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Washington rips Silicon Valley, but don’t expect much action

By John Hendel and Cristiano Lima

President Donald Trump threatened to open a probe into whether Google is committing “treason.” Sen. Bernie Sanders said he would push to break up Facebook, Google and Amazon. Sen. Ted Cruz took aim at Google in his campaign against alleged censorship of conservatives. And Democrats accused the internet giants of squelching competitors and slammed Facebook’s plans to offer a digital currency.

And that was just Tuesday.

But for all the flak Silicon Valley was taking from across Washington, the tech companies maintain a major advantage: Despite their shared suspicion and growing distrust of the tech industry, Democrats and Republicans appear to hold little common ground on what the problem is and how to fix it. And that could mean the odds of legislative punishment in the near term remain low.

The attacks Tuesday dealt with a hodgepodge of issues and sometimes-incompatible complaints, though often in withering terms, in particular at the morning Senate hearing where Ohio Democrat Sherrod Brown called it “delusional” for Facebook to expect people to trust the company with their wallets.

“Their motto has been 'move fast and break things.' And they certainly have," Brown said at a hearing on Facebook's planned digital currency, Libra. "They moved fast and broke our political discourse, they broke journalism, they helped incite a genocide and they’re undermining our democracy."

At Cruz’s censorship hearing later in the day, Sen. Marsha Blackburn (R-Tenn.), compared Google to children who repeatedly sneak into the cookie jar despite their parents’ warnings: “I feel like you all push the boundaries until your hand gets slapped.”

She also scoffed at the $5 billion fine that the Federal Trade Commission has proposed imposing on Facebook for its violations of users’ privacy — a complaint that puts the conservative Tennessean in much the same camp as liberal Massachusetts Sen. Elizabeth Warren. "It should have been $50 billion," Blackburn said.

Sen. Mazie Hirono, D-Hawaii, speaks to members of the media on Capitol Hill in Washington, Tuesday, Sept. 18, 2018. (AP Photo/Pablo Martinez Monsivais)

But amid the back-and-forth at a slew of congressional hearings, clear divisions were evident between Democrats and Republicans and even sometimes within the parties themselves, highlighting the lack of consensus on just what to do about tech companies that dominate so many aspects of Americans' lives.

Cruz (R-Texas) demanded that Google fork over data about how its algorithms work, to answer Republican questions about whether its main search engine and its YouTube video service discriminate against conservative viewpoints. Cruz again raised the prospect that Congress may pare back the online industry’s 23-year-old legal immunity for lawsuits over user-posted content, a running theme lately among tech critics in both parties.

But Hawaii Sen. Mazie Hirono, the top Democrat on Cruz’s Judiciary subcommittee, hammered Republicans for even having Tuesday’s tech bias hearing — saying they are "browbeating the tech industry for a problem that does not exist."

In the House, Judiciary committee Democrats led by Rep. David Cicilline (D-R.I.) drilled representatives of Google, Amazon, Facebook and Apple over whether they've engaged in anti-competitive conduct, to the detriment of small retailers and the newspaper industry.

But the top Republican on the antitrust panel, Jim Sensenbrenner (R-Wis.), warned against calls for sweeping antitrust action, saying that “just because a business is big doesn’t mean that it is bad.”

Earlier in the day, Republicans appeared split over Facebook's Libra digital currency. Sen. Pat Toomey (R-Pa.) called it "wildly premature" to pass judgment on the project. But Sen. John Kennedy (R-La.) appeared to share Brown’s skepticism, quipping: "I have great respect for Facebook but Facebook now wants to control the money supply. What could possibly go wrong?"

Trump had kicked off the day by entertaining a gravely serious accusation about Google: He said his administration would look into a charge by tech investor and Facebook board member Peter Thiel — and, Trump tweeted, "a great and brilliant guy who knows this subject better than anyone!” — that Google may be committing “treason” through its work in China. That suggested that he may urge the Justice Department to launch an investigation into the matter. The DOJ did not respond to a request for comment on Trump's statement.

The president later told reporters at the White House that he "would like to recommend to the various agencies, including perhaps our attorney general ... to maybe take a look" at what he called a "very strong charge" by Thiel.

At the Cruz-led hearing Tuesday, Google public policy chief Karan Bhatia firmly pushed back against Thiel and Trump's assertions.

Addressing questions from Sen. Richard Blumenthal (D-Conn.), Bhatia said Google has "absolutely not" found evidence of Chinese government infiltration of the company or its data; allowed considerations involving work in China to influence any decisions on U.S. government contracts; or turned a blind eye to any leaks of Google software or data to Chinese intelligence.

"Fundamentally in China we actually do very little today," Bhatia said.

Tech companies have deployed a range of strategies to deal with the increasing scrutiny in Washington.

They've generally kept a low-profile in the face of Trump's attacks, denying that politics influences their content decisions, while arguing more vocally against Democratic calls from Warren and others to break them up. Executives including Google CEO Sundar Pichai and Facebook Chief Operating Officer Sheryl Sandberg have argued their companies' scale allows them to invest money in developing new technologies and compete with Chinese rivals.

On the privacy front, many of the companies say they support federal privacy regulations in lieu of state-level rules, though Democrats warn against any national standard that could that gut strict privacy regulations in states like California.

Despite the long Washington list of tech grievances, agreement on any one particular issue remains elusive. Democrats continue to be the most vocal about their unhappiness with the tech companies on data privacy and competition, while Republicans keep pressing their argument that conservatives are the victims of the industry’s online censorship — something the tech companies emphatically deny.

As POLITICO reported last week, Congress is running out of time to reach an agreement on one area where both Republicans and Democrats have seemed to be largely aligned — enacting federal privacy legislation to restrain how companies like Facebook can profit off of people’s personal data. Last week’s news about the FTC’s proposed $5 billion fine for Facebook largely drew a yawn from Wall Street, and the company saw its stock price rise to its highest level in more than a year.

And tech firms also continue to benefit from Trump’s policies despite his escalating rhetoric against Silicon Valley. Just last week, his trade advisers went to bat against France’s plans for a new “digital services” tax that would hit companies like Google, Facebook and Amazon, while Apple continues to escape the brunt of Trump’s trade sanctions on China.

On Monday, Trump even defended the billions of dollars in economic incentives that New York City had offered to Amazon for its proposed second headquarters, calling it “terrible” that Rep. Alexandria Ocasio-Cortez (D-N.Y.) and fellow activists had helped block the deal. That was even though Trump frequently criticizes Amazon and its CEO, Jeff Bezos, for everything from its effect on brick-and-mortar retailers to Bezos’ ownership of The Washington Post.

Zachary Warmbrodt contributed to this report.