um mr pakai in 2007 google purchased doubleclick the leading provider of certain advertising tools is that correct uh that’s correct congresswoman when congress per when google purchase proposed the merger alarm bells were raised about the access to data google would have specifically the ability to connect a user’s personal identity with their browsing activity google however committed to congress and to the anti-trust in forces that the deal would not reduce user privacy google chief legal advisor testified before the senate antitrust subcommittee that google wouldn’t be able to merge this data even if it wanted to given contractual restrictions but in june of 2016 google went ahead and merged this data anyway effectively destroying anonymity on the internet mr pakai you became ceo and of google in 2015 is that correct uh that’s right okay and this change was made in 2016. is that correct uh that’s my understanding okay thank you for that did you sign off on this decision to combine the sets of data with goog that google had told congress would be uh kept separate congresswoman any any changes we made uh with all due respect uh please did you sign off on the decision or not uh i i reviewed uh at a high level all important decisions we make we deeply care about privacy and security of our users so you signed off on the description okay okay you signed off on the decision practically this decision meant that your company would not combine all of wouldn’t would now combine for example all of my data on google my search history my location from google maps information from my emails from gmail as well as my personal identity with the record of almost all of the websites i visited that is absolutely staggering according to an email from a doubleclick executive that was exactly the type of reduction in use user privacy that google’s founders had previously worried would lead to a backlash and i quote they were unwavering on the policy due to philosophical reasons which is larry and sergey’s fundamentally not wanting users associated with the cross-site cookie they were also worried about a privacy storm as well as damage to google’s brand so in 2007 google’s founders feared making this change because they knew it would upset their users but in 2016 didn’t seem to care mr pakai isn’t it true that what changed between 2007 and 2016 is that google gained enormous market power so while google had to care about user privacy in 2007 it no longer had to in 2016. would you agree that what changed was google gained enormous market power congresswoman this is an important issue if i could explain well you know we today make it very easy for users to be in control of their data we have simplified their settings they can turn ads personalization on or off we’ve combined most of activity settings into three groupings uh we remind users to go to a privacy checkup one billion users of that hi mr makai thank you so much for that i am concerned that google’s bait and switch with doubleclick is part of a broader pattern where google buys up companies for the purposes of surveilling americans and because of google google’s dominance users have no choice but to surrender in 2019 google made over 80 percent of its total revenue through selling of ad placement is that correct mr pakai uh you know hr yeah okay and because google sells behavioral ads ads targeted to each of us as individuals the more user data that google collects the more money google can make more user data means more money is that correct uh in general that’s not true uh for example more user data not the mortgage money google connect collection so you’re saying more user data it does not mean the more money that google can collect congresswoman most of the data today we collect is to help users uh and provide personalized experiences back thank you thank you so much mr chairman i yield back mr zuckerberg in march of 2012 you suggested by email to your management team that moving faster and copying other apps could quote prevent our competitors from getting footholes sheryl sandberg responded that quote it is better to do more and move faster especially if that means you don’t have competitors build products that take some of our users facebook’s product manager management director added that quote i would love to be far more aggressive and nimble in copying competitors has facebook ever taken steps to prevent cop competitors from getting footholds by copying competitors uh congresswoman i view it as our job to understand what people are finding valuable in all of the services that they use and certainly if if someone do you copy do you copy your competitors congresswoman we’ve certainly adapted features uh that that others have let in as have others copied and adapted features that i’m not concerned about others i’m just asking you mr zuckerberg since march of 2012 after that email conversation how many competitors did facebook end up copying uh congresswoman i i can’t give you a a number of companies is it less than five congresswoman i don’t know uh less than 50 any estimates your team was making a plan how did it play out i’m not sure i agree with the premise here our job is to make sure that we build the best services for people to connect with all the people they care about and a lot of that is done by innovating and by building new things thank you mr zuckerberg let me go on uh has facebook ever threatened to clone the products of another company while also attempting to acquire that company congresswoman not that i would not that i recall and i’d like to just remind you that you are under oath um and there are quotes from facebook’s own documents um prior to acquiring instagram facebook began developing a similar product called facebook camera correct congresswoman that’s correct i’ve i’ve said multiple times that we were competing in the space of building mobile cameras with instagram that’s what they did at the time their competitive set was companies like uh what we were building with facebook camera and viscocam and pick please thank you mr mayor thank you mr zuckerberg um did you ever use this very similar facebook camera product to threaten instagram’s founder kevin systrom uh congresswoman i’m not sure what you would mean by threaten i think it was public that we were building a a camera app at the time that was a well-documented thing let me tell you that mr in a chat you told mr seistrom that facebook was quote developing our own photo strategy so how we engage now will also determine how much were partners versus competitors down the line instagram’s founders seem to think that was a threat he convided confided in an investor at the time that he feared you would go he would that you would go into quote destroy mode if he didn’t sell instagram to you so let’s just recap facebook cloned a popular product approached the company you identified as a competitive threat and told them that if they didn’t let you buy them up there would be consequences were there any other companies that you uh use the same tactic with while attempting to buy them congresswoman i want to respectfully disagree with the characterization i think it was it was clear that this was a space that we were going to compete in one way or another i don’t view those conversations as a threat in any way i just i’m just using the documents and the testimony that the committee has collected from others did you warn evan spiegel the founder of snapchat that facebook was in the process of cloning the features of his company while also attempting to buy snapchat congresswoman i don’t remember those specific conversations but that was also an area where it was very clear that we were going to be building something it’s people want to be able to communicate privately they want to be able to communicate with all their friends at once and we’re going to make sure that we build the best products and all of the spaces that that we can around helping people stay connected with the people they care about i appreciate that mr zuckerberg i think the question again here is when the dominant platform threatens as potential rivals that should not be a normal business practice facebook is a case study in my opinion in monopoly power because your company harvests and monetizes our data and then your company uses that data to spy on competitors and to copy acquire and kill rivals you’ve used facebook’s power to threaten smaller competitors and to ensure that you always get your way these tactics reinforce facebook’s dominance which you then use in increasingly destructive ways so facebook’s very model makes it impossible for new companies to flourish separately and that harms our democracy it harms mom and pop businesses and it harms consumers mr chairman i yield back mr bezos thank you for being here today in your opening statement you reviewed your written testimony you indicated and i’ll just quote that uh amazon accounts for less than one percent of the 25 trillion global retail market and less than four percent of retail in the us when end quote when you refer to retail i take it based on the empirical studies i reviewed you’re referring to a broad definition of retail that includes restaurants bars gas stations so it’s a fairly all-encompassing view of retail i i wonder if you know what percentage of amazon’s sales are represented in the terms of online retail sales the e-commerce market stream uh the figures i’ve seen for you know i i don’t with all respect i don’t accept that the e-commerce is a different market but as a different channel what i’ve seen is sort of 30 to 40 percent is the outside studies that i’ve seen were amazon’s share of that e-commerce channel uh and that’s that’s consistent with the the data that i have seen that the the latest figure i saw was forty percent thank you mr chairman in terms of zuckerberg in march of 2012. nonetheless i do think that you know just factually it’s important it’s an important distinction that i want to make sure are we clear here um obviously i suspect you understand more than most that uh the early stages of a startup where entrepreneurs are undertaking risks to bring their products and services to market over the course of our investigation we’ve heard directly from startups who rely on amazon services and that includes obviously representative jayapal’s questions representative buck my colleague from colorado with respect to concerns about the way in which amazon uses confidential information but we’ve also heard that not just with respect to the marketplace but amazon’s cloud computing arm aws the notion that that computing arm essentially identifies startups best technologies and rolls out replica products and services so mr bezos does amazon use confidential information that companies share via aws to build competing services uh no sir not that i’m aware of aws does often you know they do keep expanding their services aws started uh you know what 15 years ago we invented this entire category let me just clarify that mr bezos uh i appreciate that sorry i don’t apologize for interrupting but um last week one of amazon’s former engineers posted online that he and his team proactively identified growing businesses on aws that they built competing products and that they targeted those products to the businesses customers and there’s been public reporting on that strategy so i guess i’m wondering if you can comment on that and how you would account for uh for those statements well i think um there may be categories you know some databases of different kinds and so on where we see that it’s an important product for customers and we make our own product offering in that arena and but it doesn’t mean we stop servicing the uh the other companies that are also making those products we have competitors using aws and we work very hard to make them successful netflix is one example hulu is another and so on i think the concern mr bezos with respect is that the pattern emerges across the different components in amazon whether it’s the marketplace or whether it’s the cloud service as i mentioned in addition there was an article i’m sure you’re aware of the wall street journal regarding the alexa fund that according to news reports amazon’s venture capital fund the alexa fund had invested in a number of different companies i believe you’re familiar with alexa fund investing for example and defined crowd corp is that ring a bell uh no sir i’m afraid it doesn’t okay well i’ll represent to you according to the wall street journal and i’ll just quote from them when amazon incorporated venture capital fund invested in defined crab corp it gained access to the technology startups finances and other confidential information nearly four years later in april amazon’s cloud computing unit launched an artificial intelligence product that does almost exactly what defined crowd does said define crowdfounder and chief executive daniel braja does that refresh your recollection are you aware of those allegations uh i read that article but i didn’t remember that piece of it i apologize for that i don’t know the specifics of that situation and i would be happy to get back to your office with more information about that well i would appreciate i i certainly would welcome that and to the extent that you all can follow up with the subcommittee with respect to this particular article and the different episodes that are referenced both in terms of defying crowd corp there’s also another company called uh nucleus that you may be familiar with the reason why i ask these questions the reason why it matters uh mr bezos to me is that we are very concerned about this innovation kill zone that seems to be emerging i represent boulder and fort collins two of the fastest growing and most innovative tech hubs in the country and entrepreneurs and founders shared their stories with this committee during one of our field hearings actually a field hearing that we held at the university of colorado law school just earlier this year and they are extremely dependent on big technology firms including in terms of investment in capital yet they live in constant fear that the platforms could steal their core technologies or ideas making it impossible to compete because of those existing advantages so i see my times expired but we will certainly be following up with respect to the episodes that i referenced with that i would yield back a gentleman’s time has expired so since july 2019 your employee nate sutton told me under oath in this committee that amazon does not quote use any specific seller data when creating its own private brand product so let me ask you mr bezos does amazon ever access and use third-party seller data when making business decisions and just a yes or no will suffice her i thank you for the question i know it’s an important topic and i also want to thank you for representing us uh i i can’t answer that question yes or no what i can tell you is we have a policy against using seller specific data to aid our private label business but i can’t guarantee you that that policy has never been violated mr bezos you’re probably aware that an april 2020 report in the wall street journal revealed that your company does access data on third-party sellers both by reviewing data on popular individual sellers and products and by creating tiny product categories that allowed your company to categorically access detailed seller information in a supposedly aggregate category do you deny that report i’m familiar with the wall street journal article that you’re talking about and we continue to look into that very carefully i’m not yet satisfied that we’ve gotten to the bottom of it and we’re going to keep looking at it okay it’s not as easy to do as you would think because some of the sources in the article are anonymous but we continue to look into it i’ll take that as a you’re not denying that you’re looking into it i will tell you a former amazon employee in third party sales and recruitment told this committee quote there’s a rule but there’s nobody enforcing or spot checking they just say don’t help yourself to the data it’s a candy shop everyone can have access to anything they want okay well let me ask you this apple requires all app developers to use apple’s payment processing system if those developers want to sell their goods or services to apple users through apple’s app store isn’t that correct that is correct because it’s and by processing payments for apps that you allow into the app store you collect their customer data and you use that data to inform apple as to whether apple should whether or not it would be profitable for apple to launch a competing app isn’t that correct sir 84 of the apps are charged nothing the remaining 16 either pay 15 or 30 depending upon the the specifics if it’s in the second year of a subscription uh as an example it only pays 15 if you look back at history what’s to stop apple from increasing its commission to 50 we sir we have never increased commissions in the store since the first day it operated in 2008 there’s nothing to stop you from doing so is it no sir i disagree strongly with that there is a competition for developers just like there’s a competition for customers and so the competition for developers they can write their apps for android or windows or xbox or playstation so we have fierce competition at the developer side and the customer side which is uh which is essentially it’s so competitive i would describe it as a street fight for market share in the smartphone business