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tv   Hearing on Tech Companies Market Concentration Data Collection  CSPAN  January 26, 2022 12:17pm-2:22pm EST

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comments, texts and tweets for sheryll cashin live february 6th at noon eastern on book tv on c-span2. next a hearing on competition and privacy in the tech industry. witnesses testified about the growing market concentration of companies like amazon and the negative effects their size have on consumers. the senate finance sub committee on fiscal responsibility and economic growth held this two-hour hearing.
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this hearing will come to order. good morning. today's hearing of the subcommittee on fiscal responsibility and economic growth. i'm pleased to be working with ranking member cassidy on this hearing of promoting competition, growth and privacy protection in the technology sector. senator cassidy will be joining us remotely. we're going to do a mixed hearing with some people in person and some people remote. under president biden's leadership, the american economy is rebounding. the unemployment rate has dropped from pandemic height of 14.8% in april 2020 to 4.6% today. 5.6 million jobs have been added since president biden's
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inauguration. more than added in the first ten months of any administration since we have been keeping records. child poverty is projected to plummet by more than 40%, thanks to the american rescue plan. all of this has occurred despite an ongoing pandemic that has plagued us now for nearly two years. families have tried to adapt and those changes have echoed throughout our economy. demand has shifted as people have consumed fewer services while buying more durable goods like exercise equipment and home appliances. the economy has recovered more quickly than many businesses projected and all of this is contributing to unexpected bottlenecks in our supply chain and sporadic shortages at warehouses. these factors contribute to the price increases for many consumer goods.
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but they're not the only reason that prices have gone up. sure. giant companies will raise prices when they have to. they will also raise prices when they can get away with it. how do we know this? because when companies are simply passing along their increases in costs, then profit margins should stay the same. when companies see a chance to gouge customers, particularly while everyone is talking about inflation, then those companies raise their prices beyond what is needed to cover their increase cost. right now prices are up at the pump, at the super market and online. at the same time, energy companies, grocery companies and online retailers are reporting record profits. that's not simply a pandemic issue. it's not simply some inevitable
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economic force of nature, it's greed and in some cases it's flatly illegal. one reason for the price gouging is that fewer and fewer markets in america are truly competitive. when several businesses are competing for customers, companies can't use a pandemic or supply chain kink to pad their own profits. in a competitive market, the margin above costs stays steady, even in troubled times. but in a market dominated by one or two giants, price gouging is much easier. for generations policy regulators under both democrats and republicans promoted free market competition. but starting in the 1970s, our government changed course. for decades now, regulators and courts have looked the other way even as one sector after another has become dominated by one or two giants. they rubber stamp merger after
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merger without regard to the consequences and when small businesses got wiped out and start ups were smothered or bought out, they just didn't care. today as a result of increasing consolidation across industries, bigger and bigger corporations have more and more power to charge their customers any price they want. they yield more and more power to underinvest in things like supply chain resiliency and more and more power to hold down wages and benefits for workers. and it's getting worse. earlier this month, federal trade commission lina kahn noted by september of this year our antitrust agencies had already received more merger filings than any other year in the previous decade. in fact, they are on track in 2021 to receive a 70% increase
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above average filings in recent years. giant corporations are taking advantage of this global crisis to gobble up struggling small businesses and to increase their power through predatory mergers. i introduced my pandemic anti-monopoloy act to slow down this trend and to protect workers and small businesses and families from being squeezed even more by harmful mergers during this crisis. i will reintroduce it this year because the needs are clear. the effects are particularly severe. that is why i'm interested in exploring today's hearing. limited competition in tech is having spillover effects across our entire economy. any competitive practices in the semi conductor industry have exacerbated supply chain issues.
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big tech firms have used their dominance to inflate prices throughout the online retail market and to subject workers to inhumane conditions during the pandemic. and as ranking member cassidy has rightly highlighted in his own work, tech firms collect and exploit sensitive personal information often threatening national security, harming our emotional health and discriminating against vulnerable groups. it doesn't have to be like this. with stronger anti-trust laws and robust enforcement, we can ensure that our economy works for american families, not just for the wealthiest corporations. congress could provide better tools to the ftc and the department of justice to investigate anti-competitive mergers and break up the companies that have held our economy down. we can also make it easier for the agencies to reject such mergers in the first place. by promoting competitive markets
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for consumers and workers, we can foster a stronger american economy and a stronger american democracy. i look forward to discussing these issues today. i appreciate all of our witnesses who are joining us. i look forward to hearing about your insights and your experiences. next, i'm going to turn to ranking member cassidy for your opening remarks. senator cassidy. >> good morning. thank you for being here. thank you to our witnesses for taking time to testify. senator warren and i have agreed to a bipartisan hearing on promoting competition, growth and privacy protection in the technology sector. i will focus my time on the privacy aspect of this and on
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the data broker industry. the data broker industry relatively unknown to most americans but its practices and techniques are interwoven into our lives. data brokers build profiles on individuals about certain attributes and then sell that information to those who they see fit or whom wishes to purchase. for example, i'm a big fan of lsu football and i search what is related to our new coach upgrading. a profile is made i'm a big fan of lsu football. i receive ads about buying lsu football tickets, merchandise, et cetera. we all experience something similar on the internet. a company will be a victim of a hack that exposes data to thousands, if not millions of customers. or go to great lengths to minimize those cyberincursions, we ignore an entire industry
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that transacts in personal sensitive information. you'll hear today from witnesses that there is very little information that data brokers cannot selen less data that they aren't willing to sell. i believe that few in this room would think it's a good idea to sell the profiles of american service members and that's what is happening. we should have a conversation about what american data we think is okay to be bought and sold without the knowledge of many americans. what type of data we think is acceptable to be bought and sold, period. should we allow lists of military personnel to be sold to foreign adversaries? should we allow a list of domestic abuse survivors to be sold to domestic abusers? we should have a conversation about what data is appropriate to collect and limits be placed on the groups that collect that data and restrictions on how
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that data is sold or transferred to others. we should have a conversation about all the things our foreign adversaries can do with this data. that's why we formed a team to look how best to move forward. thanks again to our witnesses and i'm looking forward to discussing the issue. >> thank you very much. appreciate it, senator cassidy. we have a great set of witnesses here to share their views on promoting competition, growth and privacy protections to the technology sector. i appreciate everyone being with us today. first joining us virtually we have courtenay brown in new jersey and a leader with united for respect. she's also a veteran of the united states navy. second also joining us remotely
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we have the honorable carl he's the president of the national association of attorneys general and the chair ameritus of the democratic attorney generals executive association committee. he was a managing partner at vennable associate white house council for president clinton and a staff attorney for the public defender service of the district of columbia. third we have barry lynn who is the executive director of the open markets institute. his research focuses on threats of the 21st century monopolies to our democracy, individual liberty, security and prosperity. next we have justin sherman the co-founder and senior fellow at ethical tech an initiative at duke university focused on
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research at the interaction of technology and ethics. mr. sherman studies data brokers and the sensitive data they hold on u.s. individuals. following mr. sherman, we have samm sacks and a cyberpolicy fellow at the think tank new america. ms. sacks is an expert and studies how the chinese government collects and uses data. and finally we have ms. stacey gray. miss gray is senior council at the future of privacy forum. she's a data broker expert. emerging technologies and federal regulation and enforcement. increasing consolidation throughout the american economy undoubtedly contributes to the higher prices, worsening working conditions and privacy concerns.
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the pandemic has not only exacerbated these issues, but has also exposed them more plainly. we can fix this together. we can make our economy work for all americans. i want to thank you all for being with us today. i'm looking forward to hearing your testimony. so ms. brown, we're going to start with you. you are recognized for five minutes and tell us, tell us what you want us to know. >> okay. good morning, everyone. thank you for inviting me to share my experience with you today. senator warren and members of the committee, my name is courtenay brown and i live in newark, new jersey. i'm working at an amazon fulfillment center and have been for four and a half years. before working at amazon, i served my country as a service member in the united states navy. i took the commitment that i made to my country then seriously as well as the commitment i take seriously now as a member for united for
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respect. i'm here today to raise the alarm about amazon's business model because it's a threat to to the working people and a threat to our economy. one out of every 150 american workers is an amazon employee as well as in that group there's some former employees. this multi-billion dollar corporation grew on the back of its workers by exploiting them. i'm looking to you to stand up to corporations like amazon and protect us. the job is a much needed service especially since the covid-19 pandemic began. as a process guide i'm in charge of sorting 35,000 to 50,000 groceries daily for delivery to homes in new york city and new jersey. i'm in and out of our cooler constantly, stepping in and out of temperatures as low as negative 10 degrees and setting packages down with little to no rest. the work that i do is supposed to be done with 30 to 40 people
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but we operate with 25 people or less every day. because our work is essential and our workload has increased, we need more hands on deck, not less so we can take turns getting breaks and getting the much needed rest. amazon can barely retain its workers. amazon's multi-billion dollar wealth is made possible by offering same-day delivery anywhere from same-day delivery to two-day delivery and the corporation has achieved this speed and scale through their sheer brutality watching timing and punishing associates like me and my co-workers for not working fast enough and allowing associates to take time off to adequately rest and recover and to prevent burn out. from the moment we pull into the parking lot, we are monitored. that's through every step of the facility we take. if we fall behind in any way during our 11-hour shift we risk
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being disciplined or even losing our jobs. we're pushed to our limit to the point where we can't even take regular bathroom breaks. often we have to run to and from the bathroom in under two minutes so we don't get in trouble. on top of that, the bathrooms are pretty gross and usually broken too. the constant pressure and surveillance why amazon has twice the level of injuries and turn over compared to similar jobs. research has shown that workplace injury rates are higher at amazon facilities with more robotic and automated technology. i used to be a trainer and i saw first hand out of 50 new hires, only five would make it to the one or two-month mark. many quit soon after due to injuries or overexhaustion. we're living in a country where machines are getting better treatment than people. the machines at my facility under go routine maintenance checks to ensure they don't burn out.
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one time i needed to recover from my mother's passing back in september, i was only given two days to do so. two days to plan a funeral and process my mother's death. i ended up taking a month off of unpaid time which was the only option i had at the time. this unpaid time was only because there was a reduction in the amount of work we had. my sister wasn't as lucky because she also works with me, as well. and she had to literally work the day of her death, as well as the day after. come to her funeral and then return to work two days later. so her entire funeral was literally scheduled around me and my sister's work schedule. imagine what we went through while jeff bezos made $75 billion last year thanks to me and my co-workers. amazon's high-tech sweat shop
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caused me to develop plantar facisitis, pain in my heels and ankles because i'm having to stand for long periods of time at work with little to no rest. there was once the pain was so severe i ended up in the emergency room and because i was homeless at the time and i didn't have enough time to take off i had to beg doctors and nurses to see me as quick as possible because i couldn't afford to lose my job and the opportunity i had, you know, as becoming leadership. this kind of exploitation isn't just happening to me. people have been working through the pandemic non-stop because amazon won't let us take time off. often we are so exhausted we break down and cry. a worker of mine had to stop breast-feeding her child early due to not receiving the support when she had to pump at work. this is the type of environment amazon is perpetuating across
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the country. amazon associates have been fighting back against these dangerous conditions for years. instead of fixing the problem, amazon is only doubling down on exploitative model, jeff bezos recently told shareholders he plans to use more automated control over workers in the warehouse. the worst part is amazon is setting up high-tech sweat shops in black and brown communities desperate for work. they are a big numbers company. they know there's people who look like me that have very limited choices and they know we can't afford to complain or refuse bad conditions. amazon takes advantage of this desperation. the pandemic has closed a lot of businesses in my area, so even someone like me who has considered looking for another job the pay isn't enough to make rent or put food on the table.
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this committee is considering economic growth in the tech sector when corporations break the rules to maximize the profit, they ensure they win by all 19s necessary, including exploiting workers and gutting small businesses. senators, i'm looking to you to stop corporations like amazon from ruining our economy and dictating the workplace standards for hundreds of millions of workers like me. i'm asking you to put an end to inhumane, exploitive practices that leave america's workers injured, exhausted and mentally battered each day. our country needs elected officials to side with working people, to side with essential workers, not pay corporations. >> thank you very much. i appreciate your coming in and testifying. now we go to attorney general racine. you're recognized for five minutes.
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>> chairwoman warren, member cassidy, thank you so much for the opportunity to testify before you today. as the first independent elected attorney general of the district of columbia and outgoing today president of the bipartisan national association of attorneys general, one of my most important responsibilities is to protect d.c. consumers from corporate wrong doing, including investigating and file suit against defendants that illegally exercise monopoly power, violate privacy laws and hurt workers. we've used our power and authority to sue amazon and the local d.c. court for using its overwhelming market power. that is 50 to 70% of all online sales occur on amazon's platform to control prices through restrictive agreements with
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third-party sellers that sell on amazon's marketplace and wholesalers that feed amazon's retail business. in its defense, amazon claims that everything it does in business is all about the consumer. well, our investigation reveals otherwise. amazon, indeed, is focused and the evidence is compelling on one thing. its bottom line. even at the expense of consumers like the ones it claims to care so much about. in fact, amazon is costing all of us more money by controlling prices across the entire electronic mall. like you, senator warren, i, too, am a capitalist. entrepreneurship. people should certainly watch
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their profits increase as their businesses increase. but when companies like amazon unfairly and unlawfully increase the prices on all of us, stifle competition and take advantage of consumers, the law must step in and say enough is enough. back in 2019, amazon was facing pressure from congress and regulators over anti-competitive behavior and we know the concerns around amazon and other big tech is as bipartisan as it gets. to put regulators at ease, amazon claimed it removed a particular clause in its agreement with third-party sellers that prohibited these third-party sellers from offering their goods for lower prices or on better terms in competing online marketplaces,
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including the third-party sellers own websites. again amazon claimed that it removed that particular clause. here's the spoiler alert. amazon deceived congress and consumers with its bait and switch of replacing the initial terms of the agreement with different titles and different words that had the same illegal impact. let me give an example of how this works. if i'm a third-party seller selling, for example, headphones. i do want to list my product on amazon. why? because it reaches so many people. remember, 50 to 70% of the entire electronic mall. in order to do so, i have to do the following. sell the headphones at a price on the amazon marketplace that allows me to earn a profit after
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incorporating amazon's very high fees and commissioners. then i'm barred from selling my headphones on any other platform including my own website at a lower price even though i could earn a fair profit by doing so. another way i've got to build in those high amazon fees and high amazon commissions. into every price of the headphones that i sell. why? because amazon forced me to agree to have that term in order to access its electronic mall. and if they find out that i sell my headphones, even on my own website for a lower price, lower than the built-in fees and commissions that amazon requires, guess what? you get kicked off of the amazon marketplace and have sanctions, financial sanctions imposed on me.
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this leaves third-party sellers with two choices. they could sell their product on amazon under these extremely restrictive terms that guarantee a profit to amazon and puts third party sellers at risk or they can only offer their product on other marketplaces. but because amazon controls so much of the marketplace, third-party sellers have little choice. these agreements impose a high price as i've explained all across the online retail space and consumers lose in this scheme as a result of amazon's agreements. but absent these agreements, third-party sellers could offer their products for lower prices. that's one of the bases for our lawsuits. and amazon isn't just doing this with third-party sellers. they're doing it with wholesalers as well. so we recently added that count to our lawsuit. first-party sellers sell products to amazon for amazon to
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resell at retail to consumers. if amazon lowers the retail prices to match or beat a lower price on a competing online market plas, the wholesalers, listen to this, are forced to pay amazon the difference between the agreed upon profit and what amazon realizes with the lowered retail price. this can lead to wholesalers owing amazon millions of dollars. to avoid triggering this agreement, wholesalers have increased the prices on their goods and on competing online marketplaces. in other words, they have agreed to do what amazon wants. that is to charge consumers more for products that they ordinarily would have to pay but for amazon's illegal agreements. all of these agreements reduce an online marketplace's agreement on ability to compete
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with amazon's marketplace on price and result in consumers paying artificially high prices. even outside this litigation, small businesses, of course, have complained and complained that amazon has stolen their business ideas and passed them off as amazon's own. let me give you one brief example. >> attorney general, i'm going to have to stop you here in just a minute. we just have five minutes for each of our witnesses, but we're going to be able to ask you some questions because i definitely want to hear this. is that okay? >> absolutely, senator. i'm happy to stop right here. >> great. okay. thank you so much. i appreciate it and now mr. lynn, you're recognized for five minutes. >> chairman -- >> you need to hit your button. >> chairman warren, ranking member cassidy, members of the subcommittee, thank you for inviting me to speak to you today on this fundamentally important topic. i'm barry lynn and i direct the open markets institute and it is
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good to see you today. political economics is the art of governing how people compete with and exercise power over one another. an essential truth of human society is that competition among people in inevitable. what people can control is whether corporations and markets are structured to promote the liberty and well being of the individual, the ability of citizens to make wise decisions and the security and prosperity of individuals and of the nation. for two centuries americans were mastered of engineering competition policy to achieve these ends. america citizens use anti-monopoly laws to make themselves the most equal and free people in the world and the most prosperous innovative and powerful. but beginning four decades ago, americans from both parties radically altered how we think about and enforce competition policy. democracy, community, prosperity and policymakers embraced a philosophy that said we should aim to promote efficiency only.
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the result is that today americans face the gravest threat of liberty to democracy since the civil war. today in america, as courtenay made clear, monopolies drive down the people's wages and driving up the people must pay. they threaten freedom of the press and expression. they spy on citizens and use the people's own information to enrage their citizens for profit. monopolist extort other people's businesses. they destroy better technologies and ideas. monopolist destroyed vital industrial capacity. last year we saw that with face masks and this year with semiconductors. monopolists create dangerous dependencies on powerful foreign states. monopolists strip america's communities of wealth, opportunity, independence, security and hope.
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none of this is new. i, myself, first warned of how the platform monopoly threatened democracy more than 11 years ago. myself first warned of the dangers of supply chain concentration 19 years ago. there is good news. americans are swiftly awakening to this interlocking set of crises, today the great majority of americans from across the political spectrum want to see monopolies stripped of their powers and they are on the move. the justice department and ftc have brought lawsuits against google and facebook and in the most democratic action, in u.s. history, attorneys general from 49 states, puerto rico, washington d.c., and guam launched investigations of google and facebook and filed three additional lawsuits. then there are the smart and urgent efforts to strengthen anti-trust laws here in the senate, as with senator warren's
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proposal. in the house and in europe and around the world. perhaps most important president biden has personally condemned the pro-monopoly chicago school consumer welfare philosophy of robert bork and richard posener and restored our focus on our nation's traditional focus on protecting the american people and the nation itself from all dangerous concentrations of power and control. president biden appointed law enforcement smart enough and strong enough to get the job done. today's hearing marks an especially important step forward in this great struggle. it highlights the need to learn that competition policy is more than mere antitrust law. rather, competition policy is the combination of antitrust with trade policy, corporate governance, wall street governance and industrial strategy. nowhere is this more obvious than in addressing america's twin supply chain crises. that's why my written tomorrow i
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focus on what lessons with he can learn from the role monopolists have played in concentrating so much risk and power in our production and transportation systems. such as with semiconductors. i detail how we can rebuild our industrial system in ways that make us truly safe while also breaking inflation and boosting wages. our opportunity today is not merely to rebuild what the monopolists have broken these last 40 years, it is to relearn how to use anti-monopoly laws to imagine and make an america far more democratic, just and forward looking than any of us have dared imagined in a generation. >> thank you, very much, mr. lynn. >> distinguished members of the subcommittee, thank you for the opportunity to testify today about privacy issues raising american citizens. i'm a fellow at duke university stanford school of public policy
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i lead an ecosystem. virtually unregulated industry u.s. companies aggregating, buying and selling, america's intimate personal data on the market data brokers profit off vulnerability and insecurity for u.s. and its citizens. comprehensive consumer privacy law vital, congress need not wait to resolve this debate to regulate brokerage. i will make three points today. congress strictly controlled the sale of data to foreign companies, citizens and governments. strictly control the sale of data insensitive categories like genetic health information and the patient data. stop companies from circumventing those controls by inferring data. all research at duke university found by the advertising data hundreds of families of americans. sensitive demographic
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information, political preferences and beliefs and whereabouts and real-time locations as well as data on first responders, students, government employees and current and former members of the u.s. military. data brokers contract and sell race, religion, gender, sexual orientation, income level, how you vote, what you buy, you search online and what your kids and grandkids go to school. this harms every american particularly the most vulnerable and i'll focus on three examples. data brokers advertising data on millions of current and former u.s. military personnel. criminals brought this data to scan veterans and their families because of the military benefits they get from the federal government. foreign states could acquire this data to profound military personnel, track them and their families and undermine national security.
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chinese governments 2015 hack of the office of personal management is one of the worst breaches of federal government suffered. in the future there is no need for the chinese government or many other foreign intelligence agencies to hack the databases when the data can be bought legally from the open market on the u.s. companies. people search websites, advocate millions of americans public records and make them available for search and sale online. abuse of individuals used the data including highly sensitive information on individuals and actresses, whereabouts and family members to hunt down and stop, harass, intimidate and murder other people. predominately women and members of the lgbtq community. there's little in u.s. law stopping data brokers from collecting, publishing and selling data on victims and survivors. data brokers advertising data on millions of americans mental health conditions.
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companies can legally purchase this data from other firms and music to exploit consumers. criminals already scan cedars citizens using rubber data and similarly could buy data on seniors with alzheimer's and dementia to steal away their life savings. foreign governments could acquire this data for intelligence purposes. our research found companies selling the data on hundreds of millions of americans conduct relatively little know your customer due diligence and it's unclear how strong it is and practice. brokers may make customers fine non- disclosure agreement stopping them from saying where they obtained u.s. citizen information. part of talking about data threats to american civil rights, u.s. national security and democracy we must focus on this entire data broke which equaled system. three steps congress can take now. first, starkly control sale of data broker data, foreign companies, citizens and
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government which currently can entirely legally by millions directly or through front companies. second, strictly control even consider outright bans on the sale of data insensitive categories like genetic health information and location data used now to follow, stop and harm individuals. third, stop companies from circumventing controls consumers, civil rights and national security. thank you. >> members of the subcommittee, it is an honor to testify today. i am a senior fellow at yale law school's center and security policy.
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last decade is an analyst of technology and data policies and national security community. i advise corporations on these policies. i will focus my testimony on china and data flows while my expertise focuses on china, i will speak specifically about the chinese government's efforts to acquire data. my few the most effective solutions required united states put forward a more comprehensive data governance vision which stronger productions for security and privacy for all companies. some of these are specific to china but so much is much bigger. lawmakers have the opportunity to address transnational security threats but while also advancing a more secure ethical democratic internet and its own right. chinese government embarked on
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an ambitious data strategy, the goal of acquiring, controlling and unlocking value of data. my written testimony submitted for the record have more detail with recent plans and directors. chinese state information flows and beyond china's borders. strategic and economic asset. concerning national security risks and it presumes sensitive national security information and personal records of roughly 20 million individuals from u.s. office of personnel management. if that location has social media data acquired on the open data market combined with what beijing already has, china for target individuals and sensitive government national security positions in the military.
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manipulation, coercion and blackmail. this particular concerning counterintelligence perspective. chinese online services network infrastructure grows in predominance around the world, it is possible the chinese government could use this position to monitor data processes are brought just as the united states had done as shown utilizing data transmissions across u.s. intelligence networks. we simply do not know what value and harm data created now to hold in the future. we must grapple with the implications of the ccp gaining control of information flows beyond china's close economic system. i have the following recommendations. first, the analogy of data is false and leads to bad policy. it assumes data is a finite state resource and efforts by
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both beijing and washington to board data from each other would only lessen national power, not increase it. instead, congress should mandate stronger cybersecurity protections and basic standards for what data can be collected and retained in a comprehensive federal privacy law to protect american data not just from sophisticated state hackers but also unrelated industry of data brokers around the world, trading and consumer data without transparency or control while comprehensive federal policy law moves slowly amid much debate, having baseline rules for the data broker district would close off prime target for exploitation now. currently, there is nothing in our regulatory structure that would prevent the chinese government from buying american citizens data. bans on chinese software applications will make us more secure or safe.
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tik tok for example, were an american owned applicable you could still legally by the data on the open market. american data is shockingly ex post and will remain that way as long as restrictions on data flows are only focus on specific companies deemed adversaries. u.s. should work with like-minded government to develop a common set of standards and safeguards, perhaps building off initiative put forward by the chinese -- upper chinese, japanese government known as data free throws with trust. specific recommendations in my written testimony but in conclusion, action by the united states offering an affirmative compelling vision of u.s. data government, its own right will only make the united states less secure, less prosperous, less powerful and allow space for chinese companies controlled by the ccp to flourish. thank you. >> thank you very much.
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>> thank you members of the committee for the opportunity to testify today. i work future privacy form in u.s. law and emergency consumer privacy regulation. i've been asked to speak to the topic of data brokers. privacy advocates federal trade commission and members of this and other senate committees have long called for greater transparency and accountability in the data broker industry regulations long overdue. many of the most influential reports published on a decade ago have influenced debate and then, much has changed. significant examples machine learning and artificial intelligence, adoption of consumer technology has become universal with 97 u.s. adult
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firms and additional devices. legislative landscape evolved more slowly and largely not kept up. since 2018, california and two other states have consumer privacy laws, three states established limited data broker specific regulations and many are focused on transparency with data broker registries while others such as california privacy rights act with broader consumers to opt out of sharing of data. much more work remains to be done. like to make two points regarding data brokers and then get recommendations. first, a term data broker has been in an ongoing challenge because it's a broad spectrum of diverging companies. leading definition includes businesses to collect personal information of a consumer, which the business does not have a direct relationship. many hundreds of businesses while under this definition and use data for a wide range of
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businesses that include what fishermen pointed out including marketing advertising, databases, identity theft, some of these activities directly benefit consumers such as hughes updated to protect bank accounts against fraud activity but others primarily benefit purchases or users of data such as advertisers with fewer or little benefits are in society. second, lack of direct relationship with consumers, characteristic of the broker industry is at the heart of concerns on privacy, fairness and accountability also present one of the greatest challenges, procrastinating data regulation. director of consumer relationship such as restaurant, hotel, retailer, social media network can collect large amounts of personal information about u.s. consumers today directly or purchasing it and in
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some cases, it exercises enormous market power as we have heard. there is still some degree of accountability to users aware the countries exist and can delete accounts or raise alarms. a direct relationship with consumers typically does not have the same interest, incentives and in some cases legal requirements to limit data and protected against misuse. lack of consumer relationship also means businesses engage in legitimate data practicing and cannot rely on traditional historical privacy mechanisms. meaningful from consent, where opting in may be impractical or impossible to obtain in these cases. while opting out after the fact tends to be most safeguard and impractical for most consumers to navigate, we know consumers
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can be overwhelmed with choices and knowledge to assess future risks, complex technology or future potential secondary use. what does it mean? congress should pass states on regulation that establishes rules for both data brokers and first product companies. address gaps in current u.s. sectoral privacy and should incorporate but not rely solely on consumer choice. privacy law should codify clear limits on collection of data and apply accountability measures such as transparency, risk assessment, auditing from limitations on sensitive data and retention. in the absence of comprehensive legislation, there are a number of other steps to take over privacy data brokers including (trait permission to continue deceptive trade practices through funding, staff,
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establishment of privacy bureau limiting ability agencies to purchase information data progress and legislation for uniquely high-risk technology biometric and facial recognition or updating existing federal law such as reporting act to more effectively cover effective uses of data. >> thank you very much. appreciate all of your testimony here. now i recognize senator whitehouse for five minutes of questions. >> thanks very much. this is a fascinating and important hearing and i am delighted to have witnesses here. facebook and google have been profiting off some of the worst problem peters, climate denial, digital eight, ten fringe sites that fuel 69% of climate this
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information on facebook so a little bit of focus, address this problem if it's only ten major propagator's. they make millions from google ads and runs alongside limit denial content. can you talk about how our information ecosystem suffers when a handful of companies control what people see and how they perceive reality, a communications monopoly means in a world in which there is so much deliberate denial propagated by industry. >> thank you, senator. it's a fundamental important issue. what we see today, understand google and facebook today are communications corporations of
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the 21st century. these are the at&t's and western union's of the 21st century. at&t and western union, they were prohibited by law from many belated house spoke to one another. google and facebook business model is based on past manipulation. the reason they take in data is to manipulate you. massive manipulation machines. the way they make their money by renting out manipulation machines and calling it the money they receive, they call it advertising. what we have in the midst of our society rather than networks that connect people and empower people to speak with one another and interact with one another, we have machines designed to set people into conflict with one another, feed them false information, to determine how people vote so they are ready,
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willing and able tools for false information propagator's. >> when they were established, i think the idea was the systems would be used by procter & gamble to sell soap and tired. what they now do is rent themselves out to vladimir putin, climate deniers, the chinese communist party, whoever comes along. >> let's switch to the data you're talking about that they have gathered and asked the witnesses who spoke about data privacy and brokers, what does somebody listening to the hearing need to know about what companies know about them, what data brokers can extract from companies know about them so and
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to what extent that information can be individualized back to them potentially by foreign bad actors, foreign governments. >> data brokers know everything about pretty much everything every american. where you work, where you kids go to school, how much you make, here's race, religion, sexual orientation and your entire business model to target this to individuals. the purposes of targeting specific individuals so the profiles are out there on the open market for sale. >> if you are running psychological warfare operation involving american public officials or american ceos or various decision-makers in american society, how valuable o'toole would it be if you were a foreign government to look into people's eyes and
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understand you can realistically draw about their shopping habits and so forth. >> incredibly valuable for that, you can buy databases right now where people search online, what they felt and how they think so is all out there on the open market. >> my time is up, thank you chair warren. if i could, i'd add one question for the record so as not to take up too much time but one of the things we hear in finance committee a lot, our chairman has joined us, he is very active on this subject, if we make big american companies pay a fair share in taxes, that will make them anti- uncompetitive against foreign big companies and that is the argument republican friends always make. they ignore when big american
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companies don't pay a fair tax burden, gives them competitive advantage over small american companies. you have apple and google who have come up with double irish and dutch sandwich and all of these text tricks they used to avoid paying their fair share and i would be interested in your views again but not now because my time has expired, and how that current rates competitive disadvantage with potential against them for competitive advantage in the u.s. to what extent oxen financially similar monopolistic power because they put themselves into a place where they don't have to pay taxes but all the competitors have to cross our competitors have to. >> thank you very much from a
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appreciate that question in writing. >> thank you. senator cassidy, you are up. >> thank you all for testifying. our country -- [inaudible] we make a tremendous investment in the va hospital and other services to include benefits to help these folks who have offered so much. when you speak about how a data broker can sell personal information for active military personnel, i presume a veteran, failed to allow a company to
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basically rip them off of these benefits they receive. how and where, how does someone get such information, where is the price of the profile and is it safe to say companies are getting rich off of using this data to trick our service books into giving their benefits over to the company? ...
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they are willing to sell with a paycheck and an email address. with a check and email address. at the end of the day, it's all too easy for people to use this as they have to scam veterans and to create risks to national security. >> how do they get this information? how do they know someone is active military, et cetera? >> because the collection and buying and selling of this information is so unregulated, it's very easy for these companies to put pieces of information together to figure out how you are. much like they might track where you go during the day and what
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you spend, they might look at where you travel to figure out if you are in the military. >> with the data broker themselves, would they have data that would indicate that i'm spending my night on base every night except for an occasional deployment some place which seems to be a military zone or are they buying this from others? >> likely, both. many companies collect this data directly from people's phones, whether you are working on the hill or in the military or even in an intelligence agency, and they buy this data from other companies. >> i'm a physician. let me toss this out. if one of the other witnesses on data brokers wishes to address, please do. the thought has occurred to me that we had hipaa penalties if i would reveal that somebody was hiv positive or had a mental illness.
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one of specified that the mental illness is well-known. it makes sense to me if you have location data that shows somebody goes to work every day at a place which is known to be a mental health clinic or hiv clinic, treatment clinic, that there would -- they would know the person is probably employed there. if they go every two weeks or every month and they go to a pharmacy afterwards, they could infer the patient had iv or mental health or other illness. those are often stand-alone clinics. they could infer this. is this a connect kind of guess how all this is done? doesn't this kind of violate the spirit and it seems actually almost the letter of the hipaa regulations? mr. sherman start. i will ask the others to comment. >> that's exactly the problem with data brokers, senator.
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they can basically dance around the few, limited privacy laws we have by proxy data, run algorithms to get that information anyway. >> this is what you were speaking of as inferring? they can infer even if they don't directly collect? >> that's correct. >> they sell that data to those interested in marketing to someone who has mental illness or hiv? >> yes, they do that. >> do you have any further comments on that? as a physician, that greatly offends me. the idea that we can infer that which is otherwise restricted is -- again, it violates that which i always kind of had in my dna as a physician in terms of protecting patient privacy. and e major problems that needs to be addressed in regulation because increasingly through
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apps and it can all lead to the types of information sharing which you are describing and that is directly collected from consumers through those data sets. >> and that which is connected to the internet to have an app that could theoretically to approach the information from that which is a smart car so is that true? >> much of that commercial location data. and that is tied to device id. and when it measures like
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behavior and all of that information. >> thank you very much senator cassidy. >> senator wyden. >> thank you. thank you for getting into these issues. senator cassidy just mentioned the modern car is a computer on wheels. and the sleazy unregulated world of the data brokers with the government agencies that were to eager consumers for this information we pushed apple and google to finally get the sleaziest data brokers
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out of their stores and businesses. and i'm glad we are making progress but we have a lot more to do and i want to start with you. and then important point with how foreign governments to run disinformation campaigns and identify undercover government personnel, and government employees. and i have been working on legislation for some time now to deal with the bill to be introduced shortly. you agree congress should enact legislation to strictly limit the exports of america's personal data to high risk for nations and companies to address which is a demonstrable national security threat? >> there is a huge national security threat and congress needs to control the sale of
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data for those as you reference it is all too easy to get that on the open market. >> we have also been looking at the whole issue of how the us government agencies bypass the courts by buying america's data through data brokers. introducing bipartisan legislation the fourth amendment is not for sale. do you agree the government exploitation loopholes is a serious problem? do you agree that congress ought to close the polls by passing legislation quick. >> absolutely. the fourth amendment is not for sale. >> tell us how this connects with privacy issues.
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i have also introduced another piece of legislation. the mind your own business act. and that becomes law and mr. zuckerberg would have already faced major sanctions for behavior connected to privacy violations. how does the whole area connect with privacy because on the finance committee we are increasingly looking at privacy issues. for example, we feel very strongly that wealthy tax cheats right now are as likely to be audited by the government to be hit by a meteor. we have to do more to root out corruption. but we can do in a way that is consistent with protecting people's privacy. i am a privacy hawk i will put credentials up against anybody in the united states senate. tell us how this connects with the broader expanse to protect
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people's privacy. >> one is the sheer scale and volume that is becoming increasingly untenable of the law enforcement and national security and commercial collection and use of data that originates for a particular purpose and with that being used for secondary purposes by a government agency. >> and that privacy is a massive economic and national security issue. >> and with those economics and national security and privacy are directly linked. thank you to all of you for your good work senator warren
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has been a long time leader is making sure that we hold these major economic forces in our country and holding them accountable. by the way i was just in oregon and people are asking me about these issues. being successful and ensuring there is accountability are not mutually exclusive. we can do both. of course we want our businesses to do well. of course we want them to be profitable. but they can also be accountable of key american values of protecting people's privacy. we want everybody to know we are so please senator warren is giving us this chance this unregulated data brokers to put them on notice today and tell there are serious consumer protections with those other measures to be accountability. thank you.
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>> thank you to senator wyden and for your long time leadership in this area. this is how we will make change. thank you. thank you for all you have done. talking about another aspect from the issues we have raised today when congress passed the first 80 trust laws to protect local businesses and to protect democracy from powerful corporations to undermine competition and crush workers and gouge consumers. starting in the seventies the government reversed course. corporate ceos and lobbyists push the idea that corporate behemoth is good. congress uses complicated models to say if we just let big corporations get even bigger, they would be more efficient, lower prices and they would compete better on
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the world stage. unfortunately too often that is not what happens. take the semi conductor industry for example. hedge fund managers took over the biggest chip manufacturer intel. it grew its market size to the dominant position through anti- competitive and predatory practices. and then with the competition and then to weaken the fundamentals with impunity. and from 2001 through 2010 instead of spending more money on innovation, remember we are talking about the semi conductor industry come and spend the on —- instead of spending more information on ideas or more efficient manufacturing here in the united states, manager spent $48 billion on stock buyback
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while they have hollowed out a once great company. so you know a lot about the semi conductor industry. did consolidation, particularly the growth with intel lead to greater efficiency? >> no senator. the opposite. >> did it at least make intel a stronger competitor on the world stage? >> the opposite. >> so in your assessment, what exactly did happen as a result of intel's growing dominance in its field? >> first, you measure $48 billion paid out between 2001 and 2010. that allow them to pay out much more between 2010 and 2020. actually $130 billion over the last ten years.
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so this corporation grew much faster but this results in higher prices it results in more power over workers and not just those on the assembly line but also the engineers. these are the people that we count on to develop a better future and we have concentrated power. we see less innovation and with this extreme concentration of capacity we are seeing and with all that eggs in one basket and then to dismiss as fragile and catastrophic failure. you have a system that has other powerful countries like
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china, power over the people that depend on capacity by threatening to disrupt shipments in taiwan. leads to massive shortages the structural shortages that we see leading to the shutdown of assembly lines. all around the world. not just america but 50 percent decline of production of cars. we see toyota 40 percent decline of production in q3. this equals vastly higher prices for newer cars vastly higher for used cars vastly higher for rental cars because we cannot replace them with newer or cleaner cars. >> consolidation clearly does not strengthen the semi conductor industry but consolidation or lack of competitors in this field.
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so to create the supply chain crisis. and now as you rightly point out with the semi conductor chips other manufacturers like auto companies cannot meet demand at the same time the orders are stacking up because they cannot get the chips. and what has been managed from the same executives that exacerbated the crisis by failing properly to invest in their operations and infrastructure asking congress to bail them out to make the investments they should've been making years ago. excessive concentration is a real problem. is also a problem with the domestic logistics and supply chain operations and it applies obviously to date tech
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firms. but amazon has grown bigger and bigger and profit to skyrocket. have the logistical operations improved? and especially with the covid crisis? can you speak to that? >> but it's all about pushing out and it used to be about the quality of giving the customers. they don't care how the workers are trained but is just about quantity.
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and then sending out a lot of food and everything. it's really frustrating because we are at our limits so they preach the customer obsession but for the hardest working people and workers cannot do their jobs well because that is the bottom line. and if you attempt to try and that customer obsession than they're actually terminated. >> .
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>> amazons profit had exploded during the pandemic even though the deliveries have been significantly delayed and services in a competitive marketplace amazons rivals could compete on these factors providing a reliable service but there is no competition consumers get higher prices and worse services while amazon gets even richer. markets can produce lower prices markets can produce more robust supply chains but only if there is competition when giants are allowed to dominate an industry everyone else is. >> i have a series of
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questions. so then the military personnel that is the data is that information that should be regulated. >> certainly. it is not necessarily name and contact information. will be the device id related to a mobile phone. that it is not personally identified to a certain extent
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and while it has been lessons the fact remains that persistence and precise location information over time it is very straightforward to go back to an individual person because those limits are unique over time. so that is one of the unique challenges specific to the industry. >> some i.e. keep peers about to die you get a tour of my kitchen. [laughter] but what is the difference between the data and how do i asked them in suppression.
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>> sure. so suppression is an industry term that is frequently used for the purposes of describing when a company has a list of individuals of consumers or individuals or devices for the purpose of excluding devices from products and services but not necessarily deleting the underlying data. there can be a range of reasons to do that. one of those for example is to have the art about request that are required with the emerging privacy laws. for example to automatically collect large amounts of information from public records and then to request data from individuals and release that data and then continue to delete in the
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future unless they retain limited suppression. >> and in using the suppression to mark this. so that data is suppressed and eliminated. >> it just depends on the use case with marketing and advertising. and those to exclude certain segments from those advertisements with the loss of the child. or the loss of pregnancy what they used to exclude those households from that marketing
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for baby products. so it depends on the use and there is risk associated with those more sensitive categories just by the maintenance of the suppression. >> frankly with that legislation and in that no wants so it actually sounds like as you suggest to be negative as well so this is another new ones and in the written testimony with the fact that this can be helpful so if you wish to look at an example using location data to establish at a conference in which covid was known to have
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affected people and therefore you can't do that so give you this location data were everybody would go back to and that where people have come from from the northwest and the northeast and then clearly with that data in another sense and the using the data appropriately and then i should take this route or another? that is being used nefariously. >> you are right to point out. and there is large commercial data sets and with members of
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the industry to provide to help assist public health efforts so one of the nuances here is that when we talked about information practices and privacy there are increasing concerns around the fact the data is collected in the first place whether for good or beneficial purposes that most should not be on but then for a particular service and then not to be reused for a secondary or incompatible purpose and what commercial research is technically incompatible because that is not the reason the data was
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provided so with those nuanced exemptions that sensitivity data to groups and society are all part of regulation. >> and that cannot be disputed it with that period legislation to take information from those who are stakeholders and academics to analyze to try to get that down. >> thank you senator cassidy. so as the attorney general pointed out amazon controls between 50 and 70 percent of the 430 billion-dollar market online for consumer goods. prices for everything from
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mattresses to motor oil are going up and why is that happening? and huge part of that market dominance to squeeze more dollars and the third-party sellers so one of the witnesses file the lawsuit for this very reason and a particular focus is the impact that amazon calls fair pricing policy and then to follow up on the example on this policy so if i make earphones and sell them on the website i just want to make sure we are clear if i want to sell them on amazon to access a huge
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marketplace online and extend the reach come i have to pay amazon fees and agreed to their terms. my understanding is so thanks to these fees i have to increase my prices to ensure i can still turn a profit. so now i have to charge $130. but the worst part is and i have to have be charged on my own website and every other platform where i am trying to sell my headphones. these inflated prices for american consumers. so attorney general, these inflated prices crush american consumers.
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attorney general, i want to return to your opening remarks. i wanted to go back over the example you talked about. but you also mentioned how amazon forces wholesalers to pay more as well. so i did the consumer part just there. can you say a little more about how they're doing this with other wholesalers as well? >> sure. you have captured it exactly right, senator, which, of course, is no surprise to me. with respect to wholesalers, amazon, again, forces these first party sellers, i will call them, to reach an agreement with them in regards to what the price is going to be. here is the deal. if amazon lowers its retail prices to match or beat a lower price for that initial good on the online marketplace, the wholesaler is forced to pay
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amazon the difference between the agreed upon profit that they made -- that they entered with amazon and the money that amazon realizes after it lowers the retail price. in short, amazon has profit protection at the cost of the first party seller. i do feel compelled to also mention -- don't take my word for it. look at the april 23rd, 2020 "wall street journal" article written by dana matioli, that talks about how amazon has scooped up data from its own sellers, these first party sellers, to launch competing products. not only are they crushing these first party sellers with these unlawful agreements that that's what we allege, but they are also using data around the
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popularity and selling of these products to launch competitive products against these first party sellers. amazon can't win enough without cheating. that's why we are suing them. >> this knocks me out. in a typical collusion case like price fixing, competitors illegally agree to charge higher prices. and when they get caught, they can actually go to jail. under federal law. amazon accomplishes the same thing in house. its higher fees are inflating prices on its own platform as well as in stores and other websites through these anti-competitive contract provisions with third party sellers. the result is prices go up for
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millions of americans and americans can't see it. because there's no place else to do the price comparison. the price looks the same wherever they go. it shows up as inflation. amazon -- >> can i give you numbers? >> please. >> i think it's going to make your point. between 2014 and 2020 amazon's revenue from third party seller fees and charges grew from $11.75 billion to over $80 billion. this year, amazon is estimated to reap over $121 billion in fees from third party sellers. they're doing this because it's extremely profitable. they don't care that consumers
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are paying far too much for goods. and they are not doing what they say they are doing, which is focusing 100% on consumers. they are focused 100% on utilizing their utilizing their power to extract every bit of profit that they can. >> so the question, obviously, you have to ask, is how do they get away with this? and what i would like you to focus on if you can, attorney general, is how amazon's market position contributes to this kind of pricing power that's then felt throughout our economy? >> i think the example that the headphones i gave and that you accentuated, frankly, and made better, is the best example. and that is that what amazon does is it artificially builds its commissions and fees into a
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product. it ensures that that embedded profit that it has, frankly, continues throughout the electronics mini mall or major mall in such a way that no one, either you or me, creator of our own headphones can sell our headphones cheaper than what we and amazon essentially were forced to agree to sell it at. and why do we engage in that agreement? because they own 50 to 70% of the market place. look at it as a toll booth keeper. if the road only leads to the toll booth, the toll booth keeper can raise those prices and you as the driver have no choice but to pay whatever
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they're asking if you're trying to get down that road. we think that's illegal, we appreciate the work of this great committee. we're going to make law in the courts and we look forward to helping with respect to legislation. >> well i'm very much appreciate that, because, i appreciate your point, about 50 to 70% of the marketplace they already own and yet amazon keeps growing and they don't just grow by sales, they continue to acquire. so back in may, amazon announced its proposed acquisition of mgm studios. that would be an $8.45 billion deal. now, i wrote a letter to the fdc commissioners asking them to review the deal thoroughly and how the deal may affect workers and prices and other markets in the amazon ecosystem. mr. lynn, even if the fdc wanted
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to oppose this big merger, it would be a challenge to successfully block it. not withstanding everything we heard from the attorney general and others testified about. can you explain why that is? >> yes, thank you senator. well, first, it's going to be very he thinks pencive in terms of the time, you know, for this limited staff that the ftc has, i mean going up against the richest corporation in the world, most powerful corporation that can throw, you know, wrench after wrench after wrench into the mechanism. it's also very expensive in terms of the expertise they have to pay for, economic expertise, i mean have to put millions and millions of dollars often into the key to pay for economist and
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even with biden's renunciation of the board philosophy, the legacy of the consumer welfare philosophy and focus on efficiency continues to shape how the judiciary will look at this issue and have to be careful with this expertise. third reason, it's just very difficult to consult with judges in the stylized language of consumer welfare, this is an issue of power. it's an issue of democracy. it's an issue of human liberty and they're being said, we have to talk about this in terms of efficiency. you know, judges are trained to use common sense to enforce the law, to ensure rule of law, and when you're using consumer wellfair framing, you're speaking in nonsense. >> you noted earlier that president biden has selected two out standing experts, lina con and jonathan canter to lead antitrust efforts at ftc and
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doj. these are people who believe in competition and are going to build strong cases but congress needs to do its part. we need to make sure they have the resources and make sure they have the tools to be able to wage these battles. otherwise, we're just going to continue to see companies like amazon squeeze consumers no matter who's president or no matter whatever crisis of the day we are dealing with. so i think it's important that we step up on our side too, thank you. senator cassidy, back to you. >> thank you, it appears five minutes are off, so i may go a little longer. >> i apologize, please go as long as you need to, senator cassidy. >> a series of questions for you, ms. sachs.
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first, your testimony speaks of the need to have a kind of comprehensive arrangement between countries, or blocks if you will, if we take the eu as a block in order to have some sort of agreement. i think i'm summarizing, although i'm sure you would find nuance there. now the reason i say this is that i have been told that the general data protection regulation of the eu risk making the eu a digital colony to the u.s. or china. it is so restrictive that the big data sets in a are required to enhance research on ai are almost impossible to construct. i don't know if that's true, you know far more than i do, but nonetheless, that's what i'm
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told. so there's something here. how do we allow those sort of data sets required for ai to be constructed, big data sets, if you agree that is the case, and then how do we have a governance that would exclude bad actors, and i think folks see china with all their cyber espionage as being a bad actor but nonetheless get the fruits of this big data and you mention specifically the japanese with the data free flow with trust paradigm, so i think i've given you a lot of directions to go in your answer, i'll turn it back to you. >> thank you, senator cassidy, i think you get a key point that u.s. prosperity relies on access to large international data sets but as with other areas of the data broker legislation you mentioned with ms. gray, this one will have nuance to it, so how do we allow global data
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flows but with the right safeguards in place both at home and internationally? and i think a big important step here is making sure we get our own house in order first, the transatlantic data flow relationship will be key and it's important the u.s. put forward its own vision of data privacy first, but this should not be a copy and paste of gdpr. and the topic of this hearing, focused on antitrust i think gets at some of the challenges which is that one of the most important critiques of gdpr is that it may only end up serving those companies that are wealthy enough to comply with a very heavy burden that comes along with it so it reinforces the concentration of power in big tech, while there may still be limitations on meaningful privacy protections. i think that the japanese data free flow with trust model is a compelling way to think about
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how can like-minded countries come together to put in place certain standards that would allow data to flow with certain conditions in place, and perhaps there can be a certification regime drawing on some of the privacy protections already outlined in the oecd guidelines so there are many directions and this requires nuance as well and i look forward to the efforts of the committee to do that. >> now does that require an international treaty? i'm assuming you may not be an international trades attorney but can we just basically pass legislation which is in alignment with others without having a normal treaty or do you have a sense of how we go about this oecd kind of collaboration? >> you know, i think this is one i'll need to get back to you on the specific nuts and bolts of the various tools in place, if it's all right i'll follow up with you and your staff after. >> i appreciate that.
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now, ms. sacks, tell me, so, we've learned that the chinese government as an example could purchase information on u.s. military personnel and presumably location data as well. which, would be kind of interesting to see where people are deployed, to see concentration of force, et cetera. what type of force if you know what type from other information what branch of the military they were in, but do other countries have that same sort of lax attitude allowing the legal purchase of information on security forces, so for example, what about china? >> the chinese government is moving rapidly ahead to lock down more kinds of data deemed vital to national security, even in the commercial sector. for example, they put in place a data security law this fall which seeks to put forward a data classification scheme where they will move across sectors to define what kind of data would be vital to national security.
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they did this first in the auto sector for example and data deemed vital to national security has new higher bar security obligations as well as localization requirements around who that data can be shared with. >> now, i think it was you, suggesting that it could be counter productive if you wall off your data. so, and that indeed, free flow of data, again, a nuance here, free flow of data is essential to ascending economic power for a nation as a whole, with economic power of course being somewhat linked to national security. so in your mind, is what they're doing counter productive? i mean, is that something we should also do, or is it counter productive? >> the chinese government is shooting itselves in the foot by, i think, overclassifying the kind of data it deems vital to national security but in theory, what they're trying to do is say certain kinds of data is vital to national security and needs
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to be locked down and other kinds of data should flow and circulate in the economy. now, how that's going to happen in practice is another story. but i think that there could be something we could learn here in terms of defining what is the most sensitive kind of data and mr. sherman and ms. gray have mentioned location data, for example, president biden put forward an executive order in june in which he called for creating a framework to assess what the security risks of transactions of involving american sensitive data should be restricted and in that executive order, he said not all data has the same level of sensitivity, so i think one thing we can do is have a more thoughtful process following on that executive order around what kind of data is vital to national security and should be subject to higher protections and what kind of data is less sensitive and should be subject to more international flow and sharing. >> let me finish with this, mr.
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sherman. is there any sort of data that cannot be relinked? so i think we say we're going to have location data and use it for x, y, and z purpose, will be linked, this is important, maybe use established crowd flows within a city for city planning et cetera. but any data that cannot be relinked if you have a robust enough data set by which to compare it to? >> as ms. gray mentioned there is a difference between data with someone's name or social security number attached and data that does not have that attached, but at the end of the day you can reidentify anything. as, you know, myself and wugts have now testified, there's so much data out there on americans hoarded by companies it's all too easy to combine it to identify people by name. >> okay, madam chair, i'm going to sign off now because i have to transition to come in for votes but i thank all the
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witnesses for your testimony, including senator warren's witnesses who might have not asked questions but found your testimony very interesting. and madam chair, i look forward to collaborating with you on future such events. >> and thank you, for being such a great partner in this, really appreciate it, senator cassidy, and like you, i'm delighted with the witnesses you've invited today to learn from them and hope we'll have many follow-up questions for the record here. so thank you for your partnership, this is just the opening round, and we'll keep going on this. i got one more round of questions i'd like to be able to ask right now. what i'd like to do now is focus a little bit about market dominance and the impact on workers. for too long, our antitrust policies have focused on prices and consumers, which is important, and the amazon example shows that we've had weak enforcement of those policies and that's let these
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big companies increase prices across the board, we've also talked about how consolidation creates other problems, particularly for american workers. you know, whenever these companies merge, the corporate executives like to talk about the new efficiencies and what they usually mean by that is they're going to lay off workers and cut wages. so as companies grow more dominant, they have more and more power to lay off workers and to cut wages with no real consequences for themselves. because they know that as industries become more consolidated, workers have fewer alternatives. this means that employees who are subject to increasingly harsh, dehumanized working conditions a worker can't just move to another job if there's no other available employer. this is called menocity, power
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and and our antitrust laws need to better address this. ms. brown, if i can, i'd like to ask a couple questions here. you work for amazon fresh and many people order their groceries for delivery within a few hours, never think anything more about it but there's a grueling process that happens behind the scenes to accomplish this feat. can you explain how conditions at your warehouse have changed during the pandemic? >> absolutely. so i'm going to paint a picture for you about what the process looks like. so as soon as you go on the website and you click the "place your order" button it causes a chain reaction of people running around the warehouse to gather everything. so it's a small team of those who, you know, they'll initially be looking at the numbers and everything and pass it down to, you know, another spot of people
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who are then running around a warehouse the size that's, you know, bigger than a football field to then gather those items. then it goes to an even smaller team that's usually at a max of say like five people to package those items out, and then it goes to and even, you know, smaller amount of people where they're responsible for sorting everything depending on where it's going, you know, on a conveyer belt and then it goes to my people where we work on the dock and we're responsible for sorting thousands of those orders that get to us everyday for 11 hours, making sure they get on their trucks and making sure it gets to, you know, the customers as intact as possible. so now the human toll in all of this is basically, we have very few to no breaks. we work until our bodies are basically, they're past the emergency stop button, you know, we delay bathroom breaks, we miss lunch, you know, we can't
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miss work and during the pandemic, you have a lot of us that, you know, a lot of us, me included would literally take like 30 seconds to, you know, just kind of cry it out for a little bit and then get right back to it and then when you go home you don't even have the energy to take care of your family if, you know, you have kids or you have family members who are dependent on you. things such as cleaning the house or cooking for yourself basically become nonexistent on, you know, days you have to work. >> right, so this sounds really grueling and i know that during these challenging times, many people across a lot of different industries have considered quitting their jobs and finding better employment. however, amazon is continuing to grow like no other company, especially while small retailers and small, local businesses are
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closing. so, let me ask, ms. brown, if conditions are this bad at the amazon warehouse, what other employment options do you and your coworkers have to be able to support yourselves and your families? >> well, black and brown people in my particular neighborhood, a lot of my coworkers we don't have a lot of options open to us out here in new jersey so most other jobs out here are warehouse jobs or retail and those don't pay enough. amazon pays just a bit more than them so we're stuck, you know, being taken advantage of in warehouses like this. and this is what they bank on. so they know we have no other choice, so they continue with the lack of, you know, regulation and everything to protect, to protect us.
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>> right. so you're right, it's not an accident. you know, it's the largest employer in your industry, equipped with massive power. amazon can pressure other companies to follow suit with its poor labor standards or they just put those companies out of business. now it was announced last week that the amazon facility in alabama, that workers there are entitled to hold a new union election and if that election is successful, this would be amazon's first union ever in the united states. but i want to ask about the other side of that. what it's like to negotiate with amazon if you don't have a union on your side. amazon claims, and for this one, i actually want to quote amazon on it. they claim, that direct connection between managers and associates is the most effective way to understand and respond to
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the wants and needs of amazon employees. now, it certainly effective for amazon's bottom line, but ms. brown, can you tell us how effective this direct connection that amazon talks about, negotiating with amazon without a union, has been for you and for your fellow workers? >> so, okay, so my colleague and see i have been fighting for change at amazon for years and instead of listening to us and working with us, to find solution, they tend to double down and continue to exploit us. so that's continuously why we speak out to improve working conditions and for executives to take us seriously. so, you know, going against amazon, especially when, you know, say you're going to be written up or something is kind of like, you know, trying to
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defend yourself in court, it's not -- it's usually not going to go too well. >> well i'm very concerned that the workers that are most at risk during this pandemic are more likely to be women, are more likely to be people of color, and of course it varies depending on the job. so if i can, this is the last thing i want to ask you here, ms. brown. as a black woman, what have you observed about amazon's treatment of racial minorities and women? >> so now amazon, they will hire any and everyone, that's true. but depending on what race you are, that's going to determine whether, if you can get promoted and sometimes what you're going to be doing. most of the workers are black and brown and very few of us hold high positions in the company. and it shows in the promotion process. they promote only enough black
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and brown people so that way it looks okay but mostly they hire white managers out of school who have never actually worked for amazon, versus hiring, you know, the majority of their work force that's black and brown promoting us upward with, you know, the process. they really don't -- when they do promote you, the pay is definitely different from those who get hired from outside. so if you're a black and brown worker, usually when you make manager, you know, internal promotions, you get a lower wage than somebody who is coming from outside that is going to be getting a higher wage. and women, it's, you know, even more scarce to really see in any kind of leadership roles but any of the same responsibility and respect, they'd rather promote a, usually a white guy over someone that looks like me. >> well i appreciate your testimony, you're coming in to
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talk to us about this. you know, all of this suggests to me that if we really tackled the dominant power issue by fighting abusive employer practices, by limiting mergers that would harm workers and by empowering workers to unionize, we can accomplish two important goals at the same time. we can strengthen the american labor force, and the middle class, and we can advance racial and gender equity. vigorous competition enforcement would be better for all americans who work and better for all americans who purchase goods. so thank you very much for your testimony, ms. brown, i really do appreciate it. and i now ask for unanimous consent to the statement received from the subcommittee from international brotherhood of team centers and strategic organizing center on the importance of strong antitrust policy for workers, including in
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the tech sector, be entered into the record. without objection. so ordered. i think at this moment, the united states is at an inflection point. wealth and income disparities are at levels that we have not seen in our lifetimes. the government lacks enforcement of antitrust laws during the past few decades is a huge part of this problem. regulators and judges have allowed merger after merger and the result is too little competition in u.s. markets. dominant firms in technology are free, pretty much, to do as they please including on data collection. they raise prices, reduce wages, threaten our privacy, all so they can boost their profits to their shareholders and make their ceos richer. you know, i'm encouraged that the biden administration is committed to stronger
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enforcement actions across agencies and committed to promoting competition. but congress has to step up and do its part too. it's time for congress to finally update our antitrust laws. we should ban all mergers involving huge cooperations. the biggest companies need to compete on the merits, they need to offer better products, better prices, better service, not just buy up their rivals and then gouge consumers. and second, we have to give our antitrust agencies better tools to break up the anticompetitive deals that are most harmful to our economy, like facebook's acquisition of instagram. and finally, our competition policy must safeguard our work force. those deal synergies that reduce corporate costs often come out of the hides of american
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workers. real people with families to support who deserve to work with dignity are paying a huge cost when mergers reduce competition. more than 100 years ago, our antitrust laws were not designed to promote efficiency or to increase consumer welfare. they were designed to protect people from being at the mercy of economic kings who could exploit workers and customers at their whims. those laws were also designed to protect our democracy from the corrupt influence of giant corporations. congress needs to do its part, once again, to make our economy more competitive. so i want to say again, thank you to all of our witnesses. i appreciate you being here
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today, your testimony has been very valuable and i appreciate your answers. for any senator to see wish to submit questions for the records, those are due one week from today, that's tuesday, december 14th. for our witnesses, you'll have 45 days to respond to any questions. i want to thank you all again and with that, this hearing is adjourned. >> i just want to say thank you again, we had so much to cover. thank you very much.
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>> a new mobile video app from c-span, c-span now, download today. looking for c-span essential that is will keep you warm? go to c-span, c-span's online store, save up to 20% on our latest collection of c-span sweat shirts, hoodies, blankets and mugs, something for every c-span fan and every purchase helps support our nonprofit operations. shop during the c-span shop keep warm sale at sunday, february 6th, on in-depth, george town university law professor sheryl cashin will be our live guest to talk about
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race relations and inequality in america, many books include the failures of integration, agitator's daughter, place, not race, and her latest, white space, black hood, join the conversation with your phonecalls, facebook comments, texts and tweets for sheryll cashin on book tv on c-span 2. at least six presidents recorded conversations while in office. hear many of those conversations on c-span's new podcast, presidential recordings. >> season 1 focuses on the presidency of linden johnson, you'll hear about the 1964 civil rights act, 1964 presidential campaign, gulf of tonkin incident, march on selma and the war in vietnam, not everyone knew they were being recorded. >> certainly johnson's secretaries knew because they were tasked with transcribing many of those conversations.
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in fact, they were the ones who made sure that the conversations were taped as johnson would signal to them through an open door between his office and theirs. >> you'll also hear some blunt talk. >> i want a report of the number of people assigned to kennedy on me the day he died and the number assigned to me now, if mine are not less, i want them less right quick. if i can't ever go to the bathroom, i won't go, i promise you won't go anywhere, i'll stay right behind these black gates. >> presidential recordings, find it on the c-span now mobile app or wherever you get your podcasts. >> next, military officials testify on the possibility of releasing prisoners from guantanamo bay, members of the senate judiciary committee examine legal rates for detainees, national security concerns, and the


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