And trust legislation. Welcome to todays hearing of the subcommittee on antitrust policy and consumer rights, the title we chosen for today is stacking the tech as google form competition in advertising, i want to think drinking member and her staff for working closely with me and my office, we prepared for today. I also want to think the chairman of the judiciary lscommittee, senator graham for his support of this hearing. This hearing. After i and then senator klobuchar giving our opening remarks, well hear from two panels of witnesses with questions from members of the subcommittee. We have Something Interesting to deal with in the senate and every time they call votes, when they call votes during a subcommittee hearing, were at their mercy. Senator klobuchar and i have both cast our votes on the first of a series of three or four. At some point, were going to have to pause or tag team as we allow other members to hearing is googles Online Advertising business. A novelist andha whether it might have engaged in any conduct that harms competition and consumers. Before we go into that i want to say a few things about the scentrist policy. I chaired the subcommittee for almost six years and over that time as the public debate surrounding antitrust policy and enforcement has grown ended some cases involved, so too is the gulf between the opposing sides. Whenever it might conflict with the to the laws that maintain the very freedom. They forget that the markets like governance do not keep themselves free and that liberty is only secure when power is diffused. At the other extreme, however, is a line of arguments that has been pushing an agenda to transform the antitrust laws in this country from a tool based in Economic Science to protect and promote competitive markets into a sort c of panacea for all of their perceived social ills. Adult on the economically myopic premise that big is bad and that is the beginning and the end of the question, some on this end of the spectrum that use antitrust to address allegedly per, income and Racial Disparities in the antitrust laws meant to solve, though the problems antitrust law is even capable of solving at least not without creating a whole bunch of other problems even within those areas themselves. Attempts to repurpose antitrust law into a social Justice Program would have scores of unintended consequences that would cripple our economy for generations. And ofic course, there is the hypocrisy in believing big as bs that applies only to corporations and mouth to government bureaucracy. The very type of government bureaucracy that they would expand in order to dismantle and regulate them. You may e be wondering where i e myself in those extremes. Am i on the side of theeg amerin people, am i on the side of the law. I believe vigorous enforcement of antitrust law is essential to maintain the free markets that have made this the most prosperous nation on earth did, and i believe the current laws for the most part are sufficient to meet the challenges of the day. I said a moment ago liberty is only secure when power is diffused. This is a bedrock principle of the constitutional republic. The concept of federalism and of our founding document is what makes america unique among all other nations. This principle applies equally to economic power as it does to political power. In a way, it might properly be described as federalism forto te economy. That brings us to today. We are here to discuss what may be the seminal antitrust case of the 21st century. One whose precedent will determine the competition and innovation in our dynamic iconomy for years intact for decades to come. Unlike some of my colleagues in the house, im not interested in staging a political spectacle to attack, to condescend and talk over witnesses. Naive though it may be, my hope is that by looking at this specific question, we can have a serious conversation about the state of competition in the Digital Markets. Online advertising is an incredibly complex business and one that touches every Single Person on the internet. The technologies involved in connecting advertisers and publishers have evolved rapidly in the last decade and the expansion of Online Advertising has been facilitated in an explosion of online content by allowing even the smallest website owners to monetize the content they produce. Small local businesses have also benefited from being able to quickly and easily promote their businesses without any of the same Capital Investments that would have been required and indispensable for that effort just a few decades ago. So, at the same time, this growth and expansion has been largely consolidated onto a single platform. The Online Advertising business. As it has grown, so too have the ecomplaints that google, which operates the selling and buying platforms so the inventory through those platforms have conflicts of interest and has manipulated online and the technologies and options to favor its own interest and protect its own market share. Whether this is true or not it matters because so many businesses depend on the marketing or to monetize the content they produce. Web users in turn benefit from free online content and being an a to relevant businesses in a way that helps them to make optimal business decisions. Simply put, the markets function better when t businesses thrive and consumers are informed. Ideally, Online Advertising helps accomplish this. If however it has been monopolized and constrained by exclusionary conditions, everyone loses to that degree. I would also add google and other tech companieson have been accused of a number of bad acts unrelated to antitrust and competition. I myself have repeatedly expressed concerns about an anticonservative bias by the firms and they will continue to pursue those concerns. But while the issues like the anticonservative bias have implications for antitrust such as perhaps evidencing market power, todays hearing is not fundamentally about those concerns. This hearing is about an analytically e distinct issue allegations in advertising that are a legitimate subject of inquiry and to be clear as id reject demands to use antitrust for social justice, i also intact would reject using antitrust to solve other antitrust concerns. Todays discussions i hope will help everyone to better understand the Online Advertising market and how competition works or should work and how it might not be all forgiving as well as it could. I look forward to hearing from our experience and highly codified witness. And i will now turn to the Ranking Member klobuchar. Thank you so much, mr. Chairman and thank you to the mrs. And mr. Hairston appearing virtually. I want to start by making something clear. We are not having this hearing because google is successful, it is a used it on my way here, or gee whiz dissent from my perspective why we are having this hearing. Atthey are having is because evn Successful Companies and even Popular Companies and even Innovative Companies are subject to the laws of the country including our antitrust law. Successful when we make sure that our economy is strong and our economy is. Butes the law cannot be blindedy the success of its constant innovations of the company and its zeal to achieve greater success crosses the line into anticompetitive behavior. Its our job to regulate it. Its that simple. We will touch on issues today of competition, technologicalal innovation, the use of personal data. These are some of the defining issues that the chair has set as the defining issues of our time and i think that as we go into the months to come this will just be about google. This isnt even just the technical industry as much as i believe we need to change the laws and look at the changing of the burdens and making it so that the laws are sophisticated as the companies that occupy the economy. I think we need to do all that and it should be a huge priority chairman now as the mentioned, we are focused on this issue today. Our society has never been more dependent on this technology than we are now in the midst off this global pandemic. The pandemic has forced a bunch of Small Businesses to close their doors and the five Largest Companies continue to rise to the pointhrive tothe point of ty accounted for 25 of the value of the entire 500 stock index just a few weeks ago. I do not quarrel with their success but we have to start looking at if they really match the situation and even if the original intent when the companies started at what point do you cross the line and squelch innovation and competition from other compani companies. We start with this use of data. The powerful companies that provide us with the technologies are also collecting personal information. We know that. They know who our friends are, where we live, whether weve graduated from college, income levels, race. The chair ma chairman and i shan interest in this. How long we have stayed where we are. Machine learning analyzes the data for the firms to discern even more Sensitive Information about us. Our medical conditions, o political, religious views and even preferences we dont know we have. Nnd why would companies do all of this . To target us with digital advertisement. There is no other reason. Its a capitalist society. That is what they do. Google makes more money doing that than any company in the world by leveraging its unmatched access to consumer data gained through its existing dominance in online and mobile search all pervading systems browsers, mobile mapping and Ad Technology so lets look at these two sites. On the advertising side and they control access to the huge number of advertisers that place ads on the search which is nearly 90 of the search market. On the publishers site, google has Privileged Access to inform its bidding strategies and then it also effectively controls the process. On the publisher side and advertising side and that would be a lot of the focus today who are the publishers they are content producers and the minneapolis star tribune. They depend on revenue. So many of our content producers do to get by. Given that my dad is a journalist, this is one of the key elements because if you have unfairness and help the ecosystem is going then you deprive these news organizations iat the time when the First Amendment is already under the revenue that they need to keep going. So, whether it is happening, and we dont know all the details at the department of justice right now this could be the beginning of the reckoning for the antitrust law to start looking at how we are going to grapple with the new kind of markets thati we see across the country they are able to restrain business conduct of even the largest most Successful Companies in the world and when you think of the breakup of at t that was our last big thing that happened in antitrust era. Asether that leads to lower prices, more competition, it worked. But we are not able to do this right no now, and my hope is tht we are getting the start and in the Justice Department things are going on at the ftc. But to do that they will need resources to take on the allegiance of the warriors so that is my first goal. Second what do we do to make the laws work better to look at some of the deals that have already been made. What are the remedies, do they make a difference changing the behavior and allowing the competition i literally dont have personal grudges against these Companies Like sometimes the president has expressed about various companies. H i just want our capitalist system to work. I want it to work and you simply cant have one companya dominating areas of the industry. Our Founding Fathers started this country in part because they were rebelling against the monopoly power. Our first panel mr. Hairston is joining us virtually. If you would stand, please to be sworn. Diva from the testimony you are about kids will b to give will e truth and nothing but the truth . I do. I will now briefly introduced the witness for the first panel. The partnerships oversees google Strategic Partnerships worldwide and is responsible for the products and ecosystems enablement they handle the mergers andnd investments and te focused venture. Part of joining google, a lawyer where in 2003 peters first introduced to google and helped take the company public. He served his career at the Toronto Law Firm philips and fienberg after earning a degree of Political Science and philosophy at the university and with a law degree from the university of toronto. Thank you very much for joining us today and we will look forward to your testimony. We will now hear your opening remarks. Ranking member klobuchar and distinguished members of the committee, thank you for the opportunity to appear before you today. My name is don harrison and i lead the Development Teams where thewe separate the growth of the products to partnerships working with a h range of businesses to help them use the product to grow and succeed. I also oversee the ideas of fostering innovation and the development of new technology. I job at its core is to help other businesses grow. As the partners businesses grow, ours does as well. We build tools that help other businesses grow. One way we help them grow is through Online Advertising. Of all sides to use the tools to find more customers at home and internationally. Over 36 come from overseas. Online advertising prices have fallen more than 40 since 2010. The benefits of these go directly to american businesses and consumers. The wide range of businesses including many firms advertise on o our site. Thats where we earn the majority oare in themajority ofg revenue. In addition to the propertiesn are also helps businesses advertise in a wide range of other applications known as publishers. They offer technology and help publishers sell space. This is known as an attack. This portion of the business accounts for a small fraction of the advertising revenue and the majority of the revenue is shared with publishers. The space is crowded and competitive. Oracle and verizon as well as leaders like index exchange, publishers and advertisers for an array of providers and average publisher uses tools and multiple eyesight fools. Even as the prices have fallen, benefiting google has helped publishers make more money from that. There were more than 14 billion to the Publishing Partners in the network. This is up from 10 million in 2015. More than the industry average. In other areas when it comes to ad tech, we take an open approach and make the tools with increasing choice and competition. Publishers and advertisers enjoy a wide range of choices. They get access to demand from over 700 advertising platforms and ad space on more thanem 80 publisher platforms. Tthis fosters vibrant competition. It can also work seamlessly together in an integrated way generating efficiency, speed and security benefits from the advertisers and consumers. The free and open i open interne enjoy is made possible by advertising. Websites would be forced to bring their content or shut down their operations entirely. This would harm consumers with higher prices and reduced choice online. Looking ahead we continue to invest in the innovative tools to help publishers and advertisers grow their business. Its important. Thank you for inviting me to participate in the discussion gnd i look forward to working on these important issues. Thank you very much for joining us today. We will now launch into seven minutete rounds of alternating questions. At the outset i want to address something briefly and that is i and many of my colleagues are concerned about bias at otherive online platforms. Earlier this yeari i express grave concern upon learning google reportedly had banned the conservative website the federalist from monetizing its content. I want to be clear here that a private Company Engaging in censorship on its own platform isnt a violation of antitrust laws. Nevertheless, as i pointed out on this subject, isnt this behavior evidence of market power in other words why would any company want to treat its customers that way unless it was confident of its customers had no viable alternative. Can you help me understand about . A couple of quick points. Comments that were made about the lack of choice, they have many choices to use different tools to help monetize that content. In the example you are m talking about we have policies and most dont want the content to show up next to the harmful content. In the case of the federalist, they had commentary some of which made clear was racist commentary and we have been clear on that commentary we did try to work with the federalist and there are a bunch of options available. First of all they can not have a comments section and they could moderate where there are many publishers that have a click through. The federalist and its management, are you suggesting they are racist . Guest today for not at all. You are talking about the commentary that you would like to see them have two moderate the commentary on their side is that right . Spin absolutely. This is what i find ironic and somewhat sane he be hypocritical. Google justifies the platform here because of content blocked by the site itself but it has produced, but because of content on the comments section. Google insists that under the Communications Decency act is shielded from liabilityre from s own users content. How is that not a double standard and the fact google feels bold enough to act in this way and evidence that it perhaps doesnt feel competition, doesnt feel threatened . There is no allegation i think any large platform has all meant sections users have uploaded. You mentioned section 230 thats helping many deal with the fact they shouldnt be responsible for the comments that are uploaded too their system. It is a helpful part in making sure they can stay all pervading even in a world they may have Comment Sections and people can upload. We have the same problems on youtube. Sometimes they contain language that violates our own policy. And we have systems that capture this. It can remove hundreds of millions of comments that make sure that these comments are taken down and removed and i think thatum we capture all of e 99 of comments before they are ripe. Again we can work with sites like the federalist and many others to make sure that they adopt the moderation policies that make sure they continue to operate according to the policy. They dont only have options in terms of how to monitor the above maintaining good options to go to other Advertising Solutions if they think that our solutions are not working. Most use between four to seven different tools to solve their advertising. The federalist uses almost 30 fifferent tools. Im glad to know that. But you dont dispute you are a significant part of this and unless im misunderstanding you, i still dont think youve answered my question. Isnt there a double standard, help me understand why google should be entitled to deference but you are not willing to give that to someone else, to another firm you have acknowledged doesnt sponsor those sort of things that people sometimes comment on those sites. I dont know, perhaps they could then excluded from the platform. Is that possible . Thegimmick it is often referredo that we monetize or took away the federalist ability. We didnt do that. We want to help the federalist continue to make money off the content shown. They just need to make sure the comments section is moderated. I dont think you would want any advertiser to see if showing up the content that they dont agree with that is objectionable or offensive and so we apply these policies to our own fights as well to the extent this type of content has the risk of showing thathe other platforms. This isnt directly relevant to the antitrust inquiry itself, but it is indicative of it and how theus company behaves when t senses that it doesnt have meaningful competition. Moving on to another point if i am an advertiser placing an ad using this technology it is my understanding google doesnt tell me how much the publisher is receiving for displaying my ad or how much money from each dollar google might be keeping for itself. It seems like that might be frustrating for an advertiser trying to figure out whether shes getting a good deal and consider comparisonshopping. Will you set the record straight and where it is spent on the ad platform . Thank you for the question. We did recently published two different blogs. Google is a Search Engine we benefit where people need to look for information not only is that a benefit to the ecosystem but to us. We got them to start providing the publishers and to be recognized they are going through their Business Model right now and we have a lot of projects to try to help them. I want to note they keep 95 cents of every dollar they earn from advertisers then for two reasons. They can sell them directly and mostly 75 of their advertisements directly and they pay veryry small fees where a lt of people use the tools and we are happy that its a popular product that we charge very small amounts of money. Programmatically they use both of the tools and they can pay anywhere from 70 or more of the nincome from their advertisemens and when youou bundle these this together 95 cents on the dollar. Outside of the news publishers thweve done a full analysis ani want to be clear this is all aspects and a publisher chooses also the ad exchange is used to connect those two. Publishers keep more than 69 of the revenue and thats above the industry average. Thank you. Weve got to move on to senator hawley now. It is i isnt the same as transparency on the actual date. They keep 95 , but they dont know what the advertiser bid so twe might want to get back to that later in the meantime we will go toha senator hawley. Can we go back to the federalist to clarify something that you said. Do i understand now that you have a content moderation requirement to access is that your testimony . They didnt moderate their content section. You required to engage in motivation in order to have access to a your platform is that right . Guest it will not show up against harmful offensive content that is the requirement they want to show our ad next to their content and that can be harmful. So in other words they have to moderate it. This isnt even their content from its thirdparty content in terms of section 230 they are perfectly entitled to do but yoi are saying in order to have access to have to engage in content moderation apparently according to your standards. Would you tell us the standards that they have to meet . Apologies if i wasnt clear earlier but they have three choices. They could choose to moderate or put their commentary behind the wallhe so we were not requiring them to moderate. We give them options on how to change. So basically the choices were modified the site according to your standards in onent of two ways, its they didnt moderate it but they either had to hide a section or engage in content moderation according to your standards and i think you were willing to help them do that is that right . The comments that we are talking about are highly racist comment. But they are not the federalist. m trying to get at what you are requiring especially small sites like federalist compared to your site what do they have to do to access your platform and what i think you said is they have to engage in content moderation according to standards you have and it would be useful if everybody knew what the standards are i wonder if you would connect in the committee that he will publish arose standards and expect the states to meet. Will you do that . Im happy to share the policies with you that make it clear we will not show the the t to misleading disturbing content but they are published and clear and i would be happy to share them with your office. We didnt require the federalist to adopt content moderation. We gave options that didnt highlight the policy and was not offensive. It is extraordinary market power that would enable you to do Something Like thiswa to call the tune for the construction of the site to design moderation palicies and that you are able to adopt these sort of policies are cut off the revenue stream is extraordinary. Google a. The Publishing Services but that . And a supplySide Platformd as well. Platforms on the publishers andm advertisers side. And a demandSide Platform as well. And you overpaid ad servers. That is correct. The competition on the authority recently found a market share in all of those leaders is dominant. You have greater than 90 and the Second Market between 40 to 60 and third between 50 to 70 and forth, over 90. Do you know of any other company that exercises this across every layer . We have built good products and i am proud of the products. The numbers that talk about ad serving that allows them to appear onh publisher websites we do have a popular product that doesnt take into account the richness of the entirety of the system. They choose to provide their own advertising directly. Facebook does this, amazon. But the but they dont provide overtising on the open web. Or the uk competition marketability statistics and direct . Do you dispute these statistics . Dispute these and think they use a narrow market definition and looking at how to construct the market and i also dont think they took into ccount that if we try to raise prices there were so many other options publishers or advertisers up to one of these other options. I would be curious what you think it would be in each layer, would you make that available to the committee . Im very happy to cooperate with you. I want to make one point, prices have fallen im interested inin your response to the long study about your dominance in each layer. Lets talk about whether or not how youre using your dominance of youtube as well to help. Its true that in order to place a display you have to go through google platform. Is it the same if i want to put the ad in the search i have to go through the google platform is that correct . Like many beer sold directly through the channels. If you control 92 of the market approximately to the search, does that soundel right . I do not agree with that at all. I think that when you search for the more often they use other types of apps and experiences. I will make one point about commercial searchers. We would love if people came to the website if they wanted in california rightwe now its air purifiers come up to go to amazon more often than us. As a matter of fact, 70 of the commercial inquiries start with the website other than google. I understand that you would like every search in th to havee world to be conducted by the platform but when it comes to assessing markets, your aspirations are Different Things and i am simply quoting to you the statistics other authorities including the uk have already found when they assess the dominance of the Online Search market. But again if you have a Different Number you could share that with us. You control 75 for the online video platforms. Heres my point. It looksm like in order to advertise the fact its true to advertise on either of those dominant platforms, you have to use a google ad platform. That gives you an enormous advantage that you control every layer of on the supplyside implement a demandsidsupply siu control so much inventory and so much space it alsoop because you have so much data thate is collected through the consumer facing applications like gmail. Arent you using your monopolies and search and video i researchr to boost and maintain a monopoly in this space as well . Are there lots of competitors and choices where the price is falling and i think when you look at Online Advertising not only the search for information, you will see there are a lot of companies that are doing very well. I touched on this in my Opening Statement but iff Companies Like amazon. You have Small Companies that have grown immensely over the last few years and that is because the companies are able to participate in either body parts of the advertising or narrow parts of it and are able to use whatever advantages they ave. There is no lack whether it is on mobile or connected on the web and there is no lack of Companies Including ticktock targeting people do inventoryudo advertise against. If i could ask indulgence of the comthey come back to the isf transparency senator leahy was asking about a minute ago. When google participates by buying or selling on the auction, does google disclose what it made to either party during the transaction . We have contracts with advertisers that can see what fees they pay. There is transparency. You buy and sell him to do it tson both sides of the supply se and a demandside. Im asking did you disclose to the parties they represent what they paid . Senator, again, we have a ries of do they know how much they make from transaction . One of the reasons we published and im happy to share that with you. Its much more interesting to do it under oath, so tell me here can explain to us im sorry, if you are a publisher and make the inventory available and what you charge but do they knoww what google makes . You buy and sell on both sides because you control the entire ad stack, you control the exchange, the buying and selling so you buy and sell and i just want to know do your clients know how much you have made in a given transaction when you are buying and selling on both sides . If it is a publisher making the in the array available, they are aware of how many, how much theyve received for the value of the inventory and how much they pay to us and other members of the chain by which advertising is strong. But they dont know what you made, the value of the transaction, they dont know that, right . Senator, im struggling with the question because i think that there are so many pieces into so many different people that participated in it. You can use our publishing tools you other advertising tools from other providers. Publishers are not generally aware citizens fully disclosed unless you have contracting parties that have agreed into that make it clear to them how much they are paying to us and to themselves. The concern is extremely indulgent so i will end here but concern is coming and i know you are well aware of this because there is a transparency in the market that you control from end to end you are paying prices and making profits nobody is aware of and its hard to get clear so they dont know what your role of the transaction is or what profit for taking away from it because you dont disclose that. Since you buy and sell on both sides, you privilege ourselves. Thank you very much. According to the uk competition Market Authority, google has dominant market share positions in every market in the ecosystem as i was talking about in the opening. With particularly high market shares of 80 in both the publisher and advertiserk circut market. In the opinion of some, invite media and the 2010 and 2011 and 2014. That is quite the collection of names. Although some raised competition concerns about these deals when they were proposed, none were challenged. With the benefit of hindsight it seems obvious that these acquisitions were undertaken by the company in order to add to its market share and without explanation i can think of anything else for the mergers other than to establish and maintain theirir monopoly power that it currently has. Mr. Harrison. The question is what explanation is there other than you were buying out whats woul what hasn eventual competitors. Because we recognized a vibrant healthy publisher system was to the benefit. There is only one or two sites to go to and it wasnt a useful proposition. If there are thousands that we are a good proposition. Do you think that google would have had a 90 of the market if you havent bought respectfully they found that they were able to succeed in the market. Apple, amazon, twitter. They found publishers used between four to seven tools and advertisers used four to six, so theres a tremendous choice. Into the acquisition that you outlined, for u us trying to fid a piece of innovation which is a good example we had no real tool to do that advertising so we recognized the chance to take that technology, invested with our ability to scale our knowledge and i think we built that into it into a product fore advertisers but we didnt buy it because are you troubled at this point you have this market share without any real competitor in this area . I dont agree with the market share. If we could take one aspect, and i tried to address this earlier, the ad serving market has been where we havehi a 90 share. They found when they had inhouse tools, they could very easily be made to externalize huge Companies Like facebook. The market share dropped 20 . I think that when you look again we have popular products and recognize with that popularity comes questions especially like the ones youre asking. But we do not agree that and the market is operating very effectively. We disagree on the dominance. Lets go to another area because youtube represents nearly half of the inventory available outside of gardens like facebook and has a broad Audience Reach that Facebook Youtube video ads in facebook. Youtube video ads are a must buy for these agencies. Initially all demand that muslims could bid to place themm on youtube but on 2015, google limitsd access to only the 360. This had a crippling effect on googles rival, because most advertising agencies prefer to use only one. But the limitation of only forces youtube in also had the effect of driving the volume away from the rival dsp. How does google justify its decision to limit access to youtube inventory to its own affiliate . In 2015, we were trying to wrestle with those that were coming for them and in response to that, we migrated to the viewing platform that allowed a number of features and some of the tools around how you would watch with other inventory that was available for just one of our exchanges and so we have to make the decision competing against other advertising. A couple of things they found the advertising was ten to 20 in figuring out what the market share was, they also had companies that had been successful selling their video advertising directly to their platform. And as a final point to why wouldnt the advertisers do directly with youtube . They can deal directly with youtube, sorry i dont understand the question. Im asking if they wanted to make it a walled garden, why not have them deal directly with youtube . As opposed to using our ad service in . Because that is the tool in order to find ads on the platforms. We are creating a separate tool and that doesnt seem to make sense. Whenever we go through all these thingscometh the answer usually is that google argues that it has no incentive to harm advertisers or users and if this rs true, why are we hearing so many complaints, why do we keep hearing this . Ar dont hear complaints about companies will find when we start shipping them over and over again it feels like a canary in the coal mine in terms of people feeling that there isnt an even Playing Field and because there is an inherent conflict of interest they see that it reflects and the lack o competition. Have you heard those complaints and what wouldin you do . We are a popular service, i understand that. I dont know which complaints ouu are talking about, but at the same time we made this decision, amazon was able to grow and become a larger platform. I think Many Companies have their own successful products and ways they are able to do that effectively and directly i think that they will be able to answer from senator blumenthal. Thank you, senator klobuchar. Welcome to the committee of the virtual. I think with all due respect, you have been given a thankless task of defending the indefensible. Google claims that what it does is preside over an open and free market, but in no other markets is it represented the selle repr the buyer to make the rules and conduct the option. That seems unacceptable in a really free market and a Free Enterprise system which is why i hope there will be antitrust enforcement directed against google. The european authorities have already shown us the way and their leadership on these issues to protect consumers and the point of antitrust law is to protect consumers and competition, not necessarily other businesses but in fact other businesses were also victimized. Local newspapers like the hartford current and the new Haven Register hired them to sell their ad space so they can make their table and employ people locally and provide news to people like me and provide their communities with a public service. Google collects Sensitive Information about those papers. Every Single Person who like me wakes up, reads the register and other newspapers and we trust you to act as the agent on the app market and they trust you to act as their agent. T but google has an immense conflict of interest. You dont just represent the newspapers in the transaction but many times the advertisers as well. t andti you wanting to control the exchanges where the actual transaction happens, you are able to use thatun information u have on all the parties to extract massive possible value o for google which is why you ae so immensely profitable. According to the European Authority so that we begin by asking does google firewall and other publishers data from the rest of its clients and operations . We are highly committed to news publishers in making sure that that industry that is a massively important industry to the functioning democracy we have committed to Building Products to help them transactions in times the revenue has been falling according to newspapers and so we are hoping that drive the subscription and we are in the process of engaging withev publishers resetting the relationship in order to make sure that the publishers especially of quality journalism have financial support. That money should be going to the newsroom, not to google. Do you disagree with me . Senator, we published a blog on this. Publishers keep more than 85 percent of the revenue they generate from the content that they sell because they have the option to sell it directly in many do so directly or they can use our system where the rates we take are far lower than the industry average. The question regarding data is subject to the agreements we have at the publishers. I can understand exactly what you think we are doing incorrectly with that data. You are using their data ec not forenefitd theirs or their readers and you are driving them out of business. Maybe not financially but engaging in conduct that cuts they are payroll, fewer employees at those newspapers nationwide. Connecticut and around the country. It is used to your benefit not for the benefit of the people who own the data. Senator respectfully i dont see it the way that you describe that. Wede use revenue share with publishers so we benefit when they sell advertising our sole goal is to help the publishers make as much money as they can so in turn we have revenue share on what they can sell. There is no conflict of interest is aligned. Maybe not from your point of view your interests are aligned from your company note with tears. Let me ask about the system of the amp and exclusion of bag companies. And it has the immense impact on google and consumers and google started to condition gotreatment on Google Search having 88 percent market share on publishers adoption of another google product. Amp and it did so at the time publishers finally found new tools to foster a competition when google set the rules at happen to block add competitors to force them back into googles own products also handed google a treasure trove a publisher data they were facing a loss between 40 and 50 percent of income and speed update rules unless they caved to those rule rules. Simply that is a stunning abuse of the google market power and i would like to know your explanation. We introduced accelerated mobile pages for a simple reason that when websites move slowly and in particular when they make the transition to mobile environments with new technologies if the page loads slowly it does not monetize veryhn well if it takes seconds people will move away and often the advertising interferes we introduced amp to help publishers to have a tool to allow their webpages to load morero quickly and we were proud of that tool we never architect that so it was a closed system all the tools because when they have every other product in this system amp was no different we didnt design it so that it would only work with google or somehow for close access to other ways to sell your inventory but simply to get webpages to load faster. And we have been clear since it is not required to use any of our to all. My time is expired. If we have another round of question i hope to follow up. Senator klobuchar has to go vote i will let her go out of turn. I have one question. This conflicts mr. Harrison is pretty obvious. I know you see it differently but most of your companys are y. A verb google it. You are it so it is fine but not when you are controlling as senator blumenthal just pointed out the advertisingin side on the dominant side and then publish and then control the option that the people participate in when it comes to determining the advertising. So one question i have some people have actually compared the Digital Advertising exchanges to electronic trading in the Financial Markets which are regulated to prevent conflicts of interest and trading on inside information. I know this is not how you started out as a company and are now very successful, that at some point regulators and people who try to ensure competition have to look at models like that to make sure it doesnt disadvantage one arm from the other so why shouldnt those be regulated in a way like that . Thank you senator thats an important question i thank you look for regulation in the market where you see market failure and not to sound like a broken record but i do not see market failure in Online Advertising. When the market failure may not be as obvious talking about the prices for your immediate product which could of gone lower but there is a market failure for content producers who are not able to get advertising anymore because they go to you but still trying to provide content that is a big failure for them and just something that doesnt look like you. I would highlight the cma found most publishers use between four and seven tools between 25 and 30 tools to sell advertising are they getting valuable dollars and can they see they get those valuable dollars . I think thats the case we wouldnt have large Companies Like at t and verizon if there was a chance to carve out a meaningful Value Proposition or the tradei desk in market cap in a very short period of time if they could carve out proposition for them. I think there is tremendous choice and there is a lot of competitors. I think prices have come down. Our tools have contributed and down almost 40 percent over the last ten years. I see where that would require regulation. I know that we continue to invest in research and Development Almost 26 billion in 2018 because we compete vigorously for every place we have with the success of our product. To invest in almost 20 billion in the United States and much of that innovation is produced here. Again, i do not quarrel with your success of the jobs you provided but our job is to omake sure looking at the long haul we are encouraging competition and new businesses to develop. Right now not just in your area but across the board , startups were in a slump before the pandemic now we see more of that while other companies are being more dominant so its more than being google but a systemic issue because our lives have not match the sophistication of your company or others regulators have not matched it and we are where we t are why we need to make a major overhaul. Thank you. Of course the test isnt if the publishers are getting dollars for ad space, the test is if the dollars they get our of competitive rates for the industry average those were approximately my company has a very strong position as an online publisher it is innovation and an asset that we have that is very valuable. And t if an advertiser wants to place an ad on youtube since 2013 the policy has been wanting to place an advertisement on youtube so i have some questions why google chose to implement this restriction and whether if that doesnt have a tendency to exclude competing demands from the market. Lets assume mr. Harrison that if youtube were an independent actor and as such tried to maximize demand and revenue, why wouldnt youtube in that circumstance open its inventory to as many demandSide Platforms as possible and bidders as possible . . Wouldnt that make sense . It depends on the goals of the platform and the website we were trying to balance new features and the fact those were not offered by other platforms so it would be hard to sell that inventory sidebyside to answer your question a lot of Companies Choosing to self provision their own inventory. Snap, facebook, they have chosen not to open inventory but use their tools to directly o purchase. In many cases they are trying to balance privacy and the confluence is why people have chosen different ways to sell advertising. But those are different than yours . I dont know in this context but the ability to reach consumers i do think these are platforms that do have a specific focus but very important to reach consumers him point to the massive amount of choices with your an advertiser and want to try to find a way. I know you claim advertisers might and up bidding against themselves. But truly the Worlds Largest Technology Company, that is your company, google, is capable of creating a workaround to preventyo that if the advertisers couldnt do it themselves. You being the Worlds Largest Technology Company and most successful, surely you could figure that out . As a cynical effort to leverage the market power of googles Properties Like search and youtube into a monopoly of Online Advertising. We are not the Largest Technology company in the world there are three others that are significantly larger than us. You get the point we will not quibble whether or not google is a large Technology Company. I get your point if you want to split hairs. There are not many in the world with the skill and expertise you have got. Right . Agreed. Yes. Your question is . Why couldnt you figure out a workaround so they did against themselves . It sounds like something that isnt that difficult technologically speaking. A good question. This is a complex ecosystem the points i tried to make is a result you have a hundred participants in the ecosystem there is an issue with the fact there are so many platforms on one side and on the other that you have advertisers that aggregates demand from the same sources and end up competing with themselves. One of our criticisms which we fully work with was opaque to advertisers how they were bidding and publishers were making more money but it was difficult because advertisers didnt know how the dollars were competing with themselves. One of the issues was to stitch that back together with a new product called open bidding to give transparency back to theuc advertisers. Anyone as complex as this the more participants, the more likely you have a situation where advertisers can bid against themselves. In the ideal world there is one but thats not the state of the market today i dont thank you want us to be the one to all that would solve the issue you are raising. Lets move on to a different issue. So google does not provide advertisers specific information on the effectiveness of particular ads they run such as how many clicks and add receives or how many people click on an ad actually made a purchase or how many resulted in closing a sale. That seems like an important piece of information or category for advertisers to have when doing comparisonshopping to make Strategic Decisions how and when and through what platforms to advertise. From what i hear googles competitors provide or allow third parties to provide that kind of information. Will google provide advertisers with non aggregated information with the effectiveness of adde impressions . I am surprised at this we have whole teams dedicated but to nothing help advertisers calculate their roi. The whole reason to be successful was small and Medium Business as well Large Companies could only by advertising and allowing them o spell send very small amounts of money with the ecosystem theres bikes out of south dakota they had 50 percent of the inventory and internationally not only do we provide that capability but provide the many tools to figure out if they are getting a return on their investment. So i am surprised maybe im not understanding your question but we give advertisers tremendous information do you there on begot of theres value in what they spending. So then how do you respond to the claims that you dont provide that . So advertisers say you dont give them that information . Im sorry but there seems to be specific types of information they are looking for . Iat am worried that that information is inaccurate. To the extent you provide them some information it is not as good or robust or complete as what they get from your competitors. By the way im very happy to follow up with you to understand your question. We give advertisers as much data as they can as possible some of that data relates to specific behavior of the ad compared to specific aggregation but were careful to protect the privacy of the people that use that platform and there is a limit how much we can share. Thank you mr. Chairman. Mr. Harrison welcome and thank you for testifying. Google is at every stage in the advertising process. On the buy side has buying platforms. On the sell side has the ad i exchange and as a publisher. The Weather Company i am aware of is in every space and the Weather Company is nearly as prominent would you agree that google has a dominant role buying and selling ads online . Re i agreed we have built tools and again tremendous success with their own properties and we are investing in the success of that ecosystem is good for a google also those publishers that participate the question you are asking is if we are dominant that implies some sort of abuse and all i see. Im just talking about the degree of market power is there anybody even close . And that prices have fallen and that is up ten ask over the last tenfa years. And then we have healthy competitors its a very successful bng company both its own add products and those two innovation and that is a healthy competitive they are not competing with you in the search space . Yes they are. I google something i may not have facebook to but if im searching for something i go to those for different purposes if somebody wants to think what does joe biden think about taxes so thats a great question and if i could share it is a general Search Engine we occupied a specific space to other general Search Engines but i think thats how the search for information begins but people decide they want to buy something and then they have a choice. Im not talking about purchasing thing on something amazon has a dominant position lets focus you took issue with dominance and said google is not abusive there has been some discussion of this already better earlier this year google use the market position to threaten the federalist and demanded it take the Comment Section down or it could not use google apps. If that isnt dominant why doesnt it have the power to demand the media publisher to take down the comment side and why. So we have that adds product and that has many policies so if you want to use our advertising system s your you dont want child close to appear next to offensive information where the Comment Section had racist commentary that violated our ad policies we cannot show ads next to that contenten they are clear and published. How many other places do demand they pull that down . Those in the federalist. So google owns youtube which is a dominant google does not demonetized the whollyowned subsidiary youtube. We give three choices to publishers one is it a have a section second and then i have another click in the New York Times with those Comment Section two click wants to go to a separate webpage the publisher is free to operate on a separate page this is what youtube does to heavily moderate we moved almost 700 youtube comments y in one quarter most at the 99 percent mark before people even see them again take efforts to 99moderate. In the past years how many Media Outlets has it use the market position and market power to force them to take down or change the comment page. We do receive complaints on either side of the aisle on this issue we pull down videos on the daily show and democracy now and we get complaints from both sides these are clearly stated. I will follow up in writing ask you for information you just represented that google will provide that information i have asked before and google has stonewalledha and refusing to give an answer im hoping your testimony will be followed by some modicum of transparency. Lets talk about youtube some time ago i visited with the youtube ceo who reports to google and she described Stephen Crowder and other libertarian comedian talkshow host and described how the left was pushing youtube to ban him altogether sat in my office and argued we should be happy that youtube didnt ban him but simply demonetized and took away his ability to earne money even though she conceded he had done nothing to violate youtubes terms of service. I pointed out the demands are only coming from one direction, from thent left i was not asking others for not asking and for them to speak as much as they like because their ideas dont withstand scrutiny with politically motivated to punish anyone who speech they disagree with. Whether searcher youtube it does not influences content appears or doesnt appear and we have designed our policies of political bias is not part of the equation whether youtube or search with a very rigorous process to make sure those new exchanges. Are you familiar with epsteins research and how you respond to his conclusions that are directly contrary to what you testified. Would love to follow up i am aware of the survey but we found that methodology wasnt effective and we actually ran her own investigations if we could have any bias to have a search performed and that they were balanced so we dont agree with this and by the way congress has reviewed our search and found no evidence of political virus bias. We provide a study to this committee . Yes i will. Lets come back briefly if i could what were talking about a moment ago and then dominant positions in both of those areas and platforms and that you have to use a google ad platform that a lot of people arece using google ads. So do you add volume discounts to advertisers . We do provide different rates is that the question. Do you offer volume discounts . We do have programs for those that are Industry Standard and reduced rates. Have these volume commitments that are necessary to get the discounts increased over time . Im sure as our systems have grown. It has increased so much that you can actually meet those 51 requirements by advertising on youtube and search you actually have to use those platforms to advertise on the thirdparty platforms. Correct . Im sorry i dont know the answer to that question. It doesnt sound like thats the case but i need to get back to you. Wouldnt that be a problem if that were correct . What you use your dominant position to incentivize and monopolize the demand side add market . I dont see it that way if large advertisers brands that we know and love and agencies by a large amount of advertising it is a good thing for the various networks and to benefit from the increased demand so yes we and many other companies that sell advertising is in the business of selling advertising i dont know why thats harmful for the perspective. It would be harmful because it gives you an advantage that nobody else o has you have the youtube and search platforms at other companies do not have butt as we discuss is the entire add stack and use that dominant position to give yourself that dominant position not just on the demandur side but also the supply side because you have so much value on that Side Platform it creates strong incentive to use supplyside because you have tremendous amounts of consumer data there are great efficiencies that you create if publishers with the volume to the demand side so this just looks like the antitrust contex context. These are small percentages very small percentages and i thank you will find that anyone who has large amounts of advertising those with the competitors that operate a large supply Side Platform the idea that from a business perspective that you would encourage large buyers and the choice that i have outlined in publishers and advertisers to use all sorts of different platforms i dont know where the harm is. You control youtube and search which are the dominant platforms. You control massive amounts of consumer data you have harvested from your consumer facing platforms like g suite and google maps and then use those advantages in the add stack at every single layer of which youa. Exercised dominance. This looks like monopoly upon monopoly in a classic case we will see them you will find out as the antitrust the parents is troubling thank you mr. Chairma mr. Chairman. And on the privacy front talk about googles views of consumer data as you know senator cantwell and i are trying to work out privacy legislation. Its been hard to pass and Companies Say no now states are doing individual legislation to preempt the states and i get the logic but i want to make sure anything wede do is as strong as possible. Google has a lot of personal data from consumer businesses like chrome, google maps and gmail and youtube and also on those gender buying habits the user can sense it is extremely broad to allow for practically any use. It doesnt seem like mostt people really understand and know this feeling you get on a site and click the box and nobody understands what is going on or they have consented to. This seems like a big problem do you think they understand and why were trying to drive e. Legislation . Om yes its always been a serious issue especially as we see legislation the merge in europe but certainly in the last five or ten years we design all of our products with choice and transparency and control to make it as clear as possible what it is they are consenting to. And at times m it does appear confusing and how we use their data and they have the control of they want to delete their data or what kind of ads and we are getting better. Have you ever done a study to see if they understand whats happening to their data and told them afterwards this is what you signed up for . We have almost 1 billion users to check their privacy settings almost 20 Million People per day go into their google account to check p and verify m. We just released our new version of android which is doing a much better job. I made up that question on the spot but did you have those studies did you really know what you agreed to . We have a study for any aange. Any of those changes i am sure we have studied and look at it closely and make choices that are in the best interest of our users we want them to make the decision how they control their data. And your pending acquisition of fit that that is just more data to add to googles trove of data. That is just the big data problem. I do understand that you have concerns and like is subject to regulatory review. That acquisition is not about data. And were willing to commit that we will never mix that data ino a way to show ads. Im not sure you are but i thank you are. And you would have the data. U it is about devices and the health care to make sure we are providing Good Health Care and good decisions. Those that are out there doing a good job and apple is one of them to develop Innovative Products in this space and their interactions. And i will ask for the record and with those dynamic allocationon with the doubleclick feature and how that may be unfair to other competitors and we can go over that later. Thank you so much mr. Chairman thank you for being here today is there any single competitor to googles Online Advertising business to offer services at every level . There are competitors at each portion. That there is no single competitor Offering Services at every level. I think there are a few competitors that have buy and sell side i want to say a name because im worried i will get it wrong. But as we look at this issue basically what you have built that you are controlling the entry into the add stack becauseco you are dominating at every level. So let me ask you about this in 2007 and with the contact acquisition no ownership of the data it is collected in the advertising it is owned by the publishers and advertisers and google cannot do anything with it but in 2016 google reverse course many stakeholders complained that the pricing data as its own and its very subjective. Do you agree the Data Collected by google and your business doubleclick is owned by publishers and advertisers and is not owned by google . I believe we need to provide our users with control over their data and that we require their consent and in the case you are talking about we did make changes in 2016 how doubleclick operated we got the consent of all users and if they did not consent. What about this way. Whenny you were using a Google Service online who owns virtual . Users own their data we have instituted a bunch of tools that the choices they are making uses are transparent to them and they can controle ooha you can go ono your google account right now. Does google collect and retain any of my data when im using your service . Do you collected and the retain any user data and did you collect any of this from thirdparty websites i may go on and search a a website through Google Search . Thats a broad question but to the extent we collect data on a user we make sure the user knows what we collected. You can look at your service how will your Advertising Technology service of other thirdparty advertising Technologies Services o . With each part of that journey there are many different participants with amazon and Small Companies. They all have a specific Value Proposition and their own data to define that and they compete with each other to derive the best value for advertisers or publishers. Those enter into agreements that make the most money if you are a publisher with return on investment if you are and advertiser and the market and then to make sure you get value. I thank you should be providing assurance and with chrome that you will create a fair ecosystem and for many users you have not been able to do that thank you for being with us. Thank you chairman. I want to thank you and the Ranking Member for having thisha hearing and has been extremely enlightening and the willingness to have a Frank Exchange is very important. All politics is local. Let me bring this down to a local level. I was at the theater just yesterday in newal haven thats well known to many of us that have some connection to yale. In the theater once advertised in one of the localin papers lets say the register, it sells and add on spaces other than google. If the theater puts a maximum bid on google ads for ten dollars and google sells the spot to them for nine dollars. Google might find that add on its exchange for a lower price. Four dollars. Google keeps the spread between the two options. The benefit doesnt go to either and that Market Authority doesnt that strike you as abuse of market power . Im not aware of that finding and ever since we started the add products may have been focused and then to persuade advertisers to have a new product with return on investment so over the long run to keep them interested in using services to see return on investment that they o make if they pay for advertising then perhaps the publisher wins in that m moment but over the long haul with that advertising assistance as well as google. I apologize for interrupting but we have another panel. Because google complete competes of publishers to sell ad space and with those other Google Properties given that it competes that is a classic risk of Insider Trading if you compared to the stock marke market, google would have been prosecuted long ago for Insider Trading has is that data with the publishers to develop products or steer advertising revenue towards its own property . And when we try to increase with the ecosystem that is the fundamental and to be successful that is a powerful incentive and then to make ten or 15 cents and thats a powerful reason to make sure they maximize the value of their inventory if there are many retailers and then to define goods and services. To answer your specific question so i dont have a precise answe answer. The way you describe it doesnt sound like we would use that data to sell the search ads. Most are directly connected to the content of the research itself and then you look to match the add of the language what is asked for. That is a larger amount of the formula that has nothing to do with the data. Is it your testimony to this committee that google has never merged for its own commercial benefit quick. It such a broad question. I cannot say yes or no. That is precisely what is at issue. In fact you have used the data for the benefit of developing products or steering advertising revenue toward your own properties and i think again that goes to the heart of the antitrust standards that has to be enforced. Has google ever changed its product to steer investors or direct them away from the open web and towards its own content . I meet with publishers all the time im just not aware of that accusation but i am willing and will follow up. Has google ever changed its product to Better Direct visitors away from the open web two words its own content . In 2001 we had a very simple product which were websites arranged in order how they believe they should be to the person asking the question over time. We now show a map where is a gas station near me . If you ask a simple mathematical question we could show a calculator or a location or a map or we may put the restaurant in the context and then to make it more relevant it is important because we are very small real estate to operate. These have increased with health and innovative of the Search Engine i know that people out there have complained that we think it is a better search experience that technology has developed. My time is expired. Ha i just want to say. This is not a criticism of your product. Its not a criticism of your abusinesses. It is very very grave doubts how those businesses are put together and the power is used t benefit the Company Rather than consumers and it stifles innovation. I think it is antitrust law to protect competition and consumers which is what will be necessary in a court of law. We have another panel waiting and then choose to direct for the record so before we go to the final panel in the written testimony that prices for digital advertisements have dropped by 40 percent over the last ten years. But arguably is in the most important metric a different one that focuses on how much advertisers have to spend for the same number of sales . What good is it to say advertisers pay less money per add if they have to buy more of the same ads for each conversion to a sale . Thats a good question senator if you look at the percentage of advertising with gdp and go back 20 years it was almost one. 4 percent now it is 1 percent of gdp and choice has improved advertisers can get products toto market easier and more Cost Effective than they were in the past you are addressing the right questions that we have seen not only the fact that advertising is it cost to small and medium or Large Business has fallen to the aggregate. We have a number of additional questions. I now the second panel is always at thek table please stand and be sworn. The testimony are about to give will be the truth, the whole truth and nothing but the truth so help you god. The brief introduction takes five or ten minutes so we may have having a vote in an hour we want to avoid leaving you hanging so i will only an interest of time and for your convenience dispense with the introduction and i assume that in your opening remarks you can tell us about yourself meal handed over to you and the move to the right. Right now americans are thinking of switching their mobile Service Provider to refinance their mortgage or joining a virtual gym or subscribing to a nap. An app. The company e pace of innovation and display. Google is not a key player and the invention of that is the most important digitals since 2010. The ability to be effective depends on ad exchanges that allow them to connect virtually and make the best deals for each of us without friction a million times per second. They occur as you load a webpage and it is because of Exchange Transactions m any creator can monetize the attention and any business can maximize the impact of its end of dollars. That ecosystem thrives as long as its participants from mutually interested level Playing Field and we agree that its best to interoperate with competitors on fair and equal terms so that customers can mix and match products and the best ideas win. The display exchange is nicknamed because its a free market. The company has to be careful to operate in this mode its like owning a stall in a vast openair flea Market Companies can easily compare the quality and price with those of other sellers within easy reach though it wasnt clear at the time the investigations have produced clues of the google strategy it seems they saw the market efficiency of exchanges as a threat to the primary business selling ads. The exchanges were set up to the agnostic brokers and the 2010 and internal emails called this a disintermediation risk. The concern was in the middle of the transactions then if h fewer dollars would end up in googles hands. The plan was to combine products so thatdl what appears can resut in a conflict of interest in d googles favor. Google plans to make its exchange with a stockbroker that steals every client and pays himself and would use its market powers to the ecosystem to the best in Class Solutions for example the great new bitter is less enticing if the current bid is tied to the server that has almost no competition. For the interoperable transactions, google never caught up. Instead it leveraged its market power to slow the pace of innovation display and think exchanges less attractive to advertisers. They did this by tying products ng a web enough to entangle the entire marketplace. Google combines the data breaking a promise paid to the american regulators and the industrys privacy standards by linking together their names to thenumbers assigned to browsers for what had been the anonymous transactions. From 2016 google came up with new ways to pollute what previously seemed to be embraced they came from exclusions that made it less efficient from the buyers and sellers. Among the products until the breaker was among this set of competitors you the power to interoperate with Measurement Software went from being a future of the Exchange Ecosystem to the capability exclusive to google. There is more at stake than most people realize its more that they will find customers and thrive. When the exchanges function properly, the advantage from flooding the airwaves is offset by the quiet voice is speaking directly to whoever is open to any given improvement. In subtracting the efficiencies of the market before 2016 under intense Competitive Pressure ad exchanges were becoming more transparent and privacy respectful of the ecosystem crew. Google could have coaxed with these developments without using its power. There was nothing to stop google from exiting the arena are competing with itself and standards. Whether they compete with other firms is irrelevant to the harms that caused publishers, platforms and Small Businessesog like mine and the 50 billiondollar openparen display market. It was efficient when the platforms, measurement tools and providers interoperate it. Innovators of the product or service could access a global marketplace of thousands of rbuyers and sellers quickly at low cost. Small businesses with great ideas had. A short way to success. Now funding for the startups has been drying up with the pace of innovation slowed down. The number one concern i hear from potential investors. Theyve been breaking inefficiencies and preventing the development of irans great many expect google to mislead regulators by the conduct of the openew web and the opportunity o help scrutinize their claims for the sake of competition into the benefit i it brings what they should be forced to exit the marketpp or compete within its open standards. Thanks. Thank you, chairman li and klobuchar and the other members of the committee for conducting this hearing today. My name is david and then testifying on behalf of the net worth which is a socialem change venture dedicated to ensuring the Technology Companies contribute to society and the economy that is fair and equitable, safe and conducive to driving democracy. Specifically, im here today to explain why it appears likely google has violated the current antitrust law by monopolizing the digital display advertising. He began representing the clients antitrust disputes and investigations we represented the plaintiffs and antitrust defendants. My expertise is determining whether the private doctors violated the United States antitrust laws someone opens a webpage on their laptop and when they do that, portions of the pages are populated with Digital Advertising. Advertising of this sort is a big business. Some estimates are that in the United States 139 billion was spent in this market in 2019. That is a lot of money. On moreover as we heard today this business has profound effects for publishers, advertisers and consumers for example Online Advertising is the lifeblood for many websites and other publishers. We all know newspaper circulation has fallen as more and more people get their news online. As has been mentioned today the tribune in minneapolis, the hartford current or tennessee which builds itself as a socalled voice of the greatest county in america all of these outlets depend on Digital Advertising to support rely on Digital Advertising to grow and thrive and healthcare providers, Car Dealerships will only increase from the pandemic. Online advertising also can be good for consumers when done right it provides relevant information for people who might find utility in products and services and reduces the search cost. Its critical to our ego economy and by recently coauthored a series withal the economist abot the platforms supported by Online Advertising, google and facebook. We rely on information made public that we looked at the data through the lens and our analysis led us to conclude there is a strong basis to believe theyve maintained a monopoly in the Digital Advertising. Specifically we conclude that google developed the dominant Search Engine and then to expand into what is called the ad tech. The acquisitions and vertical integration occupies every layer of this with market shares as high as 90 of the most important function. From the standpoint of an antitrust lawyer this is a big red flag. I am aware of no other market with a single firm that represents buyers and sellers and determines who buys what and at what price. Moreover, google appears to have undertaken efforts to use its market position and the data advantages to exclude competitors. We described 20 different instances of anticompetitive conduct in the paper including the 2015 decision to make if yos youtube inventory available to advertisers exclusively through its own technical tools. We talked about that today. The anticompetitive conduct such as the designs, denial of interoperability and pricing arbitrage. The prices have gone downn and t is producing innovation. Let me just preview my response to the arguments by saying this, theseav are precisely the sort f arguments that nearly every antitrust defendant puts out whenever it is accused of any sort of wrongdoing. There is nothing new here. Google says that it faces competition because advertisers also can place ads on other eratforms and even named facebook and amazon but the company that holds the monopoly defending itself by saying advertisers could also buy magazines instead. Its simply not a defense. Google also says Digital Advertising prices have gone down and output has increased but as an antitrust lawyer i am concerned with what the world would look like if google had not monopolized as the markets and had not excluded its competitors. The questions are how much lower pricewith prices have fallen, wh innovations might they have deployed if they faced real competition of the various layers of the stack. What Service Improvements such as privacy protections would that Platform Market offer. What local news outlets be getting bigger piece of pie . We dont know what the market would look like that for the apparent monopolization but my hope is that the remainder of the hearing will be an exploration of how we might get to that world through a combination of the antitrust enforcement legislative fixes and regulation. Im happy to answer questions about the path forward and i think you. Thank you mr. Chairman, Ranking Member klobuchar, members of the committee, my name is carl and im the Vice President and general counsel and an adjunct professor of internet law at the george mason law school. Im excited to be here because i appreciate as a professor especially with the Judiciary Committee does and working in this area you started talking about the importance of the consumer welfare standards that we have here in the United States. Now, we didnt achieve and come to the standard for antitrust laws at the outset. It took us a while. We have failures. We tried other systems and we found a consumer welfare standard is the best one. Antitrust experts from across the political spectrum recognize the consumer welfare standard is the best standard for the world employees that . Because it is an objective standard based on economics and facts. We dont base it on feelings, oinions or innuendo. At home i play boardgame board l the time with my son and somehow liberals always change in the middle of a game and only in a way that benefits my son. Here we see efforts in europe and antitech advocates. They want to change antitrust law away from the objective standard that we have today to the subject i know it when i see its standard. Youve are swinging a sledgehammer of antitrust law to the benefit of populist policies. Now lets use an example. If we open up the antitrust law believe from the standard to be i know it when i see it is for political purposes. Today they are probably angry because the moderates too much and have his probably angry because it didnt moderate enough. But fortunately we have an object of antitrust standard that does not allow political policies to interrupt the free flow of enterprise. So what is the consumer welfare standard . We talked about antitrust law but we havent really talked about the three factors are that proven. One, market from her, too, abuse of the market power industry, consumer harm. Now, if you look at what happened just months ago over the house Judiciary Committee, there was no real showing of market power. Just stayed in the dominant and likewise there wasnt even an effort to show consumer harm because at the end of the day there really isnt. It comes down to how you define the market and we talk about the uk airport. I think even the cma would recognize it as a wildly flawed report and it uses the phrase might over 100 times. Its based on data that they use only in the uk and it produced the outcome that they thought. Dominance of google. So what is the market . It is old advertising because you have to look at it in the consumer welfare standard in the yes of the consumer. What ar were they doing, they ae using their time differently so lets look back this past sund sunday. Football is on. You see commercials, watching the game on tv, following and you might even be listening on the radio because you like theie commentating better. F16 time advertisers competing across different platforms so its hard to narrow the market all theta way down. Second, even if we were to narrow it down to the digital lens lets look at the total revenue. If we look at the total revenue in the digital lens, google is a third, facebook is a quarter and amazon is 10 taking market share awaygo from google. None of them come anywhere near the 75 market power. Lets look at consumer harm talking about democratization of cab. To us consumers we get anything Free Services so the benefit. To advertising prices have plummeted. They are down 40 . There is an indisputable fact. Could they be lower, maybe, could they b be lower than they otherwise would have been, yes. Lets look at publishers now. Publishers otherwise could have so amused at this pace can easily sell it away and they do this on a multitude of platforms. One of the misconceptions that we have heard here today is googles help. Come aalph outside and omega oe supply side of the equation so we talk about the difficulties seen at the star tribune and the current. It does use google for advertising people at least half a dozen other platforms simultaneously. Thats what do the same zaria they use another hal halfdozen different advertising platforms. The New York Times and Washington Post were so effective that theyve abandoned them altogether and returned to inhouse so its hard to see how publishers or beholden and have the market power when the advertisers are using multiple platforms. So since there is no market power when you look at the real market which is digital ads, since there is no consumer harm, we have to ask ourselves what are they trying to accomplish. Are we trying to convict somebody because they are big and successful were trying to apply the welfare standard for t represents putting consumers first, not corporations, which has beene recognized as the bet standard we have for antitrust law and is the standard that should be used that shows that frankly it is not the caset against google. Thank you mr. Chairman and members of the committee and we welcome your question. Thank you. Appreciate your opening remarks their second begin rounds. Google hasnt violated antitrust laws because theyve benefited from its products and services that ibut that isnt what the sd means. Its part of the analysis performed where the enforcers of antitrust law and under the rule naof reason that involves a balancing test of exclusionary conduct of the same conduct. Is that accurate so far, you are not disagreeing with me so far. It means that when assessing those benefits, we look at the aggregate impact and benefits on customers and consumers and not social justice goals or political projects or arbitrary measurements and size and come from nations so it easy to make the statement generally that google has benefited consumers that are dated direct result of geologic time conduct and do they outweigh the harm from that conduct . So, mr. Chairman, i dont think that there is a situation here. One of the things you can use that one side so the similar analogy i can find a realtor on both sides you can use one end and not be tied into using the other side of the equation. So, even if you side with google in that analysis, you do agree that applying the welfare standard doesnt give you a free card. That isnt the end of the analysis, write . Cmac it is to show consumer harm. The fact layout shows as the prices have decreased substantially you can show that publishers are generating revenue that they otherwise wouldnt and then finally you can show that you and me and other consumers get free products, so we need to identify the consumer harm which i dont been espoused in actual raw data. But if they have the welldefined market and if it is engaged in tying one product to another product and its done so with the intent and effect of maintaining its monopoly in the market to the detriment of consumers, that is a violation of section two of the sherman act. If google did all of those three things that would satisfy each element of antitrust law. Said it is not about tying the two sides of theul platform together or two sides of the platform, it is first Party Advertisers and harm would be a Higher Quality adjusted price for the consumers and for the advertisers do you disagree . Theres been a loss of revenue so one of the things is googles ads are 30 and if it is below some of their other competitors now if they were a monopoly ticket price of both competitors and that isnt what we are seeing in the market itself. So, the statement of these prices are higher for consumers isnt really being planned by the fact that we are seeing them on the ground. He couldnt be worse off compared to, wouldnt they be worse off not resulting in the loss off revenue . You would see higher prices. One of the things that hasnt been made clear is advertisers do not use just one platform to advertise. They use simultaneous platforms and what they are doing is competing against each other in realtime so what that means is if google isnt getting the best of david then the advertisement ill go to a different platform to be placed so you have Competition Among those within the advertising side of the equation. Has it been skewed by the time . I think it has been because they are creating a quality product which is forcing competitors to compete on price the cma recognized a number of harms to consumers that are as consumer harm in the United States, let me list some of them. Assuming that the analysis is correct that google is acting as a monopolist in the Digital Advertising market, that means that it can raise its prices above competitive levels of the advertisers and pay a lower diprice to the publisher. We have heard prices went down and its not a good thing, yes but we dont know what they would have been absent of conduct. Assuming the face is worse than they would have been, then we could reduce the consumer harm. For example, if advertisers are paying higher thann, competitive prices and economic theory into u. S. Law would allow us to presume that they are passing at least some of that down to their customers in the form of higher prices for their products and services. If they are receiving a lower amount of the advertising spent than they wouldve a competitive market, then both u. S. Law and economic theory show that they would invest less in their content creation yielding a lower quality ofry for example local news reporting to consumers. Finally, because google cant control what ads are served and output frequency and where, google has the ability to over saturate websites with irrelevant or bad ads. We have heard we have free access to websites. Thats true. But if our quality adjusted price is higher because we are sttting too many, that is recognized as consumer harm under u. S. Law. Im out of time we will go to senator klobuchar. I thoroughly enjoyed listening to the panel but i have a lot, as my daughter said, but i just cant let it go without starting with your argument that this should all go down to the consumer welfare standard, and i think that we may have some comments on that because when you really look at whats going on with antitrust law as a whole you have a situation where incredibly conservative courts have interpreted the law in certain ways based on the consumerin welfare standard that by the way aslf far as google and other countries that use the consumer welfare standard, they decided that they should investigate and do something about it using the terms consumer welfare standards, so lets put that aside. In antitrust area if we just say everything is fine when i was looking at the experts that looked at the 15 year period ending about ten years ago and found plaintiffs were 016 in bringing antitrust cases in front of the u. S. Supreme court under the conservative interpretation of what consumer welfare being that i just want to remind all of us coming and we probably disagree about this, but when we talked about consumer welfare, he expressed the view that the only legitimate goal of antitrust is the maximization of consumer welfare but he defined it as minimizing restrictions of output and promoting efficiency however to have its way. He equated consumer welfare not with welfare for actual living breathing consumers but fewer efficiency of wealth. That is the very reason we should offer enforcement and that is part of the work senator grassley and i are doing and others on the committee to add resources and to the Justice Department, where we are never going to be able to take on the issues of our time and we should do our best but im sorry when you look at the changing economy and whats happening throughout history, it wasnt static. They added clayton and multiple bills overtime to try to get past what was happening so i just think relying on the courts right now when you look at every position you cant say that this isnt going to be taken care of google and facebook issues are just going to be taken care of by the consumer welfare standard given alpha they are interpreting it. I do believe the welfare standard is the best approach. The fact that its been 120 failedndicative of a standard is potentially indicative of the prosecution or most cases civil suits. Seone of the things it has dones its given the bedrock of some of the greatest innovations of the world. They are unique with the consumer welfare standard and does have a different standard fbi know it when i see it. It. I would also note europe is fundamentally different. I wouldnt say its terribly i innovative especially in the tech space. The main innovationn would be what, spot if via the differena different functionality where they operate under the english rule unlike in the United States as a loser pays model and that helps to eliminate lawsuits that waste time, taxpayer dollars in money. The european model and welfare standard into but they basically you think there was a decrease in innovation when we broke up at t. Hispanic the reason i say that is at t was a monopoly to begin with and they allowed a lot of the local health codes to consolidate and they approved them because they were the maint one. In the breakup and subsequent innovation. Do you want to respond and also do you think legislation to update the antitrust law would help address the type of exclusionary conduct that we are referring to here today in the hearing . Stanek thank you, senator. I do agree that this new economy in which we live requires a multitude of tools and enhanced enforcement. Co it requires some legislative changes including some of those that youou yourself have offered and proposed either to the existing or new regulators. On the point of consumer welfare, i every wish the senator this is a standard that hasnt it served us well. That shouldnt stop with respect to the breakup of at t, i would agree that if we could innovation, but that came about in the context of regulations in which the company is required to interoperate. I found this interesting on your perspective and i was thinking if i listened i wondered what questions they would have asked. As good as we are but without having to pay to experience that you have, so could you talk a little bit about that and what other things you think we need to get out and what your reactions were and what your comebacks have been. They dont really have market dominance because they are using other places to advertise. Whats your reaction to all that . Stanek thank you, senator, for having me. One that jumps out at me that god crossed over his he said it was good for publishers. He threw that away and its hard to get your hands on this, but this example was put together by a few competitors to break the dominance of googles platform specifically publishers wanted all the sources to compete directly in the unified option. It was a hack that put them in the header so they could compete directly and what happened, two things happened, publishers made 20 or 30 more money. If it was good for publishers put on the other side what that tells you is that money was going somewhere else. Its either in the middle where we experience as a quality increase when it went into place. So that, i would love for everyone to dig into that example. It wasnt a fullblown solution. Nnstead of just the little tag that created those i think that it would have been more powerful. That is a very rare example of failing to dominate and the effect was very dramatic. On the definition ofs, the industry, im not a lawyer but it might be helpful to understand that Programmatic Advertising has its own teams, its own budgets, its own ad format. People titles. There isnt money moving from social billboards and tvs and the problematic willynilly. The problematic project and production and programmatic technical commitments, the 50 billiondollar market isnt to be glossed over as a footnote in advertising. As far as i know, claiming to understand the Legal Definition it is a market and google dominates when you see those percentages. That is my experience of what its like to operate in that market. The price is going down. If you dont normalize for the growth of mobile it is meaningless but theres also the quality difference. If quality is coming down the medicine to good at all. I believe economists have shown old prices go down. What i hear when he says that if they were gaining options that forced everyone to go down and claim it as a win as the prices went down and that is why they are so upset about the local paper being unable to make money. They got that advantage because they are using the wealth coming from places that have nothing to do with ad tech and the control of the adoption process refusing to hold the option among the supply. What do you think would be the best way to fix it . When i read about how the forest interoperability was a part of that i felt there is a precedent. Tthe handpiece and they had twoo open up so anybody that wanted to build an application for windowsp good. To me that is a precedent. I dont think theyve acquiesced to that and the solutions to exit this marketplace and the Like Companies around here. Another optio option with tha markets. Right now, google is using the threat of privacy litigation in actuality of privacy litigation in europe as an excuse to claim that there is no way that it could open itself up so others could learn from the date of their captors from its various consumer facing products there were questions about the amount of data advertisers can access. They have created it allows you basically to gogl into a room ad look at data that you cant take it out more could a competitor gain access to data. In the true functioning market, there could be requirements to be sol so unfair conditions and prices to competitors to allow them to commend which they said belongs to the users, not to google and then use that for the benefit of the market. In his testimony he said that it is interoperableis with its computer technology. Is that your experience . There are many cases where not. Some cases where it is that many where its not in the pacific extensively documented. Its frustrating google keeps saying that when there are cases they refuse to interoperate. I could talk about some of the ones that have been talked abous the least. I think that the lack of interoperability says the most nefarious but has been publicized. It goes like a referee in the competition of buying, all of the others point to this books that produce the sale. They are also a competitor so they have a 90 share. I cant really get another knowing they integrate the search and then theres a bunch of other reasons its hard toi switch. Say i dont trust you to do that, you used to be able to download the data out of there and send it to all of your partners and say you go through all this data so you can see how they are refereeing and make sure you get as much credit as you can. As of 2018, you cant even do that. Not only do i want to be able to download it, that is going to see all of the bad interactions and nobody has an advantage in the competition for who gets credit so the market doesnt even come up when we talk about the advertising markets. T determines who is able to perform and when so the massively dominated and controlled it and in a way that could be easily solved by interoperability of this could be the equivalent. The rule is already in effect for the firefox browsers. Can you tell me what you know about this and how it might affect digital ads and whether you think this is equivalent . Thank you, senator that is a great question. The answer is its not the same. Its an example of how its organizing privacy regulations and they are supposed to protect consumers. Our privacy laws say if you are doing business with a company, they can use the data for advertising thats why the bank is always sending creditt card offers and if you dont like it you could not work at the bank. Another bank you could opt out of that they could handle someone using the data you gave them to do business with them in a completely different context and then they are using it off the current silicate handle this problem its going to be a level Playing Field none of this nonsense bringing the data to interactions inev the browser so when they talk about doing that, they are going to maintain the ability to track and block other people theyve merged data and there is no barrier to using that data love the things mentioned earlier is the increased concern about privacy. Its a browser that competes heavily it has entered the marketplace and a wor look to te future, privacy. So, Google Institute of. Thats been turned into an antitrust action because kind of like a hammer everything looks like a nail, that is if it is happening here with chrome. Second, why does it track you . It can better optimize the result and thats something i can opt out of this why did they make this move, because of robust competition and its competitors are fighting on privacy. It sounds like thats some and encourage platforms to do that now its being used by people who dont like it as a kind of anticompetitive behavior so it is a vice that they are being put in. Can you tell us what the market looks like for the ad agencies working on behalf of advertisers are they free to use any software if they choose . I had a deep partnership with a colleague and agency and others in the industry and they all had the same experience involving d,e agencys commitment. In my agencys case it was like a billion dollars. Thats important for the agencys competition against others because they advertise this and understand it as a negotiating power. Twohe things about it you could make a commitment for a billion dollars a. It would have been a t happenedy colleagues at the other agencies asnd the ceo called us and saide need to put money in and take it out of the trade, take it out i dont care what you thought our clients you need to move this money and because our representatives said they were going to take it back from ten to 12 ow 12 over than 900 mif you dont move this money over now. My response would be like this is a huge problem for me. Its what i told them was the best platform and how am i supposed to just tell them that we are supposed to use dd 360 so what did they do they cut youtube out of Everything Else and now i had no choice. In a way it gave me cover for doing something i never should have done but that is how they got a foothold in the agencies. By the time i left in 2018, thef agency was the primary and had the most spent and i tried not to work with them at all. About publishers, does it have a similar effect . It is exclusive demand. They care about two things. They are prices they could get so they talked about than getting more and more platforms. They are trying to get both of those, those with higher cpm is trying to raise the volume. Any publisher will tell you that google has huge funnel of lowcost highvolume bids coming in through the search platform that also lets you buy the displays of its most sophisticated advertising who dont know so much that they are doing in the display. Itse a huge volume and if you get rid of the exchange, you lose all the volumes of the publishers are stuck with the Exchange Even though it they win a huge amount of options. So when they talk about adding more and more to the platforms and why they are doing the bidding of publishers are trying to solve this problem when you say mysteriously, tell me what you mean by that. Its supposed to be the highest price wins. As incrementally google has been claiming we are making the option more and more fair, that is an easy way to cheat if you bid last you can win a lot of options at low cost. Get rid of the last book and we will allow some bidding but what hasnt happened is publishers will tell you it hasnt gone down so thats mysterious. Senator klobuchar. Thank you. I think we have another road so i will just ask a few more questions. I mentioned this earlier but over the years, the budgets of both federal antitrust agencies and the department of justice failed to keep pace with the economy despite the ever increasing workload. Theres numerous studies showing the mergers and complexities and less staff than we had during many in the past and so that is why this is something that has been declining over the years. Thats why as i mentioned, we introduced the merger modernization act to ensure the Companies Engaging in the mergers pay more of the billiondollar mergers and as you know we now have two companies over a trillion dollars that are trillion Dollar Companies and we could simply budget more money because so much more comes in from the antitrust investigations and can basically pay for itself. Given the complexity of the Digital Markets do you have a view on whether the division could use Additional Resources . Thank you, senator. I have firsthand knowledge of the workload people were facing even back in 2011 and 2012. They worked extremely hard, probably harder than they should get in the important to the economy and business life. No doubt they could benefit from additional staff andadditional expertise funds. Im not an expert in the current levels of funding so my knowledge is second and third hand but remain overworked and theres not enough resources to investigate the kind of mergers that have gone through or to bring the kind of action that we see. These are difficult actions to k investigate. They require lots of economists tim and investigators find. We do this simply by the fact that its been reported that the department of justice has been investigating for months and this public records that they may need even more time. These are complicated markets and they deserve all of the Sources Congress can allocate for them to do their job. You raise your hand. I worked for the commission are too long ago at a us they do great work at these agencies. I think the funding question is a good one to ask if they dont have enough funds to do this research. Rival for you they have been positive about adding more resources cant guess. One thing that would help us getting the delineation of authority because right now have two agencies doing the same job. One of the things we can do is move the merger and Acquisition Authority exclusively into the federal trade commission and make enforcement to the department of justice. Free up resources without increasing cost and make taxpayer dollars more efficient. One idea is to change the standard so its easier to bring the cases to investigate and begin we have disagreed about this. I just dont see this given all of the priorities we have right weve discussed with privacy and Everything Else but this is all about the cross jurisdictional fight a major shift in our economy and it is what, 20 and we havent upgraded to the wall or talked about velocities or how we are going to do anything when we have some bipartisan agreement that something has to change here. So, the history of these which ive gone through is certainly one of the reasons i think we have seen. The more effective merger enforcement as we look back might have prevented that. Thats one of the reasons i introduced a different build of consolidation prevention of the competition promotion act to restore the original purpose of the act to stop competitive problems before they fully ripen. It would create a more different standard favorable to allow the teencies to take action. It also includes provisions to shift the burden to the merging parties under certain circumstances in major cases where they have to prove that the transaction, not that it doesnt say Public Interest but simply that it doesnt hurt competition and that its not anticompetitive as opposed to having the burden on the government. And would reforming the legal standards for assessing the competitive impact help to defend the market dominance and we also could look out when dissent decrees are reached and the likes of you are able to look back at whether or not they are truly working theres all kinds of things we could do including in the case of facebook and looking back at those purchases and what that chas meant. Many of the pills that you have sponsored would be enormously beneficial to the enforcement community. From the requirement that the letransaction be shown to endanr competition materially, i think this is important especially in a fastmoving markets because its difficult to predict the often required to a high degree of certainty in merger cases. We just saw a significant case be denied by a Federal District court in new york in the case of the merger of two telephone companies. One of the problems is that its difficult to know whats going to happen next the change in the standard would benefit the merger enforcement. I also think that the conducting of hearings such as this airs the issues we all should be thinking about and how the players in these markets are acting. Id also say that politically we have been through the period in which we tended to give Technology Companies the benefit of the doubt. They were new but they seemed to the evergrowing if they were exciting. I think we have a public consciousness now that its time to think about o are they doing harm as well as benefits. The economic literature is just beginning to grow and i hope that will continue and aid the enforcement going forward. To make a difference. But i really think people have started to have it. They see that there is too much consolidation and they understand theres not enough competition. They understand all these Small Businesses are being bought out. And its on us. I dont think that senators in the past like senator sherman said no one really gets this. Theyre mad about the economy, so were not really going to do anything. Its a republican senator. I dont think some of our. And i dont think that some of our predecessors said that. Its on us for people that care about entrepreneurship and competition to take this on and thats it im hoping we are doing next year. At one point railroads were new as well. Thats right now 90 percent of the freight traffic is carried by four carriers which is the exact number of railroads on the monopoly board. Did you want to respond . Which comment . In response to my question if not thats fine i have another. Looking at the definition of market the argument is money is flowing away from television and radio and print media to online ads andd clearly those are interchangeable goods for the definition of market they are interchangeable goods and that means a definition of marketplace must include all advertising you cannot narrowly define not to be google you do that then it will be a monopoly. That is what you saw with the cma report in the uk. I have heard complaints from news publishers on occasion they are struggling because they cannot adequately monetize their content due to googles monopoly. Is it possible they could be struggling because the news industry is infected with widespread bias and Many Americans are not inclined to spend their hard earned money ggen . Ad a biased reportth one of the Biggest Challenges news media is facing today the number of options available in the notion of a reporter could be somebody with a camera and a cell phone. The conception of a newsroom to be alpha and omega has gone away thats what the democratization of speech. Now you have the drudge report or Something Like Huffington Post those are not legacy newsroom industries but i would say they are lose agencies or Information Sources may be the old Legacy Industries need to change and update and i hope they do but at the same time we have seen the New York Times and the Washington Post do quite recently so clearly they can make it through. Yes it will be harder for local News Agencies when i go to moviefone not. Com dont have to open the newspaper to get the times. We have another vote and we have to wrap up. But first described to me briefly, if in fact google is operating the ad business in the anti competitive manner what is the appropriate manner . Under the circumstances the evidence were to be shown that facebook not only has that monopoly power the remedy would be the least damaging to the entire ecosystem if it interoperability effects the smallest faxes the best to break up or threatened to break up is detrimental not only to the ecosystem that increase prices and decreased efficiency one of the things that is misunderstood about roosevelts. At the end of the day he didnt want to break up the oil barons because he recognize doing so would have 1000 Small Oil Companies with decreased efficiency so if the remedy is sought we should be the smallest remedy possible. I do cite to that Teddy Roosevelt quotation in my testimony as well. The smallest change possible because the unintended consequences downstream impact all consumers. Thank you senator one difficulty in designing remedies is the process of enforcing the law what has gone wrong and how to best fixes could be developed so the answer is we need to start with the most vigorous enforcement of the sherman act as we can and that enforcement action in my view must include. He digital ad marketn we had a variety of people testifying today about the connections between these two markets. I could explain in detail if we had time but that is a place to start. We should see with that evidences the department of justice has gathered, examine and read the complaint and have further hearings if during thatdedemm the w course of action their opportunities to think of additional actions or opportunities for Additional Authority to regulators, we should provide them to start with enforcement and disclosure of all evidence gathered over the past 16 months. I agree with everything and i go even further this is gone on so long unfortunately the remedy will have to be significant. Breakup between the ad tech market we cant forget android and chrome that is an enormous amount of data in the market with the same pattern of non ad Tech Products with the googles power in that marketplace. Ad tech is where the revenue comes from thats 85 or 90 percent . Google makes most of its money from selling ads and youtube then they use that to dominate the ad exchange market. Thats easy to separate but the deeper i have researched i am concerned there is significant data from android and chrome being put into the market even if you separated android will replace with a oihe already done from chrome. The Oil Industry Case was successfully dissolved and it was broken up president taft and that went on for a while. Yes but if you look at roosevelt was looking at as the trust busters so look at him. Its important that the record shows that did break up standard oil as it went throughe several administrations and we will eventually get to the place to do that just because we want new standards in place in the economy it doesnt mean we are antibusiness doesnt even mean you go into it to say everything should be broken up. I dont i try to be responsible by putting forward bills i think are regardless of what i think of a particular company and thats an important point to make. The third thing is i am glad there is some interest in beefing up resources on everyones part and i hope we can make sense of all of this. Because for too long people have thrown up their handsds akngeie and said they are Cool Companies so its okay now its on us to make those changes i want to put on the record a letter from Consumer Reports debated dated september 15 on their views on the subcommittee and their concerns about what is happening with Online Advertising and will be submitted without objection and the record for the hearing will remain open for one week. The committee stands adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] a hearing on the federal document declassification policy. Testimony and propose legislation aiming to modernize the system for classified information. The bills sponsor fried on sponsored by the centers of kansas and oregon would have the director of National Intelligence to set policy. One hour 35 minutes. [inaudible conversations]
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