you for the opportunity to testify. the tech industry is an american success story. the products we build have changed the world and improved people's lives. our industry is one of the ways that america shares its values with the world and one of our greatest economic and cultural exports. facebook is mapart of this stor. we started with an idea to give people the power to share and connect. and we built services that billions of people find useful. i'm proud that we've given
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people who have never had a voice before the opportunity to be heard. before the opportunit be heard and given small businesses access to tools that only the largest players used to have. since covid emerged, i'm proud that people have used our services to stay in touch with friends and family who they can't be with in person and to keep their small businesses running online when physical stores are closed. i believe that facebook and the u.s. tech industry are a force for innovation and empowering people. but i recognize that there are concerns about the size and power of tech companies. our services are about connection and our business model is advertising. we face intense competition in both. many of your competitors have hundreds of millions or billions of users, some are upstarts, but others are gate keepers with the power to decide if we can even release our apps in their app stores to compete with them. in many areas, we're behind our competitors.
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the most popular messaging service in the u.s. is i-message. the fastest growing app is tiktok. the most popular app for video is youtube. the fastest growing ads platform is amazon. the largest ads platform is google. and for every dollar spent on advertising in the u.s., less than 10 cents is spent with us. we're here to talk about online platforms, but i think the true nature of competition is much broader. when google bought youtube, they could compete against the cable industry. when amazon bought whole food foods, they could compete against kroger and walmart. now people can watch video, get groceries delivered, and send private messages for free. that's competition. new companies are created all the time all over the world. and history shows that if we don't keep innovating, someone will replace every company here
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today. that change can often happen faster than you expect. of the ten most valuable companies a decade ago, only three still make that list today. and if you look at where the top technology companies come from, a decade ago the vast majority were american. today, almost half are chinese. aside from competition, there are other serious issues related to the internet including questions about elections, harmful content and privacy. while these are not antitrust issues and are not specifically the topic of today's hearing, i recognize that we're often at the center of these discussions. we build platforms for sharing ideas and important debates play out across our services. i believe that this ultimately leads to more progress. but it means we often find ourselves in the middle of deep disagreements about social issues and high-stakes elections. i personally don't believe that private companies should be making so many decisions about these issues by themselves.
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and that's why last year i made the case that there needs to be new regulation for the internet. facebook stands for a set of basic principles, giving people voice and economic opportunity, keeping people safe, upholding democratic traditions like freedom of expression and voting, and enabling and opening a competitive marketplace. these are fundamental values for most of us, but not for everyone in the world, not for every company that we compete with or the companies they represent. as competition increases, there's no guarantee that our values will win out. i'm proud of the services we build and how they improve people's lives. we compete hard. we compete fairly. we try to be the best. when we succeed, it's because we deliver great experiences that people love. thank you and i will forward to answering your questions. >> thank you. and i thank the witnesses for your opening statements.
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before i begin recognizing members for questioning under the five-minute rule, without objection i'm going to enter into the hearing record the documents and exhibits majority members will be referencing in their questioning today. these materials have been distribute today the witnesses. i will now recognize myself for five minutes. >> over 85% of all online searches go through google, every online company in the united states depends on google to reach users. a business may sink or swim based on google's decisions alone. numerous online businesses told us that google steals their content and privileges its own sites in ways that profit google but crush everyone else. most businesses asked to stay anonymous due to fears that google would retaliate against them. he had to downsize his business and layoff half of his staff. he told us and i quote, if someone came to me with an idea for a website today, i would tell them to run, run as far
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away from the web as possible, launch a lawn care business, something google can't take away as soon as he or she is thriving. so my first question, why does google steal content from honest businesses? >> mr. chairman, with respect, i disagree with that characterization. just last week i met with many small businesses, in fact, today we support 1.4 million small businesses. supporting over $385 billion in economic activity. we see many businesses try particularly even during the pandemic businesses an example, kettle bells from texas -- >> i have a limited amount of time. but my question is very specific. we heard throughout this investigation that google has stolen content to build your own business. these are consistent reports and
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so your testimony that that doesn't happen is inconsistent with what we've learned during the course of the investigation. i'll move on to a new question. mr. pichai, most americans believe when they enter a search query, google shows the most relevant results. my question, isn't there a fundamental conflict of interest between serving users who want to access the most and most relevant information and google's business model which incentivizes google to sell ads and keep users on google's own sites. >> we have always focused on providing users the most relevant information and we rely on the trust from users to come back for google every day. in fact, the vast majority of queries in google, we don't show ads at all. and we show ads only for a small subset of inkwers.
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they may be looking for something like tv sets or so on -- >> what is the value of the part that you do use the google ads for. it's a substantial part of your business. what's the actual -- 200 billion? 300 billion? >> in terms of revenue, it's around 100-plus billion dollars, but -- >> that's a lot of money, mr. pichai. let me move on. really, mr. pichai, it's google's business model that's the problem. google evolved from a turnstile to a walled garden that increasingly keeps users within its sites. over a decade ago, google started to fear competition from certain websites. these documents show that google staff discussed the proliferating threat that these web pages pose to google. any traffic lost to other sites was a loss of revenue. certain websites were getting, and i quote, too much traffic.
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so google decided to put an end to that. mr. pichai, you've been at google since 2004. were you involved in these discussio discussions about the threat from vertical search? >> congressman, without knowing the specifics, it's -- you know, i'm not fully clear of the context. definitely, when we look at vertical searches it validates the competition. when consumers shop online, over 55% of product searches originate with amazon. in the few categories which are commercial in nature, we see vigorous competition and we are working hard -- >> let me ask very specifically, the evidence that we collected shows that google pursued a multipronged attack. they began to steal other web pages content. in 2010 google stole restaurant reviews from yelp.
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do you know how google responded when yeplp asked you to stop stealing their reviews? i'll tell you. our investigation shows that google's response was to threaten to delist yelp. the choose gave yelp was, let us steal your content or disappear from the web. isn't that anticompetitive? >> congressman, when i run the company, i'm really focused on giving users what they want. we conduct ourselves to the highest standard. happy to engage and understand the specifics and answers your questions further. >> i have one final series of questions. did google ever use its surveillance over web traffic to identify competitive threats? >> congressman, just like other businesses, we tried to understand trends from, you know, data, which we can see, and we use it to improve our
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products for our users. but we're really focused on improving our -- >> i appreciate that, mr. pichai. google's own documents show that google did just that. which is very disturbing and very anticompetitive. google began to privilege its own sites. a report published just yesterday found that 63% of web searches that start on google also end somewhere on google's own websites. and to me, that's evidence that google is a walled garden which keeps users on google's websites. and it's catastrophic for other companies online. my time is running out. mr. pichai, the evidence seems clear to me. as google became the gateway to the internet, it used its surveillance to identify competitive threats and crushed them. it's dampened innovation and dramatically increased the price of accessing users on the internet, ensuring that any
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business that wants to be found on the web must pay google a tax. with that, i recognize the ranking member of the subcommittee, mr. sensenbrenner for his first round of questions. >> thank you, very much. i've been in congress 42 years. that's coming to an end at the end of this year. during that period of time, during the decade of the '90s and the '00s, i was involved as chairman of the science committee and chairman of this committee and trying to make the net universal, open it up to everybody. one of the -- one of the theses that we used is the net should end up becoming basically the debate on issues, not only in our country, but throughout the world. and in exchange for that, this committee and the congress gave internet service providers immunity so if somebody said
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something defamatory in what they posted, the isps could not be a part of the lawsuit for defamation. after hearing mr. jordan give a long line of censorship of conservative viewpoints, i'm concerned that the people who manage the net and the four of you manage a big part of the net, ending up using this as a political screen. conservatives are consumers too. and the way the net was put together in the eyes of congress is that everybody should be able to speak their mind. mr. zuckerberg, mr. jordan's litany of censorship zeros in on facebook. exactly what are your standards in, quote, filtering out
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political speech that maybe some people out there don't agree with. >> thank you for the opportunity to address this. our goal is to offer a platform for all ideas. we want to give everyone in the world a voice to share their experiences and ideas, a lot of that is day to day things that hap lap in their lives, some of it is political. we distinguished ourselves as one of the companies that defends free speech the most. we have standards around what you can and cannot say. i think you would likely agree with most of them. they began categories of harm such as promoting terrorist propaganda, child exploitation, incitement of violence, some more legalistic things like intellectual property violations. and they also ban things like
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hate speech that could lead to dehumanizing people -- >> if i may ask a specific of you. it was reported that donald trump jr. got taken down for a period of time because he put something up on the efficacy of hydroxychloroquine. now, i couldn't take it myself, but there still is a debate on whether it is effective in treating or preventing covid-19. and i think that this is a legitimate matter of discussion. and it would be up to a patient and their doctor to determine whether hydroxychloroquine was the correct medication given the circumstances. why did that happen? >> congressman, first to be clear, i think what you might be referring to happened on twitter. it's hard for me to speak to that. i can talk to our policies about
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this. we do prohibit content that will lead to imminent risk of harm. stating that there's a proven cure for covid, when there is in fact none, might encourage someone to take something that could have some adverse effects. we take that down. we do not prohibit discussion around trials of drugs or people saying that they think that things might work or personal experiences with experimental drugs. but if someone is going to say that something is proven, when in fact it is not, that could lead people -- >> wouldn't that be up to somebody on the other side of the issue to say that this is not proven? i know as a fact that, you know, for people with certain conditions, it's contra indicated and they shouldn't take it on that. wouldn't that be up to somebody else to say, okay, what somebody posted on this really isn't true and here's what the facts are
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rather than having a twitter or a facebook take it down? >> congressman, in general, i agree with you and we do not want to become the arbiters of truth. i think that would be a bad position for us to be in and not what we should be doing. on specific claims, if someone is going to go out and say that hydroxychloroquine is proven to cure covid when in fact it has not been proven to cure covid and that statement could lead people to take a drug that in some cases some of the data suggests it might be harmful to people, we think that we should take that down. that could cause imminent risk of harm. >> thank you, i yield back. >> i recognize the distinguished chair of the full judiciary committee, mr. nadler from new york for five minutes. >> thank you, mr. chairman. mr. zuckerberg, i want to thank
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you for providing us information during your investigation. however, the documents you provided tell a very disturbing story and that story is that facebook sought instagram as a powerful threat that could siefen business away from facebook. rather than compete with it, facebook bought it. this is the type of ak admisscq that the laws were trying to prevent. on the day facebook bought instagram, which you described as a threat, you wrote, quote, one thing about start-ups is you can often acquire them. you were referring to companies like instagram in that quote, were you? >> i don't have the exact document in front of me. i have always been clear that we viewed instagram as a competitor and as a complement to our services. in the growing space around --
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after smartphones started getting big, they competed with us in the space of mobile cameras and mobile photo sharing. but at the time, no one thought of them as a general social network. people didn't think of them as competing with us in that space. you know, i think that the acquisition has been wildly successful. we were able to continue investing in it and growing it as a stand alone brand that reaches many more people that i think the co-founder or i thought would be possible at the time while incorporating some of the technology into making facebook's photo-sharing products better. so yes. >> okay. in early 2012 when facebook contemplated acquiring instagram, a competitive start-up, you told your cfo that instagram could be disruptive to
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us, and you described them as a threat, saying that instagram can meaningfully hurt us without becoming a huge business. what did you mean when you described instagram as a threat and when you said that instagram meaningfully hurt facebook? did you mean that consumers might switch from facebook to instagram? >> congressman, thanks for the opportunity to address this. at the time, there was a small but growing field -- >> did you mean that consumers might switch from facebook to instagram? >> thanks. congressman -- >> yes or no, did you -- >> in the space of mobile photos and camera apps, which was growing, they were a competitor. i've been clear -- >> fine. in february of that year, february 2012, you told facebook's chief financial officer that you were interested in buying instagram. he asked you whether the purpose
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was to neutralize a competitor or improve your services. you answered it was a combination of both, saying what we're really buying is time. even if new competitor springs up, those products won't get much traction. mr. zuckerberg, what did you mean when you said the purpose of the deal was to neutralize a potential competitor. >> those aren't my words. yes, i've been clear that instagram was a competitor in the space of mobile photo sharing. there were a lot of others at the time. they competed with other apps. it was a subset of the overall space of connecting that we exist in and by having them join us, they certainly went from being a competitor in the space of being a mobile camera to an
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app that we could help grow and get more people to be able to use and be on our team -- >> mr. zuckerberg, mergers and acquisitions that buy off potential competitive threats violate the antitrust laws. you purchased instagram to neutralize a competitive threat. if this was an illegal merger at the time of the transaction, why shouldn't instagram now be broken off into a separate company? >> congressman, i think the ftc had all of these documents and reviewed this and unanimously voted at the time not to challenge the acquisition. i think with hindsight, it probably looks like obvious that instagram would have reached the scale that it has today, but at the time it was far from obvious. a lot of the competitors that they competed with, including companies like path, which were hot at the time and had great founders and entrepreneurs running them, dave moore and i
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worked closely with them, i don't think path exists today. it was not a guarantee that instagram was going to succeed. the acquisition has done wildly well largely because not just of the founders' talent, but because we invested heavily in building up the infrastructure and promoting it and working on security and working on a lot of things around this. and i think that this has been an american success story. >> thank you. mr. zuckerberg, you're making my point. in closing, mr. chairman, i want to end where i began. facebook, by mr. zuckerberg's own admission, facebook saw instagram as a threat that could potentially siphon business away from facebook. rather than compete with it, facebook bought it. this is the type of anticompetitive acquisition that the laws were meant to prevent. it should never have been permitted to happen and it cannot happen again. i yield back. >> thank you, mr. chairman.
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i would remind the witness that the failures of the ftc do not alleviate the antitrust challenges that the chairman described. i will recognize the gentleman from colorado and thank him for co-hosting one of the most important field hearings we had in colorado that was very critical in this investigation. you're recognized for five minutes, mr. buck. >> i want to offer my appreciation to you for the bipartisan you have approached the subcommittee's investigation. capitalism is the greatest instrument for freedom this world has ever seen. this economic system has lifted millions out of poverty. it has made america the freest, most prosperous nation in the world. our witnesses have taken ideas born out of a dorm room, a
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garbag garage. you have enjoyed the freedom to succeed. i do not believe big is necessarily bad. in fact, big is often a force for good. i want to address one issue. mr. pichai, in october 2018 google dropped out of the running for a pentagon contract to complete the joint enterprise infrastructure contract which was valued at more than $10 billion. google's stated reason for removing itself from the bidding process is that the u.s. military's project did not align with google's corporate values and principles. this is the same u.s. military that fights for our freedoms and stands as a force for good across the globe. these are the same soldiers, sailors and airmen that sacrifice their lives to ensure you have the freedom to build your company and set your corporate policies without fear of government interference unlike in communist china. i find it interesting that
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months after making this decision to withdraw from the jedi contract, marine general joseph dunford, the chairman of the u.s. joint chiefs of staff, warned the senate armed forces committee that the chinese military was directly benefitting from google's work. it made me wonder, what values google and communist red china had in common. i asked myself, self, is it that the chinese communist party imprisons uyghurs? could it be that china forces slaves to work in sweat shops? maybe they align on the design to suppress free speech. did google agree with the decision to lie to the world about the covid-19 pandemic? then i thought about google's dragon fly experiment. i wondered if you agreed with the chinese government's use of technology platforms to spy on its own people and enforce security laws.
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if maybe, it's that your companies align with the chinese communist espionage policies where the strategy is to steal whatever can't be produced domestically. these values that allow google to work with the chinese military but not the american military without any hint of attribution. during our field hearing in my home state of colorado, i heard a story that sounded so brazen and contrary to free market principles that i thought it must have been in the chinese. google took advantage of your a company that relied on your search engine. google misappropriated lyrics and published those lyrics on google's own platform. however, genius caught google in the act red handed. when genius suspected this corporate threat was occurring, the company incorporated a
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digital watermark in its lyrics that spelled out, red handed. in morse code. google's lyric boxes contain the watermark. after google executives stated that they were investigating this problematic behavior, genius created another experiment to determine the scope of the misappropriation. it turns out that out of 271 songs where the watermark was applied, 43% showed clear evidence of matching. your company which advertises itself as a doorway to freedom, took advantage of this small company, all but extinguishing their freedom to compete. your correspondent values once stood for freedom, a platform that threat capitalism flourish and helped bring countless people across the globe out of poverty. my question to you, mr. pichai, do you think that google could get away with following china's corporate espionage playbook if you didn't have a monopolistic
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advantage in the market. >> i want to address the important concerns you raised. first of all, we are proud to support the u.s. government. we recently signed a big project with the department of defense to help protect pentagon networks from cybersecurity attacks. we have projects under way with the navy w the department of veterans affairs, happy to follow up and explain more. we have a limited presence in china. we didn't offer any of our services in china. and with respect to music, we license content there, in fact, we license content from other companies and so this is a dispute between genius and other companies in terms of where the source of the content is. happy to engage and explain what we do here further. >> thank you. i yield back, mr. chairman.
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>> i now recognize the gentleman from georgia, mr. johnson, for five minutes. >> thank you, mr. chairman. mr. cook, with over 100 million iphone users in the united states alone and with apple's ownership of the app store, giving apple the ability to control which apps are allowed to be marketed to apple users, you weld immense power over small businesses to grow and prosper. apple is the sole decision-maker as to whether an app is made available to app users through apple's app store, isn't that correct? >> sir, the app store -- thank you for the question. the app store is a feature of the iphone, much like the camera is and the chip is. and so -- >> my point is, and i'm sorry to interrupt, but i want to get to
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the point, point is that apple is the sole decision-maker as to whether an app is made available to app users through the apple store, isn't that correct? >> if it's a native app, yes, sir. if it's a web -- >> okay. thank you. throughout our investigation we've heard concerns that rules governing the app store review process are not available to the app developers. the rules are made up as you go. they are arbitrarily interpreted and enforced and are subject to change whenever apple sees fit to change and developers have no choice but to go along with the changes or they must leave the app store. that's an enormous amount of power. also, the rules get changed to benefit apple at the expense of app developers and the app store is said to also discriminate between app developers with
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similar apps. on the platform and also as to small app developers versus large app developers. so, mr. cook, does apple not treat all app developers equally? >> we treat every developer the same. we have open and transparent rules. it's a rigorous process. because we care so deeply about privacy and security and quality, we do look at every app before it goes on. but those apps -- those rules apply evenly to everyone. and as you can tell by going from -- >> some developers are favored over others, though, isn't that correct? >> that is not correct. and as you can tell from going from -- >> sir -- i'll give you an example. has two app stores -- two app store employees assigned to help
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it navigate the app store bureaucracy, is that true? >> i don't know about that, sir. >> well, you don't have other app developers who have that same access to apple personnel, do you? >> we do a lot of things with developers including looking at their beta test apps regardless of whether they're small or large. >> let me ask you this question. apple has negotiated exceptions to its typical 30% commission for some apps like amazon prime. is that -- is a reduced commission such as the one that amazon prime gives available to other app developers? >> it's available to anyone meeting the conditions, yes. >> okay. let me you this, apple requires all app developers to use apple's payment processing system if those developers want
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to sell their goods or services to apple users through apple's app store, isn't that correct? >> that is correct. because it's -- >> by processing payments for apps that you allow into the app store, you collect their customer data and you use that data to inform apple as to whether apple should -- whether or not it would be profitable for apple to launch a competing app, isn't that correct? >> sir, 84% of the apps are charged nothing. the remaining 16% either pay 15 or 30, depending upon the specifics. if it's in the second year of a subscription as an example, it only pays 15%. if you look back at history -- >> what's to stop apple from increasing its commission to 50%? >> sir, we have never increased commissions in the store since
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the first day it operated in 2008. >> nothing to stop you from doing so, is there? >> no, sir. i disagree strongly with that. there's a competition for developers just like there's a competition for developers. the competition for developers they can write their apps for android or windows or xbox or playstation. we have fierce competition at the developer side and the customer side which is so competitive, i would describe it as a street fight for market share in the cell phone business. >> has apple ever retaliated against or disadvantaged a developer who went public about their frustrations with the app store? >> sir, we don't -- we do not retaliate or bully people. it's strongly against our company culture. >> time of the gentleman has expired. the chair recognizes the gentleman from florida, m
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mr. gaets. >> mr. zuckerberg made the claim that facebook is an american company with american values. do you take a different view, that your companies don't embrace american values. it's great to see that none of you do. i'm worried about google's market power, how it concentrates that power and how it wields it. project maeven was a project that google pulled out of citing ethical concerns and you made the decision to pull out of that joint venture, following receipt of a letter from thousands of your employees saying that google should not be in the business of war. my question is, did you weigh the input from your employees when making the decision to abandon that project with the united states military? >> congressman, thanks for your concern. as i said earlier, we're deeply committed to supporting the military and the u.s.
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government. we have undertaken several projects since then. we take our employees -- one input, we make decisions based on a variety of factors. as a company, we were new in the cloud space at that time, since then -- >> thank you. that's a sufficient answer. you did take their feedback into account. in fact, some of your googlers have recently sent you a letter where they asked you to exit other partnerships as a consequence of ethical concerns. they asked you to stop doing business with american law enforcement saying that police broadly uphold white supremacy and google should not be engaged to any service to police. you provide some of the most basic services to police like email. but you also provide services that help keep our cops safe when they're doing their job and so my question is here in front of congress and the american people, will you take the pledge that google will not adopt the
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bigoted antipolice policy that is requested in the most recent letter. >> congressman, we have a long track record of working with law enforcement when it is supported by due process and the law, we push back against overbroad requests. we are transparent about the requests we get. but we have a long history of following the law and cooperating with -- >> i understand the history. i'm asking about the future. to the law enforcement who are watching today, can they rest assured that under your leadership, google will not adopt these bigoted, antipolice policies? >> we are working with law enforcement in the way that is consistent with law and due processes in the u.s. >> i appreciate that and i know that will be comforting to the police who utilize your services. you mentioned earlier in your -- in the discussion about china that your engagement in china was very limited.
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but yet google has an ai china center, the chinese academy of sciences has published a paper saying that it enhanced the targeting capabilities of a fighter aircraft. you collaborate with chinese universities. one of your googlers while under your employ was cited in chinese state media saying, china is like a sleeping giant, when she wakes, she will tremble the world. the former secretary of defense, mr. shanahan, said that the lines have been blurred in china between commercial and military application. a general dunford says your company is directly aiding the chinese military and peter teal who serves on mr. zuckerberg's board at facebook said that google's activities with china are treasonous. he used you of treason. why would an american company
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with american values so directly aid the chinese military but have ethical concerns about working alongside the u.s. military on project maeven. i understand your point about cybersecurity and those things. but project maeven was a specific way to ensure that our troops are safe on the battlefield. if you have no problem making the j-20 chinese fighter more effective in its targeting, why wouldn't you want to make america as effective? >> congressman, with respect, we are not working with the chinese military. it's absolutely false. i had a chance to meet with general dunford personal. we clarified what we do in china. it's very, very limited in nature. our ai work in china is limited to a handful of people working on open-source projects. i'm happy to share and engage with the office to -- >> my gosh. when the chairman of the joint
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chiefs of staff says that an american company is directly aiding china, when you're working with universities and when your employees are talking about china trembling the world, it seems to call into question your commitment to our country and values. i see our time is expired. >> i recognize the gentleman from maryland for five minutes. >> thank you, mr. chairman. mr. zuckerberg, as you know the proliferation of fake facebook accounts was a key tool in the strategy of russian interference in the american election in 2016. american law enforcement, the senate, the house have all found that vladimir putin engaged in a sweeping and systematic campaign to undermine american democracy in 2016 and to work for a victory for donald trump. in his remarkable book,
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cambridge analytica and the plot to break america, a whistle-blower who worked for several years at cambridge an analytica, steve bannon's goal was to change politics by changing culture. facebook data, algorithms were his key focus. they identified people who exhibited the three traits in what they call the dark triad. they proceeded to bombard and activate these people. a sma with increasingly dark and manipulative messages from fake facebook pages both to get them to vote for trump but more importantly to activate them as racists and white nationalists. he goes onto describe the remarkable success of this campaign, both electorally, but
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also politically in the country in terms of sowing the terrible racial and ethnic divisions that you see in america today. so they waged a mass campaign of psychological warfare to polarize america around race and religion. and it worked for them but i didn't work so well for america. so, mr. zuckerberg, which parts of this narrative have you addressed, or are you planning to address, or do you just see that essentially as the cost of being a forum in a marketplace for ideas? is there nothing that can be done about the use of facebook to in gender social division in america? >> congressman, thank you. since 2016 there have been a lot of steps that we've taken to protect the integrity of elections. we've hired -- i think it's more than 30,000 people to work on safety and security. we have built up ai systems to
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be able to find harmful content including being able to find more than 50 different networks of coordinated and authentic behavior, nation states trying to interfere fear in elections -- >> let me just pause you there for a second. i'm interested in that. the stop hate for profit campaign is a coalition that includes the color of change, the anti-defamation league and other groups and they're targeting facebook right now for a boycott because of the rapid spread of hate messages online, the presence of bgroups trying o interrupt black lives matter protests. so they're asking you to remove these pages and to join the movement for civil rights by not allowing that kind of content, they're boycotters including a lot of big companies, levi's,
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mcdonalds, and so on. but you seem not to be that moved by their campaign and i just wonder what you think about what they're asking you to do. >> congressman, thanks. we're very focused on fighting against election interference and focused on fighting against hate speech. our commitments to those issues and fighting them go back years before this recent movement. since 2016, the defenses that the company has built up to help secure elections not just in the u.s. but around the world, i think are some of the most advanced that any company or government has in the world now. we collaborate with law enforcement and intelligence agencies and are able to sometimes identify threats coming from other countries before governments are even able to. in terms of fighting hate, we have built really sophisticated systems. our goal is to identify it before anyone even sees it on the platform. and we've built ai systems and
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as i mentioned have tens of thousands of people working on safety and security with the goal of getting the stuff down so that way before people even see it. and right now we're able to proactively identify 89% of the hate speech that we take down before i think it's even seen by other people. i want to do better than 89%. i would like to get that to 99%. but we have a massive investment here. we invest -- >> can you just -- my time is almost out. can you just address the proliferation of fake accounts? i understand you get 6.5 billion fake accounts produced there, but you have a profit motive that's linked to that, because that's what shared with your investors. are you working to try to fair it out, these fake accounts? >> the gentleman's time is expired. the witness may answer the
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question. >> congressman, absolutely. we work hard on this. we take down billions of fake accounts a year. a lot of that is just people trying to set up accounts to spam people for commercial reasons. a very small percent of that are nation states trying to interfere in elections. we're very focused on trying to find those. having fake and harmful content on our platform does not help our business. it hurts our business. people do not want to see that stuff and they use our services less when they do. so we are aligned with people in order to take that down and we invest billions of dollars a year in doing so. >> i yield back. thank you. >> the committee will stand in recess for ten minutes while we benefitted from his leadership. my name is tim apple's ceo sinc 2011. >> i now recognize the gentleman from north dakota, mr. armstrong
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for five minutes. >> google has received criticism about bias from conservatives and content moderation. as a result, a significant portion of the american public has lost trust in your company. a lack of public confidence in a product usually means there's economic harm to the company. but that just isn't in the case with google. so it's a legitimate question as to whether google's market power insulates it. i also think it's a legitimate question to ask if other attempts to regulate your industries have worked. so mr. pachi, google has restricted the portability of user data due to compliance with the general data protection regulation. specifically in 2018, google restricted the ability to export the double i.d. of cookie based
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identifier that creates profiles through google data transfer. is that correct? >> congressman, not familiar with the specifics of that particular issue. but happy to follow up more once i understand it better. >> so you're not particularly familiar with how you're complying with gdpr. >> congressman, we've long been working to comply with gdpr. we think it's an important regulation, and we have -- we are in full come plibpliance to extent of my knowledge. i just meant not with that specific issue you mentioned there. >> so to comply, google must restrict the -- with other platforms to conduct cross platform analysis. it seems as if that ultimately limits the ability of advertisers to make comparisons between google based campaigns
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and nongoogle base ed campaigns. would you agree with that? >> in all the systems, we are balancing within users, advertisers and publishers. we care about the privacy of our users. so when we serve these ecosystems, we have to take that into account. we have to comply with important laws and regulations in every country we operate in. so that's the delicate balance we are striking. but we are focused on users and trying to do the best we can. >> i want to be clear, i personally believe that just the market power consolidation is significant. but i want to be clear when we're moving forward to regulate this, that we aren't squeezing out competition in our quest to do something. because i've said that before in this hearing and i'll say it again, usually in our quest to regulate big companies, we end up hurting small companies more. i'm a strong privacy advocate, but the consequences of gdpr
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have been to entrench large actors like google, leading to regulatory capture that exasperates competition concerns. and the ad market share has increased since the implementation of gdpr. do you know that to be correct? >> congressman, to just give you a sense of the robust competition we see, ad prices have fallen by 40% in ten years. in fact, in the u.s., advertising as a share of gdp has come down to less than 1% today. so we see robust competition in the marketplace. as i said earlier, we have to comply with regulation. we have to interpret it strictly and balance the ecosystem. but our utmost care is ensuring privacy and security of our users. >> i'm glad you mentioned privacy, because i would be remiss if i didn't feel with this issue. generally speaking outside of the biases with all of this, and
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this is for essentially all four of our witnesses, i think one of the wbigger concerns when we tak about that data having value and privacy, which is where people get concerned with how the digital age is moving forward. there are reports law enforcement has made use of what is called geofence warms that allow authorities to compel technology companies to disclose location for any device at a particular point in time. court filings suggest that google received a 1500% increase in geo fenfence requests. and so the fourth amendment requires probable cause and specificity. that's not what these are. these warrants are for any person in an area at a particular time. and geofen fencfence warrants r neither.
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so they are essential it will general warrants. i believe the location information should be considered as contents under the historic communications act. do you agree? >> umm, i'm happy to understand more. we deeply care about -- this is -- we think this is an important area. oversight and we simply made a change by which we automatically delete location activity after a certain period of time by default for users. so we are happy to engage with the office, congressman. >> i'm using you, because this is going on in virginia and new york right now. but this e quaut quates to ever. people would be terrified that law enforcement can get anybody's information. so it requires congress to act. it is the single most issue -- >> the time of the gentleman has expired.
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>> i have a unanimous concept request for "wall street journal" article, police request for google users face new scrutiny. >> without objection. >> and i have two letters from congressman walden and congresswoman rogers. the first is to mr. cook of apple, the second to mr. pachi. >> without objection. i now recognize the gentle lady from washington. >> thank you all for being with us. mr. bezos, in july 2019, your employee nate sutton told me under oath in this committee that amazon does not use any specific seller data when creating its own private brand product. so does amazon ever access and use third party seller data when making business decisions. just a yes or no will suffice, sir. >> thank you for the question. i know it's an important topic. i want to thank you for representing us.
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i can't answer that question yes or no. what i can tell you is, we have a policy against using seller specific data to aid our private label business. but i can't guarantee you that that policy has never been violated. >> mr. bezos, you're probably aware that in april 2020, a report in "the wall street journal" revealed that your company does access data on third party sellers, by reviewing data on sellers and products and creating tiny categories that allow your company to categorically access detailed seller information in a supposedly aggregate category. do you deny that report? >> i'm familiar with "the wall street journal" article that you're familiar with. we continue to look into that very carefully. i'm not satisfied that we have gotten to the bottom of it, and we'll keep looking at it. some of the sources in the article are anonymous, but we continue to look into it. >> i take that as you're not
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denying that. a former amazon employee told this committee "there's a rule but there's nobody enforcing or spot checking. they just say don't help yourself to the data. everyone can have access to anything they want." do category managers have access to third party products and businesses? >> here's what i can tell you. we do have certain safeguards in place. we expect people to follow the policy the same we would any other. it's a voluntary policy -- >> so there's no actual enforcement of that policy? so maybe that answers my -- >> i'm sorry, no, i think i may have misspoke. i'm trying to say amazon -- the fact that we have such a policy is voluntary. i think no other retailer has
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such a policy. enforcement of that policy, if we found someone violated it, we would take action against them. >> there's numerous reports, and the committee has conducted interviews with former employ employees, who confirm employees have access to that data and are using it. and so my next question was going to be if you thought you were enforcing these rules, do you think that's working? and, again, i would just say there's credible reporting that's documented breaches of these rules that you have put into place. and the committee has interviewed employees that typically say that these breaches typically occur. let's talk about aggregate data for a minute. rules allow for you to access combined data on a product. when there are only one or two sellers in the marketplace, correct? >> yes. aggregate data is allowed under our policies, that's correct. >> okay.
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interviews with former employees have made it clear that that data essentially allows access to highly detailed data in the product categories. there's an example of a small business that had no direct competitors except for amazon warehouse. a cheer an amazon employee accessed a report on their product with information on how much the company spent on advertising. and then amazon launched its own competing products in october 2019. that's a major loophole. i go back to the general coun l counsel's statement, clearly there was no access to this data, that amazon does not use that data for its own benefit. and i'm now hearing you say you're not so sure that's going on. and the issue we're concerned with here is very simple. you have access to data that exceeds the sellers on your
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platforms with whom you compete. you can track consumer interests, you can access to the entire of sellers pricing and inventory information past, present, and future. and you dictate the participation of third party sellers on your platform, so you can set the rules for your competitors but not follow those same rules for your self-. do you think that's fair for the mom and pop businesses trying to sell on your platform? >> i appreciate that question. i like it a lot, because i want a chance to address that. i'm very proud of what we have done for third party sellers on this platform. we started our third party platform 20 years ago, and we had zero sellers on it. >> the question i'm asking -- i'm sorry. my time is expiring. the question i wanted to ask you is that you have access to data that your competitors do not
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have. so you might allow third party sellers onto your platform. but if you're monitoring the data to make sure that they're never going to get big enough that they can compete with you, that is the concern that the committee has. and, you know, i think your company started in my district, i want to thank you for that and the work you've done and say that the whole goal of this committee's work is to make sure that there are more amazons, that there are more apples, that there are more companies that get to innovate and small businesses get to thrive. and that is what we're trying to get at. that is why we need to regulate these marketplaces, so that no company has a platform so dominant that it is companily a monopoly. thank you, mr. chairman. i yield back. >> i just wanted to remind the witnesses, we appreciate the grat tut fitude for the questio your description of them as good questions. we just assume they're good questions, so we can make sure you're making good use of your
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time. with that, i recognize the gentleman from florida. >> thank you, mr. chairman. mr. pachi, i'm going to illustrate my question with a factual incident that occurred to me. several months ago, my wife called and said there's a good article that you should read. out of curiosity, i was up here in washington, and i googled gateway pundit. and it didn't show up on the first or second page. there was a bunch of different blogging sites about how there were disagreements with what was on the gateway pundit. but i had to type in to get to it. and google didn't allow me to get to the website. that was a couple months ago before this hearing was set to be heard, before you knew you would be appearing before us today and that this is an issue that conservatives and republicans have had. last week, after this was
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noticed, this wearing was noticed, i did the same thing. i googled gateway pundit, and that was the first website that came up. this isn't from a consitituent n pi district, i did this on my laptop here several months ago and then today. so clearly, something had happened between not being notified that you were going to be appearing before our committee and last week, knowing you would be appearing before our committee and suddenly conservative websites are at the top of the bar when you search for them. so was there anything done at google between a couple months ago and last week or the week before you appearing today, that has changed your approach to silencing conservative websites? >> congressman, we approach our work with a deep sense of responsibility in a nonpartisan way. we want to seven all our users, no matter where they are. in fact, it's in our long-term
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business incentive to do so. and i believe on our platforms, including youtube, there are more conservative voices than ever before, and we believe in freedom of expression. on the specific issue, i will have to look into it. i obviously wasn't aware of it. it could be a number of reasons. we constantly get reports -- >> if you're going to look into it
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it appears to only be happening to conservative republicans. i don't see anything in the news or anything in the press or other members on the other side of the aisle talking about their campaign emails getting thrown into junk folders in g mail. so why is this only happening to republicans? and it's a fact it's happening, because i can have my supporters testify they received my emails for eight, nine years and suddenly this last year, all of their gmail, my campaign emails are going to their spam folder. so if you can give me some clarification on that, i would appreciate it. >> in gmail, we are focused on
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what users want, and users have indicated they want us to organize their personal emails, emails they receive from friends and family separately. so all we have done is an organization, the primary tab has e-mails from friends and family -- >> well, it was my father, who is not receiving now my campaign emails. so clearly that
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in 49 states across the u.s. so that we can capture all the points. >> thank you. the gentleman's time has expire. i recognize the gentle lady from florida. >> thank you, mr. chairman. let me just say for the record, i'm a democrat from florida and i've heard complaints about my emails going into spam, as well. i'm hur other democratic members have had the same experience. mr. pachi, in 2007, google
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purchased double click, the leading provider of certain advertising tools, is that correct? >> that's correct, congresswoman. >> when google proposed the merger, alarm bells were raised about the access to data google would have. specifically the ability to connect a user's personal identity with their browsing activity. google committed to congress that the deal would not reduce user privacy. google chief legal adviser testified before the senate anti-trust subcommittee that google wouldn't be able to merge this data, even if it wanted to, given contractual restrictions. but in june 2016, google merged this data any way, destroying anonymity on the internet. you became ceo of google in 2015, is that correct? >> that's right. >> okay. and this change was made in
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2016, is that correct? >> that's my understanding. >> okay. thank you for that. did you sign off on this decision to combine the sets of data that google had told congress would be kept separate? >> congresswoman, any changes we made -- >> with all due respect, please, did you sign off on the decision or not? >> i reviewed at a high level all the important decisions we made. we deeply care about privacy -- >> so you signed off on the decision. practically this decision meant that your company would not combine all of -- would now combine, for example, all of my data on google, my search history, my location from google maps, information from my emails from gmail, as well my personal identity with a record of almost all of the websites i visited.
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that is absolutely staggering. according to an email from a double click executive, that was exactly the type of reduction and user privacy that google's founders had previously worried would lead to a backlash. and i quote, they were unwavering on the policy due to philosophical reasons, which is not wanting users associated with the cross site cookie. they were also worried about a privacy storm, as well as damage to google's brand. so in 2007, google's founders feared make thing change, because they knew it would upset their users. but in 2016, google didn't seem to care. isn't it true that what changed between 2007 and 2016 is that google gained enormous market power. so while google had to care
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about user privacy in 2007, it no longer had to in 2016. would you agree that what changed was google gained enormous market power? >> congresswoman, if i could explain. we today make it very easy for users to be in control of their data. we have simplified their settings. they can turn ads on or off. we have combined most of activity settings into three groupings. we remind users to go to a privacy checkup -- >> thank you so much for that. i am concerned that google's bait and switch with double click is part of a broader pattern where google buys up companies for the purposes of surveilling americans and because of google's dominance, users have no choice but to surrender. in 2019, google made over 80% of its total revenue through
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selling of ad placement, is that correct? >> majority. >> ads targeted to each of us as individuals, the more user data google collects, the more google can make. is that correct? >> in general, that's not true. for example -- >> more user data, not the more money google can collect? i'm sorry, please. so you're saying the more user data does not mean the more money that google can collect? >> congresswoman, most of the data that we collect is to help users. >> thank you so much. mr. chairman, i yield back. >> the chair now recognizes the ranking member of the full committee, mr. jordan for five minutes. >> thank you, mr. chairman. is google going to tailor its
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features to help joe biden in the 2020 election? >> congressman, we approach our work -- we support both campaigns today. we think political ads is an important part of free speech and democratic societies, and we engage with campaigns, you know, according to law and we approach our work in a nonpartisan way. >> it was a yes or no question. can you assure americans today you won't tailor your features to help joe biden in the upcoming election? >> you know, we support work that campaigns do. i just want to -- >> i understand that. we all do all kinds of online social media, all kinds of that outreach, that communication. this is a simple question, can you today assure americans you will not tailor your features in any way to help specifically one candidate over another? what i'm concerned about is helping joe biden over president trump. >> we won't do any work to
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politically tilt one way or the other. >> be you did it in 2016. there's an email in 2016 that was widely circulated amongst the executives at your company that got public where the head of your multicultural marketing talks about the silent donation google made to the clinton campaign, and you applauded her work. if you did it in '16, in spite of the fact you did it in
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she assumed is going to help candidate clinton, and she's doing that in key states. it's one thing if you're going to increase the latino vote around the country, you're urging people to vote. it's quite another when you're
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focusing on in key states. you know what those key states were? nevada and florida, the swing states. so, again, i want to make sure this isn't going to happen in 2020. >> i can assure you we complied with laws in 2016. any work we do around elections is nonpartisan. users come to us for understanding where polling places are, which is the voting hours are. we are committed to providing that information and we'll approach our work -- >> so here's the question i think is on so many american's minds. they saw the list we read here earlier. all the things google has done. google is siding with the world health organization over anyone who disagrees with them, even though the world health organization obviously lied to america and shills for china. youtube and google is siding with them. we have the history of what google has done and the history of 2016, where they obviously, according to one of your marketing executives, tried to
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help clinton. and here we are 97 days before the election and we want to make sure it's not going to happen again. can you assure us you're not going to tailor or configure your platform to help joe biden? and second, that you're not going to use your search engine to silence conservatives? can you give us those two assurances today? >> congressman, on our search engine, conservatives have more access to -- >> that wasn't the question. can you assure us you're not going to silence conservatives and assure us that you're not going to configure your features as you did for clinton in '16, can you assure us you're not going to do the same thing for joe biden in 2020? >> you know, you have my commitment. it's always been true and we will continue to conduct ourselves in a neutral way. >> i yield back. >> the chair recognizes the gentle lady from pennsylvania. >> thank you, gentleman.
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i would like to redirect your attention to anti-trust law. mr. bezos, our investigation -- >> mr. chairman, we have the email. there is no -- >> you do not have the time. >> but, but, she -- >> put your mask on! >> mr. ras kin -- >> mr. jordan, she holds the time. [ overlapping speakers ] >> what i want to know, when someone comes after my motives for asking questions -- >> the jemtle lady is recognized. >> thank you, mr. chairman. mr. bezos, our investigation uncovered documents that show that amazon sometimes doesn't play fairly, crossing the line from competition to predatory pricing to destroy rivals rather than outcompete them. let's take the example of quincy that provided online baby care
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products. in 2009, your team viewed as amazon's largest and fastest growing online competitor for diapers. one of amazon's top executives said keeps the pressure on pricing on us, and strong competition from meant that zorn wam was having to work harder so customers didn't pick over amazon. now, because was so successful, amazon saw it as a threat. the documents that we have obtained show that amazon employees began strategizing about ways to weaken this company. and in 2010, amazon hatched a plot to go after and take it out. in an email that i reviewed, and we have these on the slides, one of your top executives proposed a "aggressive plan to win" against
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we saw one of your profit and loss statements, and it appears in one month alone, amazon was willing to lead over $200 million in diaper profit losses. mr. bezos, how much money was amazon willing to lose on this campaign to underline >> thank you for the question. i don't know the direct answer to your question. this is going back in time, maybe 10, 11 years or so. what i can tell you is that the idea of using diapers and products like that to attract new customers who have new families is a very traditional idea. >> sure, but let's delve into this a little further. i'm sorry, you know i only have a few minutes here. >> of course. >> i want to press on. your own documents make clear that the price war against
11:16 pm worked and within a few months it was struggling. so amazon bought it. after buying your leading competitor here, amazon cut promotions like and the discounts it used to lure customers away from and increased the price of diapers for new moms and dads. did you sign off on the plan to raise prices after amazon eliminated its competition? >> i don't remember that at all. >> thank you. >> what i remember is that we match competitive prices and i believe we followed i can tell you after we bought, we put -- >> just moving on. i'm sorry. so you said that amazon focuses excessively on customers. so how would customers, especially single moms, new families, how would they benefit
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when the prices were driven up by the fact you eliminated your main competitor? >> i don't agree with great respect, i don't agree with the premise. at the same time, you should recognize in context diapers -- [ overlapping speakers ] >> i'm sorry, mr. bezos, i need to push on. the evidence suggests that the predatory practices weren't unique here. in 2013, it was reported that you instructed amazon employees to approach discussions with certain business partners, and i quote, the way a cheetah would pursue a sickly gazelle. is the gazelle project still in place, and does amazon pursue predatory campaigns in other parts of its business? >> i cannot comment on that, because i don't remember it.
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what i can tell you is that we are very, very focused on the customer as you started, and of course -- >> i'm concerned with the customers, as well. especially the families in my district. [ overlapping speakers ] i'm concerned, too. especially with the current pandemic, one of the biggest needs i'm seeing at the food drives and the giveaways we're having to run in my district is that families don't have diapers, and we have to collect them to give them out. so it certainly is something that has a really hard impact on families and i'm really concerned that pricing might have been driven up here by this tactic. and i yield back. >> i just announced that both -- we're going to continue with the hearing, so i invite colleagues to vote. so vote according to your own schedule. i recognize the gentleman from colorado for five minutes. >> thank you, mr. chairman. i want to thank each of the witnesses today.
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mr. zuckerberg, in 2004, when you had launched facebook, it's fair to say, i think you would agree with me, you had quite a few competitors. would you agree with that? >> congressman, yes. >> my space, friendster, yahoo 360, aol, they were all competitors? none of those companies i just identified existed. you're certainly aware of that? they were all basically gone. facebook, in my view, was in a monopoly by then. i wonder whether you would agree with that. i take it you don't? >> congressman, that's correct. i don't. we face a lot of competitors. and every part of what we do, from connecting with friends privately to people in communities to all your friends at once, to connecting with all
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kinding of user generated content. i would bet that you or most people here have multiple apps for each of those on your phones. >> mr. zuckerberg, why don't we dig into this a bit further. we clearly disagree about that. in 2012, i'm looking at a document produced by facebook. it's a presentation prepared for cheryl sandberg to deliver to the board of a telecommunications firm, boasting that facebook is 95% of all social media in the united states. the title of the slide is even the industry consolidates as it matures. so as i look at that graph, i think most folks would concede that facebook was a monopoly as early as 2012. would you agree with me that facebook, its strategy since that time, to essentially protect what i describe as a monopoly, but obviously what you would describe as market power, that facebook has been engaged
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in purchasing competition, in some cases replicating competition, and in some cases eliminating competition. would that be a fair statement? >> congressman, the space of people connecting with other people is a very large face. i would agree that there were different approaches we took to address different parts of that space. but all in service of building the best services -- >> i appreciate that, mr. zuckerberg. it sounds like you are conceding at least some of those strategies are what i identified. in 2014, here's an email. it's from facebook's current chief financial officer described at the company's acquisition strategy as a land grab. and saying that we are going to spend 5% to 10% of our market cap every couple of years to shore up our position. my sense of the facts is that that in fact is what occurred. facebook as you conceded earlier, that instagram was a
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competitor of facebook. so you acquired instagram in 2012. instagram is now the sixth largest social media platform in the world, is that right? >> congressman, i'm not sure what rank it is, but it's certainly growing beyond our wildest expectations. >> statistics show it's the sixth largest. in 2014, facebook brought whatsapp, is that correct? >> congressman, yes, whatsapp was a competitor and complementary. they competed with us in the space of mobile messaging, which is a growing and important space. it is, again, one part of the global space of how people connect. >> and at that time, it had 400 million monthly users. and whatsapp is now the second largest social media platform in the world with 2 million users worldwide, more than facebook messenger and your company owns
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whatsapp. facebook tried to buy other competitive startups. as chairman nadler noted, you did tell a senior engineer in 2012, that you can likely buy any competitive startup, but it will be a while before we can buy google. do you recall writing that email? >> i don't specifically, but it sounds like a joke. >> well, i don't take it as a joke, as i review the email. it was in regards to having just closed the instagram sale and the response from this individual, this engineer to you was, "well played." your response was, "thanks. one reason people under estimate the importance of watching google is we can likely buy any competitive startups, but it will be a while before we can buy google." given the purchases facebook had made previous to this, facebook made several overtures to snap chat, clearly demonstrates that
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email was not in jest. here's why i ask these questions, mr. zuckerberg. it strikes me that over the course of the last several years, facebook has used its market power to either purchase or replicate the competition. and facebook, facebook messenger, instagram, whatsapp are the most downloaded apps of the last decade. your company owns them all. we have a word for that, that word is monopoly. with that i would yield back, mr. chairman. >> you know recognize the gentle lady from georgia ms. mcbath. >> mr. bezos, you referred to third party sellers as amazon's partners and your success depends on their success. but over the past year, we've heard a completely different story. as part of this investigation, we have interviewed many small businesses, and they use the words like bullying, fear, and panic to describe their relationship with amazon. i'm going to share the story of a small business owner who is
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also a wife and a mother. so you can understand how this is actually affecting the lives of evidence people and why this truly matters. >> we are a book seller on we worked hard day and night towards growing our business and maintaining a five-star feedback rating. the business feeds a total of 14 people, whiand as we grew, in retaliati retaliation, amazon started restricting us from selling. they started with a few titles in 2019, and within a few months, amazon blocked us from selling the full textbook. we haven't sold a single book in the past ten months.
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amazon didn't even provide with us a notice as to why we were being restricted. there was no warning, there was no plan. >> so mr. bezos, after amazon delisted this small business without any pparent reason or notice, she said they sent more than 500 separate communications to amazon, including to you, mr. bezos, over the past year, and there was not a single meaningful response. do you think this is an acceptable way to treat someone that you describe as both a partner and a customer? >> no, congresswoman. and i appreciate you showing me that anecdote. i would like to talk to her. it does not at all to me seem like the right way to treat her. and i'm surprised by that. and it's not the systematic approach we take, i can assure you. i don't understand what's going on in that anecdote, because we would love for third party sellers to sell books --
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>> respectively, sir -- >> i don't understand it, but i would like to understand it better. with your permission i would like to get in touch with her. >> i think you're missing the point. this is not just about one business. i'm concerned that this is a pattern of behavior. and basically, this pattern of behavior has to change. mr. bezos, my question is simply, are you willing to make sure going forward that, you know, the numerous sellers that we have talked to, they have problems just like this. and there are more sellers who told us that they have exhausted all of their options before finally reaching out to you directly as a last resort, but they're still waiting for your response. what do you have to say to small businesses that are talking to congress because you won't listen to them? >> i would say that's not acceptable. iffer not listening to you, i'm.
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i don't think that's systematically what's going on. the evidence to consider in that regard is that third party sellers in aggregate are doing extremely well on amazon. they grew from 20 years ago it was zero, and today it's 60% of sales. third party sellers are growing even faster. >> thank you so much. mr. bezos, you said that sellers have many other attractive options to reach customers. but that's not at all what we found in our investigation. according to e-marketer, a source amazon sited in submissions to this committee, amazon has seven times the market share of its closest e-commerce competitor. one seller told us that amazon continues to be the only show in town. no matter how angry sellers get, they have nowhere else to go. so are you saying that these people respect being truthful when they say that amazon is the only game in town?
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>> yeah. congresswoman, with great respect, i do disagree with that. i believe there are a lot of options. and some of them are not even listed on that chart i just looked at. but i did see some that i know of. i think there are -- >> all right, thank you for that. mr. bezos, my time is short. if amazon didn't have monopoly power over these sellers, do you think they would choose to stay in a relationship characterized by bullying, fear, and panic? >> with all respect, congresswoman, i do not accept the premise of your question. that is not how we operate the business. in fact, we work very good to provide -- >> thank you for that. mr. bezos, i'm going to close with giving the book seller the opportunity to finally be heard by you. >> mr. bezos, we increased our sales on amazon by five times in
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the past three years. and we have contributed that much of seller fees to amazon. we have contributed that much to your business, to five times. we followed all the rules that were set by you. please just help us, we beg you, there are 14 lives at stake. please, please, please help us get back on track. >> with that, i yield back the balance of my time. >>cluded our first round. mr. bezos, the marketplace is competitive. but amazon controls as much as 75% of all online marketplace sales. and e marketers, a source you cited to us, reports that amazon has seven times the market share of its closest competitor. isn't it true that small businesses have no real option but to rely on amazon to connect
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with customers and make online sales? >> no, sir. with great respect, i do have a different opinion on that. i believe there are a lot of options for small sellers. i believe amazon is a great one and we have worked very hard. i think we are the best one. we have a lot of different programs that help sellers. >> thank you. there are 2.2 million sellers as of yesterday, 37% of them rely on amazon as their sole source of income. that is over 800,000 people relying on amazon to feed their families and keep a roof over their heads. you have referred to third party sellers as partners and customers. but amazon also refers to them as internal competitors? >> i think it wouldn't surprise me in some ways we are competing, and they're competing with each other. >> your own documents that you produced refer to the very same
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sellers that you described as amazon partners as internal competitors. we heard from third party sellers again and again during the course of the investigation that amazon is the only game in town. one small business owner described it this way. and i quote, we're stuck. we don't have a choice but to sell through amazon. another said, and i quote, they've never been a great partner, but you have to work with them. during this investigation, we heard so many heartbreaking stories of small businesses who sunk significant time and resources into building a business and selling on amazon, only to have amazon poach their best selling items and drive them out of business. so one company that stood out from the rest. i want you to pay close attention to how they describe your partnership. we heard from a small apparel company that makes and sells what they call useful apparel for people that work on their feet and with their hands like construction workers and firefighters. this business discovered about started selling a unique item.
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they were making about $60,000 a year on just this one item. one day they woke up and found that amazon had started listing the exact same product, causing their sales to go to zero overnight. amazon undercut their price, setting it below what the manufacturer would allow it to be sold, so even if they wanted to, they couldn't match the price. here's how the apparel company described working with amazon, and i quote, amazon strings you along for a while because it feels so good to get that paycheck every week. and in the past, for lack of a better term, we called it amazon heroin, because you just kept going and you had to get your next check. but at the end of the day, you find out this person, who is seemingly benefit you, was just ultimately going to be your downfall. so this is one of your partners, mr. bezos. why on earth would they compare your company to a drug dealer?
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>> sir, i have great respect for you and this committee, but i completely disagree with that characterization. what we have done is kree y5i9 in the store a place -- create in the store a place -- we sold only our own inventory. we did that because we were convinced it would be better for the consumer and the customer. >> mr. bezos -- >> i think we were right, and i think it's worked out well. >> reclaiming my time. this is one of many small companies that have told us during this year-long investigation that they were mistreated and tolsed aside by amazon. you said that amazon is only focused on what's best for the customer. how is that possible when you compete directly with third party sellers with your own products that undercut the
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competition? -- >> thank you. no, i don't believe it is. we have -- we have the consumers is the one ultimately making the decisions. they're making the decisions about what to buy, what price to buy it at, who to buy it from. >> that's not the question, mr. bezos, the question, is is there a conflict of interest, because you are a data company, you know when customers put something in their cart, when they take it out, traditional brick and mortar stores don't have that. so i want to follow up and answer to the question you gave, you said you can't guarantee the pollty of not sharing third party seller's data hasn't been violated. can you please explain that to me. can you list examples where that
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policy has been violated? because it's concerning to me, mr. bezos, shouldn't third parties know for sure the data suspect being shared with your own line? why should a third party seller list their product on amazon if they're just going to be undercut by amazon's only product as a result of data you take from them? >> sir, i think what i want you to understand, and i think it's important to understand, is that we have a policy against using individual seller data to compete with our private labeled products. >> you couldn't assure that that policy isn't violated routinely. >> we are investigating that. and i do not want to sit here and i do not want to go beyond what i know right now. but we are, as a result of that "wall street journal" article, we are looking at that very carefully and -- >> thank you, mr. bezos. the evidence we have collected
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shows that amazon is only interested in exploiting its monopoly power to further expand and protect this power. this investigation makes clear that amazon's dual role as a competing seller on that platform is fundamentally anti-competitive and congress must take action. with that, i recognize the ranking member of the subcommittee for five minutes. >> mr. chairman, i think history proves that history does a poor job in picking winners and losers. i've looked over a lot of the material that has been assembled. i've been working with the chairman for over a year on this bipartisan investigation. and i have reached the conclusion that we do not need to change our anti-trust laws. they have been working just fine. the question here is, the question of enforcement of those anti-trust laws.
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now, we heard a lot about the facebook acquisition of instagram. that happened in 2012. obama's ftc signed off on that. so regardless of what you think has happened at that time, the fact is, this acquisition did pass the smell test of the regulators involved. maybe they made a mistake or maybe something else happened, i don't know. but the fact is, there is not a problem with the law. now, back about 35 years ago, at&t was broken up because it was determined that one-stop shops were monopolies. and at&t, because you have to get your long distance service from your local phone company, that was monopolyistic.
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so a whole lot has happened since then. there were mergers and acquisitions in the telecom industry. technology advanced a huge amount and guess what? we're back to exactly where we were in 1984. so this goes to show the congressional pressure is not the best. using the at&t example, which i think was a big flop and counterproduct counterproductive, let me ask mr. bezos, say the at&t example was acquired to amazon, so you might not have no more of a one stop shop, but you have to go to separate places for books or groceries or electronics, how are the consumers helped by that? >> sir, thank you. they would not be. >> right. >> very clear. >> now, mr. pachi, let me ask about google.
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if you were forced to split up your businessline, say spin off youtube, can you describe what happens to consumers there? >> congressman, today consumers in most of the areas we are dealing with, they see prices falling and they get more choice than ever before. so i think it serves them well. >> and you're right there. so i'm not going to be on this committee in the next congress. i am going to put my feet up and become a senior statesman. but, you know, let me say that we have heard a whole lot of complaints about big tech. some of them are political in nature, and i share the complaints and the concern of mr. jordan and others. and others talk about allegedly anti-competitive activity. it seems to me that it's not for congress that legislates to toss
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all of our anti-trust laws and the precedent that has been established through litigation over the last hundred plus years. but it's something where we ought to go back to the regulators, to the enforcers, have them look at this stuff and have them make a determination on whether or not the laws have been violated. i think the law is good. on that. and we don't need to throw it all in the waste basket. but there are some matters of concern that we have heard from both sides of the aisle, that i think need to be addressed. and if it requires an agency like the ftc to say that they have made mistakes in the past, so be it. we're all human. we all make mistakes. even government agencies do that. i yield back. >> the gentleman yields back. i recognize the gentle lady from
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washington. >> thank you, mr. chairman. mr. zuckerberg, in march of 2012, you suggested by email to your management team that moving faster and copying other apps could prevent our competitors from getting footholds. cheryl sandberg responded that, it is better to do more and move faster, especially if that means you don't have competitors build products that take some of our users. facebook's product manager added, i would love to be far more aggressive and nimble in copying competitors. has facebook ever taken steps to prevent competitors from getting footholds by copying competitors? >> congresswoman, i view it as our job to understand what people are finding valuable in all of the services that they use. and certainly if someone -- >> do you copy your competitors? >> congresswoman, we have certainly adapted features that others have -- as others have
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copied and adapted -- >> i'm not concerned about others. since march of 2012, after that email conversation, how many competitors did facebook end up copying? >> congresswoman, i can't give you a number of companies. >> less than five? >> congresswoman, i don't know. >> less than 50? any estimates? your team was making a plan. how did it play out? >> congresswoman, i'm not sure i agree with the premise here. our job is to make sure we build the best services for people to connect with all the people they care about. and a lot of that is done by innovating and by building new -- >> thank you, thank you, mr. zuckerberg. let me go on. has facebook ever threatened to clone the products of another company while attempting to acquire that company? >> congresswoman, not that i would -- not that i recall. >> and i would like to remind
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you that you are under oath and there are quotes from facebook's own documents. prior to acquiring instagram, facebook began developing a similar product called facebook camera, correct? >> congresswoman, that's correct. i've said multiple times that we -- we're competing in the space of building mobile cameras with instagram. that's what they need at the time. they're set was companies like what we were building with facebook camera and vsco cam -- >> thank you, mr. zuckerberg. did you ever use this very similar facebook camera product to threaten instagram's founder? >> congresswoman, i'm not sure what you mean by threaten. we were building a camera app at the time. that was a well-documented thing. >> let me tell you that -- in a chat you said that facebook was, quote, developing our own photo strategy so how we engage now
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will also determine how much we're partners versus competitors down the line. instagram's founder seemed to think that was a threat. he confided in an investor at the time that he feared you would go -- that you would go into, quote, destroy mode if he didn't sell instagram to you. so let's just recap. facebook cloned a popular product, approached the company you identified as a competitive threat expert told them that if they didn't let you buy them up, there would be consequences. were there any other companies that you used this same tactic with while attempting to buy them? >> i want to respectfully disagree with the characterization. i think it was clear that this was a space that we were going to compete in one way or another. i don't view those conversations as a threat in any way. >> i just -- i'm just using the documents and the testimony that the committee has collected from others. did you warn the founder of snapchat that facebook was in
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the process of cloning the features of his company while also attempting to buy snapchat? >> congresswoman, i don't remember the specific conversations. that was also an area where it was very clear that we were going to be building something. people want to be able to communicate privately and with all of their friends at once. we're going to make sure that we build the best products in all of the spaces that we can around helping people stay connected with the people they care about. >> i appreciate that. when the platform threatens its rivals, that should not be a normal business practice. facebook is a case study in monopoly power because your company harvests and monetizes our data and then your company uses that data to spy on competitors and to copy, acquire, and kill rivals. you've used facebook's power to threaten smaller competitors and
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to ensure you always get your way. these tactics reinforce facebook's dominance which you use in increasing destructive ways. facebook's very model makes it impossible for new companies to flourish separately and that harms our democracy, it harms mom and pop businesses and consumers. mr. chairman, i yield back. >> the gentlewoman yields back. mr. buck is recognized for five minutes. >> thank you. mr. bezos, thank you for being here today. i'm concerned that you've used amazon's market position to unfairly harm competition. we've heard from a number of companies that amazon uses proprietary data. meets with start-ups to discuss investing in the product and uses the data to create its own private label products. allows the sale of counterfeit items through its web platform. during this field hearing in
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january, pop sockets ceo detailed how amazon allowed counterfeit products to appear on amazon's marketplace ahead of pop socket's products. he said that pop socket's found 1,000 counterfeit products for sale on amazon's marketplace which amazon allegedly failed to remedy until pop socket's agreed to a nearly $2 million marketing deal with amazon. we've also seen troubling reports in "the wall street journal" detailing amazon's use of third-party sellers proprietary data to develop and markets its own competitive private label products. "the wall street journal" reported last week that amazon's venture capital fund used meetings with start-up companies to gain access to secret product information and financial details. amazon then reportedly used that information to launch competing products often disastrous results for the original start-up company. there are many examples of this
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behavior. one allegation in the reporting sticks out in particular. in 2011, amazon contacted vocal life's inventor about the possibility of investing in the technology. the founder accepted the meeting thinking this was the company's big break. after displaying the microphone technology and providing information to amazon employees the relationship came to a halt. employees stopped responding to emails before the technology eventually found its way into the amazon's echo device. these allegations are serious. especially because the size and scope of these practices couldn't happen without amazon's monopolistic control of the marketplace. i'm concerned that given amazon's allowance of counterfeit goods on its marketplace, that amazon's marketplace may be knowingly or
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unknowingly furthering china's use of slave labor conditions. this is important following recent reports that at least 80 global companies that sell on the amazon marketplace, including nike, starbucks and samsung, have ties to chinese factories that use enslaved uyghur muslims. a bill was introduced last week requiring american businesses to certify that their supply chain does not rely on forced labor. i will introduce a bill later this afternoon. i do not expect you to have knowledge of the legislation, i do want to ask all four of our witnesses a simple yes or no question. will you certify here today that your company does not use and will never use slave labor to manufacture your products or allow products to be sold on your platform that are manufactured using slave labor. mr. cook, you were kind enough to visit with me on the phone.
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we briefly discussed this issue. if you can, give a yes or no. i understand you haven't read the details of the bill. but would you agree to this idea? >> i would love to engage on the legislation. but let me be clear, forced labor is abhorrent and we would not tolerate in apple. i would love to get with your office and engage on the legislation. >> thank you. >> congressman, i share your concern in this area. i find it abhorrent as well. happy to engage with the office and discuss this further. >> i really don't want to engage with my office half the time. will you agree that slave labor is not something that you will tolerate in manufacturing your products or in products that are sold on your platforms. >> i agree, congressman. >> mr. cook?
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we wouldn't tolerate it. we would terminate a relationship if it were found. >> mr. zuckerberg? >> i agree. we wouldn't tolerate this. if e with found anything like this, we would also terminate any relationship. >> mr. bezos? >> yes, i agree completely. >> thank you very much, gentlemen, and i yield back. >> i recognize the gentleman from maryland. >> thank you. i want to thank mr. buck for that line of questioning and for the upcoming legislation. i look forward to joining that. in the 19th industry, we had the robin bearings and now we have the cyber bearings. we want to make sure that the extraordinary power and wealth that you've been able to amass is not united states against human rights around the world and not against the interest of a free market at home. mr. bezos, let me turn to you.
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i'm interested in the role that you play as a gatekeeper. a lot of people want to know when the hbo max app will be available on your devices and i understand that negotiations are ongoing. but your company is not only asking for financial terms, but also for content from warner media. is that right and is that a fair way to proceed? in other words, is it fair to use your gatekeeper status role to promote your position as a competitor in the video streaming market with respect to content? >> i'm not familiar with the details of those negotiations. as you said, they're under way right now. i predict that the companies will eventually come to an agreement and i think this is kind of two large companies negotiating agreements, kind of normal case of -- >> here's why i pursue.
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it's a large company and in a way, they stand in for hundreds of thousands of much smaller companies who are even in a more disadvantaged position with respect to negotiating with you. i guess the general proposition you can speak to, if you don't know the details of this, is it okay to negotiate not just for financial terms in having someone be part of your fire unit, but also to try to extract in that negotiation leverage with respect to getting content from them? >> well, again, i'm not familiar with the details -- >> i'm not asking about that one. in general. >> in general, i think when two companies are negotiating, you're negotiating not just the amount of money that's going to change hands, but also what you're going to get in exchange for the amount of money. that's a fundamental way that business works. >> do you see at least -- do you see at least to outsiders that
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would look like a structural conflict of interest. you're using your control over access to people's living rooms, essentially, you're using that in order to obtain leverage in terms of getting creative content that you want and are you essentially converting power in one domain into power in another doumain where it doesn' belong. >> i should offer to get you information -- i'll get it to your office for you because i'm not familiar enough with this and i could imagine that there would be scenarios if we're talking in abstract where it would be inappropriate and i could imagine scenarios where it would be very normal business and very appropriate. >> fair enough. i want to talk about smart homes and i want to start with smart speakers. does amazon price the echo device below cost?
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>> not its list price. it's often on promotion. sometimes when it's on promotion, it may be below cost, yes. >> several other companies said that amazon is pricing echo devices way below cost making it nearly impossible for them to compete and aggressively discounting alexa enabled speakers is a strategy to own the smart home. like many markets, smart speakers along with the myriad of smart home appliances make up the next platform for tech companies to lock in customers. would you say the smart home market for which the echo, ring security systems is a winner's take all market? yes or no? >> no, i wouldn't. especially if we -- if we're able to succeed at what we want, we would like our -- our vision for this is that smart home speakers should answer to
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different -- >> when considering the acquisition -- >> on a case-by-case basis. if we could achieve that, then i think you would get really good behavior on the part of competitive voice agents helping you. >> you wrote, we're buying market position, not technology and that market position is very valuable. so if smart homes are not a market with lock-in effects, why would a leading market position and momentum be so very valuable? >> sir, market position is valuable at almost any business and it's one of the primary things that one would look at in an acquisition. there are multiple reasons that we might -- sometimes we're trying to buy technology or ip, sometimes it's talent acquisition. but the most common case is market position. the company has traction with customers. maybe they were the first mover,
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any number of reasons why they have that market position. that's a common reason to acquire a company. >> once a company becomes dominant in a market, it can favor its own products and services. when i ask alexa to play may favorite song, prime music is the default music player? >> i think that's true if you're a prime member, yes. >> and a "new york times" report found that when users say, alexa, buy batteries, she responds would you like to buy amazon batteries? has alexa been trained to favor amazon products? >> i don't know if it's been trained in that way. i'm sure there are cases where we do promote our own products. of course, a common practice in business. it wouldn't surprise me if alexa sometimes does promote our own products.
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>> thank you, and i yield back. >> the chair recognizes the gentleman from florida for five minutes. >> during our prior durgs earlier today you said that google doesn't work with the chinese military. that answer was deceptive because google works with many of the entities that work with the chinese military in common collaboration and just as one example would be a university where jeff dean, who is the head of google ai served on the computer science advisory committee for the university and then the university takes a nearly $15 million from china's central military commission. if you don't show up at the offices of the chinese military, if you're all showing up at the same place, working together on ai, that would lead to my concern. i want to talk about search because that's an area where i know google has real market dominance. on december 11th you received in response to a question from my colleague about search, you said, we don't manually
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intervene on any particular search result. leaked memos obtained show that that isn't true. in fact, those memos were altered december 3rd just a week before your testimony and they describe a deceptive news blacklist, and a process for developing that blacklist approved by someone who leads search within your company and something called a fringe ranking which seems to beg the question, who gets to decide what's fringe. and in your answer, you know, you said that there is no manual intervention of search. that was your testimony. now i'm going to cite specifically from this memo, from the daily caller obtained from your company, the beginning of the work flow starts when a website is placed on a watch list. it continues this watch list is maintained and stored with access restricted to policy and
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enforcement specialists. it begs the question who these enforcement specialists are. access to the listing can also be shared on a need to know basis to enforce or enrich the policy violations. the investigation of the watch list is done in the tool, the reasonable review tool. you said that there was no manual review tool and then your documents indicate that there is a manual review tool. help us understand the inconsistency? >> congressman, there are two parts to this. in general, you know, we algorithmic approach our search results. we have robust policies to do so and we test the feedback and validate experiments and launched around 3,000 improvements to search. and we don't manually tune.
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w is there someone behind the curtain tuning a search result? we don't. in order to comply with the law in every country we operate in, for example, there may be an actor or a website identified as interfering in elections, and we then have to put that site on a list so that doesn't appear in our search results against queries. violent extremism -- >> is that done manually, that process you described? is that done manually. >> we could get reports from law enforcement agencies, you know, we're complying with -- or it's a known -- >> there's a manual component or there's not a manual component. which is it? >> for creating those lists, that process can involve manual portions. >> that's the concern that i have. you've now said something
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different today than you said earlier because you've confessed that there is a manual component to the way in which you blacklist content. and it seems to be no coincidence that its cites like the western journal, american spectator, daily caller, and breitbart that received the ire or the negative treatment as a consequence of your manual tooling and it also seems noteworthy that whistle-blowers at your own company have spoken out. you said that one of the reasons you maintain this manual tool is to stop election interference. i believe it is in fact your company that is engaging in election interference and it's not just my view. mike whacker came out and was a whistle-blower indicating that the manual blacklist targets that google specifically goes after are those who support president trump, who hold a conservative viewpoint, and he left your company in 2019
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because he was speaking out against these outrage mobs. can you see how when you empower individuals, some of the same individuals that project veratas has exposed, that can be the very election interference that we're concerned about and you're using your market dominance in search to accomplish that election interference? >> congressman, with respect, i strongly disagree with that characterization. we don't approach this work with any political viewpoint. we do that to comply with law, copy right violations, and we have to do that to comply with the law. in many cases, those requests can come from law enforcement agencies. >> you're own employees are saying it's a political bias. i yield back. mr. chairman, just given the productivity of our discussion, i would request that we be permitted a third round of
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questioning. >> without objection. >> i now recognize the chairman of the full committee, mr. nadler. >> yeah. you know, the documents prove -- the journalism industry in this country are in economic free fall. over 200 counties in america no longer have a local newspaper and tens of thousands of journalists have been laid off in recent years. the reason journalism is in free fall is that google and facebook now capture the vast majority of digital ad revenue. news publishers produce valuable content, it's google and facebook that increasingly profit off that content. establishers have told us that google and facebook maintain their dominance in these markets through anticompetitive conduct as well as conflict of interests. mr. zuckerberg, in 2015, facebook reported high and quickly growing rates of video
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viewership on its platform. based on these metrics, news publishers fired hundreds of journalists, choosing to boost their video divisions. in 2018, it was discovered that facebook has inflated these metrics and had known about the inaccuracy several years before facebook disclosed this. mr. zuckerberg, did you know that these metrics were inflated before they were publicly released? >> congressman, no, i did not. and we regret that mistake and we have put in place a number of other measures since then to make sure that we -- >> and do you realize the harm that this caused journalists across the country? >> congressman, i certainly know how important it is that the metrics that we report are accurate and we've put in place additional measures to make sure we can audit those. >> what do you have to say to the journalists who lost their jobs because of facebook's deception? >> congressman, i disagree with
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that characterization. and also your description of -- >> reclaiming my time. google, meanwhile, maintains its dominance through aggregating data from across its products and services. i understand that google collects user data on browsing activity through its chrome browser. does google use that for its own purposes either in advertising or develop and refine its algorithms? >> mr. chairman, we do use data to improve our products and services for our users. any time we do it, we believe in giving users choice, control and transparency. we give them settings to choose how they would like their data used. >> you do use the data that you get from these companies for your purposes? >> my understand was whether we use data in general to improve
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our products and services. we use data to show ads. but we give users a choice. they can turns ads personalization on or off. >> this obviously -- use of that data from all of these -- from all of these companies gives you a tremendous advantage over them and over any competitor. does the ability to make money in any way affect google's algorithm in terms of what news appears in search results? >> the way we rank our search results, we don't take into account commercial relationship that we have. >> okay. but facebook and google have gravely threatened journalism in the united states. reporters have been fired, local newspapers have been shut down, and now we hear that google and facebook are making money over what news the -- they let the american people see. this is a very dangerous
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situation and unfortunately my time is expired and i have to yield back. >> i now recognize the gentleman from florida for five minutes. >> thank you, mr. chairman. i'm going to pick up where i left off. there are rioting groups that are going unchecked with the posting of what i would contend is very violent video. yesterday i was sent a youtube video about doctors discussing hydroxychloroquine and discussing the not dangers of children returning to school. when i clicked on the link, it was taken down. i was sent a different link on youtube and it was taken down. i just checked again to make sure, it says this video has been removed for violating guidelines. how can doctors giving their opinion on a drug that they think is effective for the treatment of covid-19 and doctors who think it's appropriate for children to return back to school violate youtube's community guidelines? when all of these videos of
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violence is all posted on youtube? >> congressman, we believe in freedom of expression and there's a lot of debate on youtube about effective ways to deal with covid. we allow robust debate. but during a pandemic, we look to local health authorities. for example, in the u.s., it would be cdc, for guidelines around medical misinformation which could cause harm in the real world. for example, if there's a aspects of a video and if it states something could be a proven cure, that doesn't meet cdc guidelines, we would -- >> it's free expression of speech and you have these doctors who are giving their opinion as doctors and i don't understand why youtube and therefore google thinks it's appropriate to silence physicians and their opinion of what can help and cure people with covid-19.
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i'm going to switch to mr. zuckerberg. i think it's obviously that technology platforms have been stifling conservative news and opinions. you employ a panel of content moderators. can you explain how facebook chooses who these moderators are? >> thanks, congressman. we do hire a lot of people around the world to work on safety and security. our team is more than 30 or 35,000 people working on that now. we certainly try to do this in a way that is neutral to all viewpoints. we want to be a platform for all ideas. i don't think you build a social product with the goal of giving people a voice if you don't believe that people being able to express a wide variety of things is ultimately valuable for the world and we try to make sure that your policies and operations ultimately reflect and carry that out. >> is there an ideological
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diversity amongst the content moderators? >> congressman, i don't think we choose to hire them on the basis of an ideology. they're hired all over the world. there's certainly a bunch in the u.s. there's diversity in where they're hired. but certainly we don't want to have any biased in what we do and we wouldn't tolerate it if we discovered that. >> you don't specifically hire conservative moderators and democrat or liberal moderators so there's a balance in your content moderators? >> congressman, in terms of the 30 to 35,000 people or more at this point who are doing safety and security review, that is correct. in terms of the people setting the policies, i think it is valuable to have people with a diversity of viewpoints involved so we can make sure we have the different viewpoints represented in the policy development process and we also consult with
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a number of outside groups whenever we develop new policies to make sure that we're taking into account all perspectives. >> what are some of those outside groups that would be conservative-leaning? >> congressman, i need to get back to you with a list of specific groups. but it would depend on what the topic is. >> can you just think of one? you said you reach out to outside groups. can you think of one kref outsi -- conservative group that you reach out to? >> congressman, i'm talking about the different external stakeholders and groups that are inputs to our policy development process and i'm not involved in those conversations directly. so i would have to get back to you with specifics on that. but i'm quite confident that we speak with people across the ideological spectrum when we're developing our policies. >> i would very much appreciate a followup on that. can you briefly explain the
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approval process for third-party fact-checkers and how many fact-checkers does facebook employ? >> yes. thanks. we work with about 70 fact-checking partners around the world and the goal of the program is to limit the distribution of viral hoaxes, so things that are clearly false, from getting a lot of distribution. but we don't ourselves want to be in the business of determining what is true and what is false, that feels like an inappropriate role for us to play. we rely on an organization called the pointer institute and i think it's called the independent fact-checking organization that has a set of guidelines of what makes an independent fact-checker and they certify those fact-checkers and any organization that gets certification from that group is qualified to be a fact-checking partner within facebook. >> thank you.
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the gentleman's time is expired. i'm going to recognize mr. johnson for five minutes and take a short break of the committee. mr. johnson, you're recognized. >> thank you, mr. chairman. mr. bezos, amazon has a significant problem with counterfeit products being sold on its platform. counterfeit products not only rip off the owner's of legitimate businesses, they also can be dangerous. counterfeit medicine, baby food, automobile tires and other products can kill. amazon has said its fixing its counterfeit problem, but counterfeiting seems to be getting worse, not better. amazon is a trillion dollar company but amazon customers are not guaranteed that the products purchased on your platform are authentic. amazon acts like it's not responsible for counterfeits
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being sold by third-party sellers on its platform and we heard that amazon puts the burden and cost on brand owners to police amazon's site, even though amazon makes money when a counterfeit good is sold on its site. more than half of amazon's sales come from third-party seller accounts. why isn't amazon more aggressive in ensuring that counterfeit goods are not sold on its platform and why isn't amazon responsible for keeping all counterfeit products off of its platform? >> thank you. this is an incredibly important issue and one that we work very hard on. counterfeit are a scourge. they are a problem that is not -- does not help us earn trust with customers. it's bad for customers. it's bad for honest third-party sellers. we do a lot to prevent counterfeiting. we have a team of more than
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1,000 people that does this. we invest hundreds of millions of dollars. we have project zero which helps brands serialize individual products which really helps with counterfeiting. we have -- >> i'm glad that you have those -- i'm glad that you have those features in place. but why isn't amazon responsible for keeping all counterfeit products off of its platform? >> we certainly work to do so, congressman, and we do not not just for our own retail products, but for third-party products as well -- >> okay. thank you. we've heard from numerous third-party sellers and brand owners that amazon has used knockoffs as leverage to pressure sellers to do what amazon wants. for example, the founder of pop socket testified in january that amazon itself was selling
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knockoffs of its product. after reporting the problem, it was only after his company committed to spending $2 million on advertisements that amazon appears to have stopped diverting sales to these knockoffs. what is your explanation for that business practice? >> that's unacceptable. if that is -- if those are the facts and if someone somewhere inside amazon said, you know, by "x" dollars in ads and we'll help you with your counterfeit problem. that is unacceptable. i'll look into that. we have a counterfeit crimes unit. we attempt to prosecute counterfeiters. i would encourage this body to pass stricter penalties for counterfeiters.
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if it does, it would only be in the short term. i would much rather lose a sale than a customer. >> fair enough, sir. making companies pay extra to avoid having their products disappear in rankings seems to be so unfair, especially the small businesses, the american dream is threatened when that happens, don't you think so? >> sir, i'm not exactly sure what you're referring to. if you're talking about what we were just talking about a second ago, i agree completely -- >> totally different situation now, where a company that is selling on your platform but is not paying anything extra gets buried in the rankings and -- but companies that pay extra are able to get their products pushed up and they avoid getting pushed down.
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is that an acceptable practice? >> sir, i think what you're referring to is the fact that we offer a -- an advertising service basically for third-party sellers to drive additional promotion to their products. some sellers use it. some don't. it's been very effective at helping people promote their products. >> with that, i yield back. thank you. >> the gentleman yields back. the committee will stand in brief recess.
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committee will come to order. i recognize the gentle lady from florida, ms. demings -- i'm sorry. i recognize the gentleman from north dakota for five minutes. >> thank you. mr. bezos, earlier my colleague brought up what i think is an important issue and they were discussing amazon's stated policy against using third party seller information to inform business decisions regarding amazon's private label brands. it was specifically noted that a possible loophole that allows amazon to look at data in instances where there are only a few third-party sellers. i want to drill down on that a little more. where does amazon draw the line? >> i'm sorry. aggregate data would be more than one seller.
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and you have to remember that the person seeing the report would have no way of knowing how many sellers are inside that group or what the -- you know, what the breakdown would be between those sellers. it's not that different from perhaps a list or a product ranking which we make public for all. >> does amazon allow the use of aggregate data to inform private label brands when there are only three sellers for a product. >> yes, sir. >> am i correct in my understanding that amazon is conducting an internal investigation on the use of third-party yes. we're basically trying to understand some of the anecdotes that we saw in the "wall street journal" article. >> will you commit to informing this committee on the outcome of that investigation including the exact circumstances of when amazon is allowed to view and/or
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use aggregate data? >> yes, we will do that. >> now i want to move -- just really quick, music can be used to drive revenue. obviously there's a reason it's important now. i'll talk about twitch for a second. news reports have indicated that twitch users are receiving notice and takedown requests pursuant to the digital millennial copyright act. my understanding is that twitch allows users to stream music but does not license the music. is that correct? >> i'm going to have to ask that i could get back to your office with an answer to that question. i don't know. >> so, that would be great. and then i just have two more questions related to that. if twitch is responding to dmca notice and takedown requirements, should, one, twitch consider proactive licensing music instead of retroactively adhering to those notices? these are the questions i'm concerned in. i'm primarily concerned about
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small up and coming, making it easy for them to get cease and desist notices out as well and as we continue to move forward. >> yes, congressman, that's an important issue and we understand it. and i will get back to your office on that. >> all right. earlier this year, google announced plans to retire third party cookies that websites attach to users web browsers. and this allows users to be tracked across the internet. the consequence of that change is that it will put other participants at a disadvantage because they can no longer track users. at the very, very danger of being pro-cookie, because i'm not when i use my computer as well, and i understand there are legitimate privacy concern with third party cookies, but i want to focus on the competition aspect. did this action also place google at a disadvantage or does google have alternative means of collecting the data to inform
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activities? >> this is an area where we have focused on user privacy, and users clearly don't want to be tracked with third party cookies. in fact, other browser windows including apple have also implemented these changes. with we are doing it, thoughtfully giving time for the industry to adapt because we know publishering depend on revenue in this area. but it's an important change, and i think we have to be focused on privacy to drive the change forward. >> but you have other way of collecting that information, correct? >> on our first-party services, we don't rely on cookies. and obviously when people come and type into -- >> i'm not asking if you rely on cookies. i'm asking if you have other ways of collecting through g-mail or consumer facing platforms, right? >> we don't use data from g-mail for ads, congressman.
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to the extent on the services where we provide ads and if users have consented to ads personalization, yes, we do have data. >> thank you. i yield back. >> the gentleman yields back. i recognize the gentle lady from florida for five minutes. >> thank you so much. during discussions of changing facebook's platform policy in 2012, you said that, and i quote, in any model i'm assuming we enforce policies against competitors much moore strongly. it sounds like facebook weaponizes its policies to target competitors. why would facebook enforce its policies against competitors more strongly? >> congresswoman, when we were a much smaller company, we saw that -- >> this is 2012, now. this was in 2012, so please go right ahead. >> sure. we've had policies in the past that have prevented our competitors, which at the time
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we were primarily worried about larger competitors from using our platforms to grow and compete with us. so, we had some of those policies. we continually reviewed them over time, and -- >> since 2013, a senior facebook employee identified me as a fast growing apple on facebook and said we would restrict their access. was this another example of enforcing facebook's policies against competitors much more strongly? message me? >> i'm not familiar with that specific example, but we did have that policy. >> let's move to another one. in 2014, other facebook product managers openly discuss removing pinterest's access to facebook's platform tools as one employee said, i am 100% in favor of the idea of moving it from pinterest, but i am not recommending removing it from netflix going forward. why would facebook product
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managers want to restrict pinterest's access to facebook but not netflix? >> congresswoman, i'm not familiar with that exchange. i don't think i was on that. >> why do you think you would have to be on that, but why do you think they would make that decision or would make a decision like that? >> well, congresswoman, as i said, we used to have a policy that restricted competitors from using our platform and pinterest is a social competitor with us. it's one of the many competitors that allow people to share -- >> all right. mr. zuckerberg, these examples and supporting documents strongly suggest that facebook does weaponize its platform policies, enforcing them selectively to undermine competitors. but let's move on. mr. cook, i am concerned that apple's policies are also picking winners and users in the app economy and that apple rules
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mean apple apps always win. mr. cook, in 2019, apple removed from the apple store certain apps that helped parents control their children's devices. do you remember what justification apple cited? >> yes, congresswoman, i do. it was that the use of technology called mdm, mobile device management, placed kid's data at risk. so, we were worried about the safety of kids. >> okay. all right. so, you were concerned about that the app basically undermined kid's privacy. but another app that used this same tool was appure, an app controlled by the saudi arabian government. do you recall apple's position on this? >> i'm not familiar with that app. >> okay.
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apple allowed this saudi app to remain. there are two types of apps that use the same tool. apple kicks one out and said that that was one that was helping parents but keeps the one owned by a powerful government. if that is correct, mr. cook, that apps that supposedly did the same thing, why do you -- why would you keep the one owned by a powerful government? >> i'd like to look into this and get back with your office. >> it sounds like you applied different rules to the same apps. >> we apply the rules to all developers evenly. >> do the fact that apple had its own -- let me just ask you this. did the fact that apple had its own parental control apps that were competing with these third party apps contribute to apple's decision to kick them off the
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apple store, mr. cook? what do you think about that? >> it did not. there's over 30 parental controls on the app store today so, there's plenty of competition in this area. i would point out that this is not an area where apple gets any revenue at all. we do -- >> mr. cook, i didn't ask anything about revenue. that was not my question, but i'm out of time, and thank you so much. mr. chair, i yield back. >> thank the gentle lady, for yielding back. i yield to mr. jordan for five minutes. >> thank you, i yield to the gentleman from florida. >> thank you for yielding. just as mr. pa chi gave information, you have given testimony to congress saying there is not editorial manipulation that disadvantages conservatives and just like in the case of google there have been whistleblowers from facebook that not only have offered evidence indicating the
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testimony was not truthful but there's even video that suggest content moderators you employ are out there disadvantaging conservative content. i'm wondering if you are familiar with the experiences of zack mcilroy and ryan el wig and what is your response to the very damning video evidence and the testimony from them that the culture that you lead within facebook is one that disadvantages conservatives and leads to content manipulation? >> congressman, i'm somewhat familiar with the concerns they have raised. as i've said, we aim to be a platform for all ideas. we got into this because we want to give everyone a voice. i certainly do not want our platforms to be run in a way that has any ideological bias, and i want people to be able to discuss a range of issues. when people raise concerns like
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that, we do look into them to make sure that everyone in our operation is behaving and upholding the standards that we would like. and if the behavior that they cited is true, then that would be unacceptable in our operation. >> and following the release of those videos and that evidence from project veary tas, when yo describe the information facebook undertook to root out the corrosive effects on your platform? >> congressman, i would have to get back to you with more details on that, but i know that we have ongoing training in what we do, and we certainly will look into any complaints that come up. and we want to make sure that how we run the content review teams that it's done in a way that reflects the values of the company around giving a voice and being a platform for all ideas. >> i'm concerned that the content review does reflect the
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values of the company but those values don't give everyone a voice. they prejudice against concern content. while i appreciate training as a prophylactic endeavor to try to guide future content, it seems disingenuous for you to suggest that these videos come out that are very damning that show the people that you trust with content moderation admitting on video that they disadvantaged conservatives, they they label people who support the president, for you to then come to us many months later after that was all over the news and the internet and say, well, you'll get back to us and do a little training. it seems to suggest that you don't take these allegations and this evidence very seriously. so, i'll ask the question, perhaps, in a different way. would you revise -- in your prior testimony at energy and commerce, you said this does not happen, it cannot happen. would you at least be willing to acknowledge based on the irrefutable evidence before us that you don't seem to have
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investigated that it is that at facebook your employees do have the power to disadvantage conservative viewpoints and they in fact have used that power in ways that we need to rout out? >> congressman, my testimony in the past and today is about what our principles are as a company and what we try to do. of course when you have tens of thousands of employees, people make mistake, people have some of their own goals. so time and it's our job in running the company to make sure that we minimize errors and that we make sure that the company's operations reflect the principles that we intend to run it on. >> and when you fire people as a consequence of their politics, do you think that impacts the culture and empowers the content moderators to also treat people worse as a consequence of their politics? >> congressman, i'm not sure what you're referring to. i'm not aware of any case where
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we have fired someone on behalf of their politics. i would say that would be an inappropriate thing for us to do. >> why did you fire paul? >> congressman, i'm not sure it's appropriate to get into a specific personnel issue publicly. >> i mean, i could just tell you that i only have ten minutes. it doesn't allow him to talk to anyone except government officials. ooip government official. i've seen the messages where you have specifically directed mr. lucky to make statements regarding his politics for the benefit of your company. i think both in the case of the content moderators and the case of the testimony you just gave regarding mr. lucky and firing people over their politics, there's serious question as to whether or not you're giving truthful testimony here or whether it's lying before long. i see my time has expired and i'll yield back. >> gentleman yields back. i recognize the gentlelady from
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pennsylvania. >> thank you. i wanted to focus a little bit on google's acquisition of youtube and some of the consequence ossoff that move for consumer privacy and composition. it's my understanding google paid 1.65 billion more that acquisition. so, could you tell us why google was willing to pay so much more beyond the initial proposed bid and was this the result of any harm? >> congresswoman, we acquired youtube in 2006 and this is relevant for my time as ceo. but i recall is we saw it as a
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new emergent area and we saw it as opportunity. >> was mr. page in charge of that decision? or you don't know? okay. >> i'm pretty sure senior leadership team at the time looked into it. >> i would encourage the subcommittee to take whatever steps to hear from that. google is the top online site where americans watch videos including children's videos. as i'm sure you're aware federal law prevents companies from collecting data on children under 13. the federal trade commission found that google spent years knowingly collecting data on children under 13 on youtube and offering advertisers the ability
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to target those users directly. did youtube use the data it illegally acquired to target ads to children? >> we are -- you know, this an area, take it very seriously. i'm a parent too? we make sure we have clear policies. we enforce them rigorously. just in q4 of 2019 we removed almost close to a million videos potentially for concerns around child safety. so, it is an area we are enlisting rigorously and will continue to do so. >> i'm more concerned about the fact you're investing rigorously in luring in advertisers like toy makers ma tell and hasbro by telling them youtube is the number one website regularly visited by kids. so, that sounds like you're targeting the kids and then
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targeting advertisers to bring them on board. is that correct? >> there are scenarios to be family viewing and content oriented towards families and there are advertisers which are interested in connecting with those users. but everything here we obviously comply with all the applicable regulations. >> okay. let's look at some of the content that is specifically for children. if a show like "sesame street" doesn't want to show ads for junk food on youtube, does youtube allow it to make that
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choice? >> today we have choices for both creators in terms of tools and preferences and we have extensive tools for advertisers. and although for users we give a choice they can either use youtube as a subscription service without seeing those types of ads or they can use it for free with ads. so, we give choice. and for us, it is most importance that youtube is a place where people come to learn and we find increasingly small and medium business use youtube. >> okay. let's go back to content that's designed for children. so, if there's an organization like "sesame street" that wants to provide child-centered content, but they don't want that content to be sullied, shall we say, with junk food ads or something, my understanding is you say the content creators can do that. but we've got a recent report from the "wall street journal"
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saying youtube hasn't been honoring that request and it's been making it difficult to independently audit that and report back to the content creators about whether or not youtube is honoring those. is that correct? >> i'm not familiar with the particular report, but i'm happy to understand it better and have my office follow up with your staff, congresswoman. >> i would appreciate that. my time has expired. i yield back. >> the gentlewoman yields back. the share will now recognize himself for five minutes. mr. bezos, thank you for being here today. in your opening statement you reviewed your written testimony, you indicated amazon accounts for less than 1% and less than 4% of the retail in the u.s. when you refer to retail, i take it based on the empirical studies you're referring to a broad definition of retail that includes restaurants, bars, gas
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stations. it's a fairly all encompassing view of retail. i wonder if you know what percentage of amazon's sales are represented in the terms of online retail sales, ecommerce, markets? >> the figures i've seen. with all respect, i don't accept is ecommerce is a different market. i've seen the outside studies were amazon's share of the ecommerce channel. >> that's consistent with the data i've seen. the latest figure i saw was 40%. in terms of how we define it whether it's a stream or a channel, nonetheless, factually it's an important distinction i want to make sure we clear here. obviously i suspect you understand more than most that the early stages of a start up where entrepreneurs are undertaking risks to bring products and services to market,
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over the course of the investigation, we've heard from start ups who rely on service with respect to concerns about the way in amazon uses confidential information. we've also heard amazon's cloud computing arm, aws, the notion that that computing arm identifies start up, best technologies, and rolls out replica products ander is viss. mr. bezos does amazon use confidential information to build competing services? >> no, sir, not that i'm aware of. aws does often -- they do keep expanding their services. aws started 15 years ago -- >> let me just clarify that, mr. bezos. i appreciate that. apologies for interrupts. last week, one of amazon's former engineers posted online that he and his team proactively
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identified growing businesses on aws, they built competing products and targeted products to the business's customers. there's been public reporting on that strategy. so, i guess i wonder if you can comment on that and how you would account for those statements. >> well, i think there may be categories -- databases of different kinds and so on where we see an important product for customers and make our own product offering in that arena. but it doesn't mean we stop servicing the other companies that are also making those products. we have competitors using aws, and we work very hard to make them successful. netflix is one example. hulu is another and so on. >> i think the concern, mr. bezos, with respect is that the pattern emerges across the different components in amazon, whether it's the market or whether it's the cloud service as i mentioned. in addition there was an article, i'm sure you're aware,
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in the "wall street journal" regarding the alexa front, according to news reports, alexa fund invested in for example defined crowd corp. does that ring a bell? >> no, sir, i'm afraid it doesn't. >> well, i'll represent to you according to "the wall street journal," and i'll just quote from them, when amazon incorporated venture capital fund, it gained access to the start up finances and other confidential information. four years later in april amazon's unit launched artificial intelligence product that does what defined crowd does said defined cloud. are you aware of those al gase. >> i read that article but i don't know the specifics of that situation. i would be happy to get back to your office with more information bt that. >> i would appreciate -- i
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certainly would welcome that to the extent you all can follow up with the subcommittee with respect to this particular article and the different episodes that are referenced both in terms of defining crowd corp. there's another nucleus you might be familiar with. the reason i ask these questions, the reason it matters to me is we are very concerned about this innovation kill zone that seems to be emerging. i represent boulder and fort collins, ent tremendous preneuros and founders shared these stories with our field hearing just earlier this year and they are extremely dependent on big technology firms including in terms of investment and capital yet they live in constant fear that the platforms could steal their core technologies or ideas making it impossible to compete because of those existing advantages. i see my time has expired but
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we'll be following up with respect to the episodes i referenced w. that, i yield back. the gentleman's time has expired. and the gentlewoman is recognized for five minutes. >> thank you, mr. chair. facebook acquired whatsapp in 2014 and at the time, the deal was critical for countering the app store power of apple and google who choke off facebook's access to mobile devices. does apple have the power to exclude apps from the app store? >> if you look at the history of this, congresswoman, we've increased the number of apps from 500 to 1.7 million. so, there's a very wide gate from the app store. and there's fierce competition for developers. and we want every app we can on the platform. >> okay. so, but mr. cook, then what you're saying is that apple can exclude apps from the app store
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n. fact, it has. in 2018, apple introduced an app called screen time which helps people limit the amount of time they or their kids spend on their iphones. is that correct? >> it sounds right. >> okay. but before screen time existed, there were other apps in the app store that gave parents control over their kids phone usage, apps like our pact and kids locks. and parents depended on them. soon after you introduced screen times, however, you removed the competing apps from the app store. one mother wrote to apple saying, and i quote her, i am deeply disappointed that you have decided to remove this app and others like it, thereby reducing consumer access to much-needed services to keep children safe and protect their mental health and well-being. mr. cook, why did apple remove competing apps right after you released screen time? >> we were concerned,
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congresswoman, about the privacy and security of kids. the technology that was being used at that time was called ndm, and it had the ability to sort of take over the kid's screen, and a third party could see it. so, we were worried about their safety. >> okay. thank you. i appreciate that. >> today we have -- >> i appreciate that, but the timing seems coincidental. if apple wasn't intending to harm competitors to help its own app, why did phil promote the screen time app to customers who complained about the removal of rival parental control apps? >> congresswoman, i can't see this email. i'm sorry. my eyes are not good enough to read it. but i see screen time as just an alternative. but there are over 30 parental control apps that are in the app store today. so, there's vibrant competition
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for parental controls out there. >> well, mr. cook, the fact is that apple sidelined screen time's competition by keeping them out of the app store. and while apple claims these competitors weren't meeting apple's privacy standards, these apps creators say that you admitted them back in six months later without requiring significant privacy changes. and of course, six months is truly an eternity for small businesses to be shutdown, even worse if all the while a larger competitor is actually taking away customers. and this is not the first time something like this seems to have happened, mr. cook. let me give you another example of the harm that's been caused to your competitors n. 2010, apple introduced an online bookstore called the ibookstore where it offered ebooks and the only major publisher that didn't
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agree to join ibookstore was random house. random house wanted to offer its own ebooks through its own apps and submitted their apps to be added to the app store. amidst continued negotiations between apple and random house, senior vp eddie q. said, it prevented an app from random house from going live in the app store. q. himself cited this app rejection as a factor in finally getting random house to give in and join ibookstore. is it fair for apple to use its power over the app store to pressure a business to join apple's own app? >> i can't see the email, so i don't know the context of it. but there are reasons why an ad might not initially go through the app store gate. it may not work properly.
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there may be other issues with it. so, it's very difficult to see. what i would say though, on a macro basis, the gate to the app store is very wide. we have 1.7 million apps in it. it's become an economic miracle -- >> okay. >> -- with over $138 billion of commerce just snt united states. >> i really, really appreciate that sentiment. i want to say to you apple enjoys enormous power to which apps can reach consumers. even some of the largest in the country fear your power. our evidence suggests your company has used the power to boost your business. this is fundamentally unfair and harms small businesses that rely on you to reach customers. it stifles the innovation that is the life blood of our economy. ultimately it reduces the competition and choices that are made available to consumers, and that is a great concern to all
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of us. and i yield back. >> the gentle lady yields back. that concludes that round. in light of the request of mr. gaetz for a third round and because many of my colleagues would like to get more answers on a number of issues, we'll proceed to a final round. my expectations, we will conclude within the hour. i'll recognize myself for five minutes. mr. zuckerberg, we've seen the dominance of several of the companies appearing before us today that it's not just harmful to our economy and competition but it's harmful to the founding principles of our democracy. facebook and google are designed to keep users on their platforms whatever the cost because disinformation, propaganda and hateful speech are good for engagement, they're good for business. but over-100 years ago the supreme court oliver windal holmes jr. wrote would not protect a man from falsely shouting fire in a theater and causing panic. do you agree with that principle, that there are limits
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to harmful and false speech, and that are particularly important when it comes to the health and safety of the public? >> congressman, i certainly do, and i actually think that our policies go further than just limiting those types of things. >> well, mr. zuckerberg, you have a billion users and almost 50,000 employees so you agree you have a responsibility to remove harmful lies from your platform, correct? >> congressman, i think we have a responsibility to limit the spread of content that's going to be harmful for people. and also i would like to add that i do not believe that we have any incentive to have this content on our service. >> except that, mr. zuckerberg, with all due respect, except that it is often the most engaging. it's the most -- it brings the most likes or brings the most activity which of course produces great profit.
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so, you do have an incentive. the more engagement there is, the more money you make on advertising. let me ask you a question. let me give you specific examples that illustrate by concerns. these are some of the top ten most shared aspects on 2020. trump suggests injection of disinfectant to beat the coronavirus. coronavirus hype biggest hoax in history. u.s. hospitals getting paid to label for cause of death as coronavirus. in the public health crisis of our lifetime, don't you agree that these articles viewed by millions on your platform will cost lives? >> congressman, with respect, we certainly have policies that prohibit false information about covid that would lead to imminent harm, and we've been quite aggressive about taking that down as some of the questioning from the other side of the aisle has shown so far. i'm proud of our efforts here. >> mr. zuckerberg, with all due
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respect, the problem is facebook is profiting off and amplifying disinformation that harms others because it's profitable. this isn't a speech issue. it's about facebook's business model that prioritizes engagement in order to keep people on facebook's platform to serve up more advertisements. i'll ask you specifically what are you doing right now to protect people from demonstrably false claims related to the deadly pandemic? >> congressman, i'll certainly answer that, but i have to disagree with the assertion that you're making that this content is somehow helpful for our business. it is not what people want to see, and we rank our what we show in feed based on what is going to be the most meaningful to people and is going to create long-term satisfaction, not just what's going to get engagement or clicks today. >> if that's true,
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mr. zuckerberg, how do you explain that on monday the second most popular post on facebook was a breitbart video claiming that you don't need a mask and hydroxychloroquine is a cure for covid. and in the first five hours after being posted on facebook, it wracked up 20 million views and over 100,000 comments before facebook acted to remove it. >> congressman, a lot of people shared that and we did take it down because it violates our policies. >> after 20 million people saw it over the period of 5 hours. doesn't that suggest, mr. zuckerberg, that your platform is so big that even with the right policies in place, you can't contain deadly content? >> congressman, i don't think so. i think we have on covid misinformation in particular a relatively good track record of fighting and taking down lots of false content as well as putting up authoritative information. we have built a covid information center with
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authoritative information from health officials -- >> thank you, mr. zuckerberg. one more question. i appreciate that. mr. zuckerberg, a television runs a false political advertisement, they're held liable for that. why should facebook or any other platform be different? while you may not be a publisher, you're responsible maybe not for the first posting but you take the posting and apply algorithms that decide how to disseminate that which is a business decision, not a first amendment decision. it's hard to understand why facebook should not be responsible for those business decisions. >> in term of political ads, we follow a lot of policies off fcc guidelines on broadcasters and their requirements to run political ads equally from all different sides. >> i think this did -- yeah. i think these examples unfortunately mr. zuckerberg are just the tip of the iceberg. it's not just about covid. facebook hosts countless pages and ads dedicated to conspiracy
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theories and calls to violence including content that led to the white supremacy rally in charlottesville in 2018. facebook gets away with it because you're the only game in town. there's no competition forcing you on your platform. allowing this to spread can lead to violence and strikes at the heart of the american democracy. with that, i recognize the gentleman from florida for five minutes. >> in 2016, there was an internal google meeting. you attended that meeting along with sergey brin. a video of that meeting was leaked to breitbart and camp walker lamented trump's victory, compared trump voters to extremists, and there was attempt to mange the trump win in the populist movement in
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history. i know you testified in response to my questions and mr. jordan's questions that you don't intend this time to engage in election nearing on behalf of the former vice president, but given the video evidence of senior members of your team in your presence saying that they had the intent to make the trump victory a blip, why should we believe that testimony today? >> congressman, we do not have a view on -- we respect the democratic process. we are deeply committed to it. as a company, we take pride in the information we provide to help people participate in free elections and we are deeply committed to it. >> do you remember that meeting? 2016? >> yes, i do. it was in the context of the election.
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across both sides there was a lot of opinions. and as you know, elections are kind of a polarizing moment generally in the country, and there was a lot of rhetoric about certain issues which were -- >> i understand rhetoric. i guess the question is when the senior members of your team in your presence said that they did have the intent to change the outcome in a subsequent election and then since that moment in time where we've seen all these conservative websites and conservative viewpoints censored, you can understand why people would be concerned. after your employees and top executives said in your presence that they intended to malk the trump victory a blip, what action did you take as the ceo to protect and preserve the knew trail of your platform? >> congressman, no one had a view on ever interfering with the elections or so on. but what i can tell you is we made it very clear about two years ago. we announced new community
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guidelines, orbit and google, clearly make it clear that employees obviously are free to have their political views, but none of that should ever -- they shouldn't bring that as they work on any of our products. and if we found any evidence that people are using political agenda to manipulate any of our -- >> unfortunately there's a string of events here. we had the 2016 meeting where people demonstrated intent to hurt the president. then we have the testimony different from the testimony from december where people say people can manipulate blacklists and you have the outcome where sites like bright bart and gateway pundit and others see that retreatment. it doesn't take sherlock holmes here to see what google is doing. mr. bezos, i am deeply moved by your personal story.
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i am not accusing you of someone that would traffic in hate. b but it seems you have empowered people who do. i'm talking about the southern poverty law center who can receive donations on your amazon smile platform have said the catholic family news, catholic family ministries, federation for american immigration reform, family research council, jewish defense league, and even dr. ben carson are extremists and should be treated differently. dr. carson is on the cabinet as one of the most renowned minds in america. i'm just wondering why you would place your con i if dense in a group that seems to be so out of step and seems to take main stream christian doctrine and label it as hate. >> amazon smile is a program that allows customers to
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designate a certain fraction of their purchases to go to charity that we then pay for and they can select from any one of millions of charities. and we use the southern poverty law center data to say which charities are extremist organizations. we also use the u.s. foreign office to do the same thing. >> why since they're common catholics and jewish people groups, why would you trust them? >> sir, i'm going to acknowledge this is an imperfect system -- >> no doubt. >> -- and i would like suggestions on additional sources -- >> my suggestion would be a divorce from the splc and i see i'm out of time. i yield back. >> the gentleman yields back, i recognize mr. johnson. >> thank you, mr. chairman. facebook is dominant not just in the social media market but also in its digital surveillance capabilities. in 2012, facebook had several tools that allowed it to conduct
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digital surveillance including trackers, facebook's like button, facebook log in, and a series of application programming interfaces or apis. mr. zuckerberg, these tools provide facebook with insights into its competitors websites and apps, isn't that correct? yes or no? >> congressman, i think broadly the answer to what you're saying is yes. >> okay. >> we -- every other company here do market research to understand what people are finding valuable. >> all right. okay. so, you're going beyond the scope of my question. i appreciate that answer though. mr. zuckerberg, a few days before facebook acquired instagram, a facebook vice president emailed you suggesting ways to improve facebook's, quote, competitive research, end
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quote. by building a custom model, facebook could improve its understanding of its competitors and, quote, make more bold decisions on whether they are friends or foes, end quote. mr. zuckerberg, how does facebook improve research to distinguish friends from foe? >> congressman, i'm not sure exactly what he was referring to in that email there. but he is one of the people involved in running our analytics organization. and i think it's natural that he would as part of his responsibility be focused on market research and understanding more there. >> certainly isn't it true that facebook after that conversation purchased the web analytics company in 2013 to give facebook more capability to monitor its competitors? >> congressman, i think you have the timing correct. we purchased o-navo as part of
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broader market research. >> and that would give you the capability to monitor your competitors, correct? >> congressman, it gave aggregate analytics as to what people were using and what people were finding valuable. sort of like the type of product you would get from nielsen or come source, these other third parties that provide data. >> mr. zuckerberg, that acquisition gave you non-public real time data about engagement, usage and how much time people spend on apps. and when it became public that facebook was using onnavo to conduct digital surveillance, your company got kicked out of the app store. isn't that true? >> congressman, i'm not sure i would characterize it in that way. i think -- >> o-navo did get kicked out of
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the app store, isn't that true? >> we took it out after they changed policies. >> and it was because of the use of the surveillance tools. >> congressman, i'm not sure that the policy was worded that way or that that's exactly the right characterization of it. >> okay. let me ask you this question. let me ask you this question. after onayvo was booted out of the app store, you turned to other surveillance tools such as facebook research app, correct? >> congressman, in general, yes, we do a broad variety of -- >> so, also isn't it true mr. zuckerberg that facebook paid teenager to sell their privacy by installing facebook research app? >> congressman, i'm not familiar with that, but i think it's a general practice to be able
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to -- that the companies use to have different surveys -- >> facebook -- >> -- and understand data and what preferences are. >> facebook research app got thrown out of the app store too, isn't that true? >> congressman, i'm not familiar with that. >> okay. well, over nearly a decade, mr. zuckerberg, you led a sustained effort to surveil competitors to benefit facebook. these were steps taken to abuse data, to harm competitors, and to shield facebook from competition. you tried one thing and then you got caught, made some apologies, then you did it all over again. isn't that true? >> congressman, i respectfully disagree with that characterization. i think every company engages in research to understand what their customers are enjoying so that they can learn and make
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their products better. that's what we were trying to do. that's what our analytics team was doing. i think it allows us to make our services better for people to be able to connect in a lot of different ways which is our goal. >> did you use that capability to purchase whatsapp? >> congressman, it was one of the signals that we had about whatsapp's trajectory, but we didn't need it. without that, it was pretty clear that whatsapp was a great product. >> and it was a competitor -- >> the gentleman's time has expired. i now recognize the gentleman from florida, mr. steube. >> thank you. i have a question for all four, yes or no answer. do you believe that the chinese government steals technology from u.s. companies? start with mr. cook. >> i don't know of specific
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cases where we have been stolen from by the government. >> so, you don't believe that the chinese government is stealing technology from u.s. companies, or you're just saying that not from yours? >> i'm saying i know of no case on ours where it occurred, which i can only speak to first-hand knowledge. >> do you believe that the chinese government steals technology from united states companies? >> congressman, i have no first-hand knowledge of any information stolen from google. >> mr. zuckerberg? >> congressman, i think it's well documented that the chinese government steals technology from american companies. >> thank you. mr. bezos? you're on mute. >> mr. bezos, i believe you're on mute. >> i'm sorry. i was saying i have heard many reports of that.
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i haven't seen it personally, but i've heard many reports of it. >> so, of all the different products amazon carries you haven't seen it in the products on amazon or your company or yourself? >> certainly there are knock off products if that's what you mean. there are counterfeit products and all of that. but the chinese -- the answer is the chinese government stealing technology, that's the thing i read reports of but don't have personal experience with. >> it's no secret that europe increasingly seems to have agenda of attacking large successful tech companies yet europe's approach to regulation in general and antitrust in particular seems to have been much less successful than america's approach. as you all know from direct experience, this is a country where it's possible to start a company and seerns tremendous success. do you have any recommendations on how congress can better protect u.s. firms and u.s. companies from aggression and government intervention abroad,
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not just in europe but in china as well? anybody that would like to chime in? i'll open it up to any of you. none of you have any recommendations on how congress can better protect u.s. companies like yourself? -- >> in the emails that your company produced to the committee, there's one from david wayner in 2014 where he's describing under the mergers and acquisitions advice within the company where you need to engage in a land grab. he says i hate the word land grab but that's the most convincing argument and we
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should own that. he goes on to describe market cap each year. does that refresh your recollection? yes, congressman. thanks for the opportunity to address this. and frankly correct the record because i believe what he was referring to was a question that was incoming from investors about whether we would continue to acquire different companies. i don't think that that was -- that wasn't referring to an internal strategy. it was referring to an external question that we were facing about how we would -- how investors should expect us to act going forward. and i think he was discussing the fact that as mobile phones were growing in popularity, there were a lot of new ways that people could connect and communicate that were part of this overall broader space and market around human connection and helping people stay connected and share their experiences. >> mr. zuckerberg, it seems to be both internal and external
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because then in an email from you in 2012 we see a similar sentiment expressed. you write, we can likely always just buy any competitive start ups. so, is your desire to limit competition by purchasing your competitors consistent with the message to your investors that the way you'll run your company is through digital land grabs? >> congressman, i'm not sure i agree with the characterization of how we communicated with investors. >> it's your words, mr. zuckerberg. >> but i think the broader point is that there were a lot of new ways that people can connect that were created by smartphones. >> this is about your merger and acquisition strategy. you went on to say one thing about start ups is you can often acquire them. so, i'm not interested in how people connect. i'm interested in how you acquire businesses to limit competition. >> the gentleman's time has expired but the witness may answer the question. >> congressman, in order to serve people better and help
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people connect in all the ways they would want, we innovated and built a lot of new use cases internally and acquired others. and that, i think, has been a very successful strategy at serving people well. and a lot of the companies that we've been able to acquire have done -- have gone on to reach and help connect many more people than they would have been able to on their own. >> you've grabbed a lot of land. i yield back. >> i recognize the chair of the full committee, mr. nadler, for five minutes. >> thank you, mr. chairman. mr. cook, we've heard from businesses that apple is canvassing the app store to determine whether it can extract commissions from apps that have changed their business models in response to the pandemic. businesss th businesses that relied on in person interactions have moved on and apple is looking for its
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cut. my staff has heard from some of the affected businesses. they say you're calling them up demanding your 30%. isn't this pandemic profiteering? >> we would never do that, mr. chairman. the pandemic is a tragedy, and it's hurting americans and many people all around the world. and we would never take advantage of that. i believe the cases that you're talking about are cases where something has moved to a digital service which technically does need to go through our commission model. but in both of the cases that i'm aware of, we are working with the developers. to zoom out and give you historical context on this, we entered the app store market. the cost of distributing software was 50% to 70%. so, we took the rate in half to 30% and we've held nit that same level over time or lowered it.
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it's now responsible for 2 million jobs across america, and 84% of the apps on the store are distributed for free where 100% of the proceeds go to the developer. only that 16% is subject to a commission of either 15 or 30%. >> and school is about to start around the country. millions of parents and students will attend school online. they will rely on apps to talk to teachers, tutors, and virtual learning tools. are these online learning tools next on apple's -- are they on apple's list to monetize? >> they're not, mr. chairman. we would -- we will -- we're very proud of what we've done in education. we are serving that market in a significant way and including tons of donations. and we will work with the people
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that happen to move from a physical -- move from a physical to a virtual world because of the pandemic. we've done a lot to address covid in general as a company. we've sourced and donated 30 million masks, turning our supply chain into something that would be great for america. we've designed a face shield, donated 10 million of those. we're donated significant amounts of money across the u.s. >> thank you, thank you. >> thank you. >> we've heard that apple is now trying to extract commissions from various apps that previously didn't pay you anything. you approved, we're told, the email and days later threatened to kick it out of the app store unless it figured out a way to give you a cut of revenue. the coo of base camp testified
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before our committee this year. he was concerned over apple's disty bugs over devices. he seems to sbrn right. he says apple services have required to cut apple in. but you didn't enforce your rules this way. so, would you comment on this please? >> yes, mr. chairman, i would. hey is in the store today and we're happy that they're there. i believe they have a version of their product is for free, so they're not paying anything on that. i would also say that 30% -- i hope you give me time to explain this -- or 15% is for lots of different services from programming languages to compilers to 150,000 apis. it has been an economic miracle to allow the person in their basement to start a company, a global company, and serve 175 countries in the world.
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it is amazing. likely the highest job creator in the last decade. >> i see. and you haven't changed the rules in such a way as to make apps pay when they weren't paying before. >> i know of no case where we've done that. i'm sure we've made errors before. we get 100,000 different apps submitted a week and we got 1.7 million on the store. but across that peer of time we've never raised commissions from the first day the app store went into effect back in 2008. we've only lowered thank you. i see my time is expired and i yield back. >> chairman yields back. >> thank you for the question. >> i recognize the gentleman from north dakota, mr. armstrong. >> thank you mister chairman.
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mr. pichai, google announced it would not allow third parties to buy youtube ads. that means advice on youtube are conducted only through google demand side products. google justify this change by citing privacy and user experience. my understanding is that double sided a concern that third party digital ad participants would develop user profiles based on this theory. it's also my understanding that even under the gdpr, you allow users to provide consent which would authorize this type of activity. it seems that this policy, regardless of the privacy concerns, reduced competition for demand side platforms on youtube. do you agree? >> congressman, we are always looking to improve the youtube experience. part of being able to integrate this space and what we've been able to innovate and youtube where users gets capable ads. if they find ads not to be
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relevant, they can skip pass those ads. monetizing youtube is what allows hundreds of thousands of creators earning a livelihood. many of them are small and medium businesses. we want to support that wealth and so we are focused on that. allowing this type of integration is what allows us to create that user experience. >> after google stopped allowing third parties to buy google at the at ex, google limit to the interoperability of third-party analytics on youtube. you now allow the requiring abuse of at some data. it's based on user privacy once again. other market participants may not have access to that data what it does not disappear does it? >> congressman, this is consistent with how many services be at facebook or snapchat or pinterest, you work to buy ads on their properties. >> i understand that, the excuse is privacy but the data does not disappear. you just have greater control over it right? >> congressman, it's a service
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we provide to our users. we obviously want to make sure we protect the privacy of users there. we do monetize with ads. we give users a choice of either consuming it as a subscription service or using it with ads. we've been very focused on making youtube a great platform for creators and i think the model is working well. it's really helped many small and medium businesses to invest on the platform. as well as grow their businesses. >> regardless of the intent, was the lesson competition are not? the action resulted in smaller competitors not being able to participate in placing ads on youtube. is that correct? >> congressman, we see robust choice for advertisers. there are several all internet areas. there's obviously facebook. there's amazon with their ads marketplace. there's companies like snapchat, pinterest and twitter or new competitors that have emerged. that's why we see advertising
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costs declined by 40% in the last ten years. we see dynamism in the marketplace ... >> here's my issue. there are policies that actually protect user privacy. apples policy, microsoft just came out on facial recognition policy. my concern is that your -- one were using privacy, we're trying to use privacy as a shield. what your company is really doing is using it as a cudgel to beat down the competition. when we're talking about privacy, it's a great word that people carry about, but not when it's utilized to control more of the marketplace and squeeze out smaller competitors. with that i yield the remainder of my time to mr. gaetz. >> i thank you for yielding. mr. bezos, we were cut short in our last conversation. i want to declare this up. you don't believe doctor ben carson is an extremist do you? >> no sir i don't. >> help me understand why you
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would partner with a group that labels him as someone worthy of an extremist watchlist? >> i want you to hopefully appreciate that we're trying to make it possible for people to donate millions of different charities. we need to have some source of data to use. i accept what you're saying that the u.s. foreign asset office are not perfect and i would like a better source if we could get it. that is what we use today. >> that's breaking news. it's great to hear that you do recognize the infirmities in the southern law have a lot center. i guess mr. sucker brick and mr. pichai company use them as well. mr. zuckerberg, do you believe doctor ben carson is an extremist? >> no congressman. >> so, why would you trust the people who think he is? >> congressman, i'm not aware of where we work with the
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organization that you are saying. >> gentleman's time has expired. i recognize the gentleman from maryland, mr. raskin, for five minutes. >> thank you mister chairman. i read mr. acosta years the paranoid style of american politics. i suppose it is futile to try to cure the obsessive persecution complex and victim all edgy of some of our colleagues. they should check out these top performing facebook link posts by the united states pages today or yesterday or any day for the last week. in seven out of the ten for each day, they are right wing sites. then shapiro, fox news, then been geno, who lives matter and so on. if facebook is out there trying to repress conservative to -- speech, they're doing a terrible job at it. so i don't understand the endless whining about how facebook and twitter are
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somehow discriminating against conservatives. the removal of donald trump and donald trump junior from twitter was all about their spreading disinformation. false statements about covid-19. that was an absolute public health measure which i hope all of us would endorse. we don't want anybody, including the president of the united states, spreading false information about covid-19. they essentially destroy their own case when they pick that as their cause for going after all of you. i don't understand for the life of me the line of questioning about electioneering taking place by some of your companies. if you are opposed by electioneering by corporations, as i am, and opposed to citizens united, then you have no problem. citizens united is what gave
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corporations the power to go out and spend money. if you don't like the way some companies are spending money, then either start your own company or tell them what is wrong with it. but the idea that electioneering is something you are -- opposed to strikes me is something that is completely inconsistent with the history and facts. i want to go to mr. cook if we could. first, a quick question. are any of your companies benefit corporations? that is that something you have considered doing? as any of you considered becoming a benefit corporation? i will take your silence as no. mr. cook, i'm hung up on this 30% question that several members have talked to you about. you say sometimes it's 15%, sometimes it's 30%, can you explain when it's 15 and when it's 30 and why it's 15 sometimes and whites 30 others? >> sure. thank you for the question congressman.
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84% of the time, it's zero. 16% of the time it's 15 or 30. it's 15 if it's in the second year of a subscription. >> so you just graduate from your first year, you are taking notice essentially. the second year it's 15 and it's 30 after the? is that right? >> no. if it's a subscription product, it's 30% in the first year ended in drops 15% and the second year and every year thereafter. >> i got you. okay. what troubles me is what one business woman told me when i was looking at this. she said i pay around 25% of my income to uncle sam, to the government. then, i pay 30% of my income to apple. so i get half of it and it's very hard to make ends meet. i just wonder -- look, all of you are in
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business and tremendously successful at what you do. obviously, this model has worked for you. but the question is does this model actually squeeze out the next generation of entrepreneurs? and is it an unjust arrangement because you are the 10,000 pound gorilla and they are just trying to get started? >> i don't think so. in fact, keep in mind we've gone from 500 apps to 1.7 million. so there's a lot of apps on the store and a lot of people are making a very good living from it. >> you've said that. forgive me for interrupting, what you said that several times. that, to me, might just underscore the monopoly nature of your business. that everyone needs to go through you. there's really no alternative. i don't blame you for taking them all, but that doesn't mean that the terms being dictated are in fact fair terms. so, how would you defend that bargain substantively? >> whether you look at it from a customer point of view or a developer point of view, there
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are enormous choices out there. if you are a developer, you can write for android. you can write for windows. you can write for xbox or playstation. if you are a customer and you don't like the setup, the curated experience of the app store, you can buy a samsung. >> i appreciate that. forgive me for cutting you off again. i have a final question for mr. zuckerberg. you spend a lot of take your time speaking to our conservative colleagues who had this persecution complex that you are somehow going after them. will you have time to meet with this broad coalition of civil rights groups that are engaged in a boycott because of what they think is the proliferation of hate speech and holocaust revisionist and other affiliated topics on facebook? >> congressman, yes. i've already taken the time to meet with them. i think the topics they are pushing on are important on a lot of the goals we agree. these are issues around
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fighting hate that we have focused on for years. we are committed to continuing to improve the way our company works and just continually getting better on these issues. >> i appreciate that. >> thank you mr. zuckerberg. i now recognize the gentleman from ohio, mr. jordan, for five minutes. >> thank you. mr. cook, is the cancel culture mob dangerous? >> it's something i'm not all the way up to speed on. if you are talking about where someone with a different point of view talks and they are canceled, i don't think that's good. i think it's good for people to hear different points of view and decide for themselves. >> i agree with that. i want to reference a letter. barry weiss, who resigned as an editor from the new york times, wrote a letter explaining why she resigned. i will read three sentences for all of you. she says, first of all my own
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forays into wrong thick made me the subject of constant bullying by my colleagues who disagreed with my views. she later says, everyone lives in fear of the digital thunder dome. the online venomous excuse as long as it is directed at the proper targets. the targets are not only conservative. miss vice is actually center left. she's not conservative. the targets are anyone who disagrees with the mob. are the rest of you concerned about the cancel culture mob and what it is up to? mr. pichai? >> congressman, i couldn't hear very well for the moment. we build platforms which allow for freedom of expression. we take pride in the fact that across our platforms, including youtube, there are more diverse voices than ever before. it is something ... >> that's fun. i'm just concerned about it. again, i'm not just concerned because conservatives gets attacked, i'm concerned that
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anyone gets attacked for expressing viewpoint. i thought we had a first amendment and yet, they constantly get attacked. how about you mr. zuckerberg? >> yes congressman. i believe strongly in free expression. giving up people a voice is an important part of what our services do. i'm very worried about some of the forces of illiberalism that i see in this country that are pushing against free expression. i think that this is one of the fundamental democratic traditions that we have in our country. it is how we make progress over the long term on a number of issues. our company is committed to doing what we can to protect mr. -- peoples voice. >> thank you mr. zuckerberg. mr. bezos? >> yes, sir. i'm concerned in general about that. i find a little discouraging that it appears to me that social media is a nuanced destruction machine. i don't think that is helpful for a democracy. >> do you agree with the terms
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she used? digital thunder dome? >> i see that, yes. >> i see it to. i guess my point is, you are for pretty important guys leading four of the most important companies on the planet. it would short be helpful if you spoke out against this. mr. cook, there was a 1984 super bowl ad and black and white that had this big brother type figure as the narrator saying over the screen to the workers, our unification of thoughts is more powerful weapon on than any fleet or army on the earth. it seems to be straight out of the soviet union. then you see a women coming in and smashing the screen. busting the group think. busting the mob thank.
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do you remember that ad mr. cook? >> i remember it very well. it was apple versus ibm at the time. >> yes. but the point was, mob thank, cancel culture, group thank, is not what this country is about. we are seeing it play out every single -- just take the sports world for goodness sake. in the last few weeks, drew brees had to -- bowed to the mob because he simply suggested you should stand for the anthem. there is a football coach at oklahoma state who wore the wrong t-shirt fishing with his boys. he got in all kinds of trouble. james harden gets attacked for supporting the police. why don't we just let the first amendment work? that is all we are asking. you are four individuals who have so much influence, it would your help if you are out there criticizing what the cancel culture mob is doing to this country. people see it every single day.
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i hope you will do it. you all said you disagree with it, i hope you will really speak out against it and be fair. with all viewpoints. i yield back. >> the gentleman yields back. i recognize the general -- gentlelady from washington. >> thank you mister chairman. mr. pichai, i direct my questions to you. many of us feel a deep urgency to protect independent journalism. i wanted to talk a little bit about ad revenue and independent journalism. google makes most of its revenue through selling advertising and goggles advertising exchange is a quote, realtime marketplace to selling display advertising space. correct? >> yes congress woman, that's correct. >> over 2 million websites including newspapers use that exchange. correct? >> we are very proud to support publishers. we don't know the exact numbers, but yes that seems correct. >> that's an estimate put
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forward -- forth by a tech expert. your own website says you have access to over 2 million sites. what is google's share of the ad exchange market? >> congressman, i'm not exact are familiar. i've seen various reports. we are popular choice. >> great, let me put it up for you. if you look at the screen you will see that 50 to 60% according to online platforms and digital advertising market study that was released. in order to exchange -- websites and advertisers go through a middleman like google ads. if you look at the slide, you can see that the share of this by side market that google has is 50 to 90% according to the same study. i want to simplify how these exchanges work.
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let's say in seattle, a mom and pop business wants to buy online at space in the seattle times. the company would need to go to a middleman likable adds, which would then vivid for a space on an ad exchange. the problem is that google controls all of the entities. so it's running the marketplace, it's acting on the by side and it's acting on the sill side at the same time which is a major contract -- conflict of interest. it allows you to set rates very low as a buyer of at space for newspapers, depriving them of their ad revenue. then it also allows you to sell high to small businesses who are dependent on advertising on your platform. it sounds a bit like a stock market, except unlike a stock market, there's no regulation on your ad exchange market. if there were regulation, it would actually prohibit insider trading. that means the broker can't use the data in the broker division to buy and sell for their own
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interests. instead, brokers have to serve the clients. does google have a similar obligation to serve its clients? the businesses that are selling and buying at space. >> congresswoman, if i could explain this for a minute. we paid over 14 billion dollars to publishers. we are deeply committed to journalism. in this area, on an average, we pay about 69% of the revenue went publishers use goggles side websites. it's a low business margin for us. we do it because we want to help support publishers. >> i understand that, what i'm trying to get at is that when any company controls both the buy and sell side. i worked at long -- wall street long ago. this ad exchange is essentially the same thing. without accountability, it isn't meaningful to just care about the newspapers. we are seeing them die everywhere and ad revenue is a
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big reason. let me put up a graphic that shows that goggles ad revenues increasingly coming from ads on google owned sites and less from other websites. can you explain the trend? >> i can't quite see if this is net revenue or gross revenue. when it comes to non google properties, we share the majority of revenue back to publishers. on our own properties, we have the inventory. i would need to understand more, i just quickly looked at it. >> we can send it to you and make sure you have it. google has not made its search traffic volumes public and bears so there's no way for us to know exactly what's happening. there is no way for businesses to verify whether they have been treated fairly or left behind in favor of google owned companies. is google staring advertising revenue to google search? >> congresswoman, users on
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google search, that's where our source of revenue comes from. we work hard to earn their trust. we know competition for information is just a click away. >> thank you mister pichai. i want to make the point that independent journalism is incredibly necessary for our democracy and we want to do what we can to protect it. i want to ask one last question of mr. zuckerberg. over 1100 companies and organizations pulled their advertising business from facebook as part of the stock meat for profit campaign to protest the spread of hate speech and disinformation. but you at a staff meeting earlier this month told employees you are not going to change your policies or approach because of a threat to any percent of your revenue. my guess is all these advertisers will be back on the platform soon enough. mr. zuckerberg, are you so big that you don't care how you are impacted by a major boycott of 1100 advertisers?
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>> no congresswoman. of course we care. but, we're also not going to set our content policies because of advertisers. i think that would be the wrong thing for us to do. we've cared about issues like finding hate speech for a long time and we've invested billions of dollars. we have tens of thousands of content reviewers. we built a systems that proactively identify the majority, were nine at 89% of the hate speech removed before it is even reported to us. we will continue getting better at that. i think the results we put up will be recognized by people since i believe they are industry leading. i think our advertising is also the most effective for many small businesses. >> thank you mr. zuckerberg, my time has expired. i would just say that i know you commissioned your own civil rights audit. i don't think that you implemented all those
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recommendations yet. i hope you will move quickly to implement those. this is a critical time as we've watched the body of john lewis leave us here in the capital, that we focus on civil rights. thank you mister chairman, i yield back. >> before i call on the next witness, i want to recognize mr. pichai who i think wants to make a correction for the hearing. >>, there was a question earlier about information with respect to china. i just wanted to acknowledge on record that in 2009, we had a well publicized cyberattack which originated from their. i wanted to correct that. >> thank you mister pichai, the record will reflect that. i recognize the gentle lady from pennsylvania for five minutes. >> thank you mister chairman. in march 2020, amazon announced it would start delaying shipments of non essential products in order to better serve customers and meet needs
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while helping to ensure the safety of their warehouse workers. in practice, however, it appears that this policy was applied selectively as amazon continue to designate its own products as essential even as it delayed competing products from third-party sellers. essential items were supposed to include medical supplies, household staples, high demand products and many factors were considered were used when determining eligibility for being essential. we've had several people report that amazon continued to ship nonessential items like hammocks, fish tanks, floaty etc. mr. bezos, were amazon devices like fire tv, echo speakers and ringing doorbell designated as essential during the pandemic? >> i don't know the answer to that question. what i can tell you is that we had -- there was no playbook for this. we moved very quickly. demand went through the roof.
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it was like having holiday selling season but in march. we had to make a lot of decisions very rapidly. our goal was to limit it to essential supplies, but i'm sure we did not do that perfectly. >> okay. i know the ring doorbell has two competing products including our low and you feet. do you know if they were designated as essential? i do not. >> okay. are you able to testify to congress today whether amazon's profit factor was a factor in giving essential classification distinction? >> no. not to my knowledge. we were working to two objectives. one was to get essential products to customers and the second was to keep our frontline employees safe. we did a tremendous amount of work in both categories. that's what we were focused on. we were not focused on profitability at that time. >> pushing out the elusive clorox wipes i guess.
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at any rate, moving along, let's talk about the fees amazon charges sellers. according to a recent report, seller fees netted amazon almost 60 billion in 2019. nearly double the 35 billion in revenue from a double u.s., amazon's massive cloud computing division. five years ago, amazon took an average of 19% of each sale made by third-party on its site. today, amazon keeps an average of 30%. doesn't amazon's ability to hike those fees so steeply suggest that amazon enjoys market power over those sellers? >> no, i don't believe so congresswoman. when you see it go from 19 to 30%, it's that more sellers are taking advantage of our incremental services that we offer. but today, 60% of sellers are going through third-party
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sellers up from zero 20 years ago. >> right, i think a little more concerning is the 11% height. since 2014, amazon's revenue from cellar fees has grown almost twice as fast as its overall sales. seller fees now account for 21% of amazon's total revenue. mr. bezos, aren't seller fees now effectively subsidizing amazon retail division? >> congresswoman, i don't believe so. when you see fees going up, what's really happening is that sellers are choosing to use more of our services that we make available. they are, you know, previously they were shipping their own products. they would've had cost doing that. buying transportation services to the customer through the postal service or through ups or whoever it would be. >> let's talk about the fulfillment centers. right, okay.
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we've got fulfillment by amazon and a year ago we asked whether a merchant who is enrolled in fulfillment by amazon is a factor in if they can be awarded the by box. at that time, amazon said no. but the evidence is indicating, and your own documents are showing, that being enrolled in that program is a major factor and effectively forces sellers to pay for fulfilments services from amazon if they want to make sales. mr. bezos, as amazon's by box algorithm every favored third-party sellers who by fulfillment services from amazon over other sellers? >> i think, directly or indirectly i'm not sure, but indirectly i think the buy box disfavor products which can be shipped with prime. especially if you're a prime member, the buy boxes trying to pick the offer. if we have multiple offers from multiple sellers for the same item, the customer wants to buy that item.
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the buy box tries to pick the offer that the customer we predicted would most like. if you are a prime member, and includes if the item is eligible for prime. >> thank you mr. bezos. i think my time has expired. >> before i recognize our last two colleagues, i think mr. zuckerberg would like to clarify something for the record as well. >> chairman, thank you. in response to congressman johnson's question, i said i was not familiar with the facebook research app. i wasn't familiar with the name for it, but i want to be clear that i do recall that we used a app for research that has since been discontinued. i would be happy to follow up with his staff on any more details than he would like on that. >> thank you mr. zuckerberg. the records shall so reflected. i recognize the debt gentle men from colorado. >> thank you chairman. i want to direct a few questions to you mr. zuckerberg. i want to talk about the app store and at development.
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taking a step back, my understanding from your testimony is that apple has to operate by the same rules that the app developers operate by in terms of being able to access the app store. is that correct? >> we have 60 apps on the app store. they go through the same rules that the 1.7 million do. >> okay. here is why i asked the question. my understanding is the app store review guidelines tell app developers not to submit copycat apps. is that correct? >> i'm not totally familiar, but i believe that's the case because we were getting a number of apps that were essentially the same thing. a sort of cookie cutter. >> i could represent to you that we've reviewed the guidelines and they say that app developers should have original ideas, that copycat ideas are not fair and that apples customers do not want
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those. on the other hand, the app developer agreement which you require every developer to agree to does give apple the right to coffee other apps. the question is why one rule for the developers they compete with you and the opposite rule for apple? >> congressman, i'm not familiar with that. i can follow up with your office on it. >> i would appreciate if you could follow up with our office. my understanding is that the app developer agreement explicitly says that apple can use any information that inactive l upper the -- provides for any purpose. obviously, we have complaints from a number of app developers who have testified before our committee. we heard from a company called tile which said apple had access to confidential information about the apps distributed by the app store. given that, juxtaposed against the language in the exclusive
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agreement, you can understand why we would have concerns about anti competitive conduct. >> congressman, we run the app store to help developers, not hurt them. we respect innovation. it's what our company is built on. we would never steal somebody's ip. but i will follow up with your office on more detail on this. >> i appreciate that mr. cook. i think to the extent that apple is going to commit, i would ask mr. pichai similar questioning because this is consistent across several platforms, within the developer agreement which says you have access to the data which will not use it to replicate your own map. that would certainly, in my view, the reflection of a step away from any type of anti competitive conduct. it sounds like you'll follow up and we can learn more with respect to that issue.
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mr. pichai, similarly, there was an article just today or yesterday rather from the verge. the title is google reportedly keeps tabs on usage of rival android apps to develop competitors. i will quote from the article. google said that the data doesn't give information about how people behave while they are using individual apps, but it wouldn't say whether it had been used to develop competing apps. first, i take it you would confirm that google does have access to confidential information or competitive sensitive information on android app devices. >> congressman, if i can clarify this. today we have an api which is available for developers as long as users consent. this gives us system health metrics. this is how we can launch digital features on android. this is how we understand which apps are using a battery. it will show for crashing or
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quality control or digital well-being or better usage. this data is available through a public api and other developers can use it as long as the users to give consent to it. >> mr. pichai i just want to clarify. the article refers to this data as sensitive data about other apps including how often they are open and for how long they are used. i'm not asking how you use that information, i'm just asking whether or not the article is correct. that you have access to that data. >> yes, with user consent and the apis, we do. it's critical for us to have access to that so we can maintain, this is how we understand and improve resources, use of applications ... >> understood. my time is limited. i want to get to this core question. given that google does have access to that data, does google use that data to develop competing apps? if your answer is no, will
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google commit to making the necessary changes within its android developer app agreements to ensure that developers have that sense of clarity? that, in fact, the data will not be used for google to develop a competing application. >> congressman, we look at trans and we published a number of results in the booster. we try to understand what's happening in the market in various ways. i appreciate your concern about making sure there is clarity in this area and we will continue to investigate. >> i want to follow very quickly, mister chairman if you're willing. i want you to answer that fundamental question. does google use that information to develop competing apps? i understand the purposes you've described in terms of how you use the information.
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i'm asking if one of those is to develop competing apps? >> the gentleman's time has expired but the witness may answer the question. >> congressman, because we try to understand what is going on in the market and we are aware of popularity of apps, i want to be accurate and my answer. but in general, the primary use of the data is to improve the health of android. any data that we get, we have user consent for it and we make it available through an api to other developers as well. >> the gentleman's time has expired. i now recognize the gentlelady from georgia. >> thank you mister chairman. gentlemen, thank you so much for spending so much of your time with us today. we really appreciate it. many of you have mentioned john lewis today. i know all my colleagues and i will burn carry on his fight for equality. can you commit to ensuring racial and gender equity major
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companies including black leadership and women in your senior ranks? just a yes or no answer please. mr. zuckerberg? >> yes. >> mr. cook? >> yes, i am very personally committed. >> thank you. mr. bezos? >> absolutely, yes. >> thank you. mr. pichai? >> u.s.. we've made public commitments to this regard. >> thanks very much. mr. zuckerberg, in 2004 there were dozens of social media companies. facebook distinguished itself from competitors by focusing specifically on privacy. you have a short clear privacy policy that's just 950 words. it made a promise to users, and i quote, we do not and will not use cookies to collect private information from any user. you said we will not. that's a commitment about the future and that was 2004. mr. zuckerberg, today, does facebook use cookies to collect
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private information on users? >> congresswoman, my understanding to that is no. we are not using cookies to collect private information about people who use our services. i believe we have upheld that commitment. >> thank you. mr. zuckerberg, do you think your company would be as successful if it had started with today's cookies policy in place? >> congresswoman, i'm not sure exactly what you are referring to. in general, cookies is not a big part of how we're collecting information. we primarily use them to make sure that someone can stay locked in on the web. we use them, to some degree, for security to make sure that you don't have someone trying to log in under a lot of different accounts for one computer or something like that. >> mr. zuckerberg, once again, you do not use cookies? >> congresswoman, we do use
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cookies. yes, we do use cookies. >> mr. zuckerberg, the bottom line here is that you broke a commitment to your users. who can say if you may or may not do that again in the future? the reality is that facebook's marketplace power grew and facebook sacrificed its users policy. mr. bezos, my colleagues have touched on counterfeit goods and i share their concerns very deeply. i'm also concerned about stolen goods. mr. bezos, are stolen goods sold on amazon? >> congresswoman, not to my knowledge. more -- there is more than 1 million sellers, so i'm sure there have been stolen goods at times. >> really mr. bezos? there is not? >> i'm sorry? >> that surprises me. >> with over 1 million sellers,
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i'm sure that it has happened. but certainly, i don't think it's a large part of what we are selling. >> so basically mr. bezos you're saying yes. >> i guess so. >> i want to ask you about information that you require from sellers to prevent the sale of stone goods. do you require a real name and address, yes or no? >> for sellers? >> once again, do you require a real name and address from sellers? >> i believe we do. let me get back to your office with -- i'd rather give you the act accurate answer. i think we do. >> yes you do require a name and address. do you require a phone number? yes or no. >> i don't know if it's required. i think we often have it, but i don't know. >> so briefly, how do you verify that each of these pieces of information is accurate? >> i don't know the answer to
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your question. >> so, you don't know how many people work on verifying seller verification before the seller is allowed to sell on amazon? >> no congresswoman, i don't. >> i will ask you sir, will you commit to reporting all reports of counterfeit goods to law enforcement? will you track large-scale vendors organ -- engaged in organized retail crime? >> to the degree that we are aware of it, we will certainly pursue it. in fact ... >> sir, can you make a blanket commitment? can you just make a blanket commitment? whether you are aware of it or not. >> a blanket commitment to what? i'm sorry, congresswoman. >> reporting all sales of counterfeit goods to law enforcement and victims to trace large-scale offenders involved in retail crime? >> if we're aware of it, i see no reason why we would not
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report it. we want the corrected authorities to be involved. >> thank you so much. i yield back my time. >> thank you gentlewoman. i want to thank the witnesses for our testimony today and colleagues on both sides of the aisle. we also want to acknowledge the extraordinary work of our team led by slate bond, lena khan, amanda lewis, phil baron brooke, and a lion heart and joe venue i have done an extraordinary job throughout this investigation and preparation for the hearing today. today, we had the opportunity to hear from the decision-makers from for the most powerful companies in the world. this hearing has made one fact clear to me, these companies as they exist today have a monopoly power. some need to be broken up, only to be properly regulated and held accountable. we need to ensure the anti trust laws first written more than a century go work and the digital age. when these laws were written, monopolistic were men named rockefeller and trying to get. their control of the marketplace allowed them to do whatever it took to crush independent businesses and expand their own power.
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the names have changed, but the story is the same. today, the men are named zuckerberg, koch pichai and bezos. once again, their control of the marketplace allows them to do whatever it takes to crush independent business and expand their own power. this must end. this subcommittee will next published a report on the findings of our investigation. we will propose solutions to the promise before us. as a great american supreme court luis brandeis once said, we must make our choice. we may have democracy or we may have wealth concentrated in the hands of a few, but we can't have both. this concludes today's hearing. thank you again to our witnesses for attending. without objection, all members will have five legislative days to submit additional written questions for the witnesses or additional materials for the record. without objection, this hearing is adjourned.
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creative disadvantage to companies trying to enter the marketplace. they have so much market power and they engage in strategies to keep it by acquiring their competitors in clear violation of antitrust laws. >> do you think the response is satisfactory? did they give answers that helped? >> i think they acknowledged some of the behavior that is a tremendous concern. >> did you learn anything new today? >> yes. i'm sure i learned a lot. i have to go back through my notes.
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most of what we learned today were questions to confirm what we learned during the course of the investigation, both by way of documents that we reviewed, witnesses that we've interviewed, evidence that's been collected from the stakeholders. we have experts in the field. i think that acknowledgment of the anti competitive practices at the heart of this investigation was important to hear from some of the ceos of the four major companies. >> you said the report will come out in august? >> yes. late august or early september. >> what will you focus on in the report? >> we are looking at the market data of some of these large platforms. the behavior they engage in two delay competitors. their acquisition strategy to acquire competitors. maintain or enlarge their dominance in the marketplace. things which harm consumers, workers, innovation.
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labor in people to enter the marketplace. all of the things that competition policy is designed to promote and his being >> here's a look at our live coverage thursday. on c-span, the house is back at 9:00 a.m. eastern for general speeches followed by legislative business at 10:00. members are working on a 2020 one spending package that covers several departments, including defense, commerce, health and human services, transportation, and housing. on c-span two, the senate returns at 10:00 a.m. eastern to consider the nomination of derek can to be deputy white house budget director. a vote scheduled for 1:30. on c-span3, secretary of state mike pompeo testifies before the senate foreign relations committee about the state departments 2021 budget request followed by the funeral service for the late congressman john lewis in atlanta.
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♪ c-span has unfiltered coverage of congress, the white house, the supreme court, and public policy events. you can watch all of c-span's public affairs programming on television, online, or listen on our free radio app. and be part of the national conversation through c-span's daily washington journal programs or through our social media feeds. c-span, created by american cable television companies as a public service and brought to you today by your television provider. ♪ house speaker nancy pelosi and senate minority leader chuck schumer spoke to reporters at the capital on negotiations taking place on coronavirus relief legislation. speaker pelosi: good afternoon.


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