Hearing on Online Platforms and market power focussing on the free and Diverse Press. I recognize myself for an opening statement. In recent years, there has been a cascade of competition problems on the internet. Concentration has pushed local journalism to the verge of extincti extinction. The combination of predatory acquisitions and high Network Effects and switching costs undermine entrepreneurship and startup rates. The sheer dominance has resulted in less products leaving people without a competitive alternative of services. In response to these trends, the committee announced we would conduct a bipartisan investigation into competition in the Online Market place. The purpose stoof document anticompetitive conduct online and sense whether our competition system and current enforcement levels are adequate to address the problems. We will conduct a top to bottom review to a series of hearings, request information relevant to the information and engage in a series of discussions. This is the first significant antitrust investigation undertaken by congress in decades. Led congress to consider whether it needed to make changes to our laws and agencies. I strongly believe that this investigation is long overdue. This subcommittee has a constituti constitutional duty to ensure that they are properly working. Congress, not the courts, agencies or private companies enacted the antitrust laws and Congress Must be responsible for determining whether they are equipped for competition problems of our modern economy. Todays hearing is the first step in the process for examining the trends. The free and Diverse Press is the back bone of the democracy. Those who won our independence believe public discussion is a political duty and the greatest threat to freedom is uninformed citizen citizenry from 2006 to 2017, advertising revenue has fallen to 15. 6 billion. Roughly 2,900 reporters have lost their jobs. These massive cuts are happening to traditional News Companies and online news sources alike. For example, earlier this year the dealer announced layoffs, reducing the staff by 80 from employment levels just seven years ago. Buzz feed and the Huffington Post have announced significant layoffs. They are designed to appeal to readers on social media sites. This raises a critical question. If online news publishers cant survive, then who can. At the same time they have operated with virtual immunity. Since 2007 google as acquired several competitors resulting in significant concentration and complete lack of transparency in this market. And since 2011, another dominant Online Platform facebook has acquired two of its rivals, instagram and whats app in an effort to corner the market for social media services. Facebook now controls a user base of 2. 7 billion people worldwide, the largest Communications Platform in human history. A move critics have suggested. As noted in the preliminary report both google and facebook have substantial market power in a number of markets that is unlikely to erode over time through new competitive threats. There have been numerous reports of platforms engaging in anticompetitive conduct. That has gone unchecked by congress and unchallenged by antitrust enforcers in the United States. These trends strongly suggest it is not the result of the arrival of the internet but a direct consequence of enforcement choices that have created a Market Structure where a small number of platforms are capturing value. These has affected in two key ways. They rely on google and facebook for the vast majority of traffic online. Even minor changes can have significant effects on the news industry overall. Furthermore, as a result of this immense have little Bargaining Power with the Online Platforms exacerbating economic crisis for trustworthy news. These platforms have a dominant position in the Advertising Market. Last year facebook and google amassed more than 60 billion from Online Advertising. The majority of all online ad revenue while controlling 90 of the growth in this market. This dynamic has resulted in an economic catastrophe for news publishers. In response, i have introduced the journalism conservationism app. While i do not view the information as a substitute, it is clear that we must do something in the short term to save trust worthy journalism before it is lost forever. Whether it is an online publisher we cannot have a democracy without a free and Diverse Press. Our country will not survive if we do not have shared facts, if corruption is not rooted out and if power is not held to account. This is the reason the press is called the fourth estate. My hope is that todays hearing will serve as the starting point in this discussion. I thank our panel of extraordinary experts for participating in todays hearing and look forward to your testimony y. Yield to mr. Armstrong for his opening statement. I dont know where the button is over here. I appreciate that. And i at this time ask unanimous consent to enter the statement into the record. Without objection. And the best thing i can do for all of you is give you as much time as possible. So with that i will yield. The chair recognizes the chairman of the full committee, mr. Nadler for his opening statement. Thank you for holding todays hearing. And before i deliver my statement, let me apologize that i will have to leave afterwards. We have a slight resolution on the floor i have to deal with. Over the course of the last 200 years, congress has routinely passed laws to protect and advance a free and Diverse Press. We never knew technologies have transformed how americans produce and transfer news. Congress has sought to ensure that the new markets were structured to facility the free flow of information and to protect the independence and financial viability of the press. Today as the internet becomes the dominant platform for accessing news and as this platform grows more and more concentrated in the hands of just two major companies, the news media once again faced serious threats and congressional action once again may be required. As avenues for accessing news have narrowed, advertising revenue which is the primary means of support has steadily declined. As revenue has fallen so too is the number of journalists whose work can dee supported. Local news outlets have been most severely affected with n r nearly 2,000 ceasing operations since 2007. The majority of counties in the United States no longer have hundreds of other publishers have been forced to consolidate or shrink their operations. This journalism crisis is also a democracy crisis. Sources of trustworthy news disappear, American Civic Life suffers. Majority of local newspapers and television stations no longer assign a reporter to cover state and local government matters. With the citizenry, communities generally see lower rates of voter turnout. And cities where newspapers shut down have even seen borrowing costs rise suggesting according to one study that diminished transparency may enable governments to engage in riskier and more inefish or perhaps more corrupt financing arrangements. While there are a number of causes of this decline in the news industry including reduced print circulation and reduced revenue one major concern is the power of a small number of gate keepers over the news and information that citizens see. Today the vast majority of americans consume their news online. And two Online Platforms have immense control over how americans access their news sources. A single algorithm change can entirely distort what information the public shares and consums and what revenue the publisher receives. The same platforms dominate the Online Advertising market and account for nearly all of the growth in this market in recent years. No single factor has led to this immense concentration of control. But it is incumbent on congress to understand the sources of the problem and to address it urgently. The american tradition has long recognized that preserving an open market place of ideas is vital to safe guarding the First Amendment and vital to a democratic form of government. Antitrust and antimonopoly laws have been a primary way that lawmakers and regulators have when congress enacted the antitrust laws it was with the purpose of protecting Economic Opportunity and political equality. Senator john sherman, the author of the sherman antitrust act referred to the first law as a bill of rights and a charter of liberty. He didnt regard it as simply a question of economic efficiency or reducing prices. Overly concentrated markets concentrate economic and political power and stifle competition. It is important to keep these broad goals of reducing concentration and promoting competition in mind as we examine how Online Platforms impact the free and diverse media. As the judge reviewing the descent decree wrote, the values underlining the First Amendment coincide with the policy of the antitrust laws. Congress has a constitutional duty to ensure that markets are structured in a way that is compatible with our democrat values. It is vital that we maintain open and competitive markets which will best foster a robust independent press. With this in mind, i welcome todays hearing as the beginning of the committees investigation of competition and Digital Markets and i look forward to hearing from our panel of experts. I thank the chairman and yield back. The chair now recognizes the Ranking Member of the full committee, gentleman from georgia, mr. Collins, for his opening statement. Thank you. Thanks for holding this hearing today. I am glad that you and i have found some commonality and look forward to working together. This is the first of many hearings and oversight hearings the subcommittee hopes to hold. I firmly support this initiative. The conversations we will have in our committee are critical as congress evaluates the importance of these tech issues and whether any amendments to the antitrust laws are needed. The evauchbling role of tech in the daily lives of the American People are equally important. If we do identify needs for new legislation it is important we keep two principles in mind. First, like the existing antitrust laws new legislation consistent in keeping free market free. Proposals should be viewed with caution. Experience shows that Regulatory Solutions often miss the mark, solve problems less efficiently and can create new opportunities for anticompetitive companies to suppress. That is true when regulation attempts to take on evolving problems in fast moving markets like tech. I speak from experience here. I have worked through these before. We have to make sure that we are not looking for an immediate solution. We need to make sure we are working this through. Secondly, big is not necessarily bad. Companies that offer new innovations, Better Solutions and more consumer benefit at lower prices often become big to the benefit of society. Shockingly. Proposals to break up Big Companies just because they are big risk throwing out the baby with the bath water. Any discussion this moves to that discussion first is not the right way to move. It is because i embrace the principles that i am excited to have joined in the introduction of the competition and reservation act. Th this. In the old days, as the News Consumption has moved to the internet traditional subscriptions are drying up and online revenues are being dominated. If individual news outlets can count on being able to with the Online Platforms the bleeding could be stopped. The problem is that smaller News Organizations dont stand a fair negotiating stance. These giants stand as a bottleneck, a classic antitrust problem but consumers and the producers of news content. Journalism competition act seeks to solve this problem simply by lowing news publications to thak the bottleneck together. The bill allows the publications four years in which they can negotiate with the platforms without fearing antitrust enforcement against that activity. In other words, the bill allows news publications to take on an antitrust antitrust problem without wering their it does not threaten to break up any company. It does promise to simply solve the problem. Todays hearing provides an excellent opportunity as we begin this for all that are here and many are here representing a large diverse group. Understand from my position as i have studied clearly the principles that i have laid out and as we go forward in this, anything that happens should be done when everyone comes to the table. Everyone has a chance to share their opinion. Everyone has a chance to offer what may or may not be good legislative solutions. It is up to this body to hear from the people and the companies involved. If we take everybody at face value, it is the American People at the end of the day that will benefit. We, i promise from my perspective, will not rush to judgment. We encourage either side to not rush to judgment and companies to participate in a positive solution. When this body does that, we have seen great things happen. When we do not, we end up with more problems than we began to initiate. With that, i yield back. Our first witness is the president and ceo of news media alliance. He received our second witness, before his time he served as the director of the internet human rights project at the numeric foundation and chief council for the antitrust division and served as chief council and staff director for the antitrust subcommittee as well as legislative director with Consumer Federation of america. He serves as professor at Georgetown Washington University school of law, senior fellow at the silicon flat iron center for law at the university of colorado and on the boards of the International Media support and Global Partners digital. He received his b. A. From Brown University in providence, rhode island. Our third witness is sally hubbard, the director of enforcement strategy at the open markets institute. She was Senior Editor of antitrust she earned her bachelors of arts and jd at new york University School of law. Our fourth witness is matthew sheers, the Vice President of law and policy at the computer and Communications Industry association. Our fifth witness is executive president and General Council at news corps, the son of the dean of the law school i attended. He was a partner where he focussed on white collar defense and Securities Litigation and enforcement and served as assistant u. S. Attorney where he was deputy chief of the criminal division. He is an officer of the federal bar foundation. He received his b. A. From university of michigan. It is my pleasure to yield to the gentleman from georgia, mr. Collins. I appreciate this is an interesting thing from being a member of congress to introducing a member of the press for my own state. It is an honor and privilege to welcome kevin rowley. Those of you from georgia know the ajc is one of the best in the business. It is where i would argue where the entire state of georgia goes to get their news. In 200124 Newspaper Association of america named him one of 20 over under 40 up and comers. We asked one of his reporters to describe how he would describe his boss. I think it is very telling. Kevin is the type of editor who encourages those to experiment and try new things. He wrote a masterful story about a world war ii veteran returning to the french battlefield for the first time helping to unlock a 69yearold mystery in the process. Kevin headlined a season of the break down show as we thas more demands. The perfect cases lead by example and i cant think of a better compliment. Earlier this year kevin called to explain how this critical disabilities for the ajc for communities across georgia and entire newspaper industry. It is a core part of every it is an honor to have a member of our local media here today. We welcome all of our distinguished witnesses and thank you for participating in todays hearing. If you would please rise i will begin by swearing you in. Please raise your right hands. Do you swear or affirm under penalty or perjury that the testimony you are about to give is true and correct to the best of your knowledge information and belief so help you god . Let the record reflect that the witnesses answered in the affirmative. Please note that each witness statement will be entered into the record in its entirety. To help you stay within the time there is a timing light on the table. When the light switches from green to yellow you have one minute to conclude. When the light turns red it signals your five minutes have expired. Thank you for inviting me to participate in todays hearing. I am the president and ceo of the news media alliance, a nonprofit trade association representing over 2,000 publishers across the United States. Our members include some of the largest News Organization covering events around the