ARI SHAPIRO, HOST:
In Washington, big tech companies are under more scrutiny than ever before. It's coming from the Justice Department and the Federal Trade Commission, also a House subcommittee on Capitol Hill. The central question - have companies like Facebook, Apple, Amazon and Google become too big and powerful? Congressman David Cicilline of Rhode Island is a Democrat leading the House investigation into the tech industry. Welcome to the program.
DAVID CICILLINE: Thank you - great to be with you.
SHAPIRO: What's the potential harm to consumers here? Is it a privacy issue, a pricing issue or just a question of market share? What's the problem you hope to address?
CICILLINE: Well, the problem we are hoping to address is the enormous dominance of large technology platforms in the digital marketplace. And that results often in anti-competitive behavior that sometimes results in platforms favoring their own products or services or not respecting the privacy interests of consumers.
So there are a number of reasons to suggest that the market is not working properly as a result of this lack of competition. There hasn't been a full investigation - an antitrust investigation like this in more than 50 years, and so this is an opportunity to really look at, what is the impact on innovation; what is the impact on entrepreneurship, on competition and goods and services that consumers are purchasing?
SHAPIRO: Often antitrust cases, anti-competitive arguments are based on prices being high. And in the case of the tech giants, Facebook is free. Amazon offers low prices. Does that make it harder for you to build a convincing argument?
CICILLINE: No. I would say first of all, these services are not free. You are providing very valuable data to these platforms, and that data is being used, sometimes misused without your authority. And there are also consequences to your ability to access goods. For example, Amazon takes information. They then have begun their own label, and they are putting small businesses out of business by producing products after collecting data on Amazon that favor their own goods and services. So it has an impact on the ability of rivals to maintain themselves in the marketplace, and innovation is significantly reduced when there's no competition, when there's this kind of market dominance.
SHAPIRO: Europe has really led the way on regulating these tech companies - not gone so far as to break them up but certainly put restrictions on them. Why do you think the U.S. has lagged so far behind?
CICILLINE: I think, you know, there has been a sort of general approach to sort of let these big platforms flourish - this idea that was - they were providing a lot of value; they were companies that were growing fast. And I think we just didn't fully realize all of the implications on the kind of dominance that they have in the marketplace.
SHAPIRO: But to be fair, Europeans realized it years ago. So why wasn't the U.S. aware of this?
CICILLINE: It's a great question. I mean, there hasn't been good antitrust enforcement at the federal level. I think one of the things we have to look at is - and this investigation will provide us with that opportunity. We really need to look at all our existing antitrust statutes. It's an opportunity to kind of look top to bottom and determine how they need to be modernized. They were written back during the railroad monopolies, but I think there was just a reluctance in sort of the sense that this was exciting and adding lots of value and a lack of appreciation of what the real damages could be.
SHAPIRO: I'm sure tech lobbyists and lawyers are already making a lot of money off of this. How worried do you think the executives of these companies should be? How likely is the threat of the companies being broken up?
CICILLINE: Well, I think, you know, large technology companies should recognize that it's in their interests that this market work properly and that people have confidence that their data is protected, that there's good innovation and good competition available. So...
SHAPIRO: Sure, but it might not be in the long-term interests of Facebook to be forced to sell WhatsApp or Instagram. Is that the sort of thing you're talking about?
CICILLINE: Well, I think one of the things we absolutely will look at are the acquisitions that is extinguishing rivals, whether it's WhatsApp or other companies that buy competitors or prevent them from being successful as Facebook did with Vine. But we'd have to look at also the statutes to determine whether or not the DOJ and their antitrust enforcement could prevent some of these transactions from occurring.
SHAPIRO: Some of your own party's biggest donors are from Silicon Valley. Do you think Democrats have the will to defy these companies and the wealthy donors who run them?
CICILLINE: Absolutely. Look; this is a very important issue. This relates to this tremendous concentration of economic power that has in part made the economy not work for everyone. You know, when you have tremendous concentrations of economic power, it's often followed by tremendous concentrations of political power, and that's why we have to also be working to reduce the influence of money in our political system. But we've got to fix this problem. The Internet is broken. We're living in a monopoly moment. Our constituents expect us to fix this and to get this marketplace working right.
SHAPIRO: Congressman David Cicilline, thank you very much.
CICILLINE: Thanks for having me.
SHAPIRO: He's the Democratic chairman of the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law.
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