Saturday, September 26, 2020

Google faces Congress again, this time with Republicans in charge

Sep 16. 2020
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By The Washington Post · Rachel Lerman, Cat Zakrzewski · BUSINESS, TECHNOLOGY, US-GLOBAL-MARKETS 

 WASHINGTON - Senators grilled a Google executive Tuesday over its dominance in the digital ad market, shedding light on Congress' ongoing investigation of the company as it faces mounting antitrust scrutiny from multiple branches of the government.

The hearing, hosted by the Senate Judiciary subcommittee on antitrust, came more than a month after the House held its own exhaustive hearing on potential monopoly power with the chief executives of Google, Facebook, Amazon and Apple. The Senate hearing focused mainly on Google's effect on competitors in the digital ad market, where the company makes the bulk of its money. But it also took detours into long-running Republican allegations of censorship of conservative views at the search giant.

Sen. Mike Lee, R-Utah, the subcommittee's chairman, opened the hearing Tuesday by saying he would continue to pursue issues of perceived bias against conservatives but that the hearing was not fundamentally about those concerns. But in his first question to Google, he asked about its alleged censorship of a conservative news outlet.

"I want to be clear here that a private company engaging in censorship on its own platform is not a violation of antitrust laws," Lee said. "Nevertheless, as I pointed out in my letter to your company on this subject, isn't this behavior evidence of market power? In other words, why would any company want to treat its customers like that? Unless it was confident that its customers had no viable alternative."

The Senate panel's line of questioning sheds some light on Republicans' antitrust priorities at a critical juncture for Google. The Justice Department is expected to file an antitrust lawsuit as early as this month. A group of state attorneys general, led by Republican Ken Paxton of Texas, is also conducting a parallel investigation.

Google is the first target in what could be a watershed moment for antitrust regulation in the country. Critics have charged for years that U.S. laws have failed to rein in Big Tech, allowing companies to amass ever more power.

Three more companies were questioned at the congressional hearing in July: Facebook for its acquisition of smaller companies, including Instagram; Apple for its hold on the App Store; and Amazon for the way it collects data from third-party sellers on its site. (Amazon chief executive Jeff Bezos owns The Washington Post.)

But Google received a significant amount of attention during the hearing as CEO Sundar Pichai defended the company against concerns about the dominance of its search and ad technologies. Competitors have accused Google for years of unfairly controlling too much of the market by prioritizing its own services over others on search results pages and by managing many aspects of the digital ad buying and displaying process.

Senators waded deep into the weeds of Google's advertising infrastructure on Tuesday, probing the company executive for specific answers on how Google could claim neutrality when it controls so much of the technology.

Sen. Josh Hawley, R-Mo., grilled Google mergers and acquisitions chief Donald Harrison on how the company uses information it collects from Gmail, Search and other services to boost its advertising business.

"You then use those advantages in the ad stack at every single layer, every layer of which you exercise dominance in," Hawley said. "That gives you enormous advantage."

Harrison spent much of the hearing on defense, insisting that Google has strong competitors in the ad technology space and that the company's services are good for consumers.

"Any discussion of online advertising would be incomplete without mentioning the importance of advertising in supporting a free and open Internet," Harrison said in his prepared remarks.

Harrison had plenty of time to make his case, but senators also interrupted him and often answered their own questions while pressing on issues of market dominance. 

"Google has an immense conflict of interest," Sen. Richard Blumenthal (D-Conn) said while pointing out that Google represents both publishers and advertisers and collects information on both.

Giving the best experience to consumers has been a key defense for Google in antitrust investigations for years. But rivals say Google controls too much of the advertising process by managing both the infrastructure for sellers and many of the websites where ads are placed.

Sen. Amy Klobuchar, D-Minn., zeroed in on Google's acquisition of advertising tech company DoubleClick in 2007, as well as its pending merger with Fitbit, a fitness tracker company. That deal is still being reviewed by regulators.

Harrison pledged that the company would not mix users' health-care information with advertising data to show people personalized ads.

"This deal is about devices," he said. "It is about health care and not about ads."

Klobuchar also asked Harrison why Google's ad exchange business shouldn't be regulated in a similar way to electronic trading in the stock market.

"I think you look for regulation in a market where you see market failure," he replied. "And I don't see it here."

Republicans at the hearing also spent big chunks of time focusing on claims that the company is censoring conservatives.

Lee has repeatedly criticized the tech industry for being biased against conservatives, a charge that has little evidence and that the tech giants have repeatedly denied. He has suggested that this perceived bias is grounds for greater antitrust scrutiny.

"I view your heavy-handed censorship as a sign of exactly the sort of degraded quality one expects from a monopolist," he wrote in a letter to tech companies, including Google's parent company, Alphabet, this summer. "In any other business, you would never dream of treating your customers the way you treat those with views you don't like. That is, unless you know your customers have no other serious options."

Google has repeatedly denied allegations that it is suppressing conservative viewpoints, and Harrison reiterated that the company's advertising policies do not take political affiliation into account. In a response to Lee's letter, Google said it applies "our policies to all content creators across the board and will not allow any form of political bias."

Executives from business trade association NetChoice, tech company Chalice Custom Algorithms and Omidyar Network, a firm funded by eBay founder Pierre Omidyar, also testified at the hearing.

 

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