The Latest: Facebook denies that it’s a monopoly

Science & Technology
Steve Mnuchin

Treasury Secretary Steve Mnuchin speaks during a news briefing at the White House, in Washington, Monday, July 15, 2019. (AP Photo/Carolyn Kaster)

WASHINGTON (AP) — The Latest on congressional hearings on the reach of big tech (all times local):

4:50 p.m.

Rep.Joe Neguse, a Democrat from Colorado, sought to pin down Facebook on the subject of “monopoly” during a hearing on the power of Big Tech. Facebook argues it is not a monopoly because it has many competitors.

Neguse ran Matt Perault, Facebook’s head of global policy development, through several of the world’s largest social-media services, measured by active users.

Four out of the six — Facebook, Messenger, Instagram and WhatsApp — are owned by Facebook, Neguse noted, suggesting that might qualify as a monopoly or “monopoly power.”

Citing a historical Facebook document, Neguse also pointed out that Facebook once prohibited its developers from replicating Facebook’s “core functionality.” That policy, Neguse added, is now gone, because it would be seen as anti-competitive.

Perault said Facebook has reevaluated its policies over time.

4:40 p.m.

The chairman of a House antitrust panel investigating the tech industry repeatedly reminded an Amazon executive he was under oath as he grilled him over the company’s business practices.

Rhode Island Democratic Rep. David Cicilline asked at a Tuesday hearing whether Amazon is using the data it collects about popular products to direct consumers to Amazon’s own products.

Nate Sutton, an associate general counsel at Amazon, says the company doesn’t use “individual data to directly compete” with third-party sellers.

But that answer met with skepticism from Cicilline, who twice reminded Sutton that he was under oath.

“You’re a trillion-dollar company with online data in real time,” Cicilline said.

Representatives from Amazon, Google, Facebook and Apple are testifying at the hearing as the House Judiciary’s antitrust subcommittee pursues an investigation into big tech companies’ market dominance.

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4 p.m.

Matt Perault, Facebook’s head of global policy development, says the social media giant is an “American success story” with plenty of competition in all the areas it does business in.

Speaking at a House Judiciary subcommittee hearing on antitrust on Tuesday, Perault emphasized all the ways in which Facebook doesn’t dominate. The company, he pointed out, takes in less than a quarter of U.S. advertising spending. And he said some 92 percent of advertising happens “off Facebook.”

Next week, though, Facebook will report its quarterly earnings, likely showing sharp revenue growth as it seeks to grab a larger share of the global advertising market.

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3:50 p.m.

The House Judiciary Committee is using YouTube to live stream its hearing on antitrust issues in Big Tech, with witnesses from Google, Facebook, Amazon and Apple.

YouTube is owned by Google, the target of some lawmakers’ antitrust ire.

The panel’s live steam also didn’t disable comments, meaning that anyone with a YouTube account can chime into the proceedings with often misspelled written commentary.

Back in April, a congressional hearing on extremism and online hate, live streamed on YouTube, turned into a vivid demonstration of the very problem it was addressing when the comment stream was bombarded with racist and anti-Semitic comments from internet users.

So far comments at the antitrust hearing have been tamer. Some have ranged from “BORING” to “If ‘BORING what don’t you leave?”

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3:30 p.m.

The chairman of a House panel investigating the market power of big tech companies says Congress and antitrust regulators wrongly allowed them to regulate themselves.

That enabled companies like Facebook, Google, Apple and Amazon to operate out of control, dominating the internet and choking off online innovation and entrepreneurship, Rep. David Cicilline, D-R.I.., said at the start of a hearing.

The House Judiciary subcommittee on antitrust is hearing from executives from the four tech giants.

The panel is conducting a bipartisan examination of Big Tech’s market power. But Rep. James Sensenbrenner, a Wisconsin Republican, says “just because a business is big doesn’t mean it’s bad.” Breaking up big companies could hurt smaller firms around the U.S. and might compound privacy problems, he says.

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3:20 p.m.

Facebook says that its messaging apps such as WhatsApp and Messenger won’t be able to use digital wallets made by other companies once Facebook launches the digital currency Libra.

Wallets will be how users store and make transactions with Libra. Facebook has announced plans to create the Calibra wallet. Other companies are also expected to create wallets, too.

Facebook executive David Marcus says only Calibra will be allowed on its messaging apps. But users will be able to send or receive money from other wallets, regardless of where the transaction originated.

Marcus also confirmed that Calibra will support full data portability — so people who decide they would rather use a different Libra wallet would be able to move all their money and data there.

Even with the ability to send and receive from any wallet, Facebook will still have an advantage by allowing only Calibra within its popular messaging apps, That’s because many people will choose not to download or switch to other wallets.

The limitations came out during a Senate hearing Tuesday and precede a separate hearing on the market power of Facebook and other big tech companies.

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2:40 p.m.

President Donald Trump says federal agencies, and possibly Attorney General William Barr, should look into billionaire investor Peter Thiel’s allegations that Google may have been infiltrated by Chinese intelligence.

Over the weekend, Thiel said the FBI and the CIA should open an investigation into Google. According to an Axios story, Thiel said Google was “engaged in the seemingly treasonous decision to work with the Chinese military and not with the US military.” Google denies that it works with the Chinese military.

During a Cabinet meeting Tuesday, Trump said that’s a “very big statement made by somebody who’s highly respected, so we’ll certainly take a look at that.”

Trump also called Thiel a friend of his and a “tremendous contributor” to the Republican Party. Trump, meanwhile, has clashed with Google and other tech companies, alleging bias against conservative views.

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12:05 p.m.

Senators are grilling Facebook on its plans to launch a new digital currency when it’s still battling problems with privacy and other issues.

Arizona Republican Sen. Martha McSally says she doesn’t trust Facebook because of repeated privacy violations and “repeated deceit.”

Facebook executive David Marcus says the company wants to innovate on behalf of its users. He says if another country were to build a successful digital currency first, the system might be out of reach of U.S. regulations and sanctions.

But Hawaii Democratic Sen. Brian Schatz says the question isn’t whether the U.S. should take the lead, but “why Facebook” before it fixes its other problems.

Schatz also questioned whether Facebook has any expertise in money laundering and other financial issues. Marcus responded that Facebook now does because it has hired experts.

Facebook is defending the planned currency, Libra, before a Senate Banking Committee panel Tuesday.

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11:25 a.m.

A Facebook executive says digital transactions such as those with the company’s upcoming Libra currency will be better than cash in guarding against criminal activities.

Facebook’s David Marcus was responding to Sen. Catherine Cortez Masto, a Nevada Democrat who asked how the company will guard against money laundering and make sure terrorists don’t use its currency to finance their activity.

Marcus says cash transactions are where most crime currently happens. He says “it will be better” if a lot of transactions move to digital. He says that people who use Libra through Facebook’s upcoming Calibra wallet will have to upload a government ID for verification.

Masto says security pledges are one thing, but she wants to see the specifics.

Marcus is appearing before a Senate Banking Committee panel on Tuesday.

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10:55 a.m.

A senior Democratic senator is asserting that “Facebook is dangerous” as a Senate panel opens a hearing on Facebook’s plan for a new currency.

Sen. Sherrod Brown of Ohio, the senior Democrat on the Senate Banking Committee, sought assurances from Facebook executive David Marcus that the plan wouldn’t jeopardize the privacy of its billions of users’ data.

Marcus assured that Facebook “will take the time to get this right” and welcomes an extensive review by federal regulators.

Brown pressed Marcus on whether he and his team would accept their salary in the new currency, Libra. Marcus says that Libra is not meant to compete with bank accounts but finally says yes, “I would trust all my assets in Libra.”

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10:35 a.m.

U.S. senators from both parties are opening a hearing with tough questions and criticisms of Facebook’s ambitious plan to create a financial eco-system based on a digital currency.

Ohio Sen. Sherrod Brown, the Senate Banking Committee’s ranking Democrat, says it’s hard to trust Facebook after a series of privacy scandals. He says it “takes a breathtaking amount of arrogance” to think it can run its own bank.

Committee Chairman Mike Crapo, an Idaho Republican, is questioning why Facebook wants to base the project in Switzerland.

David Marcus, the Facebook executive leading the project, says it’s not an attempt to avoid oversight but that Switzerland is a recognized international finance center. Marcus says if the U.S. fails to act, then digital currencies could be controlled by others with dramatically different values.

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10:25 a.m.

Google is reiterating it does not work with the Chinese military after President Donald Trump said on Twitter he would “take a look” at Google and its relationship to Chinese intelligence.

“As we have said before, we do not work with the Chinese military,” said Google spokeswoman Riva Sciuto in an emailed response for comment. “We are working with the U.S. government, including the Department of Defense, in many areas including cybersecurity, recruiting and healthcare.”

The comments come as a House Judiciary subcommittee is holding a bipartisan investigation of the market power of Facebook, Google, Amazon and Apple.

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8:45 a.m.

President Donald Trump is vowing to “take a look” at Google after a billionaire investor suggested it may have been infiltrated by Chinese intelligence

Before 5 a.m. Eastern, Trump in a tweet called Peter Thiel, “A great and brilliant guy who knows this subject better than anyone! The Trump Administration will take a look!”

A House Judiciary subcommittee is holding a bipartisan investigation of the market power of Facebook, Google, Amazon and Apple. Congress begins two days of hearings Tuesday on the currency planned by Facebook, to be called Libra, starting with the Senate Banking Committee.

Over the weekend, Thiel said the FBI and the CIA should open an investigation into Google.

According to the Axios story, Thiel said Google was “engaged in the seemingly treasonous decision to work with the Chinese military and not with the US military.”

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12:10 a.m.

Facebook’s ambitious plan to create a financial eco-system based on a digital currency faces questions from lawmakers. It’s already being shadowed by negative comments from President Donald Trump, his treasury secretary and the head of the Federal Reserve.

Congress begins two days of hearings Tuesday on the currency planned by Facebook, to be called Libra, starting with the Senate Banking Committee. Meanwhile, a House Judiciary subcommittee will be extending its bipartisan investigation of the market power of Facebook, Google, Amazon and Apple.

Trump tweeted last week that Libra “will have little standing or dependability.”

The Democratic head of the House Financial Services Committee, which is holding a hearing on Wednesday, has called on Facebook to suspend the plan until Congress and regulators can review it.

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