Today, House Judiciary Committee Chairman Jerrold Nadler (D-NY) delivered the following opening remarks during a Subcommittee on Antitrust, Commercial and Administrative Law hearing on "Online Platforms and Market Power, Part 4: Perspectives of the Antitrust Agencies":
"Thank you, Mr. Chairman, for convening today’s oversight hearing of the antitrust agencies and our competition system.
"As part four of our series of hearings on online platforms and market power, today’s discussion is essential to advancing the Committee’s bipartisan investigation into competition in digital markets.
"This hearing occurs at a critical moment. There is growing evidence that a handful of dominant platforms now control key arteries of online commerce, content, and communications.
"A number of important digital markets are now dominated by just one or two firms. For example, Google controls over 90% of the global search market and Facebook captures over 80% of all global social media revenue. By some estimates, Amazon controls about half of all online commerce in the U.S.
"While the open internet has delivered enormous benefits to Americans, waves of anti-competitive consolidation in digital markets have had devastating effects on key elements of our democracy and economy, such as the free and diverse press.
"It also threatens the survival of a key element of our economy—the American startup. Empirical evidence suggests that the trends of increasing consolidation and market power in digital markets pose a threat to technology startups and innovation in the U.S. economy. For example, it has been reported that seed funding for technology startups—the initial round of investment in a startup—has declined significantly from 2015 to 2018.
"I am deeply concerned about the antitrust agencies’ lax merger enforcement which has permitted these harmful levels of concentration and the rise of market power in the digital economy.
"In addition to rising consolidation, there have also been allegations of anti-competitive conduct in digital markets. For instance, as more small- and medium-sized businesses become reliant on the dominant platforms to reach customers, they have increasing concerns that discriminatory or exclusionary conduct by the platforms could destroy their business over the course of just a few days or months.
"Despite mounting evidence of illegal monopolization activities by the dominant platforms, and numerous cases brought by international enforcers, U.S. enforcers appear to be paralyzed.
"It has been decades since the Department of Justice or the Federal Trade Commission has brought a significant monopolization case in the tech sector. Tim Wu, a professor at Columbia University testified before the Judiciary Committee in July that the DOJ’s court challenges against AT&T, IBM, and Microsoft "were foundational in terms of shaking up industry and creating room for new firms to grow."
"I am encouraged by reports of the agencies’ current investigations into the dominant tech platforms, but the decline of enforcement over the past several decades is extremely troubling—a decline, I should add, that has occurred across all industries, not just in the technology sector. I find it hard to believe that companies have simply ceased engaging in illegal monopolization rather than the more likely explanation—which is that the agencies are underenforcing the antitrust laws.
"There may be a number of reasons for underenforcement by the agencies with respect to both anti-competitive conduct and merger review, including unfavorable case law, insufficient enforcement will, and inadequate agency resources, all of which I look forward to examining at today’s hearing.
"One problem Congress can most directly address is ensuring that the agencies charged with antitrust enforcement have sufficient funding. Unfortunately, appropriations to these agencies have declined over the last decade despite an increase in merger activity and an increase in the complexity of investigations. In real terms, agency funding in 2019 was nearly 20% lower than in 2010. It is vital that the antitrust agencies have the resources they need to do their jobs.
"While ultimately it is the responsibility of the antitrust enforcement agencies to enforce the law, Congress has an obligation to assess whether existing antitrust laws and competition policies—and the will to enforce those laws and policies—are adequate to address the competition issues facing our country, and to take action if they are found to be lacking.
"Over the past six months, the Committee’s bipartisan investigation into competition in the online marketplace has explored these questions in the context of digital markets. It is essential that we continue this important work through today’s hearing, and throughout this Congress, as we seek to address competition problems in digital markets for the benefit of American consumers, small businesses, and workers.
"With that, I look forward to hearing from our witnesses today and I thank them for their participation."