ILSR’s Testimony on Amazon’s Dominance Before the House Judiciary Committee

Date: 15 Jul 2019 | posted in: Retail | 0 Facebooktwitterredditmail

On Tuesday, July 16, ILSR Co-Director Stacy Mitchell testified before the United States at a hearing about the monopoly power of dominant tech platforms.

The hearing also included a representative from Amazon, who faced sharp, well-informed, and forceful questioning from members of Congress about the company’s power in digital markets and its impact on competition and independent businesses.

Read Stacy’s testimony here.

The hearing, “Online Platforms and Market Power, Part 2: Innovation and Entrepreneurship,” was the second in a series of hearings that the committee is holding as part of an in-depth investigation into the power of dominant tech corporations.

This is the first significant antitrust investigation undertaken by Congress in decades. It represents a major turning point after years in which antitrust policy was largely ignored as a policy and political issue. Beginning in the 1970s and 1980s, the federal agencies that police our antitrust laws radically reinterpreted these laws and weakened their enforcement.

“The purpose of this investigation is to document anti-competitive conduct online; examine whether dominant firms are engaging in anti-competitive conduct; and assess whether our competition system and current enforcement levels are adequate to address these problems,” explained Congressman David Cicilline (D-R.I.), who chairs the committee’s Antitrust, Commercial and Administrative Law Subcommittee, which is leading the investigation.

“Over the coming months, we will conduct a top-to-bottom review of online markets through a series of hearings on these topics, request information that is relevant to the investigation, and engage in a series of discussions with key stakeholders and policy experts,” Cicilline added.

Tuesday’s hearing included two panels of witnesses. Attorneys representing Amazon, Apple, Facebook, and Google appeared on the first panel.  The second consisted of experts, including Stacy, economist Fiona Scott Morton, and Tim Wu, a law professor at Columbia University and author of The Curse of Bigness.

Stacy focused on Amazon’s market power, and how it uses its monopoly in e-commerce to tilt the playing field in its own favor, inhibiting and punishing small businesses and entrepreneurs. She outlined several policy approaches that Congress should take to check the power of dominant tech platforms, including structural separation, nondiscrimination rules for online platforms, stronger enforcement against anticompetitive practices, and changes to merger policy.

You can watch a full video of the hearing below and read Stacy’s written testimony.

Here are a few highlights from the video:

First Panel

18:30 — Chairman David Cicilline’s opening statement

42:44 — Nate Sutton, Associate General Counsel at Amazon, opening statement

1:02:00 — Congresswoman Pramila Jayapal (D-Wash.) questions Amazon, including about its impact on small businesses.

1:14:03 — Congressman David Cicilline (D-R.I.) sharply questions Amazon about whether it uses data from third-party sellers to advantage its own products

1:31:07 — Congresswoman Val Demings (D-Fla.) asks whether Amazon’s ad revenue from third-party sellers should be considered a “tax” or a toll on these businesses, since they depend on Amazon’s search ranking to succeed.

1:40:21 — Congresswoman Lucy McBath (D-Ga.) talks about the importance of small businesses and questions Amazon about the high fees that it charges sellers on its platform.

1:52:47 — Congressman David Cicilline (D-R.I.) asks about the increase in seller fees in a sharp exchange with Amazon’s representative.

Second Panel

3:16:00 — Tim Wu’s statement.

3:21:00 — Fiona Scott Morton’s statement

3:26:00 — Stacy Mitchell’s statement

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Follow Stacy Mitchell:
Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.

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Follow Zach Freed:
Zach Freed

Zach Freed was a Research Associate at the Institute for Local Self-Reliance from 2018 to 2020, where he researched and wrote about antitrust and corporate power. Prior to his time at ILSR, Zach was a policy staffer for Rep. Keith Ellison.