consumers

Antitrust tech hearings dig for consumer harm but come up short

Armed with face masks and fresh customer complaints, members of the House Subcommittee on Antitrust, Commercial, and Administrative Law convened both virtually and in-person on Thursday, for the first of many hearings on competition in the tech sector.

It was a six-hour marathon of gobbledygook legal turns of phrase and static-prone troubleshooting for lawmakers.

The witnesses were CEOs from some of the four largest companies in America: Jeff Bezos of Amazon, Mark Zuckerberg of Facebook, Tim Cook of Apple, and Sundar Pichai of Google.

Together, these companies serve billions of global consumers for a variety of needs, and have become very rich by doing so. They employ millions of people, make up big portions of the American economy, and have been the trailblazers for innovation in virtually every free nation.

It is also true that they’ve made many mistakes, errors in judgment, and have made it easy to be bashed by all sides.

Despite that, these companies are true American success stories. And that’s not even considering the industrious biographies of their CEOs on the witness stand: an immigrant from India; the son of a teenage mother and immigrant stepfather; a college dropout; and a gay southern man shunned by the Ivy League. Each of them is a self-made millionaire or billionaire in their own right.

But in the context of this hearing, they were America’s villains.

The potshots in the hearing came from both Democrat and Republican congressmen, each using their bully pulpits to reel out various accusations and grievances on the representatives from Big Tech. But lost in all of this was the consumer.

The scene was analogous to George Orwell’s Two Minute Hate on repeat, the face of Emmanuel Goldstein replaced by a WebEx video call on full screen with smiling CEOs surrounded by the furniture in their home offices.

For Democrats, these companies have grown far too large using unscrupulous business practices, beating competitors with lower prices, better service, speed, and slick branding – allowing them to purchase or bully their competition.

For Republicans, it’s all about the bias against conservatives online, facilitated by the thorny content moderation that selectively edits which social media posts are allowed to stand.

What’s missing from this story so far? American consumers.

The justification of the hearing was to determine whether these companies have abused the trust of the public and whether consumers have been harmed as a result of their actions.

But more often than not, questions from committee members hinged on the and “business acumen” of decisions taken within the company, classifying rudimentary strategy decisions as illegal and hostile moves.

Platforms Opening to Third-Party Sellers

An example is Rep. Pramila Jayapal, of Washington State. She represents the district where Amazon was founded by Jeff Bezos. She condemned Amazon for collecting data on third-party sellers who are able to use Amazon’s website to sell products.

“You have access to data that your competitors do not have. So you might allow third-party sellers onto your platform, but if you’re continuously monitoring the data to make sure that they’re never going to get big enough to compete with you, that is the concern that the committee actually has,” said Jayapal.

Here, we’re talking about Amazon’s online platform, which sells millions of goods. Two decades ago, Amazon opened up its platform to merchants for a small fee. It was a win for sellers, who could now have easier access to customers, and it was a win for customers who now can buy more products on Amazon, regardless of who the seller was.

When Amazon sees that certain product categories are very popular, they will sometimes make their own, knowing they have the infrastructure to deliver products at high satisfaction. This brand is called Amazon Basics, encompassing everything from audio cables to coolers and batteries.

Rep. Jayapal says that by collecting data on those merchants in their store, Amazon is effectively stealing information…that sellers voluntarily give in exchange for using Amazon’s storefront.

However, the end result of the competition between Amazon’s third-party sellers and Amazon’s own products (on Amazon’s platform) is something that is better for the consumer: there is more competition, more choice, and more high-quality options to choose from. This elevates the experience for a consumer and helps save them money. This is far from harm.

The same can be said of Apple and its App Store, which came under fire from the chairman of the committee, Rep. David Cicilline. He said Apple was charging developers who use the App Store “exorbitant rents” that veered toward “highway robbery”.

Apple CEO Tim Cook was quick to retort by pointing out that the App Store is a platform for its own apps, but it also allows third-party developers to use that store for a fee. This is an entirely new market space that never existed before Apple opened it, and thus is a net gain for any developer who uses the store, and benefits consumers who click and download even more.

Business As Usual

Throughout the hearing, public officials pointed to internal documents as proof of the malfeasance of the tech firms. The documents were unearthed by the committee and contained emails and memos on mergers, acquisitions, and business practices from all four tech firms.

The Financial Times classified these documents as evidence that the companies “chased dominance and sought to protect it.”

Rep. Jared Nadler of New York chased down Mark Zuckerberg for his decision to purchase the photo-app Instagram back in 2012, calling the move “outright illegal” because he believed Facebook bought it to “essentially put them out of business.”

Today, Instagram is an incredibly popular app that has grown to half a billion users, thanks to Facebook’s investments, talent, and integration. It’s made consumers very happy, and has become an attractive product for advertisers as well. Again, no harm for the consumer.

Pro-Consumer, not Pro or Anti-business

One of the most astute lines from the hearing came from the sole representative from North Dakota.

“Usually in our quest to regulate big companies, we end up hurting small companies more,” said Rep. Kelly Armstrong. Indeed.

And add to that the eventual scenario whereby only the highly connected and vastly wealthy tech companies will be able to comply with stringent regulation from Washington. That’s not what consumers want, and it’s not what Americans want either.

If Congress aims to use antitrust power to break up or heavily regulate the enterprises built by Google, Amazon, Facebook, or Apple, it won’t be done lightly. It would likely leave a lot of damage in its wake for small and medium-sized businesses, many of whom rely on these major firms to conduct their business. In turn, consumers rely on those companies for products and services.

Each of these companies represent a case study in innovation, entrepreneurship, and giving the people what they want to create a huge network of consumers. There’s a lot to learn there.

Instead of using the law to break up companies, what if we learned from their success to empower more consumers?

Govt shouldn’t help Thomas Cook casualties: opinion

Don’t put ordinary consumers on the hook for flying back Thomas Cook holidayers

On Monday, the travel company Thomas Cook announced it would cease operations immediately after it was unable to raise enough money to pay off its debts. This has left hundreds of thousands of travelers without return flights from their holiday destinations.

As a response, several politicians in the U.K. called for government aid to Thomas Cook, and the government has been called to intervene and help out stranded travelers.

Fred Roeder, London-based Managing Director of the Consumer Choice Center, responded by stating that an intervention by the government would be the wrong direction to take.

“It is sad to see a legacy travel company such as Thomas Cook to go under,” said Roeder. “But many politicians want to show their support to stranded travelers by flying them home on taxpayers’ dime.

“While it is very unfortunate to be stranded at the end of a holiday, one should ask why taxpayers should pay for tourists who didn’t buy insolvency or travel insurance? 

“Why should those who stayed home because they either didn’t have the money or time for holidays bail out those who went for a holiday trip but didn’t want to spend the extra few pounds for insurance? This is effectively is the scenario that ordinary British consumers and taxpayers are faced with,” said Roeder.

“We cannot expect Britons who didn’t go on holiday to bail out those who did without reasonable insurance, and effectively bail out the company for its own financial mess.

“Airlines and tour operators going bankrupt happens regularly. Monarch and AirBerlin are just two recent European examples. If the government steps in every time a travel company goes bust, the wrong incentives will be set: Travelers won’t buy insurances and at the same time risk booking heavily discounted offers from troubled travel companies. 

“If this happens, then the next government-sponsored airlift will just be around the corner,” said Roeder.

This article was originally published here.


The Consumer Choice Center fights for affordable flights across the world. For more information on how you can help, read our report Hands-off my Cheap Flights.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at 
consumerchoicecenter.org

Open letter to the Romanian government/parliamentarians


Dear Member of Parliament/the government,

We address this letter to you with regard to the law for the amendment of certain regulations applicable to the tobacco products sector. The amendment would introduce a tobacco display ban at points of sale, bans of sponsorship as well as 1-2-1 marketing. We believe that the rationale for these changes is not conclusive, and would like to explain the reasons for our opposition.

For consumers, the implementation of a display ban reduces the amount of information available for tobacco. Cigarettes are a legal product in Romania, yet consumers would become unable to identify differences between brands and are unexposed to new upcoming products. Added to that, a display ban creates uncertainty on the legal market, as the practice of selling cigarettes “under the counter” is equally present in the case of retailers engaging in the sales of illicit cigarettes.

A radical crackdown on tobacco as a legal product reinforces the prevalence of illicit trade. In France, where constant price increases, smoking bans, heavy regulation on harm-reducing products, and plain packaging are the norm, this phenomenon is particularly noticeable. There are some 7.6 billion contraband and counterfeit cigarettes in circulation in France, making up 13.1% of total consumption.

Some of our members have reported to us to have received counterfeit products when purchasing cigarettes in UK corner stores, where similar legislation is already in effect. A display ban might make it easier for vendors of counterfeit cigarettes to hide their illicit products from consumers and law enforcement until the moment of sale.

We would also like to draw your attention to the fact that a decrease in smoking susceptibility does not necessarily equate to a decline in smoking rates, since this decrease also correlates with a number of other factors, on both the regulatory and the educational side, as well as innovations such as harm-reducing products. 

A negative side-effect of a display ban can be that smoking is perceived as an ominous and secretive act, which encourages certain youth to pick it up. In a comparable fashion, illicit narcotic substances are also purchased in large numbers by youths, without any advertising or display. We know through evidence in countries that have legalised or decriminalised these substances (particularly in the case of cannabis) that youth consumption rates normalise as the handling of the substance reaches social acceptance.

We believe that harm-reducing products such as e-cigarettes represent an innovative way towards smoking cessation. A permissive approach to e-cigarettes would show a positive impact. According to the UK’s National Health Service (NHS), between 2011 and 2017, the number of UK smokers fell from 19.8% to 14.9%. At the same time, the number of e-cigarette users rose: almost half of these consumers use e-cigarettes as a means of quitting smoking.

Public health objectives can be attained through alternative products. This is why a simultaneous ban on e-cigarettes would be counterproductive. Display bans reduce the amount of information available to consumers, and mirrors the shadow economy, whose activities will be eased. Illicit tobacco trade is already a major reason for concern in Europe. Legislative acts such as these, so we fear, would worsen the situation.

We hope that our objections and concerns finds you well, and that we can work together towards achieving public health objectives in a manner that is reconcilable with consumer choice.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science. The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice.

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