Congress grills Big Tech over competition, money and power

Big Tech faced tough questions Tuesday as federal lawmakers focused on issues of potentially anticompetitive behavior by technology giants and expressed bipartisan skepticism over Facebook's plan for a new digital currency.

Companies such as Apple, Google, Facebook and Amazon have long enjoyed nearly unbridled growth and a mythic stature as once-scrappy startups — born in garages and a dorm room and a road trip across the United States — that grew up to dominate their rivals. But as they've grown more powerful, critics have also grown louder, questioning whether the companies stifle competition and innovation, and if their influence poses a danger to society.

Both Democrats and Republicans had grievances to air, even if there wasn't much consensus on what to do about them.

Google Director of Economic Policy Adam Cohen, left, testifies during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

An afternoon panel of the House Judiciary Committee focused on whether it's time for Congress to rein in these companies, which are among the largest on Earth by several measures. Central to that case is whether their business practices run afoul of century-old laws originally designed to combat railroad and oil monopolies.

For some legislators, mostly Democrats, those laws are in need of updates or at least more stringent enforcement. Ultimately such action could lead to breaking up big online platforms, blocking future acquisitions or imposing other limits on their actions.

Subcommittee chairman David Cicilline, a Rhode Island Democrat, charged that technology giants had enjoyed "de facto immunity" thanks to current antitrust doctrine, which typically equates anticompetitive behavior with higher prices for consumers. That allowed them to expand without restraint and to gobble up potential competitors, he argued, creating a "startup kill zone" that prevents smaller companies from challenging incumbents with innovative services and technology.

Facebook Head of Global Policy Development Matt Perault, second from left, testifies alongside Google Director of Economic Policy Adam Cohen, back left, Amazon Associate General Counsel Nate Sutton, second from right, and Apple Vice President for Corporate Law and Chief Compliance Officer Kyle Andeer during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

A panel of four mid-level executives from the companies countered that their firms continue to innovate, that they face vigorous competition on all fronts — including from one another — and, perhaps most of all, that they were not monopolists in any way, shape or form.

Facebook, for instance, has argued that it is not a monopoly because it has many competitors in businesses as diverse as private messaging, photo sharing and online advertising.

So Democratic Rep. Joe Neguse of Colorado asked Facebook's head of global policy development, Matt Perault, to name the world's largest social network by active users. (It is Facebook.) When Perault said he couldn't, Neguse ticked off four of the six largest — Facebook, Facebook Messenger, Instagram and WhatsApp — and had Perault verify that all are owned by Facebook.

Apple Vice President for Corporate Law and Chief Compliance Officer Kyle Andeer testifies during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

"We have a word for that and that word is monopoly, or at least monopoly power," Neguse said.

The company representatives didn't help their case by pleading ignorance on multiple occasions. Google's director of economic policy, Adam Cohen, said he was "not familiar" with how much Google pays Apple for the right to supply the default search engine for Safari on iPhones. (Rep. Jamie Raskin, a Democrat from Maryland, said It was $9 billion in 2018 and $12 billion in 2019.) Cohen also said he was "not familiar" with allegations of widespread fraudulent listings on Google Maps.

Amazon also faced some pointed questioning. Cicilline asked Nate Sutton, an associate general counsel at the online retailer, whether it uses the data it collects about popular products to direct consumers to Amazon's own in-house products.

Amazon Associate General Counsel Nate Sutton testifies during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

Sutton said the company doesn't use third-party sellers' data to "directly compete" with them. Cicilline, affecting disbelief, twice reminded Sutton that he was under oath. "Amazon is a trillion-dollar company that runs an online platform with real-time data," he said.

Expert witnesses suggested it might be time to reassess antitrust policy. Timothy Wu, a law professor at Columbia University who has advocated for more expansive antitrust enforcement, noted concerns about a fall in the number of startups being formed, and wondered aloud whether the U.S. will remain a place where startups thrive and launch new industries.

Fiona Scott Morton, a Yale economics professor, argued that stifled competition has hampered innovation and hurt both smaller businesses and consumers, who have no choice but to surrender their privacy and watch more advertising.

Google Director of Economic Policy Adam Cohen testifies during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

Others, mostly Republicans, rejected what they described as a big-is-bad approach in favor of keeping antitrust enforcers narrowly focused on protecting consumers when there's clear evidence of harm such as price gouging.

Attorney Maureen Ohlhausen, a former Republican commissioner and acting chairwoman of the Federal Trade Commission, said the government can still protect against anticompetitive behavior without "reducing the focus on consumer welfare." She warned against "drastic" steps such as breakups that carry "serious risk of doing more harm than good for competition and consumers."

Earlier in the day, a Facebook executive appeared before a Senate panel to defend the company's ambitious plan to create a digital currency and pledged to work with regulators to achieve a system that protects the privacy of users' data. David Marcus, who leads the Libra project, faced sharp criticism from both Democrats and Republicans.

Facebook Head of Global Policy Development Matt Perault testifies during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

"Facebook is dangerous," asserted Sen. Sherrod Brown of Ohio, the committee's senior Democrat. Like a toddler playing with matches, "Facebook has burned down the house over and over," he told Marcus. "Do you really think people should trust you with their bank accounts and their money?"

Republican Sen. Martha McSally of Arizona said "the core issue here is trust." Users won't be able to opt out of providing their personal data when joining the new digital wallet for Libra, McSally said.

AP business writer Marcy Gordon contributed to this article from Washington, D.C.

Facebook Head of Global Policy Development Matt Perault, left, shakes hands with Rep. David Cicilline, D-R.I., chair of the House Judiciary antitrust subcommittee, before testifying at a hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

Google Director of Economic Policy Adam Cohen testifies alongside Facebook Head of Global Policy Development Matt Perault, back center, and Amazon Associate General Counsel Nate Sutton, back right, during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

Google Director of Economic Policy Adam Cohen, left, testifies alongside Facebook Head of Global Policy Development Matt Perault, second from left, Amazon Associate General Counsel Nate Sutton and Apple Vice President for Corporate Law and Chief Compliance Officer Kyle Andeer during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

Google Director of Economic Policy Adam Cohen testifies during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

Amazon Associate General Counsel Nate Sutton testifies during a House Judiciary subcommittee hearing, Tuesday, July 16, 2019, on Capitol Hill in Washington. (AP PhotoPatrick Semansky)

WASHINGTON (AP) — Israel this week briefed Biden administration officials on a plan to evacuate Palestinian civilians ahead of a potential operation in the southern Gaza city of Rafah aimed at rooting out Hamas militants, according to U.S. officials familiar with the talks.

The officials, who were not authorized to comment publicly and requested anonymity to speak about the sensitive exchange, said that the plan detailed by the Israelis did not change the U.S. administration’s view that moving forward with an operation in Rafah would put too many innocent Palestinian civilians at risk.

Israeli Prime Minister Benjamin Netanyahu has vowed to carry out a military operation in Rafah despite warnings from President Joe Biden and other western officials that doing so would result in more civilian deaths and worsen an already dire humanitarian crisis.

The Biden administration has said there could be consequences for Israel should it move forward with the operation without a credible plan to safeguard civilians.

“Absent such a plan, we can’t support a major military operation going into Rafah because the damage it would do is beyond what’s acceptable,” U.S. Secretary of State Antony Blinken said late Friday at the Sedona Forum, an event in Arizona hosted by the McCain Institute.

Some 1.5 million Palestinians have sheltered in the southern Gaza city as the territory has been ravaged by the war that began on Oct. 7 after Hamas militants attacked Israel, killing 1,200 people and taking about 250 hostages.

The United Nations humanitarian aid agency on Friday said that hundreds of thousands of people would be “at imminent risk of death” if Israel moves forward with the Rafah assault. The border city is a critical entry point for humanitarian aid and is filled with displaced Palestinians, many in densely packed tent camps.

The officials added that the evacuation plan that the Israelis briefed was not finalized and both sides agreed to keep discussing the matter.

White House press secretary Karine Jean-Pierre told reporters on Friday that no “comprehensive” plan for a potential Rafah operation has been revealed by the Israelis to the White House. The operation, however, has been discussed during recent calls between Biden and Netanyahu as well as during recent virtual talks with top Israeli and U.S. national security officials.

“We want to make sure that those conversations continue because it is important to protect those Palestinian lives — those innocent lives,” Jean-Pierre said.

The revelation of Israel's continued push to carry out a Rafah operation came as CIA director William Burns arrived Friday in Egypt, where negotiators are trying to seal a cease-fire accord between Israel and Hamas.

Hamas is considering the latest proposal for a cease-fire and hostage release put forward by U.S., Egyptian and Qatari mediators, who are looking to avert the Rafah operation.

They have publicly pressed Hamas to accept the terms of the deal that would lead to an extended cease-fire and an exchange of Israeli hostages taken captive on Oct. 7 and Palestinian prisoners in Israeli jails.

Hamas has said it will send a delegation to Cairo in the coming days for further discussions on the offer, though it has not specified when.

Israel, and its allies, have sought to increase pressure on Hamas on the hostage negotiation. Signaling that Israel continues to move forward with its planning for a Rafah operation could be a tactic to nudge the militants to finalize the deal.

Netanyahu said earlier this week that Israeli forces would enter Rafah, which Israel says is Hamas’ last stronghold, regardless of whether a truce-for-hostages deal is struck. His comments appeared to be meant to appease his nationalist governing partners, and it was not clear whether they would have any bearing on any emerging deal with Hamas.

Blinken visited the region, including Israel, this week and called the latest proposal “extraordinarily generous” and said “the time to act is now.”

In Arizona on Friday, Blinken repeated remarks he made earlier this week that "the only thing standing between the people of Gaza and a cease-fire is Hamas.”

The Chahine family prepares to bury two adults and five boys and girls under the age of 16 after an overnight Israeli strike in Rafah, southern Gaza Strip, Friday, May 3, 2024. An Israeli strike on the city of Rafah on the southern edge of the Gaza Strip killed several people, including children, hospital officials said Friday. (AP Photo/Ismael Abu Dayyah)

FILE - Palestinians line up for free food during the ongoing Israeli air and ground offensive on the Gaza Strip in Rafah, Jan. 9, 2024. A top U.N. official said Friday, May 3, 2024, that hard-hit northern Gaza was now in “full-blown famine" after more than six months of war between Israel and Hamas and severe Israeli restrictions on food deliveries to the Palestinian territory. (AP Photo/Hatem Ali, File)

Palestinians rescue a woman survived after the Israeli bombardment on a residential building of Abu Alenan family in Rafah, southern Gaza Strip, early Saturday, May 4, 2024. (AP Photo/Ismael Abu Dayyah)

President Joe Biden walks across the South Lawn of the White House as he talks with White House press secretary Karine Jean-Pierre Thursday, May 2, 2024, in Washington, after returning from a trip to North Carolina. (AP Photo/Mark Schiefelbein)