Big tech will be in the hot seat this week as US lawmakers draw attention to the growing power of these business hands for two days of hearings.
Facebook will face scrutiny Tuesday morning when legislators in the Senate's bank committee are set to question the company's executives on their cryptocurrency project, Libra. On Tuesday afternoon, representatives of Facebook, Google, Apple, and Amazon face online monopoly issues on the sub-commission on antitrust, trade and administration law. And Wednesday morning it will be the house's turn to probe Facebook over its cryptocurrency venture.
Facebook's Crypto Launch Face Potential Junctions
Facebook announced its plans for Libra in June and sets ambitions to launch a digital currency by 2020 that would allow its billions of users to make financial transactions worldwide. Facebook says Libra will be managed by the Libra Association, an organization made up of more than 1
The plans could potentially shake the world banking system and immediately draw concerns from legislators and experts on privacy and anti-fraud measures. The US Security and Exchange Commission is currently discussing whether Libra is similar to a listed fund. If so, the SEC must approve Libra before launch. Even Donald Trump has spoken out against the effort. "If Facebook and other companies want to become a bank, they must seek a new bank charter and be subject to all bank settlements, just like other banks, both national and international," he tweeted last week.
In this week's hearings, Facebook is expected to argue that the new currency is primarily a payment tool, not an investment.
In statements released prior to the hearing, David Marcus, the former PayPal manager's leading Facebook's crypto course initiative, said that the company will not launch Libra until it has "fully dealt with regulatory concerns".
"We recognize the authority of economic regulators and support their oversight of this project," he said.
The company will also emphasize the Libra Association, arguing that the currency will not be powered by Facebook itself but by collecting companies.
"The Libra Association argues that financial inclusion, regulatory harmony and consumer issues are not competing targets, but works in lock with the association's goal of providing a single, global currency and financial infrastructure that provides billions of people," says Dante Disparte, head of policy and communication for the Libra Association.
In front of the hearings, many went into the crypto game around Facebook and noted that respos Nses from Congress and the Trump administration on Libra are indicative of a greater resistance to blockchain technologies.
"Facebook is today's practical punch bag and gives politicians an easy opportunity to increase their profile," said Roneil Rumburg, CEO and co founder of blockchain-based streaming service Audius. "The Crypto community will probably end up damaging the security of their saliva. While some of us may or may not agree with Libra's approach, we should all agree that their right to experiment and innovate is worth defending. "
The House's views on technological monopolies
In the house's sub-committee on the antitrust, trade and administration law, technological giants will meet lawmakers who are increasingly skeptical of the incredible power of large technology companies that hold markets such as digital advertising ( in Facebook and Google's case); and e-commerce and cloud computing (for Amazon).
On Friday, David Cicilline, who is in charge of the antitrust subcommittee, reports that the Federal Trade Commission will give Facebook $ 5 billion over privacy violations, calling the settlement a "Christmas five months early" and warning, "If the FTC will not protect Consumers, Congress must absolutely. "
The hearing on antitrust is part of a recently launched two-sided survey of online monopolies. The first consultation of the June survey focused on the impact of the online platforms on the new industry, while Tuesday's inquiry will address "innovation and entrepreneurship".
The major technology companies are likely to witness "how good they are for small businesses," said Sarah Miller, assistant director of the Open Markets Institute, a progressive thought tank that speaks to monopoly. "But that's not true."
"We have allowed these companies to gain monopoly power, and now they actually kill innovation because of their control over key trading types," Miller added. "There is no silver bullet solution, but a solution must come to the fundamentally dangerous level of power these companies have got to acquire. It's not just a bill to neutralize the power of these platforms."
Still, Miller said that Senate and house calls on Facebook's proposed crypto competition is a sign that her group's antitrust arguments are starting with lawmakers.
"Two years ago, Facebook had announced that it was creating a crypto competition, I think people would have been like," Oh, how innovative, "she said. "Now it is shut down. It's the power to really educate political decision makers."