On December 7, 2021, the Senate Finance Committee’s Subcommittee on Fiscal Responsibility and Economic Growth conducted a hearing on “promoting competition, growth, and privacy protection in the technology sector. The hearing could have been conducted using a split-screen format, since one group of Senators and witnesses focused on anti-competitive behavior by the tech giants and another focused on privacy and security concerns raised by data brokers.
Chair Elizabeth Warren (leader of the first group) said Congress should provide better tools to the FTC to break up companies like Amazon and, along with other senators, questioned witnesses on how monopolies hurt workers and the economy. Ranking member Bill Cassidy (leader of the second) focused on the threats of the unregulated data brokerage industry, and the need for comprehensive federal privacy legislation to protect consumer privacy and national security.
Here’s what the competition witnesses said (in brief):
- Courtenay Brown, Amazon Associate at Avenel, New Jersey’s Fulfilment Center and Member Leader with United for Respect, focused on the need to hold Amazon accountable for the poor working conditions she and other employees face daily.
- Karl A. Racine, Attorney General for the District of Columbia, described the lawsuit his office is pursuing against Amazon for unfairly and unlawfully increasing prices on Amazon’s website, stifling competition, and taking advantage of consumers.
- Barry C. Lynn, Executive Director, Open Markets Institute, discussed the monopolistic practices of tech giants such as Google, Facebook, and Amazon, which, according to Lynn, (1) perpetuate low wages, high prices, sharp declines in entrepreneurship, and political extremism, and (2) have caused the supply chain problems that are now occurring across the world.
Here’s what the data broker witnesses said (in brief):
- Justin Sherman, from the Data Brokerage Project at Duke’s Sanford School of Public Policy, explained that data brokerage is a “virtually unregulated practice” in the United States that enables advertisers and businesses to target marginalized communities and allows foreign governments to compile sensitive personal data with few controls. He proposed three steps Congress should take immediately: (1) strictly control data broker sales to foreign companies, citizens, and governments; (2) strictly control the sale of sensitive information, such as genetic, health, and location data; and (3) stop data brokers from circumventing controls by “inferring” data.
- Samm Sacks, from Yale Law School’s Paul Tsai China Center and the New America Foundation, focused on data security in the context of the U.S.-China relationship, cross-border data flows, and national security. Noting that the lack of comprehensive data privacy regulation in the United States makes our data vulnerable to both sophisticated state actors and unregulated data brokers, Sacks advocated for enactment of a federal law setting basic standards for all companies, restricting data broker practices, and limiting exports of personal data to foreign countries. She cautioned, however, against simply “cutting and pasting” the GDPR, which can end up serving only the companies that are wealthy enough to bear the burdens and costs of compliance. Sacks also supported mechanisms to facilitate cross-border data flows with likeminded countries (subject to appropriate controls), since U.S. security and prosperity rely on international cooperation with allies.
- Stacey Gray, from the Future of Privacy Forum, recommended that Congress pass baseline privacy legislation that establishes clear rules for both data brokers and first-party companies that process personal data. She also outlined more incremental steps that Congress could take, such as establishing a national registry or opt out, or limiting the ability of law enforcement and intelligence agencies to purchase information from data brokers (as required in proposed legislation from Senator Wyden). In addition, Gray recommended that Congress strengthen the FTC by increasing its staff and funding, establishing a privacy bureau, and authorizing civil penalty authority.
Like many hearings on these issues, this one examined the issues but did not appear to be leading to any particular legislative solution. We still are still left to wonder: (1) Will Congress finally be able to negotiate and pass comprehensive federal privacy legislation? (2) What will Congress do to address the many concerns that have been raised about the power of the tech giants, and how will Congress choose which issues to prioritize?
We will continue to monitor developments on this issue and provide updates as they occur.