FTC official says data collection allows Big Tech to hurt competition
Vast troves of consumer data collected by big technology companies allow them to gain a competitive edge and pose a threat to competition, Federal Trade Commission’s Rohit Chopra said on Friday.
Personal data is powering the dominance of tech companies that offer basic services for free, which are ultimately “not really free,” Commissioner Chopra, a Democrat, told the House of Representatives Judiciary’s antitrust subcommittee during a hearing.
He also said small fines and financial penalties will not be enough to address concerns about the power of big tech firms, adding that regulators will need to take a closer look at that.
For example, earlier this year the FTC fined Facebook Inc $5 billion over online privacy. Chopra voted against that decision.
There are several probes at the federal, state and congressional level aimed at determining if big technology companies – Alphabet-owned Google, Facebook, Amazon.com Inc, Apple Inc – use their considerable clout in the online market illegally to hurt rivals or otherwise break competition law.
Once lauded as engines of economic growth, these companies have increasingly been on the defensive over their outsized market influence. Politicians including President Donald Trump, consumers, other firms and regulators have criticized that power.
Earlier this week, the leaders of the House Judiciary Committee said that they had begun receiving data from these companies as part of their probe into the companies’ potential breaches of antitrust law.
Democrat David Cicilline, who chairs the antitrust subcommittee, said on Friday the committee has received “tens of thousands of documents” and is expecting more.
U.S. technology giants pose a threat to competition and innovation around the world through collection and control over massive amounts of consumer data, Federal Trade Commissioner Rohit Chopra will tell Congress Friday.
Dominant tech companies have gained enormous competitive advantages from data, which deserves special attention from antitrust officials and lawmakers, Chopra, a Democrat on the Republican-led commission, will tell the House Judiciary’s antitrust subcommittee.
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Rohit ChopraPhotographer: David Ryder/Bloomberg
“There is a growing consensus that today’s tech titans operating data-intensive platforms pose a threat to innovation and to new business formation,” Chopra said in his prepared testimony. “Without meaningful competition, we will miss out on the promises of the digital economy,” he said.
Chopra’s remarks comes as the FTC is investigating whether Facebook Inc. has violated antitrust laws, one of a number of ongoing state and federal probes of the biggest U.S. tech companies. In his testimony, Chopra endorsed the idea of company break-ups as a means of restoring competition.
The House antitrust panel, led by Democrat David Cicilline of Rhode Island, is examining whether tech giants, including Facebook, Alphabet Inc.’s Google, Apple Inc. and Amazon.com Inc. are using dominance over their markets to harm competition.
The committee has said it is in the process of receiving information from the four companies after an extensive September request about their acquisitions, business practices and executive communications.
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The House hearing will also focus on the impact of privacy rules on how big tech companies thrive in the digital market. Roslyn Layton, a visiting scholar at the American Enterprise Institute, will testify that laws like the EU’s General Data Protection Regulation are helping tech giants gain market share over rivals.
“Policies such as GDPR, net neutrality and other misguided regulation have strengthened Silicon Valley dominance, and the California Consumer Privacy Act (CCPA) will likely extend it further,” she said.
Jason Furman, professor of economy policy at the Harvard Kennedy School and chairman of the Council of Economic Advisers under President Barack Obama, will testify that the major digital platforms pose “detrimental consequences” for consumers and need to be regulated to increase competition.
Furman authored a recent study for the U.K. government arguing for the creation of a new digital regulator tasked with tackling both privacy and competition concerns, an idea that has gained some momentum in the U.S. and abroad.