▶ 0:17:00Subcommittee will come to order. Without objection, the chair is authorized to declare recess at any time. We welcome everyone to today's hearing on foreign antitrust laws and their effect on American companies. I will uh now recognize myself for an opening statement. If you want to beat your competitors, one option is to out innovate them. Uh another is to regulate them. And unfortunately, foreign governments are increasingly choosing the second option.
▶ 0:17:31Uh that is what today's hearing is about. And a growing effort to rewrite the rules of the global economy in a way that punishes success targets American innovation and leaves consumers worse off. Uh the blueprint for this effort is the European Union Digital Markets Act. Uh for over half a century, antitrust law has been grounded in a simple principle. Protect consumers by promoting competition. But the DMA flips that principle on its head.
▶ 0:17:59It protects competitors from competition without even considering how that might affect consumers. The DMA does not ask whether consumers have been harmed. It does not even ask whether a business has done anything wrong. It asks whether a company is large, successful, and most importantly, American. If the answer is yes, the rules suddenly change. Common business practices are banned.
▶ 0:18:23Innovation is treated as a threat, and foreign rivals are handed access to data and technology that they could never build or earn on their own. That is not uh competition policy. That's forced redistribution. And we should not pretend that this came out of nowhere.
▶ 0:18:42Uh Europe's economy has declined rapidly over the past several As the uh Drag report highlighted, no EU company with a market capitalization over 100 billion euros has been created from scratch in the last 50 years. Meanwhile, all six companies with a 1 trillion valuation have been created in America over that same period.
▶ 0:19:0630% of the quote unquote unicorn businesses founded in Europe, they are startups with a valuation exceeding 1 billion. They've all uh relocated their headquarters abroad at this point. Talented European engineers are frequently choosing San Francisco and Seattle over Berlin and Paris and taking with them their innovative ideas and patented technologies.
▶ 0:19:31Instead of confronting overregulation and weak economic growth, EU officials have chosen a different path, they target American companies and call it regulation, tax innovation and call it fairness. Well, what should concern us most is that this model is now spreading globally. We are seeing it in South Korea and we're seeing it in Brazil and we are even seeing it in countries like Japan and Australia. Different countries but the same framework.
▶ 0:20:00laws that single out American businesses, restrict pro-consumer conduct, enhance sweeping power to regulators and bureaucrats with virtually no accountability or due The activists behind these proposals call it competition policy, but in reality, it's industrial policy designed to give their own corporations a geopolitical edge. This is not a coincidence. It is coordination. The simple is the strategy is simple.
▶ 0:20:29copy American innovation and then find and regulate the companies that create it out of existence. This is not a technical debate among different regulators. It is a values test. Do we believe in competition driven by consumers and innovation or competition dictated by bureaucrats and foreign ministries? The United States has always chosen the first path. We let markets work. We punish real harm and we reward innovation.
▶ 0:20:56America built the strongest economy in the history of this world by trusting consumers, not regulators. The DMA style regulation would take us in exactly the opposite direction. It would raise prices, reduce choice, weaken privacy and security, and slow innovation. It would replace consumer judgment with regulatory command. That is why the Trump administration has been pushing back on these discriminatory tactics.
▶ 0:21:22Free trade does not mean tolerating attacks on the very principles that created our great economic system. Free trade only works when it is also fair. When foreign governments use regulation to discriminate against American companies, that is not competition. That is Free markets have been uh reciprocal in the past.
▶ 0:21:44When foreign governments went ahead and started to rig their laws against American companies, the United States will and can and should respond using our trade leverage to confront these policies and not aggressive. It's necessary and we should be just as clear about our own path here at home. United States should not import these failed ideas. We should reject DMA style antirust outright. We do not need European style micromanagement.
▶ 0:22:13We need free market competition. Our antitrust laws only work because they focus on consumers, evidence, and due process. In America, competition belongs to consumers, not DMA, DMA style antitrust rejects those values, and America should reject it all the way through to the end.
▶ 0:22:35Our principles are what we have made America have made America great and defending them is how we will keep America great for decades to come. I want to thank all the witnesses for being here today and I look forward to hearing what you have to say on this very important topic. I'll now recognize the ranking member. Mr. Raskin is going to go first.
▶ 0:23:03Thank you very much, Mr. Chairman, welcome to all of our witnesses. Thank you for joining us. Uh today's just the second time this Congress that the that the administration um has an official testifying before the judiciary committee. And when we hear Roger uh Roger Al Ford's testimony today, everybody will understand why they're not testifying about what's actually going on behind closed doors over there. In April, Mr.
▶ 0:23:29Alfred Ford, who is a distinguished professor of antitrust law and constitutional law at Notre Dame, began serving as the principal deputy assistant attorney general in the antitrust division. That's the number two spot at antitrust. And by July of this year, Professor Alfred was fired for insubordination after he blew the whistle on DOJ's corrupt approval of a merger between Huelet Packard Enterprise and Juniper Networks.
▶ 0:23:57Although the antitrust division strongly opposed this merger, its opposition was overridden by Attorney General Pam Bondi's then chief of staff Chad Meiselle and her then counselor Stanley Stanley Woodward after Hulet Packard lobbyists urged them to ignore and bypass the sweeping antirust problems that had been identified.
▶ 0:24:21Professor Alfred, thank you for sounding the alarm today about backroom corruption, political favoritism, and betrayal of the rule of law at the Department of Justice. We're grateful to you for your courage in speaking out before this committee. Our colleagues have described this hearing as anti-American, antirust, but I'm afraid they're not interested in actually dismantling monopolies, collusion, or price fixing.
▶ 0:24:46On the contrary, their policy is all about elevating the interests of the largest corporations, especially the ones donating directly to Donald Trump and MEGA over the public interest and putting them all far beyond the reach of US foreign and domestic antirust laws.
▶ 0:25:04Our expert agencies like the FTC, the FCC and DOJ review mergers to assess whether a proposed deal complies with the relevant antitrust laws or public interest standard, including by protecting US consumers from rising prices. If after applying the law to the facts, they find that the merger is not in the public interest, they can sue to stop it or propose conditions on any new combination.
▶ 0:25:28But under this administration, merger review has turned into another instrument of corruption, a way for the president to reward his rich insider friends and punish companies he dislikes, including news companies that have been critical of his administration. Antitrust enforcement is now driven by pay-to-play corruption, political favoritism, shakeddowns, and retaliation instead of the facts and the legal standards in each case. It's not the public interest that controls outcomes.
▶ 0:25:58It is the president's political and financial interests. Take the case of Huelet Packard Enterprises purchase of Juniper Networks. When DOJ moved to block it, Huelet Packard Enterprises hired two lawyers with connections to President Trump and his men, Mike Davis and Arthur Schwarz, for $1 million a piece to lobby the White House Attorney General Bundy's chief of staff, Chad Meiselle, and the Attorney General's counselor, Stanley Woodward.
▶ 0:26:24Although DOJ staff and Trump's head of the antitrust division, Assistant Attorney General Gail Slater, strongly opposed the merger of these two large companies, the lobbyists got Meiselle to ignore not just the facts in the law, but also the recommendations of Donald Trump's own antitrust team in order to bless the deal.
▶ 0:26:43We don't know what these lobbyists told Meiselle over cocktails in a private club in DC, but we do know that he shortcircuited DOJ's legal review process and gave the green light to a merger that according to the Department of Justice's own press release will quote significantly reduce competition, resulting in large segments of the American economy paying more for less.
▶ 0:27:06That was a backroom deal that centralizes power and sends more wealth to the wealthy, making life a lot more expensive for the vast majority of Americans already struggling to stay afloat in this economy. Or take Sky Dance's acquisition of Paramount, which is owned by the Ellison's, close friends and big donors to President Trump, who applied him with financial and political favors to ensure Paramount's purchase of Sky Dance would go through.
▶ 0:27:31The company not only gave tickets worth about $12,000 to the soontobe chair of the FCC, Commissioner Brendan Carr, but also collected Carr's candid advice on how to effectively lobby his agency for approval.
▶ 0:27:45While Chair Carr sat on the proposed deal, the White House squeezed Paramount to pay President Trump $16 million to settle an utterly frivolous personal lawsuit that he had filed about the way 60 Minutes edited an interview with Kla Harris. And he pressured Paramount to give him an additional $20 million in free ads. Well, just for the hell of it.
▶ 0:28:09Even after this corrupt tribute was paid, the administration extracted more, installing an informant or minder directly in the newsroom at CBS to make sure its news coverage would always be suitably proTrump, adding naked violation of the First Amendment to this bonfire of corruption.
▶ 0:28:28Even now, the president saying he personally will be involved in the process of Warner Brothers's sale, emphasizing that CNN must quote be sold because of the news outlets discourteous coverage of his presidency. And Netflix and Paramount both know that the person they really need to lobby on the proposed acquisition of Warner Brothers uh by either company is the president himself. And so, they've already gone to the White House to make their case.
▶ 0:28:54This is how a gangster state runs, not how antirust enforcement is supposed to work in the United States of America. Every time corporations and lobbyists use political influence and money to thwart the actual merger review process, the American people lose. We get a marketplace with more corporate concentration and consolidation, reduce competition, less innovation, and mired in political influence pedaling.
▶ 0:29:19Prices go up, wages go down, the economic elite profits, and economic inequality intensifies. As our witness, Professor Alfred, said of these lobbyists and their White House ties in August, quote, "Regardless of the outcome, their commitment is to exert and expand their influence and enrich themselves as their friends and supplicants are in power. And these cash for merger backroom deals reflect the broader patterns of money corruption that define this administration.
▶ 0:29:49So today we will hear from Roger Alfred about the difference between fair enforcement of antitrust laws and backroom dealmaking. I hope my colleagues will listen to him and take to heart the warning that he shares about the economic costs of political corruption. Thank you, Mr. Chairman. I yield back to you,
▶ 0:30:06Mr. Chairman. uh point of uh point of privilege and personal question. Isn't it true that we still have a prohibition on pjorative remarks about the office of the president or the president as the ranking member just did? Is it not still a parliamentary objection to that language personally attacking the president and accusing him of crimes?
▶ 0:30:32It is and I would ask the members to refrain from that and uh if they could direct any of their questions or comments uh to the chair or in response to the witnesses uh that that would be certainly uh more appropriate. Uh Mr. Chairman, I'd further ask that that objection be placed after the ranking members uh uh opening statement.
▶ 0:30:56And I realize that he can say anything he wants on an opening statement, including a statement that is intended to be prohibited by House rules, but I would like my objection noted for the
▶ 0:31:08Mr. Chairman, I'll just state nothing I stated is prohibited by any House rule, and we are perfectly within our both First Amendment rights and our speech and debate clause rights to characterize both public policies that are taking place and actions that are taking place. And I'm certain that uh the distinguished gentleman from California has engaged in equally vigorous criticism of democratic presidents and administrations. And that's part of living the land with freedom of speech.
▶ 0:31:34Mr. Chairman, I will not ask that his words be I will not ask that his words be taken down because I want to go forward with this hearing. But I do again insist that my uh not my objection be noted for the record.
▶ 0:31:48Very good. We will now move on to uh opening statements. Beyond opening statements, we'll come back to Chairman Jordan. And uh at this point, we will now introduce today's witnesses.
▶ 0:32:00No, I give him
▶ 0:32:09Well, then we can take Mr. Jordan next.
▶ 0:32:12Unless Chairman Jordan would like
▶ 0:32:14No, I I just want to thank the chairman for this hearing. Look forward to hearing from our witnesses. Um and we'll yield back to the chair. [clears throat]
▶ 0:32:20Okay. Okay. Then we will recognize the ranking member for
▶ 0:32:22Thank you, Mr. Chair.
▶ 0:32:24This hearing is nothing, from where I sit, is nothing but a handout to big tech. These companies will oppose any rules to reform their anti-competitive conduct, no matter what nation or state tries to hold them accountable. Republicans are concerned about other countries beating up on big tech. I'm concerned about big tech beating up on Americans. Most Americans are struggling.
▶ 0:32:51Huge dominant companies that don't have real competitors are being pushed pushed to have more and more power, but they're not being pushed to lower their prices or to make products better. We won't make life in this country more affordable if we don't commit to strong antitrust enforcement. Corporate greed is at the heart of rising prices.
▶ 0:33:14The fact is that both parties have failed to check the of economic power and the abuses of that power. Dominant companies have grown larger under both Democratic and Republican administrations. But here in the House Judiciary Committee, support for rigorous antitrust enforcement and version review has been bipartisan. It was this very subcommittee that studied the digital market, released a report, and crafted antitrust rules to reign in big tech.
▶ 0:33:45Those bills were supported and voted out of this committee by both parties. That was just a few years ago, but boy, have have times changed. Our bipartisan antitrust legislation failed to become law because of opposition from factions in both of our parties. But work still continued at the agencies. The FDC and DOJ sued big tech for breaking the antitrust laws.
▶ 0:34:11Many of these suits began under Trump were continued under Biden and now are again in the hands of the Trump administration. In the Senate, Republicans like Senators Lee, Grassly, and Blackburn, and Democrats like Booker, Clolobashar, and Blumenthal are still working to pass the same antitrust rules that started in this committee. Those bills are rightly targeted at big tech. For example, Senator Lee's America Act would reform or break up dominant tech firms.
▶ 0:34:41So why is it that today here in this House committee, my colleagues across the aisle are characterizing those bipartisan bills as anti- American? Why is that? Because they target multinational big tech companies that Chairman Jordan seems to like. Today, Republicans in this committee are showing the wide gap between men, them and other members of their own parties and more importantly the gap between what they are pursuing today and what Americans want us to be doing.
▶ 0:35:11Their Senate colleagues, the vice president and Trump appointees at the Justice Department and the FTC all support strong antitrust legislation and enforcement. While our own government prosecutes American big tech companies for breaking the law and our Senate colleagues advance measures to hold big tech accountable, we are apparently supposed to criticize other countries for doing the exact thing that our own voters want us to be doing that Americans are actually clamoring for.
▶ 0:35:41Countries around the world including Australia, Brazil, Japan, South Korea, the UK and the EU did what we did. They studied the digital market, found dominant tech companies, found that they were abusing their power and stifling competition, and then crafted rules and brought lawsuits. The majority witnesses will claim that these rules and suits are unfairly targeting American companies. But that premise ignores reality.
▶ 0:36:09Other countries are actually trying to address the monopolistic power of big tech. Power that poses danger to markets, democracies, and frankly to public health. Power that can and must be checked through the enforcement of antitrust laws. We should be world leaders on this. We're Americans. Do we still believe in healthy competition? Why would we use time in this committee to blast others who are taking on the power of monopolies?
▶ 0:36:38Monopolies that are increasingly controlling our lives. Republicans will argue today that actions by other nations to address monopolistic power are discriminatory and unfairly target US tech companies. But the only true examples of discriminatory and unfair law enforcement are right here at home. I have an idea. Why don't we clean up our own house first?
▶ 0:37:02The true threat to enforcement of antitrust law into American companies is the perversion of antitrust undertaken by the Trump administration. Under this president, principled and fact-based review of one company buying another is overruled in favor of deals struck by Hulet Packard's well-paid lobbyists with government officials over cocktails at private clubs.
▶ 0:37:26Under Trump, Parammont's acquisition of Sky Dance was only approved after the president was paid tens of millions of dollars and a government spy was installed in the NBC, excuse me, in a CBS newsroom. Under this administration, the president pardoned an indicted bid rigger. This is one of the few antitrust violations that are criminally prosecuted. The pardon came after the president played a round of golf with the alleged criminals lobbyist.
▶ 0:37:54One round at Mara Lago wipes away a possible 10year prison sentences sentence for a crime that Trump's own Department of Justice and FBI worked to prosecute. Keep in mind that the individual pardon was set to be deposed the very next day in a separate civil lawsuit, the government's Live Nation Ticket Master case.
▶ 0:38:16So, in one fell swoop, the Trump administration managed to undermine two cases important to protect Americans from being fleeced by corporate misconduct and greed. The United States has long stood for something better. Predictable enforcement, independent institutions, and decisions grounded in law and evidence.
▶ 0:38:38When the administration treats antitrust as just another way to corrupt to make a corrupt deal, when it weaponizes antitrust to achieve political goals and to reward its allies, it undermines the foundations of our market economy. Competitive merit, not political influence to determine who succeeds in this country. Competition creates the pipeline of American innovation and prosperity. Isn't that what we want? Isn't that what we say what we want?
▶ 0:39:07what's better for all of Again and again, we have seen this administration do favors for their rich friends and allies while the rest of us suffer. Big tech and big meteor are allowed to get bigger, raise prices, and squash competitors. All they need is a sevenf figureure payment to lobbyists and secret deposits into the president's ballroom fund. And companies are taking notice. They see that the fate of any multi-billion dollar deal is going to run right through the Oval Office.
▶ 0:39:36Right now, Warner Brothers is up for sale, and the two biggest bidders, Netflix and Larry Ellison's Paramount, are doing all they can to get the White House to favor their buy buyout over another. Paramount is going to the White House and hanging out in the presidential box at the Kennedy Center. President Trump promised sweeping changes to CNN after he renewed his long-standing criticism of the news channel. Not to be outdone, Netflix executives also paid homage to the president and visited the White House in recent days.
▶ 0:40:07Americans of both parties see this and they don't like it and they want us to do something about it. They want us to fight back. We should be doing all we can to address the real and present dangers that monopolies, especially media and tech monopolies, pose to our markets, our wallets, to consumers, to competitors, and yes, frankly, to the democracy itself.
▶ 0:40:30Big tech and big media are more than happy to pay to get their mega mergers approved or evidence against them thrown out. They close deals that lead to even more private economic power and control over what we watch, what we buy, what we see, and what we hear. Our chair, Jim Jordan, has long opposed bipartisan antitrust bills aimed at reigning in giant tech companies and cracking down on their abusive business practices.
▶ 0:41:00In 2021, when we advanced bipartisan tech antitrust bills, he called them quote Democrat bills. despite the support the bills continue to have from Republicans like Senators Grassly, Lee, and Blackburn. And now we're supposed to beat up on other countries for doing the thing that we attempted to do. Give me a break.
▶ 0:41:24Big tech and their secret million-dollar donations and backroom deals cannot be how this country enforces the law. We have to fight against monopolies wherever we find them. And we cannot and should not criticize other nations for addressing the big tech global harms.
▶ 0:41:45I call on my colleagues to join me in standing up for the rule of law, for antitrust and competition laws to be enforced on the merits and the facts, not handshakes and favors and pay-to-play schemes. I look forward to hearing from our witness, Professor Roger Alfred, about how far we have perverted the rule of law and what we must do to ensure that transparency, accountability, and justice rule the day. I yield back.
▶ 0:42:13Gentlewoman yields back. Without objection, all other opening statements will be included in the record. We'll now introduce today's witnesses. Mr. Shanker Singum is the chief executive officer of Compantair, trade law and economic policy consulting firm based in the UK. He is also the chairman and president of the Competer Foundation for Trade and Competition Policy, a nonprofit organization that promotes trade, competitive markets, and property rights.
▶ 0:42:43Professor Alre Leon Portuise. Mr. Portuguese is a research professor and the founding director of the GW competition and innovation lab at the GW Institute of Public Policy at George Washington University.
▶ 0:42:58He previously was an professor at George Mason University, the founding director of the Shumpeteer Project on Competition Policy at the Information Technology Innovation Foundation and a professor at various universities in both the UK and France. Mr. Dirk, Mr.
▶ 0:43:17Brower is a director of competition policy at the international center for law and economics, a nonprofit organization that promotes the use of law and economics methodologies to inform public policy debates. Mr. research focuses on the competition and antitrust issues in the United States, the UK, and Europe. And uh Professor Roger Alford. Mr. Alford is professor of law at the University of Notre Dame Law School.
▶ 0:43:44His classes and work focus on international trade, international arbitration, global antitrust, and transnational civil litigation. Uh we welcome our witnesses and thank them for appearing today. We will begin by swearing you in. Would you please rise and raise your right hand?
▶ 0:44:05Do you swear or affirm under penalty of perjury that the testimony you are about to give is true and correct to the best of your knowledge, information, and belief, so help you God. Let the record reflect that the witnesses have answered in the affirmative. Thank you. Please be Please know that your written testimony will be entered into the record in its entirety. Accordingly, we ask that you summarize your testimony in five minutes. And Mr. Singham, uh, you may
▶ 0:44:37Thank you very much, chairman. Uh, ranking members, members of the committee, thank you for the opportunity to testify today. My name is Shanka Singh. I appear on behalf of the Comter Foundation. I'm also chairman of the growth commission, which is an independent network of economists focused on lack of economic growth in the in the G7. Uh I have actually testified to this committee before in 2010 on the Chinese competition law and um anti-competitive market distortions in China.
▶ 0:45:05Uh and the concerns that I noted then uh about the possibility of the use of competition policy in other countries against American companies um is still valid today. And what I'm about to say about uh a larger group of countries is even more troubling um because it concerns countries who should be allied to US uh economic interests. There is a battle which has been waging for some time for the world's operating system.
▶ 0:45:30Uh markets based on competition without with competition on the merits without distortions versus markets that are defined by government distortions, subsidies, privileges and other methods of deciding market outcomes. The US model versus the China model. if you will. The way foreign governments regulate large digital platforms has become a major macroeconomic and trade issue for the United States.
▶ 0:45:55DMA style digital regulations and interventionist antitrust enforcement abroad are operating as non-tariff barriers. They lower growth in the countries that do them and impose very large costs on the US economy and they make the China model more likely uh to become the global norm. Our work at competitere focuses on why some jurisdictions are are able to turn digital innovate in innovation into higher incomes and others do not.
▶ 0:46:23We use an econometric framework uh to link policy conditions to GDP per capita across countries focused on three pillars. The openness of the trade regime how competitive the market is in other words how much it delivers competition on the merits uh and how well it protects property rights.
▶ 0:46:41Digital regulation has now become one of the most biggest sources of these Many governments are moving away from traditional effectsbased antitrust towards exanticriptive regimes modeled on the European Union's digital markets act. These frameworks identify gatekeepers largely by size and then impose conduct rules on self-preferencing, data use, interoperability, ranking and product integration without requiring proof of consumer harm.
▶ 0:47:10In practice, they function as non-tariff barriers that fall overwhelmingly on US firms. We've shown in our written testimony that many of the assumptions on which digital regulation and antitrust enforcement are based are false and misunderstand the nature of technology markets. How they've developed and how their underpinning economics actually works.
▶ 0:47:30This leads to the use of flawed doctrines such as the essential facilities doctrine or uh duties to deal um that treats them as if they're government created utilities that have been around for a century. Our detailed case study of Korea illustrates the scale of the problem. Korea's proposed online platform markets act uh there are various iterations of online fairness act the Koreans are introducing even as we speak.
▶ 0:47:57Um, and these have imposed asymmetric burdens on large firms, particularly US firms, but they damage the Korean economy itself. And our data suggests that the damage to the Korean economy is extensive, $450 to$470 billion over a 10-year uh period. The damage that they do to the US economy is uh greater than 500 billion uh over a 10-year period on a long run basis. So, what should Congress do?
▶ 0:48:26First, treat digital regulation, foreign digital regulation as a core trade and economic security issue. US trade policy policy should explicitly recognize the practices I've described as non-tariff barriers and address them in bilateral and multilateral engagements. The national security strategy makes it clear that economic security, which includes anti-competitive regulation applied to US firms, is a national security issue.
▶ 0:48:54Second, Congress needs to row in behind all the weapons at our disposal uh to deal with this, including section 232 tariffs uh as well as section 301 and 338 investigations to send a strong signal to countries that this type of damage to the US economy will not be tolerated.
▶ 0:49:14Third, if despite agreements and in cases where Chinese firms are clearly benefiting from heavy-handed enforcement against US firms that they are not subject to and where countries persist in damaging the US economy through these measures, we think it appropriate for section 232 tariffs to be applied until the national security threat to the United States is removed.
▶ 0:49:38We've submitted detailed testimony um our previous work over the last 30 years, a couple of books uh on uh distortions, anti-competitive market distortions and trade issues and we look forward to your questions. Thank you very much.
▶ 0:49:53Thank you Mr. Singum. Uh we will now go to Professor Portuis. You may begin.
▶ 0:49:59Chairman Jordan, Chairman Fidel, Ranking Member Ruskin, and distinguished members of the subcommittee. Thank you for the opportunity to testify today. My work as professor and founding director of the GW Competition Innovation Lab focus on one thing, promoting innovation for the benefits of consumers.
▶ 0:50:20I'm here to deliver a message of Congress must act to curb DMA inspired regulations that are multiplying all around the world. These proposals are disproportionately targeting US tech companies and insulate local monopolies. But there are things that the administrations and Congress can do to stop their spread.
▶ 0:50:44Before I turn turn to what Congress can do, including chairman Fidel, your well-crafted proposals, let me first talk about why the DMA is a Despite the benefits of the DMA, such as enhanced interoperability and adjustments to the app store rules, which could be achieved through way less harmful means, these are the reasons why the DMA is a problem. First, the DMA wrongly targets US tech companies.
▶ 0:51:14Now, every single gatekeeper designated in the DMA is a US company. This is not an accident. It's by design. Two, the DMA is anti-inovation. The DMA forces and focuses on hypothetical risks rather than actual harm. And the effect is to deter firm from innovating. Three, the DMA harm consumers.
▶ 0:51:41For example, European consumers cannot access Google Maps in their search results and they don't have Apple intelligence in their as AI features in their iPhones. This is an effect of the DMA. So despite this these problems, the DMA is spreading globally. South Korea, Brazil, Australia, Japan and other jurisdictions are considering DMA inspired regulations. I regularly engage with those regulators in these countries.
▶ 0:52:11If they move forward, that will cement Europe's approach at the expense of US enterprises. So the US can avert this trend through what I call sharp power, a proactive strategy to advance pro- innovation regulations worldwide.
▶ 0:52:29This approach requires deliberate actions from Congress and the administrations to reassert tech leadership uh by reinvesting its thought leaderships on consumer welfare globally and as as well as integrating national security concerns in competition enforcement. So now I want to align outline four ways US can curb DMA inspired regulations.
▶ 0:52:55First provisions akin to uh chairman's federal to protect US companies from foreign regulatory taxation act will be a strong step forward. This bill will empower us to impose reciprocal tariffs or sanctions on jurisdictions that implement DMA like rules. This will help uh level the global level playing field and protect American innovations.
▶ 0:53:20Second, Congress should enact legislation that will allow the government to take retaliatory measures against discriminatory foreign regulations. This could be accomplished through amendments of the international trade act of 1974 which will strengthen the US trade representative authority to address unfair trade practices in digital uh markets. Third, Congress should initiate an investigations into the DMAS effect globally.
▶ 0:53:52investigations will help assess the complant cost which are assessed to be perhaps over $1 billion per year annually. They this investigation could help measure the impact of uh the DMA and DMA like regulations on consumer experiences and any benefit if any at all. So this information will bolster efforts to identify an alternative path for government considering competition legislation.
▶ 0:54:19And fourth and finally, Congress and the administration should prioritize digital diplomacy. Europeans have digital sovereignty. We should prioritize digital so uh diplomacy to influence comp foreign competition policies. This would entail establishing dedicated task force within the state uh department and the US trade representatives office to engage bilaterally and multilaterally with allied nations through technical assistance competition dialogues.
▶ 0:54:50The US can promote alternative to the DMA. For instance, diplomatic efforts could encourage the US style effectbased analysis which focuses on actual home and consumer benefits instead of hypothetical risks. So this can help counter the EU influence and promote global standouts that are truly pro competition and pro innovation.
▶ 0:55:17I encourage the US to take advantage of this window of opportunity to counter the spread of the GMA and champion a better approach. Thank you and I welcome your questions.
▶ 0:55:28Thank you, Professor Mr. Hour, you now may begin.
▶ 0:55:33Chairman Fitzgerald, ranking member career and members of the subcommittee, thank you for the opportunity to testify. My name is Dao. While I work for an American research institution, I live in Belgium. From that vantage point, I have watched a disturbing trend accelerate. Over the past years, the European Union has enacted various digital market regulations and imposed colossal fines on American companies.
▶ 0:56:02I wish I could sit here and tell you these policies will make it markets fairer and more contestable as European policy makers claim, but that is not the It is becoming increasingly clear Europe's regulations will harm its startups, its consumers, and most importantly for me, my children's In practice, these policies are naked attempts to penalize American success and subsidize European stagnation.
▶ 0:56:32And because Europe has let all of this unfold, sorry, because America has let all of this unfold with little to no response, other jurisdictions are rapidly following suit. To understand why this is happening, we must look at the brutal economic reality. We are witnessing a great divergence. Since the year 2000, the US economy has powered ahead while Europe's engine has stalled. Real disposable income has grown nearly twice as fast in the US as in the EU.
▶ 0:57:00Over the past 50 years, Europe built ASML, Spotify, and Nova Nordisk. Not terrible. But in that same time, [snorts] the US spawned Microsoft, Alphabet, Apple, Meta, Amazon, OpenAI, and many, many others. To put it bluntly, Europe has become an open air museum. It is rich in history and culture, but increasingly irrelevant in the global production of value.
▶ 0:57:29The lack of European tech giants encourages its politicians to regulate tech firms. That way they can act tough in corporate power without antagonizing any domestic voting block. The important numbers tell the story. Since 2019, the EU Commission has virtually stopped finding domestic firms for competition violations. American firms, on the other hand, were hit with almost $8 billion in fines. And Europe did not stop there.
▶ 0:57:57Its marquee tech regulation, the Digital Markets Act, was gerrymandered to almost exclusively target five American companies while conveniently excluding almost all large European firms. All of this has resulted in degraded online services and delayed product launches. Google was forced to remove the seamless maps integration from search. Likewise, Apple intelligence was delayed in Europe.
▶ 0:58:24Worse, Europe's overzealous regulation harms American consumers, too, because the world's brightest engineers must now comply with foreign regulations instead of designing groundbreaking new An even bigger danger for the United States is that this model is highly We are seeing DMA inspired regulations crop up in the UK, Japan, Brazil, and South Korea.
▶ 0:58:50This is arguably happening because the United States aided and abetted the EU when it passed the DMA. The US administration silence was interpreted as permission and other jurisdictions are now emboldened to follow suit. Historically, defending US commerce was a bipartisan duty. When the EU targeted the Boeing McDonald Douglas merger, the Clinton administration threatened a trade war.
▶ 0:59:15When the EU went after Apple for back taxes, President Obama called it unfair and commercially driven. Unfortunately, in recent years, US antitrust agencies have broken with this tradition, effectively outsourcing their enforcement wish lists to foreign capitals. When the EU blocked the Amazon iroot deal, Washington's silence was This leads to my most critical point for this body.
▶ 0:59:42This administration must take foreign regula must make foreign regulators understand that discriminatory targeting of US tech carries consequences. Doing so would deter protectionist regulations thereby protecting US companies, their workers and ultimately American consumers. It is also crucial for the US to remain a shining beacon of consumer focused antitrust enforcement.
▶ 1:00:06The US cannot credibly combat discriminatory regulations abroad if it adopts similar ones at home. In short, the transatlantic alliance is strongest when it is based on mutual growth and innovation, not on the managed decline of one partner at the expense of the The time has come to reassert the principles of market competition and innovation that made the western economy the envy of the world. Thank you very
▶ 1:00:34Thank you, Mr. power. Professor Alford, you may begin.
▶ 1:00:39Uh, Chairman Fitzgerald, ranking member Rascin, thank you for the opportunity to testify here today. Uh, I've testified at the Senate Judiciary Committee on several occasions, but this is my first opportunity to testify here in the House and so I welcome the opportunity to discuss uh the politicalization of European antitrust enforcement. Uh but also I want to address my remarks first to the more pressing concern of the politicalization of United States antirust enforcement.
▶ 1:01:07The DOJ justice manual is unequivocal. The rule of law depends upon the even-handed administration of justice. The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the department's investigatory and prosecutorial powers be exercised free from partisan On June 16th, 2024, former prosecutor and current lawyer and lobbyist Trey Gaudy stated the following.
▶ 1:01:37Our justice system is the last thing that is holding us together. No one is above the law, but no one is beneath the law either. You should not be targeted because of your status and you should not be rewarded because of your status. Today, Trey Gaudy is playing a leading role in promoting a politicized justice system.
▶ 1:01:58After the Department of Justice indicted Tim Lewiki with bidwigging in July 2025, Gaudy lobbied senior leadership within the Department of Justice to get the case dropped, but to no avail. So Gaudi went above the heads of every senior official within the Department of Justice and appealed directly to President Trump. The Tim Luriki pardon is not the first or the last example of politicized antitrust enforcement in the past year.
▶ 1:02:24In Aspen this past August, I spoke about the HPE Juniper merger scandal. I am heartened that over a dozen state attorneys general have successfully intervened in that case and that the court is holding hearings including a hearing today on that case. Of course the concerns go far beyond Trey Gaudy. The MAGA lobbyists are shameless in their self-promotion aware that their window of opportunity is short and closing fast.
▶ 1:02:52Press reports reveal a pervasive practice of lobbyists attempting to corruptly influence antitrust law enforcement. The populist Steve Bannon said that we're in a fight right now. The concentration of power comes from the lobbyists and the top law firms and they're all over the White House, this administration, and the president.
▶ 1:03:11MAGA [snorts] lobbyists reportedly are liberally pitching their services to clients, stating that for a mere $225,000 a month per client, these lobbyists will go above and around the antitrust division to lobby their cases and even seek to have a a Gail Slater removed from her Senate confirmed position. The future of the Republican party is at stake in this battle. MAGA lobbyists are betraying President Trump's populist antirust agenda.
▶ 1:03:39If the NFS division does not have a free hand to address the affordability crisis that is plaguing the American people, what hope does it have for the Republican party to be the party of the working class and the rural poor? It is also disheartening given the hopes and dreams that so many of us had just one year ago. So what is to be done about the politicalization of antitrust enforcement? Among the best responses is greater involvement by state attorneys general.
▶ 1:04:08Uh when federal enforcers and stand alone, there is a risk of a single point of political failure. Another response is reform from within the antitrust bar. More transparency is critical. The lobbying disclosure requirements should be enforced and foyer requests should be redoubled. Of course, as I mentioned, greater judicial oversight is also critical both with respect to merger review and conduct cases.
▶ 1:04:32Congressional oversight is welcome and I welcome hearings such as this to address the matter and then ultimately though reform must occur from within the department of justice. Uh the government enjoys the presumption of regularity but that presumption can be In my view we should consider the current hearing as another manifestation of efforts to politicize antitrust enforcement.
▶ 1:04:55Much of the antitrust enforcement in Europe parallels antitrust enforcement in the United States, including prosecutions brought by the Trump administration and Republican state attorneys general. I am not suggesting that there are not real risks of discrimination against American companies with respect to antitrust enforcement abroad. My written testimony provides details in that regard and I have said as much on previous occasions. So yes, the risk of discrimination is real abroad and I witnessed it firsthand when I was at the Department of Justice.
▶ 1:05:24But the risk that big tech companies have achieved gatekeeper status are also and abusing their monopoly power are also real. Uh I look forward to your questions. Thank you very much.
▶ 1:05:37Uh thank you professor. We'll now proceed under the fiveminute rule with questions. Uh I want to recognize gentleman from California Mr.
▶ 1:05:44Thank you Mr. Chairman and thank you for holding this important hearing. uh notwithstanding the professor's uh claim that this is somehow politicizing, nothing could be further from the truth. The fact is this subcommittee and the entire committee has clearly been on this subject for a long time, but it vacasillates as the ranking member would uh often state, forget about uh competition uh abroad. Uh I'm talking about the subcommittee ranking member in this case.
▶ 1:06:13Let's just go ahead and focus on American companies. Nothing could be man more inappropriate. President Trump is the first president in a very long time to ask what is the relevant market. Three out of our four witnesses understand the relevant market in antitrust is now the world and in tech it is the world.
▶ 1:06:34And when countries like Australia, most of Europe, countries that we have and Brazil for that matter, we considered allies in fact use their vast market power, not always in that product, but their vast market power as sovereign nations to in fact adversely affect our competitiveness.
▶ 1:06:56It doesn't matter, and I'll go on the record, it doesn't matter if you have a 100% market share in the United States and a 100% global market share as an original innovator. If in fact, foreign nations, in jealousy or simply not wanting to in fact allow these unicorns to exist, in fact, use their market power to stop you. That is what's going on often with our closest allies.
▶ 1:07:26Notwithstanding, I'll just quote one and I'd like it put up behind me. Chairman Joe of the Korea Free Trade Commission, that's a wonderful title. In his own words, disparages America, takes us down.
▶ 1:07:42And in fact, his commission, as this board says, and I'd ask unanimous consent that the entire article be placed in the record, says, "So why are many Americans, especially white workers in the rust belt in the Midwest, so angry?" I'll tell you why they're so angry.
▶ 1:07:58to somebody born and raised in Cleveland, Ohio, in somebody who happily went to work for the Trump administration because in fact they believed in free and fair trade, something that we had talked about but always left the second half off. The fact is we now have to take on the status quo of global competitiveness, China, but also our allies.
▶ 1:08:24Europe, one of our closest partners, including Australia, in fact, are operating in unfair trade uh practices. The Digital Markets Act is just one in which every unicorn in that field is American and as innovators and they as regulators, they intend on using regulation to take us out of our competitive lead. Let there be no doubt there are additional barriers and they are not new.
▶ 1:08:54I know that the testimony we are receiving today is important, but I'm just going to give you one piece of More than 40 years ago, I began traveling the world and doing international business. More than 30 years ago, I was in South Korea for a trade conference.
▶ 1:09:13the highest level of management at that time, both government and at the Samsung and the other majors proudly said to the delegation that had gone there, "We're so delighted to have you here. We want you to in fact come here and invest, transfer your technologies, and enjoy the benefits of our ability to make your products." He didn't even listen to himself. They were not interested in buying our products.
▶ 1:09:42They were not interested in joint ventures. They were interested in technology transfers. Even when they manufacture in the United States, Hyundai and Kia, they won't even obey our ex our rules and in fact will illegally bring in their own workers, which has recently been found by this So, I normally ask a lot of questions. I'm not going to ask a lot of questions this time. I'm going to thank our witnesses.
▶ 1:10:10I'm going to uh because you raised your hand go to uh professor Portuguese because you do want to say something and I'd like to hear it e
▶ 1:10:19Thank you very much. I want to revert back to uh the point that you made about relevant markets because that's at the basis of antitrust principles in order to look at if companies abuse their positions. We look at first you have to define the relevant market. We cannot call companies monopolist if we haven't defined relevant market. And you say that the relevant market today is the world. That is true. I just want to add also the relevant market is not online or offline.
▶ 1:10:48These companies compete both with other online platforms but they compete with also offline groceries and other things. So the idea of first insulating what we call digital market is wrongheaded. There's no such a thing as digital market. There are markets and digital is just a means of distribution to the consumers. So when digital platforms compete, digital advertising competes with print advertising.
▶ 1:11:17Digital supermarkets compete with groceries offline. And so the competition is much larger than what we can think.
▶ 1:11:25Gentleman's time is expired.
▶ 1:11:26Mr. Chairman, I'd ask unanimous consent to enter into the record an article entitled the Chinese fan who made it into the Trump administration. And this article discusses the professor who is with us here today, Mr. Alfred. And
▶ 1:11:39Without objection,
▶ 1:11:40Mr. Recognized,
▶ 1:11:41I ask unanimous consent.
▶ 1:11:43Asking consent to submit Trump Warner Brothers meddling pushes the limits of executive power from Bloomberg, which quotes Professor Herbert Hovamp stating that Trump's involvement in this merger, quote, illustrates that not only is this president interfering with enforcement policy, but is doing so for reasons that have nothing to do with antitrust. Now recognize the ranking member of the full committee, Mr. Raskin again for
▶ 1:12:08Mr. Chairman. Thank you very much. Uh Mr. Alfred, you served in the first Trump administration and the second Trump administration. Is that right?
▶ 1:12:15Yes, correct.
▶ 1:12:16Am I correct in deducing you are a
▶ 1:12:19Yes, correct. thank you for your testimony. Uh I'm wondering about this. But what's the greater threat today to a healthy and competitive US economy? Corruption in our own antitrust agencies or foreign countries enforcement of their antitrust laws? I would say the former.
▶ 1:12:42The concern for protecting the US market is absolutely critical to the American people and uh what we want in the United States is vigorous antitrust enforcement that will protect the average American and that is being undermined now in light of the undue influence of lobbyists. The uh DOJ manual begins by stating the legal judgments of the Department of Justice must be impartial and insulated from political influence.
▶ 1:13:10Can you share with the judiciary committee what you saw as the second most senior political appointee at the antitrust division of DOJ relevant to that principle? Yes, obviously I have to be careful with respect to government deliberative privilege, but as has been publicly reported, uh lobbyists are pervasively involved in uh the every level of the Department of Justice trying to influence the outcomes, not based on the merits, but based on
▶ 1:13:41relationships that these lobbyists have with particular individuals in power. My written testimony actually goes into detail of numerous different articles that sort of outline that kind of So in that context, if our antirust system is failing because it's being overrun by insider influence, political lobbying, money contributions, and so on.
▶ 1:14:04What do you think the role of this deflection is towards international antitrust in the conversation about what needs to be happening in America? Well, obviously if you really want to focus on the politicalization of antitrust enforcement, we should focus about fixing our problems at home first and foremost.
▶ 1:14:21um with respect to concerns about what is happening abroad and the extent to which there's discrimination um most of the cases that are being addressed with respect to European antitrust enforcement have very close parallels to exactly the same kinds of cases that are being brought in the United States by Republican uh administrations as well as Republican state attorneys general uh as well as private parties. You can go down the list and look at what the European cases are and then find parallels in the United States.
▶ 1:14:47So that you've taught uh both international antitrust and domestic antitrust for for decades uh at Notre Dame Law School and other places. Um can you explain can you put in just a common parliament what it means to American citizens, American consumers, small businesses if we depart from strong antirust enforcement and instead let the whole system be overrun by insider influence and big money?
▶ 1:15:16Well, uh, just last month, the Rasmusen poll had a survey of whether or not American people support antit vigorous antitrust perfor enforcement. And the results were overwhelming overwhelming American support for vigorous antitrust enforcement. And so what we what we fear and what we think is happening is that rather than having cases decided on the merits, there are cases that are being resolved based on political relationships.
▶ 1:15:41And when that happens uh there is a corrupting influence that happens throughout the government. Um and the the risk is real that without the contributions of state attorneys general or private litigation uh or careful judicial oversight that the good work that uh the antitrust division is trying to accomplish that Gail Slater is trying to accomplish will not be possible.
▶ 1:16:05No, but again, if you would break it down for us, and I'm talking about like the original principles of antitrust, if we allow for greater and greater concentration, consolidation of corporate power uh and control over markets, what does that mean to consumers in terms of prices? What does it mean to workers in terms of wages? And what does it mean uh for the possibility of other businesses to enter into the competitive sphere?
▶ 1:16:33Sure. So obviously if there's not vigorous antitrust enforcement then the pocketbook issues that are central to the American people with respect to housing, healthcare, agriculture, um entertainment, the whole variety of different industries that are critical to the American people. All of those prices will go up. There will be lower quality and less innovation and fewer
▶ 1:16:55Very good. I yield back to you, Mr.
▶ 1:16:58Gentleman yields back. Now recognize the gentleman from Texas for five minutes.
▶ 1:17:02Thank you. Uh Mr. report to say the um based on your work on digital competition policy, what have we learned about how broad Xanti platform regulations such as the DMA affect the speed at which new technologies reach the market particularly for small and medium-siz tech firms.
▶ 1:17:19Thank you very much. These exonte type of regulations are what I call fundamentally precautionary. In Europe, we have this principle of precautionary principle which stop acting developing product and services even if there's no actual harm just a very remote what we call hypothetical risks of something happening leads to prohibition.
▶ 1:17:42So what we've learned from this exante type of regulations is that blanket regulation doesn't work in a sense that it's just overdetering on innovations and leads to underinvestments because companies spend more time on compliance and councils and fees and trying to understand the regulations that is always vague rather than focusing on innovation deploying product and I just want to agree with uh representative uh Ruskin when I say we need stronger enforcement Yes,
▶ 1:18:13but that's why we don't need regulations. Regulation is the opposite of enforcement. And the greater risks for potentially corruptions or risks for consolidation is regulatory capture is the risk of chronic capitalism. And what we have is the greater we amount of the number of regulations, the more we have these kind of regulator dialogues between these large companies and the regulator behind closed door.
▶ 1:18:41And I prefer a system based on US antitrust where there's enforcement in court that is public and it's based on evidence and effects based analysis rather than regulatory potential capture between closed doors between a regulator and a company where each company is treated differently according to their political failures favors or others.
▶ 1:19:05So we need to reinforce the role of the courts and the judicial principles that are underlying the antitrust history.
▶ 1:19:14And so I guess I've also heard that these laws are designed by foreign governments to kneecap American companies so that the local companies who are effectively exempted um can get ahead. My question uh to you finally then is how many of these domestic companies are subject to these new rules and can you explain how these foreign legislators have carefully or not carefully designed their regulations to target American companies?
▶ 1:19:39It's it's very interesting because the DMA uh was capturing most of the US tech companies. Now it's all US tech Booking.com was the only Dutch European companies that could have been included into the DMA. Now booking.com as a holding in Connecticut can be considered as a American company and Tik Tok was regulated now with the sale of Tik Tok we can consider Tik Tok as a US company when it comes to US. So all companies under GDMA are somehow American companies.
▶ 1:20:10Some sometimes those regulations in other parts of the world they try to include a local company to avoid uh discrimin overt discriminatory intent of those regulations because otherwise they're going to be sued in before the world trade organizations. So but that doesn't mean that in effect they are disproportionately targeting US tech companies to include one company out of seven or eight and the rest are all Americans. The point is digital sovereignty and to target US tech
▶ 1:20:39Thank [snorts] you.
▶ 1:20:40Wait, Mr. Single.
▶ 1:20:42Oh, I'm sorry, Mr. Single. Go ahead.
▶ 1:20:44Just wanted to come back very quickly on that question with regard to Korea specifically and it relates to something that um Congressman Raskin also said, which is this issue of cronyism that my colleague mentioned. uh what you see in Korea is that the US companies and the US platforms are targeted through the regulation and through the uh operation of the KFTC and and some of the things that it does uh which violate the principles that were talked about here in terms of predictable enforcement, due process and competition on the merits that Congresswoman Balant mentioned.
▶ 1:21:15Um what's happening is that the Chinese firms are linked to the Korean chai bowl. they escape virtually all uh enforcement activities and it's the US companies that are in the target uh crosshairs. Uh and that is why I made the comments I made about delivering by this kind of approach, you're delivering the markets in these sort of battleground countries to the China model and to Chinese companies.
▶ 1:21:41Thank you. I appreciate that. I yield
▶ 1:21:43Gentleman yields back. I'm going to recognize the gentleoman from Wyoming for a unanimous consent request. Thank you. I would like unanimous consent to enter into the record an article by Axios titled US intelligence intervened with DOJ to push HPE Juniper merger. This article explains that it was not corruption but US national security interests against communist Chinaowned Huawei that led to the HPE Juniper settlement.
▶ 1:22:10Without objection, now recognize the uh ranking member of the committee today.
▶ 1:22:16That's right.
▶ 1:22:19Thank you so much to the witnesses for being here. I very much appreciate it. and Professor Alfred, um you've been such an important voice on antitrust and I'm so grateful that you're here because the work that we have to do going forward has to be bipartisan and um the majority argues that antitrust rules for dominant big tech um in other countries are discriminatory and you know they they claim it's anti-American and we don't have any jurisdiction
▶ 1:22:49over foreign countries. what this hearing is really about and as um my ranking member has said is about trying to stop longstanding bipartisan efforts to to hold big tech accountable. Professor Alfred, does the EU's digital markets act resemble bills that this subcommittee advanced in the 117th
▶ 1:23:11Yes, it does. Uh there were a whole spate of bills particularly in 2022 that addressed concerns uh about these different monopoly abuses in a whole variety of different sectors. Those bills were bipartisan in nature. They were voted out of committees but with supermajority numbers.
▶ 1:23:30Um and Senators Grassly, uh Blumenthal, uh Senators Grassley and um uh Lee and others like that were very very prominent proponents of those of those bills.
▶ 1:23:44I think they and I actually think they would have had a very good chance of passing, but for the fact that Chuck Sum Chuck Schumer did not present them to the floor.
▶ 1:23:51And this is this is what we um have talked about on this side. is what I talked about in my opening statement that it is both parties, members of both parties that are holding up progress on this. Um, does antitrust enforcement help smaller tech companies?
▶ 1:24:09Antitrust enforcement is critical to the success of small and medium-sized companies. uh if we do not have a way to reg to bring enforcement actions against monopoly abuse then the companies that are trying to compete with those uh big tech companies are going to have an incredibly difficult time to survive. So the central focus of antitrust is not protecting other competitors. It's protecting the American consumers.
▶ 1:24:34But obviously the American consu consumers want vigorous opportunities to choose between different products from different companies and therefore to nourish to the benefit of the consumers when uh little little and medium tech companies are thriving.
▶ 1:24:46And as you said, you referenced the Rasmmanson poll which um is is fascinating. It happened the was conducted back in November. You had 69% of those pled saying they want the government to do more antitrust enforcement. Only 13% of those pled disagree. This is what I'm hearing from my uh constituents regardless of party. They feel like they're getting screwed over by big companies that do not have their best interest in mind.
▶ 1:25:12And you know, given the framing of this hearing this morning, it it seems like the majority would like foreign governments to stand down and not act even when American tech companies break their rules. So, let's think about the inverse of that. Should we only enforce our laws against US companies or should we also address bad conduct in the US by foreign companies? Mr. Alfred.
▶ 1:25:39Well, I mean, as I said in my written testimony, um, federal enforcers are acting appropriately when they investigate foreign companies that are abusing monopoly power, engaging in price fixing, or seeking to merge in a manner that is anti-competitive. And if foreign competitors are harming United States markets with anti-competitive conduct, I assume I hope that foreign federal enforcers will not hesitate to act.
▶ 1:26:02When I was at the Department of Justice in the first Trump administration and in the second Trump administration, we saw numerous examples of foreign companies that were engaging in anti-competitive conduct. And we did not hesitate to go after those companies if we thought that there was a serious
▶ 1:26:16So you go where the evidence is. And as you said, and and this is one of the things that I really appreciate about you and your integrity is it's evenhanded justice. You go where the facts take you. Um I wanted to give you time uh to respond to to my colleague um from Wyoming um about the national security concerns in the HPE Juniper merger. Do you have do you have something that you'd like to say on
▶ 1:26:40Yeah. So it's interesting uh the suggestion that this was really about national security is belied by the fact that it was never presented to the antitrust division as a serious argument. Obviously it would have been the kind of thing that we would have considered had it been uh uh considered relevant. The department of justice right now in the hearings at the Tony Act in California before the federal court have not mentioned not one time the national security arguments. It's not even in any of the arguments.
▶ 1:27:10So, uh, they recognize that that that's not the kind of thing that should have been a factor in the determination of whether or not to steal that case.
▶ 1:27:18I really appreciate that and it's my understanding it only came in that argument only came in in a press conference when they knew that cameras would be there and it was was a hook for uh the press. I really thank you for your time and again this requires bipartisan efforts and I'm ready to do the work with anyone on the other side that is willing to work with me. I mean antitrust enforcement is a bipartisan
▶ 1:27:40Gentle woman back.
▶ 1:27:42Gentleoman [snorts] yields back. Now recognize the gentleoman from Wyoming for five minutes. [sighs and gasps]
▶ 1:27:47Professor Portoe, um you have said that the digital market act and similar legislation harms consumers and I am especially concerned about harms to children. For example, Apple has written that DMA compliance creates new exposure to harmful apps, citing that for the first time, pornography apps are available on iPhone from other marketplaces.
▶ 1:28:12Can you speak more to how these foreign laws are creating this issue and the implication for child Thank you very much for the questions. The the positive things with interoperability is that it can create more choices for consumers. But the negative things is when you have blanket regulations that force interoperability, force other operators to accept business users that are not uh the most legitimate one.
▶ 1:28:40And this is the type of regulations that makes interoperability and force to accept different apps, different app stores that can lead to really uh ch safety issues. The question is how can we uh have these tech platforms create in a way that promote choice but for quality you know bringing new actors, new business users in these digital systems that promote quality and we don't want to undermine children's safety.
▶ 1:29:10But these regulations are blanket regulations that force any actors who have any claim to enter into this digital ecosystem and that's why we end up with potentially those apps in our iPhones where we haven't asked for it. So I think it's it's a case for it's it's it demonstrates that we need a casebyase approach to every kind of complaints or every kind of competition concerns.
▶ 1:29:35But we cannot have blanket relations where we treat equally US firms and Chinese malware and spiderwear or Russian malware and power. And these regulation almost treat equally all these actors that is unacceptable because we don't have a way to correct or to bring efficiency defense or innovation defense. These defense these defense are pro explicitly prohibited in those types of
▶ 1:30:02Okay. And Mr. Mr. Singham, you seem to have something you'd like to offer with regard to this discussion.
▶ 1:30:06Yes, because Thank you, uh, Congressman. I think because your question, I think, goes to the the heart of the issue, which is, um, much of this regulation is based on the assumption that these uh, platforms are sort of like governmentowned utilities that have monopoly power or or total power. And you must therefore impose on them duties to deal. and you must impose on them through through the operation of things like the essential facilities doctrine.
▶ 1:30:36Now in the US we have learned that the essential facilities doctrine duties to deal should be sparingly used and only when the facility is truly essential. So leaving aside the issues of market power uh durable durability of market power and the size of the market that that Congressman uh uh Isa mentioned um the fact that these are not in fact governmentowned entities means that if you impose this kind of duty to deal
▶ 1:31:06on them, you are going to get all of these unintended consequences. And that's why the regulatory approach, the Xanti re-regulatory approach is not a very good approach. So what's the solution?
▶ 1:31:16Well, the solution is the proper and sound implementation of competition law. What I can I'm concerned about with the way that competition agencies in Europe and Korea particularly and other countries are approaching it is they are imposing those kinds of same duties on uh these companies through competition law.
▶ 1:31:36Uh I am also concerned about the way that competition law is being enforced in places like uh Korea in particular where we see um uh enforcement that is unpredictable harassment of witnesses. You see a whole range of procedural irregularities that are actually captured in our economic model which is why the amount the cost to the US uh economy is so great. Um when you talk about the affordability crisis it's around $2,000 per American.
▶ 1:32:06Um that is the cost of the bad regulation and the bad approach to competition policy coming from Europe in other countries and coming from these other countries
▶ 1:32:16that $2,000 is just Korea by itself
▶ 1:32:18just Korea.
▶ 1:32:18So the EU and all the other countries is going to be much greater. So that there is real damage to the US economy economy that is being done by the lack of proper enforcement of competition policy that flies in the face um in the case of from the US operate operation and implementation of antitrust law and even the European um operation of antitrust law.
▶ 1:32:42The complaints that people make about Korea are the same complaints people made about the EU's enforcement in the 1990s and 2000s.
▶ 1:32:50Well, I appreciate that and obviously we need to have a much more detailed discussion about these particular issues, but I am out of time. Before I yield back, I would like unanimous consent to enter into the record a speech by Professor Alfred that he delivered in Beijing in May 2016 in which Professor Alfred compared President Trump to Senator Bernie Sanders and complained that President Trump might use trade to stand up to
▶ 1:33:16Without objection,
▶ 1:33:16I yield back.
▶ 1:33:17Without objection. And gentleoman yields back. Gentleman from California is now recognized for five minutes.
▶ 1:33:23Thank you, Mr. Chairman. First of all, let me welcome and thank the witnesses for being here today. If I can, I'd like to each ask each and every one of you a yes or no question. Mr. Alfred, are you for corruption?
▶ 1:33:37No, I'm not.
▶ 1:33:38Mr. Hour, are you for corruption?
▶ 1:33:42Mr. Portuis?
▶ 1:33:44Mr. Zingham?
▶ 1:33:47And I want to also distinguish between and overregulation European style. I think European overregulation there's really only one winner. That's a Chinese economy. There are some in the US who have embraced the U European Union philosophy of big is bad irrespective of the consequences.
▶ 1:34:14I I want folks to remember two proposed mergers. Spirit Airlines and Iroot. Both of those mergers were opposed. They didn't happen. I consider them both self-inflicted wounds. Today, instead of Amazon, a Chinese rival robot company took over I'm from California, the fifth largest economy in the world today.
▶ 1:34:43These big firms we're talking about are mostly California firms. They're our biggest taxpayers in California that support our social programs, support create millions of jobs in California, and they're responsible for innovation, Silicon Valley, and any in most other places in the state of California.
▶ 1:35:09But I'm I believe the European approach puts a big target on the backs of these firms, American companies. problem today is not only are US firms being threatened by European regulation, other self-inflicted wounds is what we're doing to them here in the US, crushing tariffs, slashing research funding, zeroing out research funding at our universities, and of course, our new immigration policies
▶ 1:35:39that have essentially stopped the immigration of the world's best and brightest to America. Mr. Hour, I'm going to start out with you if I can with the little time I have. Explain to me the concept of US gatekeepers. What is that? So under the DMA um the European um
▶ 1:36:03European regulation
▶ 1:36:04yes the sorry the under the European digital markets act uh the European Commission has the power to designate as gatekeepers essentially companies that have very large revenue and uh a very
▶ 1:36:16and those are companies that have been designated from all over the world that are US are gatekeepers. It is essentially the US tech companies.
▶ 1:36:25US tech companies when they go after US firms that have when Europeans go after US firms those penalties are those based fines and revenues of the Europe or the whole company worldwide revenues
▶ 1:36:41for competition it's based on their European revenue with a cap being set based on their global revenue. Under the DDMA it's not yet clear. You talked about your children's future. What did what did you mean by that?
▶ 1:36:54Europe's overregulation. There is mounting evidence that Europe's overregulation is causing huge harm to its economy. For the GDPR, for instance, the evidence is clear. I am worried that Europe if no one pushes Europe in the right direction will continue down this path and it's the path to poverty.
▶ 1:37:14So saying goes that US innovates, Europe regulates and the Chinese Close your eyes and think about what the world is going to look like in 5 to 10 years. If we go down the European I think it's a very scary thought. If you're in Europe and you see on the one hand you're falling behind the technological frontier compared to US antagonist uh jurisdictions like China.
▶ 1:37:44You know my concern is that we're looking at antirust. We're looking at competition with a lens of maybe 10 to 15 years ago. Today the competition is not only American firms but it's international competition as well. AI and other areas of high-tech competition is fierce. Investment is tremendous. European have fallen behind. American firms are leading the way.
▶ 1:38:13The Chinese firms are right with us. What is the significance of winning these high-tech competitions to the American economy, to the American worker, to the American taxpayer? Mr. Mr. report to us.
▶ 1:38:28Just Mr. Hitzingham, you you had something to say
▶ 1:38:30in terms of the cost to uh the US person, the the average American family of the in the interpretation of antitrust policy in these countries and the regulations that come out of the competition world. They're they're competition derived regulation if you like. It's about and they're always classed as fair competition. Um, you know, our career study alone says 525 billion over 10 years to the US economy. These are very significant numbers.
▶ 1:38:59So, we're essentially losing it long-term economic
▶ 1:39:03loss, job loss,
▶ 1:39:05job loss, uh, loss of money in the affordability crisis. But as Mr. said, uh, the European economy and the countries that do this are the ones that lose, you know, arguably the most. uh all growth commission uh report.
▶ 1:39:18I'm really more focused on the California US jobs than I am on the Europeans, but thank you, Mr. Chair. I'm out of time. Appreciate your indulgence.
▶ 1:39:26Gentleman yields back. I'm not going to recognize myself for five minutes. Um and thank you, Mr. Korea. I think you got us kind of back on the on the right track here for what we were trying to accomplish today, which was just to have a discussion and expose what's going on and has started in Europe uh which uh some members of this committee were exposed to on a uh congressional trip that happened uh this past summer in uh
▶ 1:39:57Brussels and then in London and in Dublin where it was very clear to me uh after meeting with those that had created the DMA or similar types of bureaucratic structures that there's eight major platforms. seven of the eight are were created here in the states and many of them Mr. Korea's district.
▶ 1:40:24Um, and all I had to do was hear the first conversation with the council with the attorney for Apple who said the issue is and very frustrated by this is that these European commissions that are creating these DMAs, it's a uh it is a situation where it's a moving target always.
▶ 1:40:48Always a moving So once they think they're in uh they will get another letter saying you're in violation and oftentimes a violation that quite honestly they disagree with.
▶ 1:41:02And then beyond that, um what you would see is this level of frustration on something that we just spoke about, which was uh how they were going to levy fines on these American 2% of global revenue. It's ridiculous what they're actually doing.
▶ 1:41:26And the 27 countries of the EU who are now floundering on many different fronts and you know there's always this affinity with with the EU but quite honestly they're not able to compete uh with with the states. So what they're doing is trying to carve out a space for some of these platforms that may have had a little bit of success or small successes uh so that they can try and flourish.
▶ 1:41:55Well, that's not the way it works and it's not going to work that way. So uh that's what I was hoping this discussion would be about today. We have a real problem with the EU on this front. Uh and it's up to us I think as members of Congress and you know I know the administration has taken a lot of bullets here today but you know it it also is a responsibility for the executive branch to do the same thing and that may have been missed here today.
▶ 1:42:25Uh Mr. Interesting. I I want to ask you specifically if I could to move on the Korea Fair Trade Commission, which we are now concerned is kind of doing the same thing that we're seeing in Europe.
▶ 1:42:39Uh can you give us because because you've estimated that South Korea's targeting of American com companies it could cost us trillions in economic costs and then South Korea could potentially lose out on as much as 450 billion if it continues kind of down the same road. What's your overall perspective about what's going on in Korea when it comes to fair trade right now?
▶ 1:43:06So I I think uh sorry I I I think uh uh chairman the um what you're seeing in Korea is there's one element of this which is that the DMA the European digital markets act is the model that is sort of being spread around the world. Korea is a particular battleground. Japan, Brazil, Australia, the UK, others are following are following suit. Uh I think it's based on a fundamentally flawed model that we've described you know ear earlier here.
▶ 1:43:37Um but what the Korean case shows is it's not just the regulation uh approach to the uh digital platforms. It's also what the KFTC is doing and our economic model uh that we wrote about in this book um actually picks up these procedural So the the the uh lack of predictable environment that you referred to with the uh council I think from Apple you mentioned um that sort of thing is incredibly
▶ 1:44:07chilling because what what happens is companies don't don't know what they can do. Uh competition is not a tea party. It is a brutal exercise and actually the efficiency gains and the wealth creation that comes from competition comes because of that uh you know that you know really brutal competitive process. It isn't a tea party. And when these companies don't know what they're supposed to do, they pull their punches and they don't do anything. They don't innovate. They don't develop.
▶ 1:44:38And that's what you're seeing in Europe and that's what you're seeing in Korea. Uh, and that's why the cost is so high.
▶ 1:44:45Very good. Thank you. Thank you very much. I'm going to uh I'm going to now recognize gentleman from Illinois for five minutes.
▶ 1:44:52Uh, [clears throat] thank you, uh, Chairman Fitzgerald. Donald Trump campaigned on reigning in the power and influence of the tech industry. He said he would no longer allow the industry to quote run wild, stifling competition in our most innovative sector. end the quote. He appointed regulators who talked the big game about breaking up tech companies and smashing their cartel.
▶ 1:45:20It turns out that Trump was not running to be commanderin-chief. He was running to be lobbyist and chief for big tech. There was a reason why the tech CEOs were grinning in the front row at Trump's inauguration. They had him in his p in their pocket. They knew that he would sell out American workers and consumers. And they were right.
▶ 1:45:44As part of his betrayal, Trump has turned the State Department and USR into lobbying arms for big tech. His administration uses industry talking points and abuses trade authorities to bully countries over tech regulation. And let's be clear about what Republicans are empowering big companies to do. Favoring their products on the platforms they own. Forcing users to take bundled products.
▶ 1:46:14Refusing to make their products compatible with their competitors, surveilling users, and denying them access to their own data. Where is the popular support for any of this? Since when did MACA voters want their elected officials to fight for big tech's right to screw them over? This isn't about innovation. Big tech companies are in the business aren't in the business of innovation.
▶ 1:46:41They're in the business of extracting our data and selling it to advertisers at the expense of labor, privacy, and consumer rights. And they're paying politicians like Trump and his loyalists in Congress to let them get away with it. And the truth is Trump's betrayal of the working class and his corrupt embrace of big tech is not a break from US policy. It's a continuation.
▶ 1:47:06This is just the latest example of the US defending corporate abuses even if it comes at the price of undermining democracy at home and abroad. This corrupt alliance is why our government negotiates trade agreements like NAFTA to prioritize corporate interests over workers. It's why we prop up autocratic leaders who back US corporate interests even if they support terrorism or drug trafficking, too.
▶ 1:47:37And it's why we fail at effectively regulating industries even as their practices harm workers, consumers, and communities at large. But when Trump used the age-old playbook, campaigning on big tech regulation, then selling people out, he got caught in a lie. He's not America's first. He's corporate America first.
▶ 1:48:01And now Trump is angry that other countries are actually trying to do what he promised to do. Mr. Alfred, thank you for being here today. In your opinion, does threatening other countries with tariffs and sanctions over their digital regulations without evidence of discrimination against US companies help or harm the movement to address big tech monopoly abuses?
▶ 1:48:28It does nothing to address the monopoly abuses in the United States. Uh the litigation that was started in the first Trump administration and has continued with state attorneys general, including many Republicans, is the best way to deal with that concern. Thank you. And Mr. Chairman, I yield
▶ 1:48:45gentleman yields back. I'd like to uh ask unanimous consent to enter into the record of speech by Professor Alford that deliver that was delivered in Beijing in August of 2018. Uh also unanimous consent to enter the record of speech by Professor Alford that [clears throat] was delivered in Shanghai in August of 2017. Um and I now would recognize the chairman of the whole committee.
▶ 1:49:10Uh Mr. saying the ranking member said United States needs to be more like Europe. Do you agree with that?
▶ 1:49:16No, I think uh No, I think um uh Mr.
▶ 1:49:19That would be the dumbest thing ever. How about you, Mr. Portuguese? You think we should be more like Europe?
▶ 1:49:23No, I I don't. We should.
▶ 1:49:24Wasn't it about like 20 years ago the e the the uh GDP in the European Union which was like 400 some million people and the GDP in the United States like 300 some million people was roughly the same. Right.
▶ 1:49:35What's it today? What's it today? It's a one-third higher in the
▶ 1:49:39And that's even accounting for for Brexit, right?
▶ 1:49:41Yeah. And in the UK, it's um actually 40% lower in the UK.
▶ 1:49:45You got a member of Congress saying we should be more like Europe. That may be one of the craziest things I've ever What do you think, Mr. Hour? Should we be more like Europe?
▶ 1:49:51No, [snorts] I don't think so.
▶ 1:49:53Yeah. Not just not just overall, but but with a digital marketing act that we're going to we're going to How many big tech companies does Europe have, by the
▶ 1:50:02Zero. Zero. So, we want to take this what we got like seven humongous tech companies that have done amazing things and they're not all perfect. I went after them before they for goodness sake. They they shadow banned me. We found out a few years ago. So, I went after them. They're not perfect, but they're amazing. And what's Europe want to do? Oh, we can't create them because we got layer of bureaucracy on top of bureaucracy. Our GDP is like flat while America is growing like crazy. So, let's go shake down the American tech industry. Is that right, M?
▶ 1:50:33I see you shaking your head, Mr. Port. Is that
▶ 1:50:35The the main thing about competition is that we need dynamic competition and Europe is frozen into a static competition where we preserve the status quo. And so what the core of the competitive process is competition on the merit where there's disruptions, technological innovations. It's not about protecting the current incumbent
▶ 1:50:54choice and competition to get growth and to and good things for consumers. the the the chairman points makes this point better than anyone. But when we were over there this summer in Europe, we met with the app creators in Europe and they told us they said, "You know what? If you got a new app, you know where you go? You don't go to Europe. You go to United States or Frank, I was surprised. They said you go to United States or Dubai. You don't go to Europe because you can't. There's so much regulation. You can't do it." And it's even scarier because it's not just the digital marketing act, it's also the digital services act.
▶ 1:51:24So they get into the censorship thing. Mhm.
▶ 1:51:26So maybe that's why Democrats want us to be more like Europe so they can censor what Americans are saying. But I don't want that
▶ 1:51:33and it's just a matter of time before it happens because we had the the it was the irony how the good Lord works. It was amazing. We had Nigel Farage testifying and that very week, the day before he came, Graham Lanahan, a comedian, issues a tweet while he's in Arizona. So an Irish citizen does a tweet in Arizona, flies to Heathrow, and gets arrested for what he tweeted here. He's not even a citizen of the UK. That now that's that's the online ser, but it's the same as the digital services.
▶ 1:52:03It's part of the same package. The digital services act is one leg. The dig DMA is the other leg. And more generally, there's the the cloud out and there's also the EU AI act which is coming. So it's part of a legis what they call legislative package. It's not one regulations or the other. those comes by packages of regulations.
▶ 1:52:21So such a deal and I'm gonna I know Mr. Sing and Mr. Hour want to get in here, but it's such a deal. We can censor American speech, censor European speech, censor American speech, and they don't do what we want on the we can shake them down and get a ton of money under the
▶ 1:52:36Wow, such a deal.
▶ 1:52:38And we got members on the other side saying we should do that. We should embrace that.
▶ 1:52:43Mr. I was just going to say with respect to Europe, I think um you know it's not working that well over there. So we certainly don't want it over here. But I mean um it's very clear if you look at the data in the last 25 years the European economies particularly western European economies uh the central eastern Europeans are doing slightly better um have have absolutely stagnated. In fact in many cases some of the member states Germany for example have been in a contraction phase. I mean not just GDP per capita going down but overall GDP going down.
▶ 1:53:13And this is why it is so troubling for European uh citizens because their prospects, their growth prospects are are looking extremely bad at the moment. Uh and and this is something they've done to themselves. This is not something that's been imposed from without. It's the regulatory approach of the Europeans of which the DMA and the DSA are examples that have led to this crisis in Europe.
▶ 1:53:35I'm going to give Mr. Hour the last 30
▶ 1:53:37I think America has one superpower above all. It's the faith in free markets. And in our space that leads to evidence-based antitrust that tries to ensure that consumers get the best deal and that um puts aside the idiosyncratic preferences of enforcement and looks at the data coldly and dispassionately.
▶ 1:53:58Europeans recognize their over relations. As chairman Federal mentioned, we have the draggy report. If you read the draggy report in Europe, it says like we killed innovation in Europe by European regulations. So Europeans themselves recognize they're overregulated. That's why now they posed the EU AI act. They know they're killing the reg the regulation. So it's not like there's no diagnosis. The diagnosis is here. So why would you emulate and copy something that they themselves recognize as broken?
▶ 1:54:27Great question. Great question. I yield back to the chairman. Thank you for the
▶ 1:54:30Chairman yields back.
▶ 1:54:32Mr. Chair, I have some unanimous consent to enter into the record.
▶ 1:54:35Recognizer ranking member
▶ 1:54:36from Common Dreams. Big Tech's most effective lobbyist Jim Jordan is temporarily constrained from the Washington Examiner. Swamp Unra Trump cozy lobbying firm and from National Politics. How big tech power justice department and economic policy Trump is big tech's personal lobbyist. Thank you, Mr. Chair.
▶ 1:54:54I also ask unanimous consent. Letter from the US Chamber of Commerce dated December 2015. Letter from the Consumer Choice Center dated December 11th, 2025. Uh letter from Net Choice dated December 15, 2025. Letter from the App Association dated December 25. And a statement from Alden Abbott and Satya Mara of the Mir Cartis Center at George Mason University.
▶ 1:55:23Mr. Chair, I have one more, please.
▶ 1:55:25A gentleoman is recognized.
▶ 1:55:27I ask you consent to enter into the record um Professor Alred's whistleblowing speech from April, the rule of law versus the rule of Thank you, Mr. Chair.
▶ 1:55:37Gentleoman yields back. Uh, that concludes today's hearing. We thank our witnesses for appearing before the committee today. Without objection, all members will have five legislative days to submit additional written questions for the witnesses or additional materials for the record. Without objection, the hearing is adjourned.