Press Release Platform Competition

Gene Kimmelman to Testify Before Senate Judiciary Committee on Digital Platform Competition

March 9, 2020 , , , , ,

Public Knowledge Senior Advisor Gene Kimmelman will testify before the U.S. Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights this Tuesday, March 10 at 10:00 a.m. His testimony in the hearing on “Competition in Digital Technology Markets: Examining Self-Preferencing by Digital Platforms” will argue that creating a federal agency, alongside strong antitrust enforcement, to provide oversight of digital platforms will help promote fair market practices among dominant firms like Google and Facebook.

The testimony will also highlight that as dominant digital platforms have become today’s marketplace and public square, we must assess what antitrust can do to promote competition, how antitrust should change to better do so, and which other policy tools are needed to generate robust competition in our exploding digital marketplace.

The following is an excerpt from the testimony:

“Digital platforms are today’s marketplace, library, and public square. Yet key elements of these markets are dominated by one or two firms. As experts across the globe examine digital platform markets, they have identified problems of persistent market power and very little entry or expansion. If this is accurate and sustained, the likely results will be less innovation, limited consumer choice, and lower quality products. 

“The United Kingdom’s Competition and Markets Authority (CMA) recently released its interim report on digital advertising markets. At this preliminary stage, it found — in the UK — that Google has significant market power in search advertising, general search, and parts of the ad ecosystem. It also found that Facebook has such power over social networks. While this may not apply precisely to the U.S. market, it certainly should set off alarm bells that we need to assess what antitrust can do, how it needs to change, and which other policy tools are needed to generate robust competition in our exploding digital marketplace.

“Even if current antitrust investigations successfully identify and remedy antitrust violations by dominant platforms, that will not be enough to overcome the natural tendency for these markets to tip toward monopoly, and therefore more oversight is needed to protect consumers and give them the benefits of competition. Fundamentally, antitrust waits for illegal conduct and seeks to remedy that conduct. For gatekeeper platforms, significant market power is sustained without effective entry or expansion thanks in part to the powerful position that dominant platforms hold in our economy and market forces that reinforce their advantages. Long-term innovation and competition will require tools — like those used to open the telecommunications market to competition after the breakup of the AT&T monopoly — to sustain the work that effective antitrust enforcement can achieve.

“This means it is up to Congress to take the baton and enact meaningful reform to rein in the power of these platforms. We need a new expert agency, focused on digital platforms and equipped with pro-competition regulatory tools. If Congress waits to see the results of the antitrust investigations currently ongoing, which could take years, the marketplace will suffer. The time to act is now. We must get started right away building the regulatory tools necessary to jump-start and sustain competition against dominant digital platforms.

“Today’s exploding digital marketplace is characterized by a tendency to tip toward monopoly in an environment with inadequate public policy tools available to counteract this trend. Lack of public duties to protect personal information, the inadequacies of current antitrust jurisprudence and a vacuum in sector-specific regulation over the dominant tech platforms leaves society at enormous risk. Network effects and economies of scale, when connected to the enormous power of data control in the hands of the leading tech platforms, is likely harming innovation, preventing the growth of healthy competition, and enabling the exploitation of personal privacy. 

“We therefore propose, in addition to strong antitrust enforcement, the creation of a federal agency agile enough to handle the oversight of data abuses, gaps in competition policy, and capable of establishing corporate duties that promote fair market practices.”

You may view the full testimony here.