U.S. Senators grilled Facebook and Google representatives during a hearing to determine the value of consumer data and the power it gives to the companies wielding it.
The U.S. Senate Subcommittee on Competition Policy, Antitrust and Consumer Rights led by Sen. Amy Klobuchar, D-Minn., and Sen. Mike Lee, R-Utah, has conducted multiple hearings in 2021 to better understand the business practices of tech giants and how they potentially hinder competition -- from wielding vast amounts of consumer data to operating online platforms and app stores through which they sell third-party products as well as their own. The hearings inform legislation being introduced in an effort to rein in tech companies.
Klobuchar forced Steve Satterfield, Facebook's vice president of privacy and public policy, and Markham Erickson, Google's vice president of government affairs and public policy, to defend their companies' business practices. Both argued that consumer data accumulation is not exclusively what makes their organizations successful. Senate subcommittee members disagreed.
Klobuchar said big data is at the core of the modern economy, "powering targeted advertising and driving artificial intelligence" to select products and services consumers are shown.
"Technology companies such as Google, Facebook and Amazon collect an enormous amount of information about our daily activities in real time," she said. "Through services such as Google's Gmail and Facebook's Instagram, though those services are offered to us for free, these companies and advertisers use the data they collect about us to sell to other companies. In the end, we are the product. We are the product that makes the companies money."
Facebook, Google on success and data
But Facebook's Satterfield argued that consumers share data with many apps and platforms beyond Facebook, meaning the same data can be accessed by multiple companies.
"Success comes from building great products, not from how much data you have," Satterfield said.
"Data is important to connect people to relevant experiences -- that includes showing them relevant ads," he said. "But the success we've had has come through building great experiences and not from the amount of data we collect."
Google's Erickson echoed the point. "Data, alone, does not guarantee better products for consumers," he said.
Amy KlobucharU.S. Senator
Senators challenged the argument, citing Google's promise to remove third-party cookies from websites and limiting other companies' abilities to gather user data, as well Facebook's recent earnings report that showed the company received about $52 in advertising revenue per user in the U.S. and Canada.
"Our data is a commodity, but consumers aren't getting enough in return," Klobuchar said.
Getting regulation right
Both Satterfield and Erickson, as well as other witnesses at the hearing, supported the creation of a federal data privacy law as one method of ensuring consumer data's security.
Charlotte Slaiman, competition policy director at nonprofit public interest group Public Knowledge and a witness at the hearing, said while a federal data privacy law would help protect user data, the "gatekeeper power" is at the root of big tech's competition problems.
"Right now, big tech has the power over us and our data," she said. "We need to protect both users and a competitive market with new laws and rules to promote fair competition against them. Until we have a real choice to leave these platforms if we're not happy with them, they won't have the incentive to win us over and we'll continue to miss out on disruptive innovations that challenge the status quo."
Slaiman said current legislation being considered could neutralize big tech's control, including the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act that would require data portability and interoperability.
John Robb, a technology expert focused on data ownership, author of the Global Guerrillas blog and another hearing witness, said big data is valuable and will become more valuable over time as it is integrated into more products and services.
Yet he said there isn't a clear approach to handling big data in the marketplace. He cautioned that some countries that have implemented methods to regulate data collection and use may be getting it wrong.
Europe's privacy laws are suppressing data aggregation, Robb said, and "that will affect their economic capabilities long term, reducing their capabilities to produce high-quality products in the future."
Robb said the U.S. can learn from other countries' approaches and instead focus regulation on giving data ownership back to consumers.
The U.S. does not have any protections against overreach in the corporate realm, he said. "We need a set of digital rights we can exercise to protect us against any overreach on the corporate side."
Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.