Thread by @thedextriarchy

Oh hey, new antitrust hearing! It’s probably gonna involve Google Search. And god willing no coronavirus. judiciary.senate.gov/meetings/compe…

Mike Lee is kicking off with an unusual damper on techlash stuff, saying we "cannot fall prey to the mentality that treats big as categorically bad.” Lee takes a moment to say that US law isn’t like Europe, and that we need to focus strictly on the consumer standard.

Lee says it’s ridiculous that the FTC and DOJ are both carrying out investigations. “I’ve expressed to both my profound frustration that these agencies are conducting monopolization investigations of the very same tech companies at the very same time.”

Still on this! The entire hearing so far is just railing on how agencies are conducting antitrust investigations.

Okay, now we’re on to Klobuchar, who is talking about the topic of the hearing. “I’m a little less obsessed with this overlapping jurisdiction. What I want is action when it comes to some of this conduct."

Klobuchar refs her cross-country travel during her presidential bid. “Americans know intuitively that competition is key to the health of our markets … they know that our company has a monopoly problem."

Citing cases of vertical integration: Google offers access to Maps &c through Search, Apple has the App Store on the iPhone. Both companies have been accused of favoring their own products.

"Depending on the circumstances, these practices scan have a devastating effect to competition.”

Klobuchar describes sherlocking as a type of self-preferencing, which seems a little odd, but okay.

Klobuchar touting a new antitrust bill that imposes a heavier burden of proof on companies in all industries to prove they’re not acting anti-competitively, among other things.

It’s called the "Anticompetitive Exclusionary Conduct Prevention Act.”

Klobuchar says they need a better acronym, which is not true, ban cutesy acronyms forever!

Now we’re on to the witnesses! Again, list of them found here. We’re starting with Gene Kimmelman of Public Knowledge. judiciary.senate.gov/meetings/compe…

Kimmelman explaining why today’s big tech platforms are stopping competitors from entering the market. It’s “extremely dangerous” to have high barriers to entry for new potential Facebooks and Googles.

“The network effects around these platforms bringing everyone together, economies of scale, the power of data to fuele their ability to serve consumers may be unmatched by others in the marketplace. So this is an extremely difficult task for antitrust enforces…"

Kimmelman is praising Klobuchar’s new bill as a way to go deeper on sifting natural monopoly emergence from bad behavior. “But even with this, the fundamental economics of these markets keep driving us toward few players and ultimately monopoly."

So he wants Congress to enact clear pro-competition policies — he’s citing new interoperability policies around breaking up Ma Bell in the ‘80s.

“It’s these kind of interventions that we now need for digital platforms."

Sally Hubbard of Open Markets Institute up now. Her testimony is opening with a definition of “the American Dream” from Wikipedia. Okay.

The point is, having a few big consolidated platforms makes the American Dream harder for entrepreneurs. “They’re each more than 20 years old and have dominated their arenas for more than a decade."

They’re “following Microsoft’s playbook” to favor their own services. “Google picks itself as the winner” in online search, Android, and other areas. “Amazon picks itself as the winner of commerce.” Apple also “picks the winners and losers” in apps.

Hubbard also says "Facebook and YouTube pick the winners of information” by promoting divisive borderline content, which seems sort of like its own issue — not necessarily connecting the dots with how this drives out competitors.

“Consumers benefit from the choice, innovation, and quality that robust competition brings. Consumers are also citizens that benefit from the free flow of speech.” As well as entrepreneurs, etc.

Economics professor Thomas Hazlett is up now. We’re getting a generalized introduction of monopoly. Lots of people here seem to be noting that digital platforms are an outgrowth of a generally hyper-consolidated market.

This is also significantly dryer and more theoretical than some of the other recent hearings, i.e. the House’s big Tile/PopSocket/Sonos/Basecamp one. theverge.com/2020/1/21/2107…

This makes sense — there’s a pretty fine distinction between a company making a good service accessible to consumers and one unfairly shutting out competitors that it sees as inferior.

Morgan Reed from the App Association up. Talking about the app ecosystem — companies that have benefited from the “explosion of platforms” for them to use. Platforms provided a trusted space, reduced overhead, and offered a global marketplace.

“In the 1990s, it cost at least a million dollars to start up a software company.” Today, it’s about $100,000, and prices have massively dropped for consumers. “My members are not scared of competing with apps by the platforms.” But they still need to watch for self-preferencing.

“Platforms need to communicate with developers on their guidelines,” and they need to strive for security platforms and remove pirated apps. He’s generally wary of antitrust policy, though — “antitrust cases tend to lock everyone in place.”

Luther Lowe of Yelp is here now — he’s here instead of the CEO, who had to stay and deal with coronavirus issues. Also, Lowe is a major Google gadfly, so this is a perfect environment for him.

“I’m here to talk about how Google betrayed the web.” ! Lowe’s full testimony is here, by the way. drive.google.com/file/d/1D9RnEk…

The big issue with Google is its answer boxes — the things that appear above organic results and often feature Google’s own stuff. Google was the subject of an FTC investigation in the early ‘10s, but it ultimately fizzled.

Klobuchar is starting questioning by talking about the rarity of serious antitrust enforcement. “We haven’t seen any big increase in enforcement” under Section 2 of the Sherman Act. So she’s basically asking the panel if her bill is a good improvement.

“There are extreme hurdles for prosecution in this area,” says Kimmelman, thanks to legal precedent. Hubbard cites “a lack of political will” to bring cases in the first place. “Enforcers need to be more willing to take a risk."

“I think Congress should aim to remove the complexity and make antitrust cases easier, faster, and cheaper” - Hubbard

Lowe thinks you could bring a Google antitrust case over Search today, but “we support the use of any new tools that help empower enforcers to bring these cases. … There’s just a culture of under-enforcement."

Klobuchar: “Do you think we should be concerned if we don’t consider regulation that other countries are going to set the global standard?”

Kimmelman says we don’t need to follow Europe here. “What if your voice assistant could actually compete all the way across Search?” Besides antitrust enforcement, we should let people move data around and interoperate. Portability/interoperability is a big issue for tech reform.

Hubbard says we also need stronger privacy regulation “because data is such a source of dominance.” Stronger merger enforcement and “a neutrality/non-discrimination standard” as well. Lots of interlocking parts here.

Klobuchar’s questions are wrapped up now, and it’s Lee’s turn. He’s asking Hazlett about Klobuchar's bill, and Hazlett is generally down on banning self-preferencing. “You don’t want to hamstring” competition that might come through vertical integration.

Reed is raising the point that app developers build things like integrated camera services into their own apps to create new tools — even though Apple, etc. are technically self-preferencing that camera.

That said the camera app that’s getting screwed here is sort of theoretical, while there are *real* app devs (like Tile) that are getting explicitly locked out, albeit for complicated reasons.

Anyhow, Hawley is up now, starting with more railing against the FTC/DOJ dual investigations. Also promoting interoperability &c: “I think every consumer ought to have a right to get all their data back from these companies” and we need to look at how consumers are compensated.

“It seems to me there’s a little bit of a straw man here: this argument that we have to accept either no product integration at all or total self-preferencing or self-bias.” - Hawley

Hawley’s talking about Google Search, asking if Search still simply returns the “most relevant, useful” results.

Lowe: “It depends."

Lowe says it’s fine for Google to, say, integrate a calculator into its main search page — but if you’re trying to look for the best pediatrician and so on, it’s not helpful to get just one source. But users have been “habituated” to believe the top results are best.

“This is problematic because [users are] seeing an objectively lower-quality set of information.” - Lowe

Is this the first time somebody has explained robots.txt in Congress? Maybe!

Hawley isn’t wrong here, but he's spending a whooole lot of time reiterating stuff Lowe has said and it’s not really necessary to make his point, which is that “the devil is in the details, I think, when it comes to self-preferencing."

Richard Blumenthal is following Hawley — the two of them just asked the DOJ to make Search part of any antitrust investigation into Google, BTW.

Blumenthal asking Lowe: “Have you felt there has been retaliation as a result of your criticism” of Google?

“I like to think that by being vocal it has in some ways signaled to Google that by doing this they know we are willing to make hay of it and raise it with antitrust authorities. But I know dozens and dozens and dozens of CEOs that are terrified of retaliation.” - Lowe

Blumenthal is now talking about Barr consolidating power over antitrust, and how this is worrying — “I’m concerned about the politicization of the Department of Justice in this administration."

“I'm concerned that political control over these investigations is a harbinger of a result that fails to serve the interests of consumers.” Blumenthal worries it’s just a way for Trump to punish companies he doesn’t like. This is… not unreasonable.

“Even when the DOJ does the right thing, it’s going to be tainted,” warns Hubbard — there’s going to be a question of whether (to use an example they’re not mentioning) Trump just really hates Jeff Bezos and wants Amazon dinged for antitrust.

Marsha Blackburn is up next, and she wants to talk about privacy. “As we talk about antitrust ... I want you to talk about having a federal privacy standard as a way to rein in some of Big Tech’s abuses.”

Everyone in this hearing is doing the congressional equivalent of dropping a SoundCloud link during their questioning.

I mean to be clear this hearing could be 1000% worse, but things are going a little far afield from the actual topic here.

Lowe is distinguishing Yelp from Google by saying Yelp isn’t unfairly privileging or downranking businesses. In fairness, some businesses *hate* Yelp because they think it’s doing exactly that. slate.com/technology/201…

This hearing is starting to go in circles — we’ve established that distinguishing unfair self-preferencing is a fine line, and now we’re just meandering around that line and occasionally tripping into semi-related topics like privacy.

Okay, somewhat back on track: Lee is asking how something like AmazonBasics differs from Costco selling a store-brand product.

Hubbard: “The difference is that Costco is not nearly as dominant as Amazon is."

More from Lee: what does an extreme version of non-self-preferencing look like? A completely modular phone with no apps? “Where would you draw the line, and why?"

Kimmelman: You could have an expert agency look at what’s fair treatment of yourself versus third-party players. “It’s not about prohibiting bundling or prohibiting the offering of vertical services, except in the most extreme of cases."

Update: we are talking about the blackberry user experience, send help.

All right, the antitrust hearing is over! We will now return to our regularly scheduled apocalypse.