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tv   Facebook Google Executives Discuss Competition Privacy  CSPAN  September 22, 2021 2:59am-5:44am EDT

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hearing. executives from facebook and google are discussing competition and privacy today. you're watching live coverage on c-span3. >> good afternoon. before we begin, the chair of the committee can only be here for the first few minutes. it was very important to have him here. and as we would give senator
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grassley the same due i ask senator durbin if he could say a few words before i begin. >> thank you very much, senator klobuchar, and to our witnesses and my colleague senator lee for giving me this opportunity to say a few opening words about the scope and unrestricted nature of big data collection. in 2018 we had an extraordinary hearing with the head of facebook, mr. zuckerberg. he faced 42 senators who had questions for him because of overlapping jurisdiction of the committees. it was an ordeal that went on for some period of time. i was somewhere in the middle of the pack. the question i asked him was, very basic. would you mind sharing with us the name of the hotel you stayed in last night? and after a kind of embarrassed and awkward pause he said, no. i said, well, would you mind sharing with us the e-mails that you've sent out in the last 24 hours and who you sent them to? he said, no. i said, really isn't that the issue we're getting down to?
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privacy? and my right to say there is a line i'm going to draw and you can't cross it legally to invade my space and my privacy? and in today's world information is economic power. companies are using it to make more money. i share the concerns of my colleagues that have enabled the collection of too much information by a selected few giant companies. there could be benefits and efficiencies to big data but there are costs and impact. these costs and impact affect everyone including our children. i introduced the clean slate for kids online act because i was concerned with the amount of data collected and stored on our children and grandchildren. every click a child makes on the internet leaves a trail of personal data that can last a lifetime. companies that market products toward children are accumulating massive amounts of personal data and the kids never had the chance to even consider giving informed consent. my bill would give every american an enforceable legal
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right to demand internet companies delete all personal information collected about a person when he or she was under the age of 13. kids deserve the right to request a clean slate once they've grown up and are old enough to appreciate the consequences of data collection. this bill gives them a basic privacy protection. it is one aspect of data collection that can be manipulated and impacted on consumers and competition. today's hearing is an important part of that effort to shine light on big data collectors. i thank senator klobuchar and senator lee. >> thank you very much, chairman durbin. i wanted to make clear that this hearing is one of a series of hearings senator lee and i are conducting our bipartisan review of america's competition issues. i thank my staff as well as senator lee and his staff for helping to plan the hearing. today we are going to be talking about how competition is affected and threatened by the use of big data.
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big data is at the core of our modern economy as senator durbin so well pointed out powering targeted advertising and driving artificial intelligence to select what products and services we are shown online and increasingly offline as well. in this hearing we'll explore the companies that control the data, the state of competition and barriers to entry, and the effects of big data on consumers, choices, and privacy. now, i'd like to be clear about what we mean when we say big data. technology companies such as google, facebook, and amazon collect an enormous amount of information as senator durbin pointed out about our daily activities in real time. they know what we buy, who our friends are, where we live, work, and travel, and more. in fact, their very business models were set up around getting that information and then using it to profit. through services such as google's g mail and facebook's
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instagram those services are offered to us for free, these companies and advertisers use the data they collect about us to sell to other companies. so in the end, you can't get around the fact, we are the product. we are the product that makes the companies money. big tech companies are not the only ones keeping tabs on all of us. data brokers including kineso and its sister company axiom also buy. >> process, and sell massive amounts of personal information about consumers. they've actually been doing it since before we even knew what the internet was. they collect information from the department of motor vehicles, public records, our grocery store loyalty cards, and even other data brokers. today they also buy our browsing histories and guess how much money we make and what religion we practice. this data has immense competitive value. and the way it is collected and
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used has important impacts on consumers. i'll give you an example. the simple act of a consumer visiting a utility company's website to pay a monthly gas bill allowed dozens of companies to profit off of her for the most part without her knowledge. facebook and google are likely to know about that consumer paying her bill even though they had nothing to do with the transaction. if the gas company runs advertisements on facebook as many do, facebook would have trackers embedded on the gas company website. and if the consumer uses the world's most popular web browser, chrome google, would know what websites she visited. both companies collect and analyze this kind of information building a detailed profile of the consumer and giving advertisers access to her online for a price of course. but not something she gets paid. at the same time data brokers like axiom are buying and selling data from utility
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providers so they also potentially know she paid her gas bill. they pair that information with her other purchasing habits, location data, financial information, family details, and their guesses about her race and gender. they sell this kind of information to governments, advertisers, health care companies, and others. just a few years ago, axiom had a partnership with facebook to combine their data for advertisers and share the profits. at that time facebook would have supplied the consumers online activities and axiom would have provided her offline activities. advertisers could use them both to show her ads. facebook ended the program in 2018, raising questions about whether massive technology companies now have so much data that they don't need to buy from data brokers. in today's hearing we will discuss how this kind of control over enormous data affects
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competition. while data driven targeting can filter out things we don't want, show us products that might be of interest, and help some small businesses reach new customers, it also functions as a gatekeeper to important services and opportunities. and so we talk a lot in this space as senator durbin did about the privacy concerns. and obviously there are big concerns about that. i've been a long time advocate for privacy legislation, federal privacy legislation. i think the time has long come and i know we are looking at focusing some resources into these privacy issues in the bill that's currently debated in the senate. we also have to look at another piece of this and that is that there are real threats to fair competition from these massive data sets and the artificial intelligence inferences these companies make based on them. for example, after years of complaints and a federal lawsuit facebook is reportedly still disproportionately showing job ads for mechanics to men and for
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preschool nurses to women. that distorts labor markets and it doesn't help us get to where we need to be to be able to recruit people for these jobs. we also see the control that big data has serious implications for healthy competitive market places. data can be a barrier to entry unless you have a lot of it you may not be able to reach consumers successfully. big data allows you to target ads, create algorithms that others who might want to be entering the market can't do if they don't also have the data. it can be another way the powerful internet gatekeepers regain control of how much small business reaches customers and outside profits from that control. the impact of big data should also play an important role in merger analysis. as dominant digital platforms try to acquire other companies with massive troevs of consumer data the antitrust agencies must place greater emphasis on
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determining the competitive impact of obtaining even more data through mergers. this is why i talk about that our laws have to be as sophisticated as the markets we operate in today. we all want opportunities for new and innovative companies to emerge and new markets to develop. when big data inhibits competition by allowing those who have it to block access to markets for those who do not, we need to step in and fix it. this means enforcing our existing antitrust laws to their fullest extent to protect competition and means updating our antitrust laws for the modern economy just as we've done centuries past. it is like every 50 years or so we do a major update. the time has long passed for today's tech world. my bill, competition, and antitrust law enforcement and reform act would do so by updating the legal standard to prohibit harmful mergers and anticompetitive conduct, shifting the burden to dominant companies to prove that their
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acquisitions and most significantly here their exclusionary conduct doesn't threaten competition. we also have to make sure that our antitrust enforcers have the resources to do their jobs. they can't take on the biggest companies and some of the most complex conduct the world has ever seen with duct tape and band-aids. senator grassley and i with the support of this committee got our bill through to update merger fees which will bring in over a hundred million dollars for both agencies. it has passed the senate. we are awaiting action in the house and have every reason to believe we'll get it done. but there is more we can do not only in the reconciliation bill before us but in the year end budget to make sure these agencies have what they need. we also need competition reform specifically targeted at tech. these are things like issues of interop rablty. we've been talking about app stores recently, a major bill on that bipartisan that's been introduced as well as bills targeting discriminatory conduct
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with tech companies. as we explore a path forward we see the dynamics of data mining are already changing. in recent months apple rolled out an update that lets iphone and ipad users decide whether they want to be tracked online by facebook and other apps. that was a major good change. what happened? what do we know so far? early reports indicate consumers have overwhelmingly opted out of being tracked. more than 75%, senator lee, decided not to be tracked on when they posed the simple, straight forward question. as we push for increased consumer privacy we must make sure that monopolists don't fool us into handing over the data to them at the expense of competition. we must control monopolies and protect consumer data. we can do both at once but i don't want us to not realize
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this brave new world we are in where having the data at all completely advantages certain companies who are the gatekeepers and makes it much more difficult to have a competitive market. i will now turn it over to ranking member lee. thank you. >> thank you, chairwoman klobuchar. i like the band-aids and duct tape analogy. a friend used to say you have a spool of bailing wire, roll of duct tape, and pair of vice grips you can fix anything. i'm sure he wasn't talking about antitrust law. >> maybe not this. but thank you. >> i think the title of today's hearing is an apt one. as big data does itself by its very nature present big questions although the answers might not always be what we expect. on the one hand, data is increasingly valuable. it is often essential to developing and improving
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technologies that will power our economy through the rest of the 21st century. these technologies obviously have a bearing on consumer markets and retail markets. they also make enormous contributions to national security and defense and likely influence global strategic thinking in countless ways. at the same time, as more and more data about us is collected, the risks of unauthorized disclosure increase considerably. the more valuable and useful our data becomes the more companies will do to obtain it. and the more we can start to expect more intrusions into our privacy. privacy, too, can be weaponized to entrench market incumbents and provide them with a convenient pretext for excluding competition. in some cases evading it all
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together. i see several key considerations going forward. first is the value of our data. viewing user data as a form of payment for online services is no longer just a theory. it is how the companies, themselves, and how many antitrust enforcers view the market. it's time for lawmakers and for the public to catch up. we need to reframe our understanding and our expectations of supposedly free, online services to realize that they're not in fact free at all. but they come at a cost. a cost that is often opaque, unstable, and significantly greater than we may realize. the second consideration, which flows naturally from the first, is the need to reinforce our ownership and our control over our data. when we recognize the value of the data that we provide for
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companies like google and facebook in exchange for their services and realize the massive imbalance and bargaining power that consumers had up until this point, it should compel us to take greater care that our data is truly ours. that we have the ability to meaningfully consent to its use. and to revoke that consent. each of these will help to promote competition and markets that rely heavily on data by forcing companies to compete for the quality of services offered in exchange for our data and for the right to continuousing our -- continue using our data. it is often claimed better data mean better services but that is dependent on how the data are put to use. intrusions on our privacy are an obvious threat to quality but so, too, are the more insidious threats like those uncovered recently by "the wall street journal" about facebook.
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it may be that the most pressing question when it comes to data access and aggregation is not whether it is entrenching monopolies but whether it is leading big tech firms to act with flagrant disregard for the effects of their business on society at large. finally, we should be reticent to immediately embrace concerns that focus merely on the bigness of data access or aggregation. data is not a finite resource. it's constantly being generated by innumerable sources. no one company could likely ever control all data necessary to its or a competitive business. moreover, punishing companies for obtaining the data sets necessary to achieve economies of scale and scope smacks of penalizing success. it is not something we should be doing. in the name of tearing down all barriers to entry will we next
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demand that market incumbents share trade secrets, expertise, and intellectual property with competitors? all of these questions and more should make for a deeply interesting and informative discussion both at today's hearing and in the years to come. i look forward to it. thank you, madame chairwoman. >> thank you very much. i'll introduce our witnesses now. some are remote. some are here with us. steve satterfield, a vice president on the public policy team at facebook. he leads the team responsible for developing and advocating for the company's positions on privacy and data related regulations. prior to joining facebook, he worked at covington & burling as a privacy lawyer. markham erickson, leads google's centers of excellence, a global team of subject matter experts focused on the application of law and policy with respect to technology and the internet. prior to joining google, mr.
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erickson was a partner at stepto & johnson. sheila klokauser the digital chief responsibility and public policy officer at ipg kineso responsible for leading the global data policy and digital responsibility strategies at the company. she previously worked at the sister company, as the public policy executive. she also served as staff assistant here in the united states senate. i always like to add that. an author and podcaster with the global guerrilla's report, alumnus of the united states air force academy and yale university. he previously served in uniform as a pilot and with the special forces. he is also the author of the book "brave new war." charlotte slaiman has been with
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us in the past the director at public knowledge a nonprofit dedicated to promoting freedom of expression and open interfillet and access to affordable communications. prior to joining public knowledge she served as an attorney with the ftc and here in the senate as a legislative aide. we thank you. if the witnesses could please stand and raise your right hands. including our remote witnesses. do you swear that the testimony o you will give before the subcommittee shall be the truth, the whole truth, and nothing but the truth, so help you god? >> i do. >> thank you. you may be seated. i will now recognize the witnesses for five minutes of testimony each. why don't we begin with you, mr. satterfield? thank you. >> thank you. chairwoman klobuchar, ranking member lee, and members of the subcommittee, good afternoon and thank you for the opportunity to be here today.
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i'm vice president of privacy and public policy at facebook where i focus on developing and sharing the company's perspectives on data regulation globally. i appreciate the subcommittee's interest in the topics of today's hearing and the work you all do to ensure the competitiveness of american markets and to shape data policy. i believe facebook has an important perspective here given the substantial contributions we've made to the technology sector in the nearly 20 years since our founding. we believe that many of the concerns expressed by congress and other stakeholders with respect to privacy and content moderation can be addressed by appropriate legislation. we stand ready to be a productive partner in those efforts. as you know, our company is currently facing multiple lawsuits including those brought by the federal trade commission and a number of state attorneys general. and that will limit what i am able to address today. but i assure you, we want to be helpful where we can and i look forward to our discussion.
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like many services facebook helps people share, connect, communicate, or simply find entertaining content. each day millions of americans use facebook to connect with people and businesses. to share and view a wide range of content, to join communities of interest, and set up fundraisers for good causes among many other things. all of these activities support our mission to give people the power to build community and bring the world closer together. data helps make all of this possible. at facebook we use and analyze data responsibly to provide personalized user experience. we also use data to improve our products, provide measurement, analytics, and other business services, to promote safety, integrity, and security. to communicate with people who use our services and to research and innovate for social good including by connecting and lifting up marginalized communities and addressing
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humanitarian crises. data also helps us show people better and more relevant ads, which keep facebook free. it lets advertisers reach the right people which benefits more than 10 million businesses and nonprofits. for the data people trust us with, we recognize that we have an important responsibility to protect it. we work around the clock to help protect people's accounts. we build security into every facebook product. we offer a number of tools that provide people transparency and control over the data we receive. we have steadily made improvements to the privacy protections and controls we offer. we also have a variety of tools to help users understand the data facebook has about them. we're always working to develop technologies that enhance the way people connect and communicate. data is key to ta work. we know that if we don't keep innovating and improving we'll fall behind. when facebook started we faced
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established competitors including aol and myspace with lots of user data. that didn't protect them from competition. success comes from creating products users value and enjoy not how much data you have. as our ceo mark zuckerberg has explained we believe strong and consistent competition is vital because it shows the playing field is level for all. facebook competes hard because we're up against other smart and innovative companies. we know that our future success is not guaranteed especially in a global tech industry defined by rapid innovation and change. technological innovation has created an ever more competitive environment and we invest heavily in our products and services to stay relevant and competitive, committing more than $18 billion to research and development last year. we're proud of our record. we'll continue to focus on building and updating our products to give people the best experience possible.
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thank you and i look forward to your questions. >> thank you very much, mr. satterfield. next up, markham erickson of google. >> chairwoman klobuchar, ranking member lee, and distinguished members of the subcommittee, thank you for the opportunity to appear before you today. my name is markham erickson and i am a vice president of government affairs and public policy at google where i oversee a global team of subject matter experts focused on the application of law and policy to technology and the internet o data should be used to make consumers' lives better by improving the quality and diversity of products and services available while protecting users' privacy and giving them control. in my testimony i will describe how google uses and protects data, the safe data mobility empowers consumers and boosts competition, that data alone does not guarantee better
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products for consumers. data plays an important role in making google products and services people use every day functional and helpful. we are committed to treating that data responsibly and protecting privacy with strict protocols and innovative technologies. google combines industry leading technology with insights from data to develop products that help people find directions, build businesses, and search for information. on an individual level, what data is collected and how it is used depends on how each person uses our services and how they manage their privacy controls. data is one element of our ad's business where it helps us connect people with relevant advertisements. advertising is google's main source of revenue and it enables us to make many of our flagship products available for free to billions of people around the world. the ads shown are often informed by a search query or page content but they can also be based on a user's interest or
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personal data if their privacy settings permit. we do not sell our users' personal information to advertisers or to anyone. our business relies on ensuring our users' trust specifically in how we use and protect their data. we work to maintain that trust by offering industry leading controls to manage privacy. 3 billion users visit google accounts every year where they can review or change their privacy settings and delete data stored with their account. we constantly innovate. for example privacy sandbox is a collaborative initiative that aims to build a more private and secure web. because many publishers and advertisers rely on online websites to partner with consumers. we will continue working to get this balance right. in addition to our work to advance privacy preserving
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technology we contribute data and expertise to the broader ecosystem. data portability empowers consumers to choose services or online platforms based on quality and individual preference. not because they are locked in. since 2011 google takeout has enabled users to easily move their content to competing services with more than 1 billion gigabytes exported from google products. additionally through our leadership in the data transfer project google makes it easier for other companies to provide tools that let users seamlessly move data between online services. we are also proud of our contributions to the open source community. many of the largest successes in the machine learning ecosystem have come from data that is openly available on the web. senators, data by itself does not guarantee better nor more successful products. rather it is the investment, innovation, and methods that matter. not just the amount of data that
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a company may have. cutting edge technology or new ideas allow companies, new companies to succeed sometimes without any data at all. new entrants such as zoom, snap shot, spotify, pinterest, and many others have all become successful because they provide an innovative product not because they have access to data from established companies. our focus is continually improving our products. and our greatest source of innovation comes from extensive research and development. last year alone we spent over $27.6 billion on research and development, which is nearly ten times what we spent in 2009. at google we are committed to protecting data through privacy, security, and user control. and improving our products in a way that ensures more consumer choice and competition. we will continue to engage with policy makers and regulators as well as other stakeholders to support thoughtful regulation that encourages innovation and protects consumers.
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for example, we have long supported federal privacy legislation in the united states and we encourage congress to enact such legislation. thank you for the opportunity to discuss our work with you today. i welcome your questions. >> thank you very much, mr. erickson. next up -- >> chairwoman klobuchar, ranking member lee, members of the committee, good afternoon. thank you for the opportunity to speak today. i'd like to make several key points about the importance of fair and open data use, the intersection of data privacy laws, and federal competition practices and their potential impact on today's connected marketplace. first, responsible companies are ready for a comprehensive federal data privacy law that is good for citizens and good for america. i work for kinesso a subsidiary of ipg one of the largest and most data driven advertising
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agency holding companies in the world. we strongly support a national privacy law. ipg's business is built on four pillars of consumer trust. accountability, fairness, saw of the, and transparency. we work hard with our industry partners to instill these values throughout data driven advertising. second, in today's economy, any privacy law functionally will be a competition law whether a legislature intends it to be or not. america needs a future fit national privacy law and appropriately applied antitrust policy. in our connected marketplace, both of these have data availability, use, and control at their core. a federal privacy law should be people centered and ensure data is used to serve people. limiting who can collect, control, and use data won't
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work. a privacy law that restricts who can collect data would give data control and thus market control to a few companies and unavoidably weaken competition. as we have seen in other jurisdictions, market power belongs to whoever controls the data. a federal privacy law should preserve data sharing for beneficial and innovative purposes while making companies responsible and accountable for harmful uses. similarly, competition policy should ensure that companies with better technology, better ideas, and innovation, but which may not have adequate data of their own are not foreclosed from the marketplace. a company shouldn't have to create a first party platform to compete. today's connected marketplace increasingly is dominated by companies who thrived thanks to ready access to consumer data. national laws that in effect
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limit data to just a few dominant players risks putting more power in those few players' hands and in our data intense economy over use preclude robust competition and vital innovation and the possibility of a small company finding and competitively serving its audience. we emphasize how essential data availability, open data flow, and fair uses of data are to innovation, competition, and a vibrant market of connected participants. federal privacy law and competition law should provide for responsible and accountable data sharing so that everyone can compete. we urge you to consider the effect of mergers on who controls the consumer data value change and, thus, on competition and analysis of the growth of the major online platforms shows
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the role that acquisitions have played in the development of dominant data positions. to protect people, the fair use of their data, and support a robust, trust worthy, and competitive connected market place federal law should promote fundamental privacy rights for citizens and enable responsible accountable use and ensuring commercial data by commercial enterprise. this allows the market to continue to provide a wide array of benefits like safer online payments, ready access to business and consumer credit, access to free content and platforms, and cost effective and efficient advertising for all especially small business and new market entrants. we at ipg have built accountability and responsible data practices into everything we do. we believe corporate america is ready to responsibly collect and share consumer data and be accountable for its actions in doing so.
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we encourage the committee to protect the fair and open use of data as fundamental to competition. we urge the committee to help develop a federal privacy law that is future fit for the digital age and protects consumers and enables the connected marketplace in which all participants can compete fairly so long as they engage in safe and accountable data use and sharing. i thank the committee for its attention and look forward to your questions. >> very good. thank you very much. next up? >> thank you so much for the invitation. i am a bit of an outlier here. i'm not a lawyer. but big data and the ais articulated are already clearly valuable and will become more valuable over time as they are integrated into all of the products and services that will be sold in the next 20 or 30 years. unfortunately, there is a clear
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approach to how to deal with this big data in the market place. currently there are three major methods of actually dealing with data. we have it in china where they have incorporated this big data into their national security and implemented a national security totalitarian state. you have europe who is suppressing the aggregation of big data through privacy laws basically turning it into something to be destroyed rather than embracing it. that will affect their economic capabilities long term. reducing capabilities to produce high quality products in the future. but it does award them better. social stability and then we have the u.s. still up in the
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air. we are still trying to decide what to do with it. if you use the frame work on the economic model for the united states the way we are treating data right now is very futile. it is basically a futile system where you have the corporations, the lords and owners of the data and farm people. who are the data as peruse their platforms. it is not sustainable. it will create wealth inequalities as big data and its ais move toward the center of the economy. you know, that will also create social instability. the solution is the same we used to eradicate feudel im in the past is data ownership so people can exercise ownership privileges and reap the benefits for having that ownership. that means taking data off big
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platforms and putting it into a central repository controlled by the owner of the data where it can be pooled with others or resold or lent to organizations that will make use of it. it doesn't always have to be commercial. it could be open source efforts, noncommercial university development. the consumer, putting the individual in the driver's seat changes the whole equation. it cob a source of royalties and revenues for the individual driving their personal prosperity forward. a different way to approach it, it does destroy it directly through privacy but allows them to benefit from data as it moves forward. there is also a strong tie between big data and its ais to
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the national security component that comes into this tangentially. i don't think people appreciate how much this has shifted over the last 20 years. all of the technologies needed to implement a national security, data driven surveillance state have lept forward substantially. most of the shift has occurred within the context of the corporate development. a shift from what governments used to only be able to do to now corporations are only able. china has embraced that and are using those corporations to gather the data and create the tools and control society. the problem here in the united states is that there are any natural factors to prevent that from happening here. we don't have any protections against the overreach in the corporate realm. we don't have any like we do against government overreach.
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we don't have any free speech rights. we don't have any rights of access. we don't have the ability to resolve disconnection. disconnection in the modern environment can radically reduce your ability to operate in the world. we need a set of digital rights we can exercise over, to protect us against any kind of overreach at the corporate side. thanks. >> okay. very good. thank you. next up? >> chairwoman klobuchar, ranking member lee, thank you so much for the opportunity to testify today on behalf of public knowledge, a nonprofit working in the public interest for over 20 years. i'm charlotte slaiman competition policy director at public knowledge. gatekeeper power is at the root of big tech's competition problems. experts, policy makers, and
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advocates the world over have identified gatekeeper power, sometimes bottleneck power, sometimes strategic market status, as the power that dominant digital platforms have over other businesses' ability to reach their customers. right now big tech has the power over us and our data. and we need to protect both users and a competitive market with new laws and rules to promote fair competition against them. until we have a real choice to leave these platforms if not happy with them they won't have the incentive to win us over. and we'll continue to miss out on innovations that challenge the status quo. i want to take the opportunity to highlight important legislation that i think can help to address the underlying power dynamics that have led us here. interoperability, data portability, and delegatability are the privacy protective ways
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to neutralize the power big data confers upon dominant, digital platforms. right now if i am frustrated with how facebook treats my data i don't really have the option to leave because my friends and family, the businesses, groups, and even schools i need to communicate with are on facebook. interoperability would allow competition to flourish by letting users communicate across platforms. look to the access act for a model of implementing interoperability to maximize competition and protect privacy. these platforms can abuse their gatekeeper power to freeze out would be competitors from the market and one of the tools for the anticompetitive discrimination is big data. gatekeeper platforms can put their own products first on the page, give them the best attention grabbing design, and point users away from companies that pose a competitive threat. while this offends our basic
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notions of fairness, this behavior would be difficult to stop using our existing antitrust laws. we need a nondiscrimination law to reliably stop it. and i'm so glad to see news reports that chairwoman klobuchar is working on just such a bill here in the senate. there is a strong model in the american choice and innovation online act from david cicilliny in the house. strict limitations on mergers by dominant merger platforms and given our federal antitrust enforcers the ability to sue to break up vertically integrated dominant digital platforms are also important parts of ow we can address gatekeeper power. the platform competition and opportunity act and the ending platform monopolies act are strong examples of how these tools could work. these four bills were recently endorsed by a bipartisan group of 32 state attorneys general. app stores and operating systems preference their own products when it comes to communication with the user and to data. the open app markets act zeroes
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in on the gatekeeper role app stores play. purposeful narrowing of antitrust laws by the courts have left big business with a license to engage in a host of anticompetitive conduct. my optic focus on price and other easily quantifiable effects leaves out important innovation and consumer choice harms that antitrust is supposed to address. chairwoman klobuchar's competition and antitrust law re-enforcement act would help rein in the power of big data by updating standards for stopping exclusionary conduct. competition is not a panacea for the challenges of big data. we also urgently need new privacy laws to protect users and a digital regulator to comprehensively address the policy questions surrounding digital platforms. a comprehensive federal privacy law can be pro competitive by creating a level playing field for dominant incumbents and new entrants alike.
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for decades washington has taken the perspective we need to let digital businesses run wild to see what great innovations they might come up with. but today unscrupulous data practices and consolidated power have led us to a place that isn't anyone's dream of what the internet was supposed to be. these largely unregulated platforms have been allowed to amass powerful gatekeeper roles where they need not fear competition or government intervention. for users to really have control we need to have a real choice to leave these platforms. we need real competitors and switching to be easy and to get those things we need new laws and rules to promote fair competition on and against gatekeeper platforms like google and facebook. congress has already done the laudable work of introducing a series of bills to combat these harms. the best time to pass them was ten years ago. but the second best time is now.
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thank you. >> okay. very good. why don't we start out mr. satterfield, mr. erickson. facebook and google both collect data about consumers to enable targeted advertising which is the principal way i believe your companies make money. how important is consumer data to each of your companies? you can start, mr. satterfield. >> thank you, chairwoman klobuchar. the way we look at it is success comes from building great products not from how much data you have. >> okay. but if you could just straight forward answer the question, how important is consumer data to your company in your profit model? >> data is important you know to connect people to relevant experiences. that includes showing them relevant ads. again i'd say the success we've had has come through building great experiences and not from
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the amount of data we collect. >> mr. erickson how do you answer that for google? >> thank you for the question. at google we provide a means for people to find relevant information and helpful information on the internet and to do that we have to understand what they're looking for. anyone can use our products for free without providing or storing any personally identifiable information with us. we provide transparent mechanisms for users to understand how their data is being collected and how their data is being used and meaningful tools to give consumers the ability to see the data that is stored in their account and to make choices like, delete the data or use one of our auto delete tools to set up regular cadences where information such as their search history or viewing history or location history if they've opted into location history, can be regularly deleted.
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we've also as i mentioned in my testimony since 2011 have created tools to give consumers the ability to take the data they provided to us and playoff it to a competitor's site. we don't want users to work to engage with google because they feel locked in because their data is with us. we want them to be able to go to the services and technologies that suit their needs based on a competitive dynamic rather than any sense of lock-in. >> okay. why don't we go to you, ms. slaiman? i was just looking at some twitter feed. someone just reported that they were talking with a few friends on one of the sites going back and forth online about being a female politician a while back including a tv makeup artist for some reason and this person said they referred to me as immitable online and within an hour got an
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online ad for shanell immitable mascara linking the tv makeup artist with their adjective. is that possible? i don't know if this is true or not but this is what has happened to me and how important is the data to these companies? they've kind of given round about answers here. what does it mean for other platforms to compete if they don't have the data? >> i think the data is very important. i appreciate what the witnesses have said there is also a role played by their innovative engineers. that is absolutely right. but the data is important and that's why we're concerned about whether it is being treated competitively or not. i think the relevant ads are not always what is best for us but best for the platform and sometimes that lines up with what is best for us and sometimes it doesn't. we need to be sure we have protections for users and the competitive marketplace when looking at that problem.
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>> mr. satterfield along the same lines last quarter facebook publicly reported that its advertising revenue per users in the u.s. and canada was $51.58. i want to ask you a few questions about that. the comparable number for europe was only $17.08. in asia it is $4.13. the rest of the world you reported advertising revenue per user of about $3. why is the value of a user in the u.s. worth so much more than the rest of the world especially when we are comparing ourselves to comparable countries in europe? >> senator, there are a lot of factors that go into those average revenues per user numbers. >> okay. i just, that is not really an answer though. that's the beginning of an answer.
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>> we're breaking down revenue per reason according to the number of folks we serve in those regions. that is what is reflected in the numbers you're describing. >> why don't we go to you, mr. robb. do you think facebook should pay all of its u.s. users $51.58 for facebook's use of their data which we now know is in their recent fiscal report? maybe the individual profit centers which is all of us should actually get the money back. >> if you own the data you would at least be able to compare offers. and get paid for its usage. i don't think you would get the full amount obviously. >> right. maybe a discount but you could get a good chunk of it just like you do when you're a consumer and you go and buy something or you sell something is probably the better example. >> that's correct. >> mr. robb, when companies collect data about us and either sell it or use it to target us
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with ads, we aren't just the consumer or the user anymore. we really have to start thinking about this because i think when we get on these platforms we can have fun. people do business. but they don't realize every single second they're on there they are creating profits but they are not reaping the benefit. we are, in fact, our data is a commodity. but consumers as i note aren't getting enough in return. i've discussed the idea of somehow putting a tax on the data for these companies to pay. you have written about paying people for their data. in your opinion, what is the strongest argument for ensuring the tech companies have to pay for the consumer data that they collect and use and if facebook and google had to pay for using consumer data, how do you think their behavior would change? >> okay. the most compelling argument is that it would change the perspective people have on data if they were -- had ownership
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rights over it. by unlocking it, through ownership, you don't just limit the data to what -- that facebook or google collects to what they can do with it. you then open it up to what all of these other companies can actually do with it and they can generate revenue. you know, people in control of their data, people who have ownership of their data, they will be more willing to give more and if they can set permissions in terms of how it is used they'll feel comfortable, like they're participating in the economy. rather than being observers or being treated as resources. it is a complete face shift. it is not even comparable to what we have now. >> okay. i thought it was just so interesting, i'll go back to you, mr. erickson and mr. satterfield, my last questions here. i thought it was interesting when apple unleashed the power
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of allowing people to opt out that 75% did that because i think it is probably because they did it in a pretty straight forward way. i know i try to do it sometimes and then i am on some site and i don't know if i've opted out t is really complicated for people or they make me opt in to try to do something and i can't figure it out and you're just trying to order something online. mr. erickson, you've spoken about putting consumers' privacy preference first and giving them the ability to change what is collected and used about them. i understand how you think that protects user privacy. but from a competition policy perspective, it seems like we look beyond what benefits an individual user even if millions of consumers give you permission to collect and use their data shouldn't we be concerned about the competitive impact of your exclusive access to their data? which you use to compete with companies that don't have that data? do you want to answer that, mr.
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erickson, first? >> sure. thank you, senator, for the question. at google we do want to make sure consumers first understand how their data is being collected and how their data is being used. we do want to give them meaningful choice about the use of their data. unlike facebook a user can use google services for free. they do not need to establish an account or provide any personally identifiable information to google. we never sell personally identifiable information about our users even when they do sign in. they can delete that information at any time. most users when using online services are providing similar information if not the same information to multiple, online services. so in that regard the data is really nonrivalry from a competition standpoint. it is easily gotten by other companies that want to purchase data from for instance data
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brokers or other entities but i think the key here for us is to put users in the position where they have meaningful choices and meaningful control about the use of their particular data. >> okay. do you want to take a crack at that one, mr. satterfield, from facebook's perspective? >> yes, thank you. and just to be clear facebook services are also free. but to your question, chairwoman klobuchar, the statistics are so interesting right now. the average user has something like 46 apps they're using every month. there's more than a hundred apps on the average person's phone. people are sharing more data in more places than they ever have before. we think there is a lot of data out there being used for innovative purposes including to show people ads. >> do you think they all know they're sharing their data on all those apps? >> senator, we hope so.
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transparency and control is a core value of ours and we think they should be of other companies as well. >> if you could answer though do you think they know they're sharing that data? do you think they all know that? >> on facebook? madame chairwoman, they do. i'm confident of that. it is a core value of ours. we invest a lot in providing transparency and control. with respect to other companies this is an area where if congress could intervene and make sure they do transparency and control could be core components of a federal privacy legislation. >> just one follow up because i really want to turn it over. ms. slaiman do you think that is true they all know this? by the way the companies are now coming to us saying they want privacy legislation after opposing it, various iterations, after all the states have started to get into the act which is kind of a pattern we've seen in other areas here. do you want to respond quickly? then i should let senator lee ask some questions. >> yes.
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i'm sure there are many users who do not know they are sharing the data. i also think even if they know about the data that they're sharing it's quite complicated to understand what that data can be used for. that data can be used to figure out additional information about you. a user may be making a decision to share some data not realizing what that could tell a company about who they are and their preferences. i also think i want to respond to the point that mr. erickson made about google doesn't sell your data. i think it is important to keep in mind that google has within them the capacity to fully exploit your data without ever selling it because they have the advertising system. so within this one large vertically integrated company they can both collect the data and fully exploit it to advertise to you so the necessity for selling isn't there and they can still be exploiting it as effectively. >> thank you very much. senator lee? >> thank you. mr. satterfield, i'd like to
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start with you. i want to start by asking you about recent reports about facebook. the first is from jeffery fowler at "the washington post." he did a deep dive into facebook's collection of user data including revealing that facebook's own financial modeling estimates that facebook's estimate of user data is worth an average of $464 per user per year. now, this would seem to confirm my own view and that of several state attorneys general including my home state attorney general in utah that facebook isn't actually a free service as you suggested a moment ago but rather it is one that we pay for with our data. what is concerning is that there is so little transparency in the transaction. and you've sort of confirmed that moments ago by saying that
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it is completely free. i am never told what my data is worth. you are not even acknowledging it is worth anything or there is a transaction involve here. what i get in return is always subject to change. you change the systems by which posts are reviewed, what is prioritized, what is deprioritized. now, it is basic antitrust law that you look for symptoms, for signs. one pretty consistent sign of monopoly power involves the ability to set prices and control output. what could be a better example of that very thing than facebook's ability to demand data from its users as it does without telling them its value or even acknowledging it has a value at all while providing a service whose quality, features, terms of service in terms of use are subject to change at any moment and they do frequently
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change at any moment? can you answer that question for me? >> thank you, senator. respectfully, i think we see things differently. we don't see data as something people give us in exchange for providing our services. we see data as something we use to provide the service to them to provide value to them. >> okay. so you disagree with the assumption that when there is a service out there that per ports to be free you are the product, you are sort of what is being served. i mean, i get your point. nobody is paying out of pocket with money. they are not paying in literal coins or virtual tokens to go on there. you are a for profit enterprise, you are profitable, and you do that because there is something of value.
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i think we're quibbling here over sort of nonsensical distinctions between literal payment which i didn't say nor did i imply. i guess i'd ask you to answer the question accepting the premise that i think all the rest of us in this room and pretty much every other american would acknowledge exists. which is the premise that your service is, while it purports to be free it is in fact paid for in the sense that people contribute their time. they give their time. and with their time you acquire data. you're able to monetize that. with that understanding, i am asking you that, it is a basic principle of antitrust law that one side of monopoly power is the ability to set prices and control output.
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with that premise, what is your response to that about the fact that i'm asking what better example could one find once one accepts this premise than that of facebook's ability to demand data from its users without telling them the value of that data and without a service -- when dealing with the services quality and whose features and terms of service are subject to change at any moment and often do? >> well, senator, again, respectfully that is just not how we think about data. >> all right. i get it that is not how you think about it. clear you don't want to answer that. whatever. i was throwing awe bone to try to allow you to engage in dialogue. we'll move on to the next question. "the wall street journal" released a series of bombshell
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reports last week on internal facebook documents that revealed shocking, absolutely stunning lapses in facebook's ability to protect facebook's consumers users from being harmed by using its platforms. this, too, looks like behavior of a monopolist so sure its customers have nowhere else to go that it displays a reckless disregard for quality assurance, for its own brand image, and even just being honest with its users about the obvious safety risks that it is subjecting its users to, particularly its teenage users. in light of these reports doesn't it look like facebook lacks competition? >> senator, thank you. the journal series you are referencing raises really serious and important questions.
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i think it misses the mark in terms of what we are trying to do in the matters that it describes. >> how does it miss the mark? how does it miss the mark any more than revelations years ago about tobacco companies concealing the dangers of tobacco? how is that missing the mark any more than the revelations about tobacco and what tobacco companies knew about what they were doing to their own users? >> senator, i think what is being discussed in these articles are issues that we have identified ourselves and are attempting to work through as a company. this is research we are doing ourselves in order to identify gaps and issues and address them to make our platform safer. i think these are self-identified issues and internal deliberations dedicated to one thing which is making the platform a safer place for the people who use it. >> ms. slaiman i'd like to turn to you. in your testimony you advocate for updating antitrust laws to
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tackle problems like big data. it seems we ought to first try to enforce the laws we have, which i think in most circumstances are more than up to the test if in fact we will utilize them. if in fact we will utilize the law and reinforce it. the reason we haven't used antitrust law to address many problems in big tech has everything to do with things that could be accomplished with the law. in other words, it's not just because the courts have said no. it is not because enforcers have taken these things repeatedly to the courts and the courts have smacked them down. that hasn't been the case. it's rather because our antitrust enforcers simply didn't bring the cases to begin with. now, look at the obama administration. president obama's antitrust enforcers let google off the hook after a two-year monopoly
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investigation ignoring rather specific, rather conclusive staff recommendations to sue. they failed to stop facebook from buying instagram and failed to stop facebook from buying whatsapp. nascent competitors they acquired at the time. they failed to stop google from buying its way to dominance of digital advertising. moreover, in the last year of the trump administration alone just the last year of that administration, the trump administration which finally filed cases against google and against facebook that the obama administration had turned down, the ftc blocked 27 mergers. so far in 2021 the ftc now supposedly run by antitrust hawks eager to protect competition has filed just seven merger cases one of which is the
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case against facebook and five of which were filed in fact by the outgoing trump administration. can't we agree the problem of antitrust law isn't just the law but lacks antitrust enforcement? >> we absolutely need to improve antitrust enforcement. i believe it will be very important to improve the antitrust laws as well but there have been lapses in enforcement. i think there are some situations where the antitrust enforcers have correctly identified that the law wasn't there for them. but there are absolutely also cases they missed that i wish they had brought. so improving antitrust enforcement is definitely an important part of this effort. >> thank you. mr. erickson, and mr.
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satterfield, i want to ask you both this question. "the wall street journal" and the "new york times" reported about a year ago google and facebook had entered into an agreement to partner together with regard to digital advertising. now, setting aside the question of whether data can be a barrier to entry shouldn't we at least be concerned when two companies with possibly the greatest access to user data secretly agree not to compete with each other for the primary way in which that data is to be used, which is digital advertising? we'll start with you first, mr. erickson. >> thank you, ranking member lee. at the time of the agreement we publicly announced facebook's participation in our open bidding platform as well as 25 other companies that are participating in that platform. we thought it would be useful to
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publishers where we'd have multiple ad networks competing for the publishers inventory and having large ad networks like facebook benefits consumers. there's no truth to the allegation that our auction system is somehow rigged in facebook's favor if they provide the highest bid they'll win. if they don't they'll lose. at the end of the day, those 25 companies which facebook is one of them, creates more competition and more demand for the publishers inventory. >> okay. you are saying just one of them, just two of those companies. you are in fact the two biggest, arguably the two biggest companies with access to this much data. you don't see antitrust implication associated with this? when two companies with possibly the greatest access to user data
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agree not to compete with each other. when it comes to digital advertising you see no antitrust implications for that? >> senator, respectfully that is not the agreement. there is no prohibition for facebook to provide their ad network and compete on other auction systems. competing on google's auction system with other ad net works creates more competition and competitive dynamics which ends up benefiting publishers who are selling their inventory. >> my time is expired. can you respond to the same question? >> senator, i don't have anything to add to what mr. erickson said. we compete hard and fairly. we did so here as well. >> i am not surprised to think you don't think there is anything unseemly. we'll get back to it later. my time is expired.
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thank you. >> very good, senator lee. i was off in the other room doing another hearing and i can see you used your time well. with that we turn it over to senator blumenthal. we've also been joined by senator hawley and senator cruz. senator blumenthal. >> thanks, madame chair. i thank both you and ranking member for holding this hearing. i hope it will be the beginning or maybe just another step in an effort to forge a bipartisan effort on privacy law. i've been working with one of our colleagues senator moran on a draft for quite sometime. we have come very close and i hope we'll continue to make progress because this issue of privacy is central to our time. there is no question data is the
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source of pay and power to these companies, not only a source of vast revenue. it is also the fulcrum of dominance and the ability to prevent others from entering the market and the companies have learned to do it very adroitly and adapted to the challenges put to them by the kinds of answers we've seen today. i want to return to those issues my colleagues raised so well. but first let me ask a few questions about "the wall street journal" investigative report. it was filed last week showing the heinously destructive impact of instagram on teens.
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the simple fact of the matter is facebook has known for years that instagram is directly involved in an increase in eating disorders, mental health issues, and suicidal thoughts especially for teenage girls. despite that horrifying risk, facebook is now dead set on pushing instagram to even younger children. far from being transparent about this danger as mr. satterfield just attempted to represent, facebook in fact has been blatantly deceptive and disingenuous about it. last plongt on the 4th senator blackburn and i wrote to mark zuckerberg and asked him specifically about this issue. we asked and i'm quoting has
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facebook's research ever found that its platforms and products can have a negative effect on children's and teens' mental health or well being such as increased suicidal thoughts, heightened anxiety, unhealthy usage patterns, negative self-image, or well being. it wasn't a trick question. it preceded the reports in the journal. we had no idea about the whistle-blower documents that were ultimately revealed. facebook dodged the question. quote, we are not aware of a consensus among studies or experts about how much screen time is too much. end quote. we are not aware. we all know now that representation was simply
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untrue. internal documents reported on by "the wall street journal" demonstrate that facebook has known for years that instagram harms children and young people and for years facebook studies have found clear links between instagram and mental health problems. and it was common knowledge in the company so that the response was a clear attempt to mislead congress, misinform parents. i ask that "the wall street journal" report of september 14 by george wells, jeff horowitz, and deepa sedahim be made part of the record madame chair. >> it will be. thank you. >> thank you. so the comparison to big tobacco made by senator lee is entirely apt. and i know something about big tobacco because i sued big tobacco. and i remember the revelation of
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the documents that showed big tobacco not only knew but had done experiments proving that cigarettes cause cancer. they denied it for years. they had the knowledge about the damage done to people who smoked. my question to you, mr. satterfield, is why did facebook misrepresent its research on mental health and teens when it responded to me and senator blackburn? >> senator, thank you. respectfully i don't agree with that characterization but i do understand the frustration and concern that we're hearing about these reports. the safety and well being of the teens on our platform is a top priority for the company. we'll continue to make it a priority. this was important research.
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we're proud that we did it. we're going to continue to, you know, study these really important issues. >> why did you conceal it? >> senator, we didn't make it public because we don't, with a lot of the research we do because we think that is an important way of encouraging free and frank discussion within the company about hard issues. >> do you have more research that shows the destructive effect of your platform on teens? >> senator, i'm not aware of any other research on teens. i don't work on these issues. i work on privacy and data. >> are you not aware in the same way that the company responded that it was not aware when in fact it knew about the research? >> senator, i apologize. i am not familiar with the context of that letter or what went into the response. you know, what i can tell you is that we think it is important to be having a dialogue with congress on these issues and we're prepared to work with you
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and your team going forward. >> will you work with me and my team by appearing on september 30 at a hearing that we've invited you to do? >> senator, i know our folks have been in touch with your staff, you know, to discuss that. it's something that i think we're discussing right now. >> well, we are discussing it right now. i'm asking you for a commitment that your company will send a high ranking, knowledgeable, and representative to that hearing on september 30th. senator blackburn and i are respectively the ranking member and chairman but it includes senator klobuchar and lee. they are members as well. we need to hear from someone capable of answering these questions. it should be next week. do you commit to have someone at that hearing?
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>> senator, we'll follow up promptly on this. we know these are incredibly important issues and we want to work with you and your staff going forward. >> mr. satterfield i just want to point out to you that your company contrary to what you just told this committee is continuing with this really unfortunate charade. vice president nick clague doubled down on the misleading statement in fact this weekend when he said the research is, quote, still relatively nscent and evolving, end quote. but according to one of these studies facebook found 13% of british users and 6% of american users traced a desire to kill themselves to instagram. how is it not misleading to tell this committee that the research is unclear if according to your
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own research tens of thousands of teens have suicidal thoughts directly because of instagram? don't you think you owe us an explanation next week? >> senator, i appreciate the concerns. i do. i do think that nick was accurate in his op-ed. what i can tell you is that we can commit to working with you and your staff going forward on these issues. >> has facebook ever conducted research that found instagram was more toxic to teens than another, other social media platforms? >> senator, i am not aware of that. these, again, aren't issues i work on at the company. you know, we're happy to follow up with you and your staff. >> well, will you follow up
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next -- september 30th by having someone at the hearing that can answer the question? by the way the answer is you have found instagram is more toxic than snap and tiktok. it is your own research and i'd like someone to come provide an explanation next september 30th. >> we're going to get back to you promptly, senator. i can commit to that. >> i want to ask about another area but perhaps i should wait until -- i hope we'll have a second round. >> we will. thank you. >> thank you. >> next up senator hawley, senator usof then you senator cruz if it works. >> thank you. thanks to the witnesses for being here. this is such an important topic. mr. satterfield, let me just pick up where senator blumenthal
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left off. can i just ask you a fundamental question, are teenagers safe on any of your platforms? >> senator, we are working really hard to make that the case. >> so they're not now? >> senator, we are investing a lot in safety and integrity across all of our platforms. we've invested billions of dollars. >> and are you concerned though that teenagers are currently subject to all kinds of potential predators, the social effects? i mean, you're saying you hope they'll be safe on the platforms. are they not safe now? >> senator, i think it is our responsibility to invest the resources we need to make sure these things don't happen. that is why we're investing billions of dollars in protecting the integrity of our platform. >> let me read you a few quotes 32% of teen girls said when they felt bad about their bodies instagram made them feel worse.
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quote, we make body image issues worse for 1 in 3 girls, end quote. new quote. teens blame instagram for increases in the rate of anxiety and depression. this reaction was unprompted and consistent across all groups. how about this? teens who struggle with mental health say that instagram makes it worse. how about this? social comparison is worse on instagram. how about this? aspects of instagram exacerbate each other to create a perfect storm when it comes to body issues, identity, depression, anxiety. that doesn't sound like a very safe platform to me. those of course are all from your own internal research. what do you have to say about that? >> senator, these aren't issues i work on but we do have teams working across all of those issues. body image, well being, and so forth. we're investing, you know, we're doing research like this so we can identify gaps and address
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them. we're going to continue to do so. >> will you make the research public? >> senator, again, generally the way that we approach research is we keep it confidential to encourage free and frank discussion about it internally. it's -- keeping it confidential -- >> sounds like a no to me. i haven't been in the senate that long but it sounds like that is a no. let me try again. you've already done the research. this research is completed. you've done it. you know the results. you know the data. you've actively misled congress for years now. you've deliberately misled senators as recently as just a month ago, senator blumenthal was just telling, putting on the record. you have the research. will you make it public? yes or no? >> senator, i respectfully strongly reject those characterizations. the issue of greater transparency -- >> let's try answering my question. will you release the research
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yes or no? >> senator, it is something we're looking into how to provide greater transparency with appropriate context. >> right. what would the appropriate context be exactly? what is the context for 32% of teen girls saying they feel worse when they use instagram? is there context i'm missing there? what is it that parents need to know? what is the context exactly? i'm intrigued by that statement. >> well, senator, i mean, i think it's a broader view of what the potential impact of services could be on folks. >> oh, like maybe the things instagram does that is positive that outweighs all of the terrible effects that it has on teen girls and others? is that what you're talking about your benefits? how much money does instagram make for facebook every year? >> senator, i don't know the answer to that. >> how much money do you make from teens being addicted to instagram every year? >> senator, i wouldn't agree with that characterization.
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>> how much money do you make from teen users every year? >> senator, i don't know the answer to that question >> i bet it's a lot. i'll give it to you for the record. i think we all know what is really going on here. you won't release the research because this is a cash cow for you and you won't answer our questions because you make a gob of money on this. it is the whole reason mark zuckerberg wanted to get instagram in the first place. back in 2012 mark zuckerberg wrote to his own chief financial officer that buying instagram will give us time to integrate their dynamics before anybody else can get close to their scale. we know why facebook bought instagram. it was to get rid of a competitor, gobble up all the data. now they've done that. and now it is making teenagers sick and destroying their mental health. you know, hey. it is lucrative. it is really amazing. how about this? will you commit to suspending any efforts to develop the instagram kids product that would target children under the age of 13?
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>> senator, we know that tweens are online. we want them to have an experience that is a good one, a healthy one. >> like the one teenage girls are having on instagram right now that kind of experience? >> these are issues we take seriously and are investing in. there is no more important thing than the safety and well being of the people who use our products. >> i really can't believe you're saying that. i mean, really. i've listened to facebook and these other big tech companies before, these committees for years, and i guess just two years though it feels like 20. you always dis-semyon bl. you always mislead. i can't believe that given the research that you have conducted, that you can sit there and say that teens' health and security and safety is your top priority. clearly, it is not. you won't share any of the data?
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you're stonewalling every member of this committee. what about this? will you at least commit to keeping behavioral advertising out of any product that a kid can access? >> senator, we think that advertising is a potentially very valuable. we have made changes with respect to teens under 18. limitations around the ability of advertisers to use our products to reach them. >> so let's see. you won't reveal the research. you won't restrict your advertising. you won't pull back on plans to target children under the age of 13 with this platform which you know is toxic for so many teenagers especially female teenagers and yet their health and well being is your top priority. have i got that right? did i miss any part? >> senator, i'm not sure i said any of that. what i would say is again these are incredibly important issues
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to the company. we're committed to having a constructive dialogue with congress about them. we're going to continue to invest heavily in them at the company. >> i'm sure you'll invest heavily in it. i have absolutely no doubt about that. that is probably the truest statement you've made today and i have no doubt you will continue to pour money into instagram as long as you can extract money from it and from the teenagers whom you are quite frankly exploiting. here is just a final question for you. why should you be able to advertise to teenagers at all? given all the dangers inherent in collecting their data which is what you are doing on instagram why should you be able to advertise to teenagers? why shouldn't we prohibit that. >> >> as you know advertising supports our service. we do think additional protections for teenagers are appropriate. we've put those in place. we'll continue to look into ways to keep teenagers safe on our services while being able to
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support them with advertising. >> mr. satterfield the truth is you and i both know your product isn't safe. your platforms aren't safe. they are dangerous. you know it. we know it. you stonewald us. you stonewalled the public. it is time for some accountability and all i can say is accountability is coming. thank you, madame chair. >> thank you very much, senator hawley. before i turn it over, i want to, something when i was asking my questions that could lend information to you facebook publicly reported that last quarter its revenue, advertising revenue per user, which i presume includes teens in the u.s. and canada was $51.58 per user. so i guess just to follow up, mr. satterfield, do you have the breakdown for teens versus the rest that we could get playboy not today but later? >> senator, the only breakdown i am aware of is the one you referenced. >> is that including instagram? is it companywide? >> senator, i believe it is.
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>> okay. all right. and senator hawley, compared it to some of the other countries which were a lot less than our country. so we'll have to be looking into that. how much revenue they make. with that i'll turn it over to senator osof. >> thank you so much, madame chair. first question please for you, ms. col closure. does axiom or any other ipg company provide services to entities outside of the united states based upon or linked to data about u.s. persons? >> thank you, senator for your question. of course i am at kinesso and formerly axiom and part of the ipg family so axiom data and at kinesso both we have clients who are multi nationals and clients that operate in other markets around the world. and part of the services we
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provide are data enabled services. marketing and advertising services. so, yes. >> thank you. do kinesso, axiom, or other ipg companies provide data connected services or services based on or related to data about u.s. persons to federal agencies, state or local law enforcement, or any other public sector actors in the united states? >> of course again i am speaking about axiom. axiom does have and shortly to be retired an identity authentication product made up of regulated data and provided for regulated service and we call that our risk product suite and it solves things like know your customer obligations that financial services have. and that we are exiting that business shortly and concentrating on marketing and advertising. >> and is that the only product
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or service that you sell to any public sector entity in the united states? >> we do other things like marketing and advertising data enabled services like we supported an ad council, advertising campaign to help get information out to help with the pandemic. another example i can think of is we helped the american red cross when the hurricane katrina hit new orleans several years ago. we helped get data to them for some marketing communications to go out and find audiences so they could learn about health and services from the american red cross. we have a few other campaigns like that that i am aware of. does that help? >> thank you. do any ipg entities provide any services or have financial relationships direct or indirect with any agencies or clients at the department of defense in the
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intelligence community or in federal state or local law enforcement? >> it is not an area of concentration and i don't know the answer right off. i do not know the answer right off but i promise i will go and research it and get you an answer so that i can be certain. of course, there may be confidentiality issues i have to navigate if we have those sorts of contracts but i am glad to go research and get you an answer. >> so just to be clear, ms. colclasure you are not personally aware and have never heard of any financial relationship between an ipg entity and the department of defense, the u.s. intelligence community, or any federal state or local law enforcement entity? >> i do know that axiom of course i'm not at axiom now, and axiom historically has had some relationships with some of that
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community. but i do not have the knowledge to share but i'll research it for you. >> what are you aware of? what do you recall? >> we do have some -- we did -- i'm not in command of the knowledge because i am not axiom now. there are some governmental agencies that we have worked with. most of it like the veterans administration was advertising and trying to do outreach to their veterans' community. so rather than fish around if you might allow me sflor i'll go and research and get you an exactly right answer if that would be okay. >> thank you. do any ipg entities have direct or indirect financial relationships or provide any services or products to any foreign governmental entities? >> not to my knowledge. >> will you please double check for the record? >> i certainly will. >> thank you. and how does axiom or how do other ipg entities engage in
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their activities obtain device identifiers? >> well, at axiom and kinesso we advertise in the digital marketing space and run unified ethical framework is the basis for our data governance program. when we either source data we undergo a due diligence process i always like to say not all data is the same and not all data uses are the same. some of the data like device i.d.s, that is a connecting piece of data that we use to enable and activate digital advertising campaigns on behalf of our clients. so it may be that it flows in from one of our connected partner ecosystem providers like an advertising network or a publisher and we sit in the
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middle. that is typically how the data flows. does that help answer? >> do you place any limitations, does axiom or any ipg entity place any limitations on the form, category, type of entities to whom you'll sell services? >> absolutely, senator. thank you for that question. we do as we mentioned we use what is called a unified ethical frame for our data governance program, practice an accountability based accountability program. >> forgive me. my time is limited. which types of entities specifically will you not license data to or provide services to? >> well, they have to be a legitimate, commercial enterprise. we don't provide data to individuals or data enabled services to individuals. it is to commercial entities for a legitimate, ethical purpose. we judge the data use and context via our privacy impact assessment process. we check it off against legal requirements, regulatory
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requirements, coregulatory requirements. we do a harm detection and prevention test. and then very important to all of us we do a fairness test. i mentioned in my opening remarks that we're people centered and that is we design from people outwards. >> my time is limited. i appreciate the elaboration of the policy. let plea ask you this question. does any ipg entity or has any ipg entity provided any service or sold any product to private investigators? >> no. a very long time ago there was one business that axiom owned that we divested that did serve pis but it might have been ten or 15 years ago so the answer is no today. >> which firm was that? >> it was an axiom -- we had acquired an entity and operated it for a few years and then we sold it and i apologize i cannot recall the name.
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>> thank you, madame chair. i yield. >> excellent. senator blackburn? >> thank you, madame chairman. ms. sleiman, let me come to you first. i know you're aware that senators blumenthal, klobuchar, and i filed the open market app store bill so we could address google and apple and their stranglehold on that app market. very quickly how do apple and google's data practices factor in to this app store and limit the use there and do they incentivize the app store developers to continue the monopoly over this market that they have? how are they manipulating that marketplace, very quickly? >> thank you so much, senator
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blackburn. we were so glad to see the introduction of the open app markets act. i think that is going to be really important not just for big data but for gatekeeper power at large when it comes to app stores. but in particular, with regard to big data, i think the app stores and the operating systems have this privileged position where they can treat users' decisions about their data differently based on whether the app is owned by the app store company or the operating system company or whether it is a competitor. so one thing that is really important is to make sure those are being treated the same so that we have the level playing field for competition. >> i think that's important in that privileged position, this ai exercise is important to note. you mentioned the gatekeeper property and how it would apply to other applications whether it is publishers and other forms of content development. so i think this is an important
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bill that we get passed and on the record. very quickly on filter bubbles i know you mentioned that. how do you address or think we could address the filter bubbles and the platforms' secret algorithm ims if you will that manipulate the consumer experience online? >> one way big data is used is to decide what prod toukt show the users. the platforms are in the gatekeeper role where they make those decisions a lot of times based on an algorithm fed by data they are collecting from users. so those decisions about which products to show to users, which services to offer, those are decisions the platform gets to make and that is limiting the options a user sees. >> and i think that the open apps market act gives us that footing as i said that
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gatekeeper role to begin to address that so the consumer, online, has a more private and more genuine experience. and we're looking forward to getting that bill passed. so thank you for those comments. i agree with you. i think the implications we are going to see are large in industry. mr. satterfield if i may come to you for just a moment, as you're aware senator blumenthal and i have kind of been doing a deep dive on what you're doing with this data you are collecting on teenagers. from working with whistle-blower and from the data that we've seen basically reams of data at this point, we are concern about this amount of data that you are
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keeping on teens basically what you're doing is building a virtual presence, virtual you of these teenagers. do you think that is a violation of the children's' online privacy act the fact you're tracking and following and building these files on these children? >> senator, no. we are complying with the law. we do think it is really important to provide protections around teens' experiences on our services. these are things we've been investing in, consulting with third party experts so we do this -- >> who are the third party experts you're consulting with? because when we talked to teachers, parents, pediatricians, psychologists and we look at the data you've collected from teens and the changes they have recommended you make to your platform, it is
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like you're turning a blind eye to that because you are chasing a dollar. why don't you bring some clarity to bear on that? >> senator, this isn't something i work on at the company. i'm happy to get back to you with more. >> if you are the vp of privacy and public policy, one would think you were probably in meetings and would have a stakeholder position in what your company chooses to do on that issue. are you not involved in these discussions of privacy and how to protect this data and there by protect the virtual you of these children and teens using your platform? >> well, senator, yes, of course. i was talking about safety experts and experts on well being and such. yes, of course i'm involved in privacy issues including privacy issues that affect the teens on our platform.
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do you have any plans in the works to use the data you have collected, the data that teens gave you, the information they gave you when they participated in your mental health survey? are you going to use that to put protections in place for these teens on your site yes or no? >> senator, all of the research we do informs the decision making in the company. it is certainly something that we'll take into account. >> the decision making you are exercising shows that you're making decisions that allow you to be more profitable. not that you are making decisions based on the welfare of that child. why do you collect so much data if you do not use it to improve the user experience? you're not using it to protect
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children or improve the user experience. for the record why don't you tell us what you are using this data for? >> senator, we are using the data that we collect when people use our services to improve their experience. >> why would teens that took your mental health survey say, why would older teens say we are advising our younger siblings not to use instagram? not to be part of this online community? because they feel like you're not following what they are asking you to do. what are youing the data for? for micro targeting, to go in and target advertising? are you using it to push them further down paths if they click on one something you keep feeding them more? why don't you for the record tell us what you are yoosing
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this data for. you have reams of it. >> when it comes to the data we collect when people use our services we do a couple things. we use the data to provide the service. we use it to improve the service and provide enhanced experiences. >> tell me what improvements you have made to keep teens healthier and safer. give me three examples of things you've done that would keep teens healthier and safer as they use your platforms. >> senator, with respect to instagram, we have made changes to the ways in which adults can contact potentially younger users. we've made changes to the way in which people can comment and we've made changes that are designed to address potential bullying and harassment in comments. we've made resources available on well being and body image
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issues. we have made a number of investments over the years to address these issues. >> do you nibble around the oejs or are you aggressive? are you going to stop allowing human traffickers, sex traffickers, drug traffickers to use your platform whether it is in the u.s. or other countries? is that the kind of improvement you are making? >> senator, respectfully, absolutely not. there is no place on facebook for activities like that. >> it happens. it happens. there's a mexican drug cartel that's been on your platform. you didn't take them off. >> senator, that organization was designated and banned on our platform. if what you're referring to is the organization from "the wall street journal" article. >> you know, i have to tell you, and i have grandchildren. i have two grand sons and a granddaughter. my grand sons are 12 and 13.
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my granddaughter is a year old and i tell my grand sons all the time that they cannot trust you all with their information. i think what you have done to a lot of these children is inexcusable. i think the fact you collect this data, you monetize that data. you benefit from that data and then knowing you have this data don't you think parents would have liked to have known that this was taking place on your site? i do. i think it is unfortunate you all have hesitated to answer the questions senator blumenthal and i have. we do look forward to having a representative from your company come next week and answer the
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questions we have in our hearing. madame chairman, we look forward to hearing more from google and apple about the open market apps bill. and with that i will yield back my time. >> thank you very much, senator blackburn. second round senator blumenthal. >> let me just say mr. satterfield if you fail to have someone here on september 30th there can only be one reason that you're continuing the concealment. let me just be very blunt. you've been sent here to defend the indefensible. but at some point mr. zuckerberg should get the message. houston, we have a problem. and better to be here on september 30 than continue to evade responsibility. i thank my colleague senator blackburn for putting it so
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succintly and eloquently. i just want to point out that behind the numbers and perhaps seemingly abstract questions there are real human beings. young women and men who are deeply hurt by these images, the focus on body images, on self-worth that comes along with those images. in one study of teens in the united states and the uk, according to the journal article facebook found that more than 40% of instagram users who reported feeling unattractive, said the feeling began on the app. and about one-quarter of the teens who reported feeling not good enough said the feeling started there. many felt, in quotes, addicted
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to the and felt that they were deprived of self-control. again, the analogy to big tobacco is undeniable, an analogy, not an exact comparison. but the exploitation of that kind of attraction even addiction i think is represent rehencible. and i really do hope that you understand that there is a certainty here, which is accountability is coming. as senator blackburn has said. and senator hawley put it exactly. accountability is coming and it will be bipartisan.
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i want to shift to the issue senator blackburn also raised, our bipartisan bill, the open app markets act, would set robust rules to promote competition and strengthen consumer protection. i am proud this bill is bipartisan. i want to thank my colleague senator klobuchar for her leading role in this area. and she is a cosponsor of the bill. it's received wide support. as was mentioned earlier from consumer groups, antitrust experts, and app developers. ms. lieman i especially appreciate your reference to it. and the support that public knowledge has provided for the bill. two companies, google and apple, have gatekeeper control of the dominant app scores that allow them -- stores that allow them to dictate terms for everyone. their duopoly allows them to set
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the terms, and they do. if app developers don't like the terms there is nowhere for them to go. that is what we call a broken market. not even facebook is immune to google and apple's gatekeeper control. big as facebook is. powerful as it is. it is not immune. apple has blocked the facebook gaming app from the app store at least five times and it has prohibited other cloud gaming services from becoming available on the app store. apple has also forced facebook to remove a notice informing consumers about the so-called apple tax. that is the infamous 30% rent fee they extract from digital goods and services. the little guy is as much a victim as the big guys like facebook.
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and the open markets, open app markets act would protect developers' ability to offer competitive prices, tell consumers about lower prices, and give consumers the right to make their own decisions about the apps they install. that is what is called competition. and a free market. or at least freer than it is now. it would mean that facebook and others don't have to pass the apple tax on to consumers. and small businesses. it would mean that iphone users could side load facebook gaming directly on to their phones if apple continues to block the app. these are basically pro-consumer and pro-competition rules. mr. satterfield, would facebook support congress setting fair, clear, enforceable rules on app stores that would prevent apple
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and google from using their gatekeeper power to extract excessive rents and block competition likeway happened to you and your app facebook gaming? >> senator, thank you. our team is looking at the bill and we're providing feedback through the normal channels and continuing to work with you and the other cosponsors in providing that feedback. >> what are the normal channels? >> we're communicating with your staff and others. >> okay. well, let me point out in case it isn't obvious and i think it is that facebook really should support these kinds of rules if it is in favor of competition and open markets and not just for you but for others. mr. erickson, apple has claimed that if we allow consumers to
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make their own decisions, all sorts of really horrible or terrible things are going to happen. unlike apple, google has allowed side loading and better developing access on android from the very start. given apple's alarming claims would you characterize everyone's apple phone as insecure or vulnerable to cyber security risks because that's what apple says will happen if we eliminate the apple tax of 30%. >> senator, thank you for your question. if i may step back for a moment we share the values you and senator blackburn have that consumers should be able to choose the lawful applications
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to down load those and that there should be competition in this marketplace. we are taking a look at your legislation as well. and we'll be happy to engage with you going forward. the android ecosystem, no, we do believe we provide a very safe and secure ecosystem for app developers to reach a global audience of billions of users in 190 countries and that is not undermined by allowing consumers to be able to down load applications outside of be able applications outside of the app store. >> so you do believe android is secure? >> senator, yes. >> let me just close this round of questioning because i know my colleagues may have other questions. and i cannot help but make this
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observation about the action just over the last weekend by google and apple at the behest of vladimir putin to censor their apps. apple has taken down thousands of apps from its app store at china's request. almost a third of them relate to human rights and it includes hong kong protests and lgbtq rights. you know, in a tweet i analogized what's going on here to the attempt to appease germany.
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i view it very much as the same type of appeasement and the communist party in china. i think it was winston churchill who said about nevel chamberlain he had to choose between dishonor and war. he chose dishonor and he got war. in fact he got both. at the end of the day you're not going to appease these totalitarian dictators not even apple or google or any of the big tech companies are going to win by appeasement when it comes to human rights. so i think that it's craven pandering and undermines our national interests. >> thank you, senator blumenthal. senator lee is next. >> thank you very much.
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my next question is for mr. rob. what are the ramifications of our personal data having become the method of payment for so many online services? >> well, it's a loss of control, loss of income. and, you know, we're looking at the snapshot right now of the tech industry, and we're looking at -- we're focusing in on marketing and the big players that exist today, but this is going to evolve. you know, i've been in the tech industry for decades, and i started in the internet 25 years ago, and that was well before facebook and google even existed. simply what's going to happen in the next 20, 30 years is that this data is going to persist, and we need to give individuals control of that data so they can learn how to either exercise their control, set permissions
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on how it's used and make money on commercial apps and use it to build products and services. >> so what if anything can we do to reassert our ownership and control of our own data? >> well, i think the key way to do that is to get the data off of the platforms that are aggregating it and then putting it into a central repository that's managed by the individual. and if they do that, they're in control. they're the focal point where kmael combining that data and who's using it rather than having it sold by third parties to third parties and combined in ways that they don't have any jurisdiction over. by putting it -- the individual at the center of the equation it
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makes life more complicated but an essential thing for us to move forward and do this successfully long-term. otherwise we're going to be caught in this privacies fine, but really it's this destruction of data and limitation rather than actually solving the problem. >> are third party brokers like axiom an obstacle or an aid to consumers trying to regain control of their data? >> the fact they're combining data from muttple sources, they're actually acting in opposition to what individuals should be able to do. if you have the individual at the center of the equation, you don't need an axiom, you don't need a data broker. i mean they can cut deals directly with them. it may even be managing the data repository. we don't have a data repository
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now, and it seems fanciful to think in terms of that, but we can build it. we can set the standards for how that would operate. we can lay out those standards and have companies actually compete to deliver on those standards just like we built the web, just like we built so much of what we have in terms of web architecture. you know, data agigators can do business with individuals, but they can't be a substitute for them. >> mr. erikson, i'd like to turn to you next. in the last year google announced it would stop servicing third party cookies in the chrome browser. now, google's announcement said the purpose of this was to protect their users and their data. left unsaid was how it could
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protect google ad competitors and the amount of information google collects from consumers, browsing data, app usage data, financial transaction data, et cetera. tell me how is it consumers are anymore more protected if google collects this data and your competitors can't? can you help me understand that? >> senator, thank you for the question. yes, i can try. with the announcement that we made you rightfully pointed out we'd stop tracking cookies interest third parties. we did not unilaterally withdraw our support for that. but rather wanted to engage in a thoughtful conversation with advertisers, with publishersthality rely on an ad supported ecosystem to function
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on their websites or reach consumers. and we want to engage with residents and regulators and other stakeholders to explore more privacy protected technologies. >> sir, i'm not sure you're grasping my question. you're at least not answering it. i appreciate that you're wanting to have a thoughtful conversation. i appreciate that this is in your business interest and it may well have been. that's totally within your right. what i'm asking you to explain is your apparent assertion that consumers are anymore protected if you collect that data and your competitors can't. that is your assertion right? i mean that is the assertion you made in that announcement. you said you're not going to service the third party cookies in the chrome browser.
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go ahead. >> senator, we think the advertising ecosystem can thrive without having privacy intrusive technologies like tracking devices like third party cookies. it data that users -- we are transparent with the collection practices that we have in the uses of our data and we want to give consumers and we do give them meaningful choice over the uses of their data including to decide they don't want to see targeted ads and relevant ads. they can choose not to see those. there are many third party advertisers in the ecosystem. the access to data from consumers can be gotten from data roamers and other providers. the data in that regard is not
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revulerous. the data consumers may provide with us are often provided to other online actors as well, and some of these companies are some of the biggest companies in the world. but you implisletly raise a very important point. there are competitors out there that are urging competition authorities to have us make more personal aidentifiable information released to the ecosystem. we think that we want to engage in these conversations. we think we can have a privacy centric web while ensuring consumer choice and competition and that publishers and advertisers will continue to have a business model that will continue to aprovide their websites and services to consumered in a way they do
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today. >> i understand that, and look i get the fact you can always point to areas where things could get worse. there are mandatory disclosures of personally identifying information on the web or otherwise. it is rather significant here these things that you're talking about, steps you've taken to exclude what would-be competitors from the marketplace and circumstances in which google is happy to provide advertisers with an alternative making them more dependent on google it does ignore pretty much your bottom line. do you agree with google's statement? are consumers better off with only google being able to collect these types of data? >> no, i don't agree with that statement. i don't think that users privacy is improved and i think it's a problem for competition. i really think we're being presented here with a false choice. there's another alternative
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which is some of this data should not be tracked at all. >> sounds like you agree with my reluctance to accept the premise people are safer because of this. i just realized i'm dangerously overtime. chairwoman klobuchar has been very indulgent. i apologize. >> next up senator cruz. >> thank you, chair. last week the wall street germ ran a damning article entitled facebook knows instagram and toxic for teen girls, company documents show. the tag line below it was, quote, its own in-depth research shows a significant teen mental health issue that facebook plays down in public. i know about this article because my wife heidi who reads the journal every day said you need to read this article now. i read it word for word.
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all of us know these products are addictive and that companies like facebook design them in this way in order to maximize addiction, to capture eyeballs which captures data which is then used to sell advertising. but for years facebook has been publicly insisting that its products aren't harmful and particularly they aren't harming teenagers. we now know that was a lie. facebook knew that its products and specifically instagram was destroying the lives of far too many teenage girls. facebook knew this was facebook conducted its own study into how instagram affected young users and found instagram was harmful to a small percentage of them. summarizing this research said, quote, we make body image issues worse for 1 in 3 teen girls. another facebook slide said,
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quote, teens blame instagram for increases in the rate of anxiety and depression. another slide said, quote, teens who struggle with mental health say instagram makes it worse. and most egregiously one presentation said that among teens who reported suicidal thoughts 13 bers of british users and 6% of american users traced their desire to kill themselves to instagram. this should have made facebook stop dead in its tracks and ask what the hell you were doing. instead facebook publicly down-played to risk to young users and committed to push, to make sure more at risk teenage girls used instagram because more users including more teenage girls means more money
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no matter the cost. this is appalling. the american people deserve a thorough investigation into facebook's willingness and eagerness to mislead the public about their own products. "the wall street journal" article states that the research has been reviewed by top facebook executives and was cited in a presentation given to mark zuckerberg. mr. satterfield, is this accurate? did mark zuckerberg have personal knowledge of this facebook research? >> senator, i don't know the answer to that question. to your other points i mind strongly disagree with the notion that our products are unsafe. i strongly believe they are safe. >> let me ask you. did you have knowledge of this research, mr. satterfield? >> i'm sorry, senator. i've read "the wall street journal" article. >> did you have knowledge of it before "the wall street journal" article? >> senator, i'm generally aware that we do research on our
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products. >> are you familiar with this research? >> i wasn't familiar with this research outside of the context of the journal article, no. >> so, wait a second, your title is vice president of privacy and public policy and you had no idea about facebook's own research showing that you're violating the privacy and destroying the lives of teenage girls? you didn't know about it? is that what you're testifying to today? >> senator, we're a large company. we have a lot of teams working on a lot of different issues. i don't work on these issues. >> so you didn't know about it? >> i didn't. other people did. we're happy to connect -- >> and you had zero knowledge whether mark zuckerberg knew about it or not? >> senator, i don't know that. >> you knew you were coming to testify in this hearing. i'm going to guess you read the journal article before you showed up to testify? >> senator, i came here to testify on a data issue -- >> did you read the journal article before you showed up to testify? >> senator, yes, i read the
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journal articles. >> and presumably you prepared for today's testimony, yes? >> yes, senator, i prepared. >> and did that preparation include inquiring whether wall street germ was accurate whether mark zuckerberg was aware of this research? >> senator, i can't get into the issues we discuss during prep with my lawyers. >> why not? you're here testifying on behalf of facebook. i'm asking whether you inquired whether the journal was right that zuckerberg knew about this research. did you inquire about it, or did you remain willfully blind and not want to know if zuckerberg knew about it? >> senator, respectfully, i'm here to testify about data and anti-trust issues. i don't work on these issues. >> again, you're the vice president of privacy and public policy, and so putting in place policy that result in more teen suicides, that does not fall within your purview? >> senator, i don't agree with
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that characterization. >> okay, let's take the specifics of facebook's research. i read a quote a minute ago. quote, we make body image issues worse for 1 in 3 teen girls. i didn't write that. facebook wrote that. is that an accurate statement? >> senator, we do these research in order tool inform hard conversations -- >> i didn't ask why you did the research. i asked if the statement that was the result of your research is true? >> senator, this is research that was discussed in the journal. this is research that we did internally. >> was that a conclusion of your research, yes or no? >> senator, i'm aware of "the wall street journal" article. >> let's try another conclusion. the facebook research concluded that 13% of british users and 6% of american users trace their desire to kill themselves to instagram. is that a conclusion of your
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research? >> senator cruz, respectfully, we have teams that work on these issues. i'm not on those -- >> respectfully you're not answering the question. it's a simple binary question. did your research conclude that or not? if it's not, show us the research that didn't conclude that. if it is, then the question is what's the culpability of a company that knows it is contributing to and expanding teen suicide? so did your research conclude that 6% of american users traced their desire to kill themselves to instagram? yes or no? >> senator, again, these aren't issues i work on at the company. i'm happy to bring my staff in for a briefing with your staff. >> i'm the father of two girls including a teenage girl. in your judgment of facebook is increased teen suicide an acceptable business risk? >> senator, of course not.
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>> has facebook quantified how many additional teenagers took their life because of your products? >> senator, again, with respect these aren't the issues i work on. i came here today to talk about data and anti-trust. >> well, let me ask you. what would you say to the parent of a teenager who took her own life because of your products? what would you say when two years ago you had research that you conducted that concluded that your products would contribute to and expand teen suicide? what would you say to a parent on behalf of facebook who was facing that horrific tragedy? >> senator, obviously losing a child to a tragedy like that is devastating. i have children. i take these issues incredibly seriously myself. >> does facebook? >> of course we do, senator. >> so what did you do differently? you got these results two years ago. what conduct changed?
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you don't get to say you take these issues seriously if you continue doing exactly the same and profiting off of applications that are endangering the lives of teenage girls. what did you do differently because of this research? >> we did this research to inform our decision making. we have consistently made -- >> did anything change? >> -- improvements to the product. >> did anything change? >> senator, we've made changes to our products over the last -- >> did anything change to reduce the risk of teen suicide because of your product? did you read this research and say oh, my god, this is horrifying, let's change? did you do anything to change, or did you just say, hey, we're printing money sole we're good with this? which one was it? >> senator, i would love to have a team come and give you and your staff a full briefing on these issues. we have made -- >> it's the american people who deserve a briefing. >> -- to safety and security. i would love to share more about
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this with you to the folks who work more on these things. >> well, in the entire american people deserve to know the answers to these questions. >> thank you very much. i'm going to finish up here with my second round of questions. and i want to bring us back to the subject of the hearing on data because we have some major opportunities to move right now legislation that i think will be very helpful. the first i mentioned which is right in front of us before the house. the bill senator grassly and i have to modernize the merger filing fees. we also have opportunities in this budget in reconciliation. and, you know, my view is, and i guess i'll ask you this, the president can appoint aggressive enforcers. he can issue executive orders, which was great.
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but if we don't have the resources to take on the world's biggest companies is it all going to work? >> i think you're absolutely right, madam chairwoman. we need more funding for our anti-trust enforcement agencies. obviously that alone is not going to be sufficient, so i'm glad you're working on a lot of other important pieces of the puzzle as well. but that's a -- an important one we ought to be able to get done. >> okay, very good. and then we have not seen a lot of anti-trust enforcement against mergers or anti-competitive conduct based on the issues raised by -- with this hearing has for the most part focused on, which is data. it's clear that big data does raise complex competition issues, but i'm doubtful that when you see some of these court cases recently that in my mind have gone in the wrong direction to begin with, but then we have this complex area of data and
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what that means for dominant carriers with no new laws or adjustment of laws. and that's why the competition and anti-trust law enforcement reform act which i introduced with senators leah, blumenthal and others would update our laws. could you talk about how this would help to address competition issues raised by big data? >> yes, thank you so much, madam chairwoman. i think that's absolutely right recently and not so recently -- it's been going on for decades now -- that our anti-trust laws have been narrowed by these court decisions. so now we're facing the difficult challenges of big data, it's very difficult to bring a case, for example, where innovation harms are an important part of, you know, what the agencies are trying to argue. so i think it will be incredibly helpful to have your legislation in place that updates the legal standard both for mergers and
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for exclusionary conduct. exclusionary conduct in particular is how a lot of these big data concerns are happening. and it has really been difficult to bring revolutionary conduct to cases. which has been a big problem to big data but is particularly relevant here. >> and maybe we could talk a bit more about that, the relevance of it. as we look at privacy legislation, and i know mr. satterfield you talked about privacy ledgesation. and in your past testimony you've written about the need for congress to enact it that could govern rules how platforms should use, analyze and share data. what restrictions do you think the u.s. government should put on targeted advertising both from a privacy and competition respective? and should such legislation be
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limited to platforms like facebook, google and amazon or should it apply to data brokers, too? >> thank you, senator. we think comprehensive privacy legislation is incredibly important for congress to take up and pass. in terms of who it should apply to, we think it should apply across the board to personal data, the rights to access, correct, delete and move your data to another service. we think that companies should be required to build internal processes to make sure they're thinking about privacy when they build their products and services. so i think that those are the basic components of the framework that we would advocate for. >> anyone else like to comment on the rules the federal government should put in place to ensure the market for targeted advertising remains competitive, which is a little different than just privacy. >> i'd like to jump in.
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>> okay. >> and say that i think we need an accountability based law. we've been advocating for a federal law for almost 20 years and we believe it's very important for all americans to have the same rights and for businesses to have predictability and certainty. and the accountability construct is one that says it parses out and this is especially important for digital advertising that you should use data for benefit, for good purpose. and you are responsible and answerable to the accountability construct for detecting and preventing harm. i love what senator blumenthal said earlier that data an abstract of a person, and i believe it deserves all the dignity that we people should have. so when you process data, when you activate data for digital advertising, it's about fairness not manipulation. and that's the way we govern data and that's the way we believe, and that's what we advocate for in addition to the basic rights. we parse privacy out. it's the right to an area of
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seclusion, where can we as a people be free, natural unobserved humans, the right to agency, participation, control, access and then the right to fair processing. that is the third piece of privacy, and that is in the digital age. the reality of digital is it's it getting so complex. people do not want to sit in front of a nasa space station control panel and say yes, yes, yes no, yes, yes. we have to get the debaults right and has to be all participants are accountable for do no harm and do good things in service to people. the computer code is the conduct. thank you, senator. >> very good. one of the goals of competition falls to policies to ensure there's a broad range of choices. if ads are targeted based on what data companies have collected on each of us and the inferences they have made about our interests, does that raise
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concerns for you about consumers ability to really choose the products and services that are best for them ranging from financial services, housing, health care, employment opportunities and more when some of them are being targeted because of their data that they didn't really know they shared compared to other competitors? you want to address that? >> yes, that's something we're very concerned about. i do think that creates an opportunity for anti-competitive discrimination. it also creates an opportunity for racial discrimination and gender discrimination and we've seen instances of that happening. i think these are serious harms we need to be addressing, but to focus on the anti-competitive discrimination i do think in addition to the consumer choice limitations we're also concerned about the imfact this has on businesses. if a business is assessed by one of these aggurhythms to not be
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popular with a certain category of users that can make things incredibly difficult for them because of the power of these platforms because they occupy that gatekeeper role. it's much different than if brick and mortar grocery store decides not to show your product. you can go somewhere else. with these gatekeeper platforms that's not a practical, real option for these companies. so there's a variety of harms that come from that. >> mr. erikson, what is your company doing to ensure your competition is not being distorted with advertising? >> we think primarily consumers need to have transparency over how their data is being used and meaningful choices about the use of that data. so on the google platforms we provide an easy way for consumers to see exactly what data is stored relative to their account. they can delete that data if they want to.
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they can also make changes to say they don't want behavioral advertising targeting ads to them. they don't want to see -- they want to mute ads on third party sites. so i think the important thing here is to ensure that consumers have transparency and that they have meaningful choice, and we think privacy legislation should -- should reflect those values as well. >> okay, so earlier in my opening i talk about apple recently rolling out an update to its users prompting them to agree or opt out of being tracked from across the apps they use. early indications as i noted suggest a lot of them are doing it, something like 75%. has google considered doing something similar including for its android operating system? >> senator, thank you. so google has announced that they will -- we will stop supporting privacy intrusive tracking telk technologies like
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third party cookies and we've opened up a sandbox initiative to have discussions with adatizers, with governments to how the industry can move to more privacy enhancing privacy protective business models that still allow small businesses, website owners to be able to have an ad supported of business provide free products and services to consumers. >> and through the initiative, the privacy sandbox initiative, you've mentioned some of these changes that you made to your web browser, chrome. however, from a competition perspective these have raised concerns google will have access to detailed data but others won't. how do you respond to those concerns? >> senator, when we announced we would cease support of these intrusive tracking devices, the third party cookies, we also announced we'd not substitute
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those with alternative tracking mechanisms but rather the idea behind the privacy sandbox was trying to move as an industry towards more privacy secure technologies that would still support an ad ecosystem but in privacy enhancing ways. >> do you want to respond to that and then i'll ask you the last question here. >> thank you so much. the privacy sandbox creates a situation where google is still getting the data. so they may call that privacy because fewer companies are getting the data, but google is still able to fully exploit that data. so i don't think that is giving users full privacy. >> my last question is about -- i'll ask you some questions on record about mergers and things like that on my bill. but just the kind of broad question here, in your opinion
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do we need new laws to fully address the competition issues raised by big data or can we live with what we got? >> thank you so much. we absolutely need new laws, and that's something we're working very hard on. i think we need to use all the tools at our disposal, so we need increase enforcement with the current laws we have. we need to push for rule making at the ftc with the current rules we have, but it's so important we have improvements to sector specific anti-trust laws focused on big tech. >> very good. i think that says it all. you want to add anything, senator? you do because we want to have a four-hour hearing not just a 3 1/2. >> i'll keep this brief. mr. satterfield, what's going to happen to the employees at facebook involved in providing
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the leaked documents to "the wall street journal"? are they going to be retaliated against? >> senator, i can't discuss hr issues in a public forum? >> would it be appropriate for you to retaliate against them assuming they've broken no laws? would it be appropriate -- >> of course it wouldn't be appropriate to retaliate againstgon. >> would you issue a commitment to me facebook will not retaliate against them? >> senator, yes, i'm happy to commit to that. >> that'd be wonderful. thank you. i appreciate that. >> okay. well, i want to thank everyone for coming. there is a lot going on. we have a bill this week before the full committee for markup on venues that senator lee and i have done together. we have the funding bills and proposals that are very ripe for action right now.
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we have other bills that are tech specific with senator blumenthal and senator blackburn and myself. we are interoperability proposals from the past, and then we have discrimination bills -- anti-discrimination bills for disclusionary conduct in the light we're in the middle of right now working on. the house has proposals some similar to ours, some different, but we've been working closely with our counter parts which is representative cicilliny and representative buck. and also we have broader bills. we had a hearing on meat packing and consolidation in the grocery area. we had one that was very well attended would the full committee here. senator lee and grassly have a broad bill on anti-trust. i have another one with a number of cosponsors. there are some similarities in the bill, right, senator lee?
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yes, there are. so we're also looking at that across industry lines about things we can do that aren't just about tack actually, that hit the fact we're seeing consolidation across this country from everything from cat food to coffins. it's not really good to end with the word coffin, so although, you know, we're not too far from halloween, but i just want to thank the witnesses and assure you that -- that we continue to want to work with everyone, but we know we need change. that just keeping ongoing like we are and saying everything is fine and we trust you and it's just not enough. you know, we're glad that these companies have been successful. we're glad they employed people. we truly are. i have a fitbit. senator lee and i have compared some of our fitbit data over the years, although i'm not going to
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reveal that. although you already know that, so there. but at the same time we believe in capitalism and encouraging capitalism and rejuvenating capitalism and a lot of what's going on right now is the obvious privacy concerns many of which you heard today with a lot of understandable emotion, but then there's also competition concerns, that once you get so big and have so much dominance there are these barriers to entry, they make it impossible to allow competition. and that in term in the long-term allows for too much money in the same few hands. it allows for companies to start preferencing themselves, and they'll we've seen incredible developments in technology, we do not deny that, we'll never know some of the new bells and whistles on privacy we might have seen if we didn't have facebook and instagram and whatsapp, and if there'd been control on that. it's one of the reasons i
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support looking back on one of the most consolidated industries just like we did during the at&t breakup to figure out what we can to do make this area more competitive. so you're not going to find a more interested and energized subcommittee than this one as you can see from today including some visitors that aren't even on the subcommittee that we welcome. so thank you. we will keep the record open for is it a week? okay, very good. and thank you to mark and to avery for their work and senator lee and his staff. thank you. the hearing is adjourned.
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mr. schumer: mr. president. the presiding officer: the majority leader is recognized. mr. schumer: mr. president, yesterday speak pelosi and i put in motion the path to pass a continuing resolution that in one fell swoop would accomplish four very important things. it would keep the government open through december 3 of this year and avoid a needless and dangerous shutdown. it would provide emergency funding to help resettle


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